BILL ANALYSIS H.B. 3804 By: Lambert Pensions, Investments & Financial Services Committee Report (Unamended) BACKGROUND AND PURPOSE The 88th Legislature enacted legislation modernizing the statutes governing banks; however, the Department of Banking, which oversees banks with a state charter, has found that some additional changes are needed to correct drafting errors enacted into law during the 88th Legislative Session. H.B. 3804 seeks to address this issue by clarifying the applicability of an exemption from restrictions on the acquisition of control of a state bank regarding voting securities and to remove a specification on the form of dividends which a bank may not pay to a bank's shareholders during a period of supervision. CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS H.B. 3804 amends the Finance Code to revise the exemption from the change of control requirements applicable to the controlling person of a state bank with respect to an acquisition of voting securities in any class or series by the controlling person. The bill, in revising that exemption, clarifies that the state bank to which the controlling person's exemption applies is the state bank for which the applicable controlling person was previously identified as a controlling person in a prior application filed with and approved by the banking commissioner, provided that the person, as specified in current law: has from the date of receipt of that approval continuously held power to vote 25 percent or more of any class of voting securities of the state bank; or is considered to have from the date of receipt of that approval continuously controlled the state bank under applicable state law. H.B. 3804, with respect to the prohibition against a bank paying a cash dividend to the bank's shareholders during a period of supervision and without the prior approval of the banking commissioner or the supervisor or as otherwise permitted or restricted by the order of supervision, makes the prohibition applicable to the payment of any dividend rather than only a cash dividend as provided under current law. EFFECTIVE DATE On passage, or, if the bill does not receive the necessary vote, September 1, 2025.
BILL ANALYSIS
# BILL ANALYSIS
H.B. 3804
By: Lambert
Pensions, Investments & Financial Services
Committee Report (Unamended)
H.B. 3804
By: Lambert
Pensions, Investments & Financial Services
Committee Report (Unamended)
BACKGROUND AND PURPOSE The 88th Legislature enacted legislation modernizing the statutes governing banks; however, the Department of Banking, which oversees banks with a state charter, has found that some additional changes are needed to correct drafting errors enacted into law during the 88th Legislative Session. H.B. 3804 seeks to address this issue by clarifying the applicability of an exemption from restrictions on the acquisition of control of a state bank regarding voting securities and to remove a specification on the form of dividends which a bank may not pay to a bank's shareholders during a period of supervision.
CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS H.B. 3804 amends the Finance Code to revise the exemption from the change of control requirements applicable to the controlling person of a state bank with respect to an acquisition of voting securities in any class or series by the controlling person. The bill, in revising that exemption, clarifies that the state bank to which the controlling person's exemption applies is the state bank for which the applicable controlling person was previously identified as a controlling person in a prior application filed with and approved by the banking commissioner, provided that the person, as specified in current law: has from the date of receipt of that approval continuously held power to vote 25 percent or more of any class of voting securities of the state bank; or is considered to have from the date of receipt of that approval continuously controlled the state bank under applicable state law. H.B. 3804, with respect to the prohibition against a bank paying a cash dividend to the bank's shareholders during a period of supervision and without the prior approval of the banking commissioner or the supervisor or as otherwise permitted or restricted by the order of supervision, makes the prohibition applicable to the payment of any dividend rather than only a cash dividend as provided under current law.
EFFECTIVE DATE On passage, or, if the bill does not receive the necessary vote, September 1, 2025.
BACKGROUND AND PURPOSE
The 88th Legislature enacted legislation modernizing the statutes governing banks; however, the Department of Banking, which oversees banks with a state charter, has found that some additional changes are needed to correct drafting errors enacted into law during the 88th Legislative Session. H.B. 3804 seeks to address this issue by clarifying the applicability of an exemption from restrictions on the acquisition of control of a state bank regarding voting securities and to remove a specification on the form of dividends which a bank may not pay to a bank's shareholders during a period of supervision.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
H.B. 3804 amends the Finance Code to revise the exemption from the change of control requirements applicable to the controlling person of a state bank with respect to an acquisition of voting securities in any class or series by the controlling person. The bill, in revising that exemption, clarifies that the state bank to which the controlling person's exemption applies is the state bank for which the applicable controlling person was previously identified as a controlling person in a prior application filed with and approved by the banking commissioner, provided that the person, as specified in current law:
has from the date of receipt of that approval continuously held power to vote 25 percent or more of any class of voting securities of the state bank; or
is considered to have from the date of receipt of that approval continuously controlled the state bank under applicable state law.
H.B. 3804, with respect to the prohibition against a bank paying a cash dividend to the bank's shareholders during a period of supervision and without the prior approval of the banking commissioner or the supervisor or as otherwise permitted or restricted by the order of supervision, makes the prohibition applicable to the payment of any dividend rather than only a cash dividend as provided under current law.
EFFECTIVE DATE
On passage, or, if the bill does not receive the necessary vote, September 1, 2025.