Texas Senate Bill SB440

Texas 2025 - 89th Regular

• Filed: 11/21/24

Caption

Relating to audits of and reports by self-directed and semi-independent financial regulatory agencies.

Impact

Under the provisions of SB440, financial regulatory agencies will be required to submit detailed reports every two years to the legislature and the governor. These reports must outline their activities, include audit findings, and provide comprehensive financial condition reports. By enforcing such requirements, the bill aims to enhance transparency and allow for better legislative oversight of financial regulatory practices. It signals a move towards more accountability within state agencies that oversee financial institutions.

Summary

SB440 introduces significant changes to how self-directed and semi-independent financial regulatory agencies in Texas are audited and report their activities. The bill mandates that the state auditor conduct audits of these agencies at least once every six years, which must include financial, effectiveness, and performance audits. This ensures that a rigorous standard of oversight is maintained, holding these agencies accountable for their operations. The state auditor also has the discretion to perform risk-based audits at any time, enabling a more proactive approach to audit timing and focus.

Conclusion

The implementation of SB440 is set to take effect on September 1, 2025, which allows time for agencies and the state auditor to prepare for the changes. Overall, the legislation reflects an ongoing endeavor to strengthen regulatory oversight in Texas, particularly in the financial sector, while also balancing the operational capabilities of regulatory agencies.

Contention

While the bill may seem straightforward in its objective to improve transparency and accountability, there are potential points of contention regarding the increased regulatory burden on financial agencies. Critics may argue that the frequency of audits and the extensive reporting requirements could divert resources and attention away from the agencies' primary regulatory duties. Furthermore, there could be concerns about the implications of risk-based audits, which may lead to increased scrutiny for some agencies while allowing others to remain less monitored.

Texas Constitutional Statutes Affected

Finance Code

• Chapter 16. Financial Regulatory Agencies: Self-directed And Semi-independent
  • Section: New Section
  • Section: 005