88R12646 MLH-F
 
  By: Lambert, Ashby H.B. No. 3574
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the regulation of state banks.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 31.002(a)(15), Finance Code, is amended
  to read as follows:
               (15)  "Deposit" means the establishment of a
  debtor-creditor relationship represented by the agreement of the
  deposit debtor to act as a holding, paying, or disbursing agent for
  the deposit creditor.  The term:
                     (A)  includes:
                           (i)  an unpaid balance of money that is
  received by the deposit debtor in the usual course of business in
  exchange for conditional or unconditional credit to a commercial,
  checking, savings, or time account of the deposit creditor or the
  creditor's designee, or that is evidenced by a certificate of
  deposit or similar instrument, a certified check or draft drawn
  against a deposit account, or a letter of credit or traveler's check
  on which the deposit debtor is primarily liable, but excluding an
  obligation arising under Chapter 151 [152];
                           (ii)  money or credit given for money
  received by the deposit debtor in the usual course of business for a
  special purpose, including money:
                                 (a)  held as escrow money, as security
  for an obligation due to the deposit debtor or another person, or as
  security for a loan;
                                 (b)  left with a deposit debtor by a
  deposit creditor to meet maturing obligations that are not yet due;
  and
                                 (c)  held by the deposit debtor to meet
  an acceptance or letter of credit;
                           (iii)  an outstanding draft, cashier's
  check, money order, or other officer's check issued by the deposit
  debtor in the usual course of business for any purpose, including
  payment for services, dividends, or purchases; and
                           (iv)  an obligation that the finance
  commission by rule defines as a deposit liability, except that the
  term may not include money received for immediate application to
  reduction of an indebtedness; and
                     (B)  does not include an obligation that this
  subtitle or finance commission rule determines not to be a deposit
  liability.
         SECTION 2.  Section 31.005(b), Finance Code, is amended to
  read as follows:
         (b)  Subsection (a) does not apply to a federally insured
  depository institution [or other entity] organized under the laws
  of this state, another state, the United States, or a foreign
  sovereign state to the extent that the depository institution or
  other entity is:
               (1)  authorized under its charter or the laws of this
  state or the United States to use a term, word, character, ideogram,
  phonogram, or phrase prohibited by Subsection (a); and
               (2)  authorized by the laws of this state or the United
  States to conduct the activities in which it is engaged in this
  state.
         SECTION 3.  Section 31.105, Finance Code, is amended by
  adding Subsection (c-2) to read as follows:
         (c-2)  If a person currently serving as an officer, director,
  employee, controlling shareholder, or other position participating
  in the affairs of a state bank refuses to comply with a subpoena,
  the banking commissioner may issue an order on an emergency basis
  removing the person from the person's position and prohibiting the
  person from participating in the affairs of the state bank or any
  other entity chartered, registered, permitted, or licensed by the
  banking commissioner until the person complies with the subpoena.
         SECTION 4.  Section 33.005, Finance Code, is amended to read
  as follows:
         Sec. 33.005.  EXEMPTIONS.  The following acquisitions are
  exempt from Section 33.001:
               (1)  an acquisition of securities in connection with
  the exercise of a security interest or otherwise in full or partial
  satisfaction of a debt previously contracted for in good faith and
  the acquiring person files written notice of acquisition with the
  banking commissioner before the person votes the securities
  acquired;
               (2)  unless the banking commissioner provides
  otherwise in writing, an acquisition of voting securities in any
  class or series by a controlling person who:
                     (A)  [has previously complied with and received
  approval under this subchapter or who] was identified as a
  controlling person in a state bank in a prior application filed with
  and approved by the banking commissioner;
                     (B)  has from the date of receipt of approval
  under this subchapter continuously held power to vote 25 percent or
  more of any class of voting securities of the state bank; or
                     (C)  is considered to have from the date of
  receipt of approval under this subchapter continuously controlled
  the state bank under Section 33.001(b);
               (3)  an acquisition or transfer by operation of law,
  will, or intestate succession and the acquiring person files
  written notice of acquisition with the banking commissioner before
  the person votes the securities acquired;
               (4)  a transaction subject to Chapter 202 if:
                     (A)  the acquiring bank holding company currently
  owns and controls a state bank; or
                     (B)  the post-transaction controlling person[:
                           [(i)  has previously complied with and
  received approval as a controlling person under this subchapter; or
                           [(ii)]  is identified as the controlling
  person in a merger or other acquisition-related application filed
  with the banking commissioner concurrently with the submission
  required by Section 202.001; and
               (5)  a transaction exempted by the banking commissioner
  or by rules adopted under this subtitle because the transaction is
  not within the purposes of this subchapter or the regulation of the
  transaction is not necessary or appropriate to achieve the
  objectives of this subchapter.
         SECTION 5.  Section 34.103(c), Finance Code, is amended to
  read as follows:
         (c)  A state bank may not establish or acquire a subsidiary
  or a controlling interest in a subsidiary that engages in
  activities as principal in which the bank is prohibited from
  engaging directly unless:
               (1)  the state bank's investment in the subsidiary has
  been allowed [approved] by the Federal Deposit Insurance
  Corporation under Section 24, Federal Deposit Insurance Act (12
  U.S.C. Section 1831a); or
               (2)  with respect to a subsidiary engaged in activities
  as principal that a national bank may conduct only through a
  financial subsidiary, including firm underwriting of equity
  securities other than as permitted by Section 34.101, and not
  otherwise engaged in activities as principal that are impermissible
  for a state bank or a financial subsidiary of a national bank, the
  subsidiary's activities and the bank's investment are in compliance
  with the restrictions and requirements of Section 46, Federal
  Deposit Insurance Act (12 U.S.C. Section 1831w).
         SECTION 6.  Section 35.002(a), Finance Code, is amended to
  read as follows:
         (a)  The banking commissioner has grounds to issue a cease
  and desist order to a current or former [an] officer, employee, or
  director of a state bank, or the bank itself acting through an
  authorized person, if the banking commissioner determines from
  examination or other credible evidence that the bank or person
  directly or indirectly has:
               (1)  violated this subtitle or another applicable law;
               (2)  engaged in a breach of trust or other fiduciary
  duty;
               (3)  refused to submit to examination or examination
  under oath;
               (4)  conducted business in an unsafe or unsound manner;
  or
               (5)  violated a condition of the bank's charter or an
  agreement between the bank or the person and the banking
  commissioner or the department.
         SECTION 7.  Section 35.106, Finance Code, is amended to read
  as follows:
         Sec. 35.106.  AUTHORITY OF SUPERVISOR.  During a period of
  supervision, a bank, without the prior approval of the banking
  commissioner or the supervisor or as otherwise permitted or
  restricted by the order of supervision, may not:
               (1)  dispose of, sell, transfer, convey, or encumber
  the bank's assets;
               (2)  lend or invest the bank's money;
               (3)  incur a debt, obligation, or liability;
               (4)  pay a cash dividend to the bank's shareholders;
  [or]
               (5)  remove an executive officer or director, change
  the number of executive officers or directors, or have any other
  change in the position of executive officer or director; or
               (6)  engage in any other activity determined by the
  banking commissioner to threaten the safety and soundness of the
  bank.
         SECTION 8.  Section 281.006, Finance Code, is amended to
  read as follows:
         Sec. 281.006.  RECORDS.  To the extent permitted by state or
  federal law, a financial institution shall provide, on request,
  access to or copies of records relevant to the suspected financial
  exploitation of a vulnerable adult to the department, the
  commissioner, a law enforcement agency, or a prosecuting attorney's
  office, either as part of a report to the department, commissioner,
  law enforcement agency, or prosecuting attorney's office or at the
  request of the department, commissioner, law enforcement agency, or
  prosecuting attorney's office in accordance with an investigation.
         SECTION 9.  Section 35.002(a), Finance Code, as amended by
  this Act, applies only to a violation that occurs on or after the
  effective date of this Act. A violation that occurs before the
  effective date of this Act is governed by the law in effect when the
  violation occurred, and the former law is continued in effect for
  that purpose.
         SECTION 10.  To the extent of any conflict, this Act prevails
  over another Act of the 88th Legislature, Regular Session, 2023,
  relating to nonsubstantive additions to and corrections in enacted
  codes.
         SECTION 11.  This Act takes effect immediately if it
  receives a vote of two-thirds of all the members elected to each
  house, as provided by Section 39, Article III, Texas Constitution.  
  If this Act does not receive the vote necessary for immediate
  effect, this Act takes effect September 1, 2023.