Bill Text: TX SB1401 | 2017-2018 | 85th Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to the regulation of banks and trust companies.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Passed) 2017-06-09 - Effective on 9/1/17 [SB1401 Detail]
Download: Texas-2017-SB1401-Introduced.html
Bill Title: Relating to the regulation of banks and trust companies.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Passed) 2017-06-09 - Effective on 9/1/17 [SB1401 Detail]
Download: Texas-2017-SB1401-Introduced.html
85R12819 EES-F | ||
By: Campbell | S.B. No. 1401 |
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relating to the regulation of banks and trust companies. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 31.002, Finance Code, is amended by | ||
adding Subdivision (55-a) to read as follows: | ||
(55-a) "Third-party service provider" means a person, | ||
company, or other legal entity that: | ||
(A) provides data processing services; | ||
(B) performs activities in support of the | ||
provision of financial services, including lending, transferring | ||
funds, fiduciary activities, trading activities, and deposit | ||
taking activities; | ||
(C) provides Internet-related services, | ||
including web services, processing electronic bill payments, | ||
developing and maintaining mobile applications, system and | ||
software development and maintenance, and security monitoring; or | ||
(D) performs activities relating to the business | ||
of banking. | ||
SECTION 2. Sections 31.107(a) and (b), Finance Code, are | ||
amended to read as follows: | ||
(a) The banking commissioner may regulate and examine, to | ||
the same extent as if the services or activities were performed by a | ||
state bank on its own premises: | ||
(1) the activities of a state bank affiliate; and | ||
(2) the [ |
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third-party service provider that a state bank or state bank | ||
affiliate has contracted for or otherwise arranged to be performed | ||
on behalf of the [ |
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(b) The banking commissioner may collect a fee from an | ||
examined third-party service provider [ |
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connection with each examination to cover the cost of the | ||
examination or may collect that fee from the state banks that use | ||
the examined third-party service provider [ |
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SECTION 3. Section 31.301(a), Finance Code, is amended to | ||
read as follows: | ||
(a) Except as expressly provided otherwise by this | ||
subtitle, Chapter 11 or 12, or a rule adopted under this subtitle, | ||
the following are confidential and may not be disclosed by the | ||
banking commissioner or an employee of the department: | ||
(1) information directly or indirectly obtained by the | ||
department in any manner, including an application or examination, | ||
concerning the financial condition or business affairs of a | ||
financial institution, [ |
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shareholder, officer, director, or affiliate of a financial | ||
institution, or a third-party service provider of a financial | ||
institution or its affiliate, other than information in a published | ||
statement or in the public portion of a call report or profit and | ||
loss statement; and | ||
(2) all related files and records of the department. | ||
SECTION 4. Subchapter D, Chapter 31, Finance Code, is | ||
amended by adding Section 31.3015 to read as follows: | ||
Sec. 31.3015. DISCLOSURE TO STATE BANKS. The banking | ||
commissioner may disclose to a state bank information about an | ||
affiliate or third-party service provider of the state bank. | ||
SECTION 5. Section 33.106, Finance Code, is amended to read | ||
as follows: | ||
Sec. 33.106. OFFICERS. (a) The board shall annually | ||
appoint the officers of the bank, who serve at the will of the | ||
board. Unless the banking commissioner consents otherwise in | ||
writing, a person may not serve as an officer of a state bank if: | ||
(1) the person is the subject of an order described by | ||
Section 35.007(a); or | ||
(2) the person has been convicted of a felony. | ||
(b) The bank must have a principal executive officer | ||
primarily responsible for the execution of board policies and | ||
operation of the bank and an officer responsible for the | ||
maintenance and storage of all corporate books and records of the | ||
bank and for required attestation of signatures. Those positions | ||
may not be held by the same person. The board may appoint other | ||
officers of the bank as the board considers necessary. | ||
SECTION 6. Section 35.007(a), Finance Code, is amended to | ||
read as follows: | ||
(a) Except as otherwise provided by law, without the prior | ||
written approval of the banking commissioner, a person subject to a | ||
final and enforceable removal or prohibition order issued by the | ||
banking commissioner, or by another state, federal, or foreign | ||
financial institution regulatory agency, may not: | ||
(1) serve as a director, officer, or employee of a | ||
state bank, state [ |
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bank, or as a director, officer, or employee with financial | ||
responsibility of any other entity chartered, registered, | ||
permitted, or licensed by the banking commissioner under the laws | ||
of this state; | ||
(2) directly or indirectly participate in any manner | ||
in the management of such an entity; | ||
(3) directly or indirectly vote for a director of such | ||
an entity; or | ||
(4) solicit, procure, transfer, attempt to transfer, | ||
vote, or attempt to vote a proxy, consent, or authorization with | ||
respect to voting rights in such an entity. | ||
SECTION 7. Section 35.101, Finance Code, is amended by | ||
amending Subsection (c) and adding Subsection (d) to read as | ||
follows: | ||
(c) Subject to Subsection (d), a [ |
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the earlier of: | ||
(1) the expiration of the period stated in the order of | ||
supervision; or | ||
(2) the date the banking commissioner determines that | ||
the requirements for abatement of the order have been satisfied. | ||
(d) The banking commissioner may terminate an order of | ||
supervision at any time. | ||
SECTION 8. Section 35.206(a), Finance Code, is amended to | ||
read as follows: | ||
(a) On certification by the banking commissioner, a book, | ||
record, paper, or document produced or testimony taken as provided | ||
by Section 35.203 [ |
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as evidence in any case without prior proof of its correctness and | ||
without other proof. The certified book, record, document, or | ||
paper, or a certified copy, is prima facie evidence of the facts it | ||
contains. | ||
SECTION 9. Section 181.002, Finance Code, is amended by | ||
adding Subdivision (47-b) to read as follows: | ||
(47-b) "Third-party service provider" means a person, | ||
company, or other legal entity that: | ||
(A) provides data processing services; | ||
(B) performs activities in support of the | ||
provision of financial services, including lending, transferring | ||
funds, fiduciary activities, trading activities, and deposit | ||
taking activities; | ||
(C) provides Internet-related services, | ||
including web services, processing electronic bill payments, | ||
developing and maintaining mobile applications, system and | ||
software development and maintenance, and security monitoring; or | ||
(D) performs activities relating to the trust | ||
business. | ||
SECTION 10. Section 181.106, Finance Code, is amended to | ||
read as follows: | ||
Sec. 181.106. REGULATION AND EXAMINATION OF RELATED | ||
ENTITIES. (a) The banking commissioner may regulate and examine, | ||
to the same extent as if the services or activities were performed | ||
by a state trust company on its own premises: | ||
(1) the activities of a state trust company affiliate; | ||
and | ||
(2) the [ |
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service provider that a state trust company or state trust company | ||
affiliate has contracted for or otherwise arranged to be performed | ||
on behalf of the [ |
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affiliate [ |
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(b) The banking commissioner may collect a fee from an | ||
examined third-party service provider or affiliate in connection | ||
with each examination [ |
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the examination or may collect that fee from the state trust | ||
companies that use the examined third-party service provider. | ||
SECTION 11. Section 181.301(a), Finance Code, is amended to | ||
read as follows: | ||
(a) Except as expressly provided otherwise by this subtitle | ||
or a rule adopted under this subtitle [ |
||
following are confidential and may not be disclosed by the banking | ||
commissioner or an employee of the department: | ||
(1) information directly or indirectly obtained by the | ||
department in any manner, including through an application or | ||
examination, concerning the financial condition or business | ||
affairs of a state trust company, [ |
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prospective shareholder, participant, officer, director, manager, | ||
or affiliate of the state trust company, or a third-party service | ||
provider of the state trust company or its affiliate, other than the | ||
public portions of a report of condition or income statement; and | ||
(2) each related file or record of the department. | ||
SECTION 12. Subchapter D, Chapter 181, Finance Code, is | ||
amended by adding Section 181.3015 to read as follows: | ||
Sec. 181.3015. DISCLOSURE TO STATE TRUST COMPANIES. The | ||
banking commissioner may disclose to a state trust company | ||
information about an affiliate or third-party service provider of | ||
the state trust company. | ||
SECTION 13. Section 183.106(a), Finance Code, is amended to | ||
read as follows: | ||
(a) The board shall annually appoint the officers of the | ||
state trust company, who serve at the will of the board. Unless the | ||
banking commissioner consents otherwise in writing, a person may | ||
not serve as an officer of a state trust company if: | ||
(1) the person is the subject of an order described by | ||
Section 185.007(a); | ||
(2) the person has been convicted of a felony; or | ||
(3) the person has violated, with respect to a trust | ||
under which the state trust company has fiduciary responsibility, | ||
Section 113.052 or 113.053(a), Property Code, relating to loan of | ||
trust funds and purchase or sale of trust property by the trustee, | ||
and the violation has not been corrected. | ||
SECTION 14. Section 185.007(a), Finance Code, is amended to | ||
read as follows: | ||
(a) Except as provided by other law, without the prior | ||
written approval of the banking commissioner, a person subject to a | ||
final and enforceable removal or prohibition order issued by the | ||
banking commissioner, or by another state, federal, or foreign | ||
financial institution regulatory agency, may not: | ||
(1) serve as a director, officer, or employee of a | ||
state trust company, [ |
||
bank, or as a director, officer, or employee with financial | ||
responsibility of any other entity chartered, registered, | ||
permitted, or licensed by the banking commissioner under the laws | ||
of this state while the order is in effect; | ||
(2) directly or indirectly participate in any manner | ||
in the management of such an entity; | ||
(3) directly or indirectly vote for a director of such | ||
an entity; or | ||
(4) solicit, procure, transfer, attempt to transfer, | ||
vote, or attempt to vote a proxy, consent, or authorization with | ||
respect to voting rights in such an entity. | ||
SECTION 15. Section 185.101, Finance Code, is amended by | ||
amending Subsection (c) and adding Subsection (d) to read as | ||
follows: | ||
(c) Subject to Subsection (d), the [ |
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until the earlier of: | ||
(1) the expiration of the period stated in the order of | ||
supervision; or | ||
(2) the date the banking commissioner determines that | ||
the requirements for abatement of the order have been satisfied. | ||
(d) The banking commissioner may terminate an order of | ||
supervision at any time. | ||
SECTION 16. This Act takes effect September 1, 2017. |