85R20222 EES-F     By: Dean H.B. No. 2822     Substitute the following for H.B. No. 2822:     By:  Holland C.S.H.B. No. 2822       A BILL TO BE ENTITLED   AN ACT   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(a), 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 [performance of data processing, electronic   fund transfers, or other bank] services or activities of a   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 [a] state bank or state bank affiliate [by a   third-party contractor, other than a national bank].          (b)  The banking commissioner may collect a fee from an   examined third-party service provider [contractor] or affiliate in   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 [contractor].          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, [or] a present, former, or prospective   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 the 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 [or] trust company, or holding company of a state   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 [A] supervisor serves 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 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 [35.204] and held by the department is admissible   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(a), Finance Code, is amended by   adding Subdivision (47-b) and amending Subdivision (49) 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.                (49)  "Trust business" means the business of a company   holding itself out to the public as a fiduciary for hire or   compensation to hold or administer accounts. The term includes:                      (A)  the business of a trustee or custodian of an   individual retirement account described by Section 408(a),   Internal Revenue Code of 1986; and                      (B)  the business of an administrator or servicer   of individual retirement accounts described by Section 408(a),   Internal Revenue Code of 1986, who possesses or controls any   assets, including cash, of those accounts and who makes the   administrator's or servicer's services available to the public for   hire or compensation.          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 [performance of data processing, electronic   fund transfers, or other] services or activities of a third-party   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 [a] state trust company or state trust company   affiliate [by a third-party contractor].          (b)  The banking commissioner may collect a fee from an   examined third-party service provider or affiliate in connection   with each examination [the state trust company] to cover the cost of   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 [Section 181.003(a)(1)], 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 through an application or   examination, concerning the financial condition or business   affairs of a state trust company, [or] a present, former, or   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 182.021, Finance Code, is amended to   read as follows:          Sec. 182.021.  ACTIVITIES NOT REQUIRING CHARTER. Subject to   Subchapter C, Chapter 187, a company does not engage in the trust   business in a manner requiring a state charter by:                (1)  acting in a manner authorized by law and in the   scope of authority as an agent of a trust institution;                (2)  rendering a service customarily performed as an   attorney in a manner approved and authorized by the Supreme Court of   Texas or State Bar of Texas;                (3)  acting as trustee under a deed of trust made only   as security for the payment of money or for the performance of   another act;                (4)  conducting business as a trust institution if the   exercise of fiduciary powers in this state by the trust institution   is not otherwise prohibited by law;                (5)  engaging in a business regulated by the Office of   Consumer Credit Commissioner, except as limited by rules adopted by   the finance commission;                (6)  receiving and distributing rents and proceeds of   sale as a licensed real estate broker on behalf of a principal in a   manner authorized by the Texas Real Estate Commission;                (7)  engaging in a securities transaction or providing   an investment advisory service as a licensed and registered dealer,   salesman, or advisor to the extent that the activity is regulated by   the State Securities Board or the Securities and Exchange   Commission;                (8)  engaging in the sale and administration of an   insurance product by an insurance company or agent authorized or   licensed by the Texas Department of Insurance to the extent that the   activity is regulated by the Texas Department of Insurance;                (9)  engaging in the lawful sale of prepaid funeral   benefits under a permit issued by the banking commissioner under   Chapter 154;                (10)  engaging in the lawful business of a perpetual   care cemetery corporation under Chapter 712, Health and Safety   Code;                (11)  engaging as a principal in the money services   business under a license issued by the banking commissioner under   Chapter 151;                (12)  acting as trustee under a voting trust as   provided by Section 6.251, Business Organizations Code;                (13)  acting as trustee by a public, private, or   independent institution of higher education or a university system,   as defined by Section 61.003, Education Code, including an   affiliated foundation or corporation of such an institution or   system acting as trustee as provided by the Education Code;                (14)  engaging in another activity expressly excluded   from the application of this subtitle by rule of the finance   commission;                (15)  rendering services customarily performed by a   certified accountant in a manner authorized by the Texas State   Board of Public Accountancy;                (16)  serving as trustee of a charitable trust as   provided by Section 2.106, Business Organizations Code;                (17)  performing escrow or settlement services if   licensed or authorized under Title 11, Insurance Code;                (18)  acting as a qualified intermediary in a tax   deferred exchange under Section 1031, Internal Revenue Code of   1986, and applicable regulations; [or]                (19)  providing permitted services at a trust   representative office established in this state pursuant to   Subchapter C, Chapter 187; or                 (20)  acting as a trustee or custodian approved by the   Internal Revenue Service under 26 C.F.R. Section 1.408-2(e) of an   individual retirement account described by Section 408(a),   Internal Revenue Code of 1986.          SECTION 14.  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 15.  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, [or] state bank, or holding company of a state   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 16.  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 [The] supervisor serves   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 17.  This Act takes effect September 1, 2017.