By: Parker  S.B. No. 1644          (In the Senate - Filed March 6, 2023; March 16, 2023, read   first time and referred to Committee on Business & Commerce;   April 17, 2023, reported favorably by the following vote:  Yeas 10,   Nays 0; April 17, 2023, sent to printer.)Click here to see the committee vote     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.     * * * * *