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  H.B. No. 3555
 
 
 
 
AN ACT
  relating to certain administrative procedures and enforcement
  authority relating to state banks, state trust companies, and bank
  holding companies.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  The heading to Section 31.201, Finance Code, is
  amended to read as follows:
         Sec. 31.201.  BANKING COMMISSIONER HEARING; INFORMAL
  DISPOSITION.
         SECTION 2.  Section 31.201, Finance Code, is amended by
  adding Subsection (d) to read as follows:
         (d)  The banking commissioner may informally dispose of a
  matter within the jurisdiction of and before the banking
  commissioner by consent order, agreed settlement, or default.
         SECTION 3.  Subchapter A, Chapter 35, Finance Code, is
  amended by adding Section 35.0001 to read as follows:
         Sec. 35.0001.  APPLICABILITY TO BANK SUBSIDIARIES. This
  subchapter applies to a subsidiary of a state bank, a present or
  former officer, director, or employee of a subsidiary, or a
  controlling shareholder or other person participating in the
  affairs of a subsidiary in the same manner as the subchapter applies
  to a state bank, a present or former officer, director, or employee
  of a state bank, or a controlling shareholder or other person
  participating in the affairs of a state bank.
         SECTION 4.  Section 35.002, Finance Code, is amended by
  adding Subsection (b-1) to read as follows:
         (b-1)  A proposed cease and desist order may require an
  officer, employee, or director of a state bank, or the bank itself
  acting through an authorized person, to cease or desist from a
  violation or other practice or to take affirmative action to
  correct the conditions resulting from a violation or other
  practice, including the payment of restitution or other action that
  the banking commissioner determines is appropriate.
         SECTION 5.  Subchapter A, Chapter 35, Finance Code, is
  amended by adding Section 35.0035 to read as follows:
         Sec. 35.0035.  REMOVAL OR PROHIBITION ORDERS IN RESPONSE TO
  CERTAIN CRIMINAL OFFENSES. (a) For purposes of this section, a
  person is considered to have been finally convicted of an offense if
  the person's case is not subject to further appellate review and:
               (1)  a sentence was imposed on the person;
               (2)  the person received probation or community
  supervision, including deferred adjudication community
  supervision; or
               (3)  the court deferred final disposition of the
  person's case.
         (b)  The banking commissioner has grounds to remove or
  prohibit a present or former officer, director, or employee of a
  state bank from office or employment in, or prohibit a controlling
  shareholder or other person participating in the affairs of a state
  bank from further participation in the affairs of, a state bank or
  any other entity chartered, registered, permitted, or licensed by
  the banking commissioner if the person has been finally convicted
  of a felony offense involving:
               (1)  a bank or other financial institution;
               (2)  dishonesty; or
               (3)  breach of trust.
         (c)  If the banking commissioner has grounds for action under
  Subsection (b), the banking commissioner may serve a removal or
  prohibition order, as appropriate, on the person who has been
  finally convicted of a felony offense. The banking commissioner
  shall also serve a copy of the order on any state bank that the
  person is affiliated with at the time of service of the order.
         (d)  An order issued under this section becomes effective
  immediately on service and continues in effect unless the order is:
               (1)  stayed or terminated by the banking commissioner;
               (2)  set aside by the banking commissioner after a
  hearing; or
               (3)  stayed or vacated on appeal.
         (e)  Not later than the 30th day after the date an order is
  served under this section, the person against whom the order is
  issued may request in writing a hearing before the banking
  commissioner to show that the person's continued service to a state
  bank or participation in the affairs of a state bank does not, or is
  unlikely to, threaten the interests of the depositors, creditors,
  or shareholders of the state bank or the public confidence in the
  state bank.
         (f)  Not later than the 30th day after the date the request
  for a hearing is received under this section, the banking
  commissioner shall hold the hearing, unless the party requesting
  the hearing requests a later date. At the hearing, the party
  requesting the hearing has the burden of proof.
         (g)  After the hearing, the banking commissioner may affirm,
  modify, or set aside, in whole or in part, the order. An order
  affirming or modifying the order is immediately final for purposes
  of enforcement and appeal. The order may be appealed as provided by
  Sections 31.202, 31.203, and 31.204.
         SECTION 6.  Subchapter B, Chapter 35, Finance Code, is
  amended by adding Section 35.1001 to read as follows:
         Sec. 35.1001.  APPLICABILITY TO BANK SUBSIDIARIES. This
  subchapter applies to a subsidiary of a state bank, a present or
  former officer, director, or employee of a subsidiary, or a
  controlling shareholder or other person participating in the
  affairs of a subsidiary in the same manner as the subchapter applies
  to a state bank, a present or former officer, director, or employee
  of a state bank, or a controlling shareholder or other person
  participating in the affairs of a state bank.
         SECTION 7.  The heading to Section 181.201, Finance Code, is
  amended to read as follows:
         Sec. 181.201.  BANKING COMMISSIONER HEARING; INFORMAL
  DISPOSITION.
         SECTION 8.  Section 181.201, Finance Code, is amended by
  adding Subsection (d) to read as follows:
         (d)  The banking commissioner may informally dispose of a
  matter within the jurisdiction of and before the banking
  commissioner by consent order, agreed settlement, or default.
         SECTION 9.  Subchapter A, Chapter 185, Finance Code, is
  amended by adding Section 185.0001 to read as follows:
         Sec. 185.0001.  APPLICABILITY TO STATE TRUST COMPANY
  SUBSIDIARIES. This subchapter applies to a subsidiary of a state
  trust company, a present or former officer, director, manager,
  managing participant, or employee of a subsidiary, or a controlling
  shareholder or other person participating in the affairs of a
  subsidiary in the same manner as the subchapter applies to a state
  trust company, a present or former officer, director, manager,
  managing participant, or employee of a state trust company, or a
  controlling shareholder or other person participating in the
  affairs of a state trust company.
         SECTION 10.  Section 185.002, Finance Code, is amended by
  adding Subsection (b-1) to read as follows:
         (b-1)  A proposed cease and desist order may require an
  officer, employee, director, manager, or managing participant of a
  state trust company, or the state trust company itself acting
  through an authorized person, to cease or desist from a violation or
  other practice or to take affirmative action to correct the
  conditions resulting from a violation or other practice, including
  the payment of restitution or other action that the banking
  commissioner determines is appropriate.
         SECTION 11.  Section 185.003(a), Finance Code, is amended to
  read as follows:
         (a)  The banking commissioner has grounds to remove or
  prohibit a present or former officer, director, manager, managing
  participant, or employee of a state trust company from office or
  employment in, or prohibit a controlling shareholder or participant
  or other person participating in the affairs of a state trust
  company from further participation in the affairs of, the state
  trust company or any other entity chartered, registered, permitted,
  or licensed by the banking commissioner if the banking commissioner
  determines from examination or other credible evidence that:
               (1)  the person:
                     (A)  intentionally committed or participated in
  the commission of an act described by Section 185.002(a) with
  regard to the affairs of a financial institution, as defined by
  Section 201.101;
                     (B)  violated a final cease and desist order
  issued by a state or federal regulatory agency against the person or
  an entity in which the person is or was an officer, director, or
  employee; or
                     (C)  made, or caused to be made, false entries in
  the records of a financial institution;
               (2)  because of this action by the person:
                     (A)  the financial institution has suffered or
  will probably suffer financial loss or expense, or other damage;
                     (B)  the interests of the clients, depositors,
  creditors, or shareholders of the financial institution have been
  or could be prejudiced; or
                     (C)  the person has received financial gain or
  other benefit by reason of the action, or likely would have if the
  action had not been discovered; and
               (3)  that action by the person:
                     (A)  involves personal dishonesty on the part of
  the person; or
                     (B)  demonstrates wilful or continuing disregard
  for the safety or soundness of the financial institution.
         SECTION 12.  Subchapter A, Chapter 185, Finance Code, is
  amended by adding Section 185.0035 to read as follows:
         Sec. 185.0035.  REMOVAL OR PROHIBITION ORDERS IN RESPONSE TO
  CERTAIN CRIMINAL OFFENSES. (a) For purposes of this section, a
  person is considered to have been finally convicted of an offense if
  the person's case is not subject to further appellate review and:
               (1)  a sentence was imposed on the person;
               (2)  the person received probation or community
  supervision, including deferred adjudication community
  supervision; or
               (3)  the court deferred final disposition of the
  person's case.
         (b)  The banking commissioner has grounds to remove or
  prohibit a present or former officer, director, manager, managing
  participant, or employee of a state trust company from office or
  employment in, or prohibit a controlling shareholder or participant
  or other person participating in the affairs of a state trust
  company from further participation in the affairs of, the state
  trust company or any other entity chartered, registered, permitted,
  or licensed by the banking commissioner if the person has been
  finally convicted of a felony offense involving:
               (1)  a financial institution, as defined by Section
  201.101;
               (2)  dishonesty; or
               (3)  breach of trust.
         (c)  If the banking commissioner has grounds for action under
  Subsection (b), the banking commissioner may serve a removal or
  prohibition order, as appropriate, on the person who has been
  finally convicted of a felony offense. The banking commissioner
  shall also serve a copy of the order on any state trust company that
  the person is affiliated with at the time of service of the order.
         (d)  An order issued under this section becomes effective
  immediately on service and continues in effect unless the order is:
               (1)  stayed or terminated by the banking commissioner;
               (2)  set aside by the banking commissioner after a
  hearing; or
               (3)  stayed or vacated on appeal.
         (e)  Not later than the 30th day after the date an order is
  served under this section, the person against whom the order is
  issued may request in writing a hearing before the banking
  commissioner to show that the person's continued service to a state
  trust company or participation in the affairs of a state trust
  company does not, or is unlikely to, threaten the interests of the
  clients, depositors, creditors, or shareholders of the state trust
  company or the public confidence in the state trust company.
         (f)  Not later than the 30th day after the date a request for
  a hearing is received under this section, the banking commissioner
  shall hold the hearing, unless the party requesting the hearing
  requests a later date. At the hearing, the party requesting the
  hearing has the burden of proof.
         (g)  After the hearing, the banking commissioner may affirm,
  modify, or set aside, in whole or in part, the order. An order
  affirming or modifying the order is immediately final for purposes
  of enforcement and appeal. The order may be appealed as provided by
  Sections 181.202, 181.203, and 181.204.
         SECTION 13.  Subchapter B, Chapter 185, Finance Code, is
  amended by adding Section 185.1001 to read as follows:
         Sec. 185.1001.  APPLICABILITY TO STATE TRUST COMPANY
  SUBSIDIARIES. This subchapter applies to a subsidiary of a state
  trust company, a present or former officer, director, manager,
  managing participant, or employee of a subsidiary, or a controlling
  shareholder or other person participating in the affairs of a
  subsidiary in the same manner as the subchapter applies to a state
  trust company, a present or former officer, director, manager,
  managing participant, or employee of a state trust company, or a
  controlling shareholder or other person participating in the
  affairs of a state trust company.
         SECTION 14.  Section 202.005, Finance Code, is amended by
  adding Subsection (a-1) to read as follows:
         (a-1)  The grounds, procedures, and effects of an
  enforcement proceeding brought under this section apply to a bank
  holding company, an officer, director, or employee of a bank
  holding company, or a controlling shareholder or other person
  participating in the affairs of a bank holding company in the same
  manner as the grounds, procedures, and effects apply to a state
  bank, an officer, director, or employee of a state bank, or a
  controlling shareholder or other person participating in the
  affairs of a state bank.
         SECTION 15.  This Act takes effect September 1, 2015.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 3555 was passed by the House on April
  30, 2015, by the following vote:  Yeas 138, Nays 1, 1 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 3555 was passed by the Senate on May
  20, 2015, by the following vote:  Yeas 31, Nays 0.
 
  ______________________________
  Secretary of the Senate    
  APPROVED:  _____________________
                     Date          
   
            _____________________
                   Governor