CHAPTER 12. TEXAS DEPARTMENT OF BANKING - Texas Statutes

FINANCE CODE

TITLE 2. FINANCIAL REGULATORY AGENCIES

CHAPTER 12. TEXAS DEPARTMENT OF BANKING

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 12.001. DEFINITIONS. The definitions provided by Section

31.002 apply to this chapter.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

SUBCHAPTER B. OPERATION OF DEPARTMENT

Sec. 12.101. BANKING COMMISSIONER. (a) The banking

commissioner is the chief executive officer of the Texas

Department of Banking. The finance commission, by at least five

affirmative votes, shall appoint the banking commissioner. The

banking commissioner serves at the will of the finance commission

and is subject to the finance commission's orders and directions.

(b) The banking commissioner must have not less than seven

years' experience in banking or bank supervision.

(c) The finance commission shall set the compensation of the

banking commissioner. The compensation shall be paid from money

of the department.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2001, 77th Leg., ch. 867, Sec. 14, eff. Sept. 1,

2001.

Sec. 12.102. DEPUTY BANKING COMMISSIONERS. (a) The banking

commissioner shall appoint one or more deputy banking

commissioners as necessary to the efficient operation of the

department. The banking commissioner shall prescribe the

qualifications and duties of a deputy banking commissioner.

(b) During the banking commissioner's absence or inability to

serve, a deputy banking commissioner has the powers and shall

perform the duties of the banking commissioner.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2001, 77th Leg., ch. 412, Sec. 1.01, eff. Sept.

1, 2001.

Sec. 12.104. OATH OF OFFICE. Before assuming the duties of

office, each deputy banking commissioner, examiner, assistant

examiner, conservator, supervisor, and special agent, and each

other officer or employee specified by the banking commissioner,

must take an oath of office to:

(1) discharge faithfully the duties assigned; and

(2) uphold the constitution and laws of this state and of the

United States.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2001, 77th Leg., ch. 412, Sec. 1.02, eff. Sept.

1, 2001.

Sec. 12.105. FEES, REVENUE, AND EXPENSES; AUDIT. (a) The

finance commission shall establish reasonable and necessary fees

for the administration of this chapter, Chapter 11, Chapter 13,

and Subtitle A, Title 3.

(b) The costs of an audit of the department under Chapter 321,

Government Code, shall be paid to the state auditor from the

money of the department.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Sec. 12.106. LIABILITY. (a) The banking commissioner, a member

of the finance commission, a deputy banking commissioner, an

examiner, assistant examiner, supervisor, conservator, agent, or

other officer or employee of the department, or an agent of the

banking commissioner is not personally liable for damages arising

from the person's official act or omission unless the act or

omission is corrupt or malicious.

(b) The attorney general shall defend an action brought against

a person because of an official act or omission under Subsection

(a) regardless of whether the defendant has terminated service

with the department before the action commences.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2001, 77th Leg., ch. 412, Sec. 1.03, eff. Sept.

1, 2001.

Sec. 12.107. CONFLICT OF INTEREST. (a) In this section, "Texas

trade association" means a cooperative and voluntarily joined

association of business or professional competitors in this state

that:

(1) is primarily designed to assist its members and its industry

or profession in dealing with mutual business or professional

problems and in promoting their common interest; and

(2) includes business and professional competitors located in

this state among its members.

(b) A person may not be a department employee if:

(1) the person is an officer, employee, or paid consultant of a

Texas trade association in an industry regulated by the

department; or

(2) the person's spouse is an officer, manager, or paid

consultant of a Texas trade association in an industry regulated

by the department.

(c) A person may not act as the general counsel to the

department if the person is required to register as a lobbyist

under Chapter 305, Government Code, because of the person's

activities for compensation on behalf of a profession related to

the operation of the department.

(d) A department employee may not:

(1) purchase an asset owned by a person regulated by the

department in the possession of the banking commissioner or other

receiver for purposes of liquidation, unless the asset is

purchased at public auction or with the approval of the

receivership court;

(2) except as provided by Subsection (e), become directly or

indirectly indebted to a person regulated by the department;

(3) except as provided by Subsection (f), become directly or

indirectly financially interested in a person regulated by the

department; or

(4) obtain a product or service from a person regulated by the

department, or an affiliate of a person regulated by the

department, on terms or rates that are more favorable to the

employee than those prevailing at the time for comparable

transactions with or involving other similarly situated

consumers.

(e) Subject to Subsection (d)(4) and except as otherwise

provided by employment policies adopted by the banking

commissioner, Subsection (d)(2) does not prohibit indebtedness

of:

(1) a clerical or administrative employee to a person regulated

by the department, if the employee does not exercise

discretionary decision-making authority with respect to the

person; or

(2) an employee of the department, other than a clerical or

administrative employee, if the indebtedness was permissible when

incurred and became prohibited indebtedness under Subsection

(d)(2) as a result of employment by the department or a

circumstance over which the employee has no control, including a

merger, acquisition, purchase or sale of assets, or assumption of

liabilities involving a regulated person, if the employee:

(A) repays the indebtedness; or

(B) does not knowingly participate in or consider any matter

concerning the person to whom the employee is indebted.

(f) Except as otherwise provided by employment policies adopted

by the banking commissioner, Subsection (d)(3) does not prohibit

a financial interest of an employee of the department solely

because:

(1) the employee owns publicly traded shares of a registered

investment company (mutual fund) that owns publicly traded equity

securities issued by a person regulated by the department; or

(2) the spouse of or other person related to the employee is

employed by a person regulated by the department and receives

equity securities of the person through participation in an

employee benefit plan, including an employee stock option, bonus,

or ownership plan, if:

(A) the sole purpose of the plan is to compensate employees with

an ownership interest in the person for services rendered; and

(B) the employee does not knowingly participate in or consider

any matter concerning the person until the spouse or other

related person no longer owns equity securities issued by the

person.

(g) The banking commissioner may adopt employment policies

relating to this section, including policies to:

(1) require employees to notify the department of possible

conflicts of interest;

(2) specify the manner or extent of required recusal;

(3) define the circumstances under which adverse employment

action may be taken; and

(4) impose more restrictive requirements on senior officers of

the department for whom recusal is not viable or consistent with

the prudent exercise of the department's responsibilities.

(h) The finance commission may adopt rules to administer this

section, including rules to:

(1) codify employment policies of the banking commissioner

adopted under Subsection (g);

(2) define or further define terms used by this section; and

(3) establish limits, requirements, or exemptions other than

those specified by this section, except that an exempted employee

must be recused from participation in or consideration of all

regulatory matters specifically concerning the person to whom the

exempted indebtedness is owed or the financial interest relates.

(i) Before the 11th day after the date on which an employee

begins employment with the department, the employee shall read

the conflict-of-interest statutes, rules, and policies applicable

to employees of the department and sign a notarized affidavit

stating that the employee has read those statutes, rules, and

policies.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2001, 77th Leg., ch. 699, Sec. 1, eff. Sept. 1,

2001; Acts 2001, 77th Leg., ch. 412, Sec. 1.04, eff. Sept. 1,

2001; Acts 2003, 78th Leg., ch. 1276, Sec. 8.001, eff. Sept. 1,

2003.

Sec. 12.108. CONSUMER INFORMATION AND COMPLAINTS. (a) The

banking commissioner shall:

(1) prepare information of consumer interest describing:

(A) the regulatory functions of the department; and

(B) the department's procedures by which consumer complaints are

filed with and resolved by the department; and

(2) make the information available to the public and appropriate

state agencies.

(b) The department shall maintain a file on each written

complaint filed with the department. The file must include:

(1) the name of the person who filed the complaint;

(2) the date the complaint is received by the department;

(3) the subject matter of the complaint;

(4) the name of each person contacted in relation to the

complaint;

(5) a summary of the results of the review or investigation of

the complaint; and

(6) an explanation of the reason the file was closed.

(c) The department shall provide to the person filing the

complaint and to each person who is a subject of the complaint a

written summary of the department's policies and procedures

relating to complaint investigation and resolution.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2001, 77th Leg., ch. 699, Sec. 2, eff. Sept. 1,

2001.

Sec. 12.1085. FINANCIAL LITERACY PROGRAM. (a) The department

shall seek to improve the financial literacy and education of

persons in this state and to encourage access to mainstream

financial products and services by persons who have not

previously participated in the conventional finance system, by:

(1) coordinating, encouraging, and aiding banks in the

development and promotion of financial literacy and education

programs and community outreach;

(2) serving as a clearinghouse of information about financial

literacy and education programs;

(3) creating and maintaining a resource bank of materials

pertaining to financial literacy; and

(4) promoting replication of best practices and exemplary

programs that foster financial literacy and education.

(b) The department may solicit and accept a gift, grant, or

donation from any source, including a foundation, private entity,

governmental entity, or institution of higher education, to

assist in the implementation of this section.

Added by Acts 2007, 80th Leg., R.S., Ch.

110, Sec. 1, eff. September 1, 2007.

Sec. 12.109. SUNSET PROVISION. The office of banking

commissioner is subject to Chapter 325, Government Code (Texas

Sunset Act). Unless continued in existence as provided by that

chapter, the office is abolished September 1, 2013.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.

Amended by Acts 2001, 77th Leg., ch. 699, Sec. 3, eff. Sept. 1,

2001.

Sec. 12.111. STANDARDS OF CONDUCT. The banking commissioner or

the banking commissioner's designee shall provide to agency

employees, as often as necessary, information regarding the

requirements for office or employment under this chapter,

including information regarding a person's responsibilities under

applicable laws relating to standards of conduct for state

officers or employees.

Added by Acts 2001, 77th Leg., ch. 699, Sec. 4, eff. Sept. 1,

2001.

Sec. 12.112. EQUAL EMPLOYMENT OPPORTUNITY POLICY. (a) The

banking commissioner or the banking commissioner's designee shall

prepare and maintain a written policy statement that implements a

program of equal employment opportunity to ensure that all

personnel decisions are made without regard to race, color,

disability, sex, religion, age, or national origin.

(b) The policy statement must include:

(1) personnel policies, including policies relating to

recruitment, evaluation, selection, training, and promotion of

personnel, that show the intent of the department to avoid the

unlawful employment practices described by Chapter 21, Labor

Code; and

(2) an analysis of the extent to which the composition of the

department's personnel is in accordance with state and federal

law and a description of reasonable methods to achieve compliance

with state and federal law.

(c) The policy statement must:

(1) be updated annually;

(2) be reviewed by the state Commission on Human Rights for

compliance with Subsection (b)(1); and

(3) be filed with the governor's office.

Added by Acts 2001, 77th Leg., ch. 699, Sec. 4, eff. Sept. 1,

2001.