CHAPTER 276. FINANCIAL INSTITUTION ACCOUNTS - Texas Statutes

FINANCE CODE

TITLE 3. FINANCIAL INSTITUTIONS AND BUSINESSES

SUBTITLE Z. MISCELLANEOUS PROVISIONS RELATING TO FINANCIAL

INSTITUTIONS AND BUSINESSES

CHAPTER 276. FINANCIAL INSTITUTION ACCOUNTS

Sec. 276.001. ACCOUNTS FOR CANDIDATES FOR PUBLIC OFFICE. (a) A

financial institution may not open an account in the name of a

candidate without obtaining that candidate's consent and

signature. This subsection does not require that the candidate be

a signatory to the account.

(b) In this section:

(1) "Candidate" has the meaning assigned by Section 251.001,

Election Code.

(2) "Financial institution" means a bank, savings and loan

association, savings bank, or credit union.

Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.27(a), eff. Sept.

1, 1999.

Sec. 276.002. GARNISHMENT OF FINANCIAL INSTITUTION ACCOUNT. (a)

Notwithstanding the Texas Rules of Civil Procedure, if a

financial institution fails to timely file an answer to a writ of

garnishment issued before or after a judgment is rendered in the

case, a court may enter a default judgment against the financial

institution solely as to the existence of liability and not as to

the amount of damages.

(b) A financial institution against which a default judgment is

entered under Subsection (a) is not deemed to have in the

financial institution's possession or to have knowledge of

sufficient debts, assets, or personal effects of the debtor to

satisfy the debtor's obligations to the garnishor.

(c) After a default judgment is entered against a financial

institution as to the existence of liability as provided by

Subsection (a), the garnishor has the burden to establish the

amount of actual damages proximately caused to the garnishor by

the financial institution's default.

(d) The court may award to the garnishor:

(1) damages in the amount determined under Subsection (c); and

(2) for good cause shown, reasonable attorney's fees incurred by

the garnishor in establishing damages under Subsection (c).

(e) Notwithstanding Section 22.004, Government Code, the supreme

court may not amend or adopt rules in conflict with this section.

Added by Acts 2005, 79th Leg., Ch.

1319, Sec. 1, eff. September 1, 2005.

Sec. 276.003. USE OF PROCEEDS OF EXTENSION OF CREDIT FOR

FINANCIAL INSTITUTION ACCOUNT. (a) An obligor may use proceeds

of an extension of credit made by a financial institution for

business, commercial, investment, or similar purposes to

establish collateral for the extension of credit by:

(1) making deposits;

(2) purchasing certificates of deposit; or

(3) establishing other accounts at the financial institution.

(b) The amount of the proceeds used as provided by Subsection

(a) is not considered a reduction in the amount of the proceeds

of the extension of credit for purposes of Title 4 or for any

other purpose.

(c) A determination by the obligor that it is beneficial to use

proceeds of an extension of credit in the manner described by

Subsection (a) is conclusive.

(d) This section may not be construed to imply a contrary rule

for transactions not covered by this section.

Added by Acts 2005, 79th Leg., Ch.

1319, Sec. 1, eff. September 1, 2005.