CHAPTER 37. EMERGENCIES
FINANCE CODE
TITLE 3. FINANCIAL INSTITUTIONS AND BUSINESSES
SUBTITLE A. BANKS
CHAPTER 37. EMERGENCIES
Sec. 37.001. DEFINITION. In this chapter, "emergency" means a
condition or occurrence that may interfere physically with the
conduct of normal business at the offices of a bank or with the
conduct of a particular bank operation, or that poses an imminent
or existing threat to the safety or security of persons or
property, including:
(1) fire, flood, earthquake, hurricane, tornado, or wind, rain,
or snow storm;
(2) labor dispute or strike;
(3) power failure, transportation failure, or interruption of
communication facilities;
(4) shortage of fuel, housing, food, transportation, or labor;
(5) robbery, burglary, or attempted robbery or burglary;
(6) epidemic or other catastrophe; or
(7) riot, civil commotion, enemy attack, or other actual or
threatened act of lawlessness or violence.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 37.002. EMERGENCY CLOSING OF OFFICE OR OPERATION BY BANK.
(a) If the officers of a bank located in this state determine
that an emergency that affects or may affect the bank's offices
or a particular bank operation exists or is impending, the
officers may determine:
(1) not to open the bank's offices or conduct the particular
bank operation; or
(2) if the bank's offices have opened or the particular bank
operation has begun, to close the bank's offices or suspend and
close the particular bank operation during the emergency,
regardless of whether the banking commissioner has issued a
proclamation of emergency.
(b) Subject to Subsection (c), the office or operation closed
may remain closed until the officers determine that the emergency
has ended and for additional time reasonably required to reopen.
(c) An office or operation may not remain closed for more than
three consecutive days, excluding days on which the bank is
customarily closed, without the banking commissioner's approval.
(d) A bank closing an office or operation under this section
shall give notice of its action to the banking commissioner as
promptly as possible and by any means available.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 37.003. EMERGENCY CLOSING OF OFFICE OR OPERATION BY BANKING
COMMISSIONER. (a) If the banking commissioner determines that
an emergency exists or is impending in all or part of this state,
the banking commissioner by proclamation may authorize banks
located in the affected area to close all or part of their
offices or operations.
(b) If the banking commissioner determines that an emergency
exists or is impending that affects or may affect one or more
particular banks or a particular bank operation, but not banks
located in the area generally, the banking commissioner may
authorize the bank or banks affected to close their offices or a
particular bank operation.
(c) A bank office or bank operation closed under this section
may remain closed until the banking commissioner proclaims that
the emergency has ended, or until an earlier time that the
officers of the bank determine that the closed bank office or
bank operation should reopen, except that the affected bank
office or operation may remain closed for additional time
reasonably required to reopen.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 37.004. EFFECT OF CLOSING. (a) A day on which a bank or
one or more of its operations is closed during its normal banking
hours as provided by this chapter is a legal holiday for all
purposes with respect to any banking business affected by the
closed bank or bank operation.
(b) A bank or a director, officer, or employee of a bank does
not incur liability or loss of rights because of a closing
authorized by this chapter.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
237, Sec. 64, eff. September 1, 2007.
Sec. 37.005. LIMITATIONS ON WITHDRAWALS FROM STATE BANK. (a)
At the request of a state bank that is experiencing or threatened
with unusual and excessive withdrawals because of financial
conditions, panic, or crisis, the banking commissioner, to
prevent unnecessary loss to or preference among the depositors
and creditors of the bank and to preserve the financial structure
of the bank and its usefulness to the community, may issue an
order limiting the right of withdrawal by or payment to
depositors, creditors, and other persons to whom the bank is
liable.
(b) The order:
(1) must expire not later than the 10th day after the date it is
issued;
(2) must be uniform in application to each class of liability;
and
(3) is not subject to judicial review.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 37.006. FINANCIAL MORATORIUM. (a) The banking
commissioner, with the approval of a majority of the finance
commission and the governor, may proclaim a financial moratorium
for, and invoke a uniform limitation on, withdrawal of deposits
of every character from all banks within this state. A bank
refusing to comply with a written proclamation of the banking
commissioner under this section, signed by a majority of the
members of the finance commission and the governor:
(1) forfeits its charter if it is a state bank; or
(2) may not act as reserve agent for a state bank or as
depository of state, county, municipal, or other public money if
it is a national bank.
(b) On order of the banking commissioner after refusal of a
national bank to comply with the proclamation, a depositor of
public money with the bank:
(1) shall immediately withdraw the public money from the bank;
and
(2) may not redeposit public money in the bank without the
banking commissioner's prior written approval.
Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.
Sec. 37.007. TEMPORARY BRANCH OR OFFICE. (a) If the banking
commissioner determines that an emergency has affected and will
continue to affect one or more particular bank offices for an
extended period, either as a result of the emergency or
subsequent recovery operations, the banking commissioner may
authorize the bank or banks affected to open temporary branch
offices or other facilities required for bank operations for the
purpose of prompt restoration of access by the public to banking
services.
(b) A temporary bank office opened under the authority of
Subsection (a) may remain open only for the period specified in
the banking commissioner's order, except that the banking
commissioner may extend the period the office may remain open on
a finding that the conditions requiring the temporary office
continue to exist. The bank may convert a temporary branch office
to a permanent bank location only by obtaining the prior written
approval of the banking commissioner under Section 32.203.
(c) If requested by the state bank regulatory agency of another
state that is experiencing an emergency and is contiguous to this
state, the banking commissioner may authorize a bank or banks
located in the state to open temporary offices in this state for
the purpose of prompt restoration of banking services to the
existing customers of the bank or banks, as the circumstances of
such emergency may require. A temporary bank office opened under
the authority of this subsection may remain open only for the
period specified in the banking commissioner's order, except that
the banking commissioner may extend the period the office may
remain open on a finding that the conditions requiring the
temporary office continue to exist. A bank may convert a
temporary branch office to a permanent bank location if permitted
by and subject to the conditions and requirements of Chapter 203.
Added by Acts 2007, 80th Leg., R.S., Ch.
110, Sec. 12, eff. September 1, 2007.
Sec. 37.008. REGULATORY COORDINATION. (a) To ensure effective
coordination among and between the department and other state and
federal agencies and the banking industry, and to further rapid
restoration of banking services after an emergency, the banking
commissioner may:
(1) enter into cooperative, coordinating, or information-sharing
agreements with other state or federal agencies or with or
through organizations affiliated with or representing one or more
state or federal agencies;
(2) enter into cooperative, coordinating, or information-sharing
agreements with banks or banking trade associations or other
organizations affiliated with or representing one or more banks;
and
(3) issue interpretive statements or opinions to temporarily
waive or suspend regulatory requirements that threaten to impede
recovery and restoration of financial services.
(b) Disclosure of information by or to the banking commissioner
under this section does not constitute a waiver of or otherwise
affect or diminish an evidentiary privilege to which the
information is otherwise subject, regardless of whether the
disclosure is governed by a confidentiality agreement.
Notwithstanding other law, a party to an agreement described by
Subsection (a) may execute, honor, and comply with an agreement
to maintain confidentiality and oppose disclosure of information
obtained from the banking commissioner, and shall treat as
confidential any information obtained from the banking
commissioner that is entitled to confidential treatment under
applicable state or federal law.
(c) The banking commissioner shall coordinate and cooperate with
and assist the office of the governor in the performance of
duties under this chapter and other state or federal law as
required by Section 421.071, Government Code.
Added by Acts 2007, 80th Leg., R.S., Ch.
110, Sec. 12, eff. September 1, 2007.