HBA-AMW H.B. 3454 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 3454
By: Tillery
Financial Institutions
5/5/2001
Committee Report (Amended)



BACKGROUND AND PURPOSE 

Current law compels financial institutions to comply with certain requests
from a regulatory agency for financial institution records.  The requests
from regulatory agencies are usually reasonable and narrow in scope.
However, a request may place an undue burden on smaller institutions if the
information requested is substantial or not easily obtained.  House Bill
3454 provides relief for a financial institution in district court if the
institution establishes that the request for financial institution records
is onerous or unreasonable. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 3454 amends the Finance Code to authorize a financial
institution that receives a request for certain financial institution
records (records) to bring an action in district court for relief.  If the
financial institution establishes in the action that the request for
records is unreasonable or onerous, the bill authorizes the court to issue
an order limiting the scope of the records that the financial institution
must provide, requiring the person requesting the records to pay the
financial institution's reasonable cost of complying with the request, or
both limiting the scope of the investigation and requiring payment of
reasonable costs of compliance with the request. 

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001. 

EXPLANATION OF AMENDMENTS

Committee Amendment No. 1 removes a demand or inquiry from a state or
federal government agency authorized by law to conduct an examination of a
financial institution from the types of record requests for which a
financial institution may bring an action in district court for relief and
for which a court is authorized to issue an order limiting the scope of the
records the financial institution must provide and requiring payment of
reasonable costs of compliance with the request, or both, if the financial
institution establishes that the request is unreasonable or onerous.