HBA-ATS, NLM H.B. 2800 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 2800
By: Driver
Financial Institutions
6/16/1999
Enrolled




BACKGROUND AND PURPOSE 

The holder of a dishonored check written on a business checking account may
be unable to locate the person who wrote the check if the name of the
business owner is not on the check, the address on the check is not a
physical address, or the business owner or business has moved from the
address listed on the check. Prior to the 76th Legislature, it was unclear
whether the financial institution that returned the check had an obligation
to provide to the holder of the dishonored check any of this information in
its possession. 

H.B. 2800 requires a financial institution to maintain certain information
on all business checking accounts, including the name, home address, and
driver's license number of the business owner and the address of the
business, if the business is a sole proprietorship.  If requested in
writing, the financial institution is prohibited from unreasonably
withholding this information from a person to whom it returned a dishonored
check written by a business that maintains a business checking account with
that institution. 

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. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subtitle Z, Title 3, Finance Code, by adding Chapter
277, as follows: 

CHAPTER 277. BUSINESS CHECKING ACCOUNTS

Sec. 277.001. DEFINITIONS.  Defines "business," "business checking
account," and "financial institution." 

Sec. 277.002.  ACCOUNT INFORMATION REQUIRED.  (a) Requires a financial
institution to require,  as a condition of opening or maintaining a
business checking account, that the applicant or account holder provide: 

 _if the business is a sole proprietorship, the name of the business owner,
the physical address of the business, the home address of the business
owner, and the driver's license number or the personal identification card
number of the business owner by the Department of Public Safety; or 

 _if the business is a corporation or other legal entity, a copy of the
business's certificate of incorporation or a comparable document and an
assumed name certificate, if any. 

(b) Requires the financial institution to request that the account holder
inform the institution at least annually of any changes in the information
the institution is required to obtain under this section. 

 Sec. 277.003.  DISCLOSURE OF INFORMATION.  Prohibits a financial
institution from unreasonably withholding the information described by
Section 277.002 in response to a written request for certain information.
Authorizes a financial institution that assesses a reasonable research fee
in the regular course of business to assess the fee on a person who
requests information under this section.  Provides that a financial
institution is not liable to an account holder or other person for the
disclosure of information under this section. 

SECTION 2.  Effective date: September 1, 1999.
                       Makes application of this Act prospective.

SECTION 3.  Emergency clause.