HBA-CBW H.B. 565 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 565
By: Deshotel
Financial Institutions
3/21/2001
Introduced



BACKGROUND AND PURPOSE 

Currently, Texas law makes no provision for the regulation of fees that a
financial institution may charge to nonaccount holders.  Several financial
institutions in the state charge individuals fees for cashing a check drawn
on that particular institution.  No federal statute prohibits a federally
chartered bank from charging a nonaccount holder for cashing a drawn check.
House Bill 565 allows a nonaccount holder to cash a check drawn on the
issuing bank without incurring a fee and institutes a civil penalty for
each violation by the bank. 

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 565 amends the Finance Code to prohibit a financial institution
from charging a person a fee for cashing a check drawn on that financial
institution,  regardless of whether the person holds an account at that
financial institution.  The bill provides that a financial institution that
charges such a fee is liable to the state for a civil penalty of $200 for
each violation.  The bill authorizes the attorney general to sue to collect
the penalty. 

EFFECTIVE DATE

September 1, 2001.