Magazine article American Banker

Texas Regulator Rejects Bill to Limit Power

Magazine article American Banker

Texas Regulator Rejects Bill to Limit Power

Article excerpt

Texas' bank commissioner last week rejected a legislative proposal by the Texas Bankers Association that would clarify and limit her ability to make regulatory policy for state-chartered banks, setting the stage for a court or legislative battle.

The development came after a month of heated back-and-forth maneuvering over interpretation of the state's "wildcard" statute, which gives state-chartered banks the same rights and privileges as national banks operating in Texas.

Many bankers who run state-chartered institutions believe they, therefore, automatically have the same powers as national banks in the state. But the bank commissioner disagrees, saying she must approve any banking practice not allowed by state law, even if it is permitted to national banks.

This month, after Bank commissioner Catherine Ghiglieri rebuked the bankers association, its board backed off from seeking a declaratory judgment in state court. Instead, it sought a more indirect line of attack - putting forward a bill for the upcoming Texas legislative session that would clarify the wildcard law's meaning.

Association President Robert Harris said the organization presented the proposed legislation to Mrs. Ghiglieri last week "to give the commissioner an opportunity to respond"

Association representatives late Friday said the commissioner had "rejected outright" the proposal. The group's board, according to sources, is again considering suing the commissioner

Sources said the association had decided to take the less confrontational approach after Mrs. …

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