Case Information
*1 Hon. H. B. Rider
Deputy sanklug Chnl~eloner
DepartrmcmtofBanking Teuae
Au&in,
Dear Sir:
opinion No. O-519 Be: Conetltutlonallty of Senate Bill No. 295, now penMng.
'~lrie.wiu wsnowledge receipt of your *tter of mmb 16, 1939, invhloh,ou request the opinion of this DepeLrlmntas to tale oon<n- tionallty of 6sllst.e BilLI Boo. 295, nov pendln~ In the Senate of Tw?ie, a copy of vhlch you enoloeed with yonr letter.
Senate BlllIlo. 295 reads ae follover "A BILL
To Be Entitled “An Aot to emend Artale 538 Of t&e ReYlee6'civllStatut0e 80 (LB to provide bank- servicea end fhoilltiee to em&'&t hadng auoh service; prmidlnfj oertain'reetridtiini2;~r+iling all lavs or parte of lawe in conflict herevlth, and declaring an emergency. ~.
"Be it enactedby the Legislature of the State of Terse: "Se&ion 1. Amend Artiole of the Revleed Cl~ilStatutaa 60 aa tohereafterread (LB follow:
"'Art. Branohbanks. Ipo banking corporations organlaed under the lava of thie State shall ever engag>in bveinese atm?re than one plaae, which shall be ~eslgoated in lte oharter, exoept ~~~ .under the con<loae hereinafter set out. Covntq or State deposl- tories or county depositories not looated at the county aeat;'and ordhary clearinghouse trensaotione betveem banke, are not affeoted by this extiole.
Eon. IL B. Rider, Page 2 (O-519)
n Itehallbe lawfulfor enybankto ftlrnleh and engply banklug eenloee, and faollltlee to areae or oammltlea in which nobank la looatedand no bankingeervloee orfaollltlee are available; provided, however, that the parrmt bank ehallnot furnlah euoh servioee and faollltlee to any area or oornmanlty looated eleewhere other than +Ae oouutq in vhloh the pamat bank is Moated; and provided further, that before suoh parent ~JX& e&all eetabllmh and grant such eenloee and faoilltlea, the oapltalof eaoh parent bank ohall be rained ten per oenlt.'
“Sea. 2. .All lfbwtv or parte of lave lu ooufllot with the provlslon~ of thin Aotarehe~~eelprerelJIre~a~d to the extent of euah oonfllot.
*sea. l%e faot that- areas awl oammltlee are extremely handioapped at present by reaeon of the laok of banking eervioee and faollltlea, oreatee en -r-y and an imperative publla neaeselty that the Conet1tut1ona1Bul.e requiringblllm tobe readon three eereraldayfs ln eaohHoaee, be suepended,and the eeme l~herebyen8peided, and this Aot a&all take effeatarrdbe In foroe fromand after lta paeeage, and. It IE 80 ennoted."
The bill as hereinabove quoted propoaea to authorize any bank “to furnish and supply banking services and facllltiee to areas or coumamltiee in which no bank i8 located and uo banking pervices or facilities are avall- able.” Although the proposed bill doee not specifically otate that branch banks are to be eatabllahed, it appear6 to be quite impoee1bl.e for the services propoaed to be furnlahed to be made available in any other man- ner except by and through the establishment of branch bar&s lu the coumu- nitiee not now served.
Article of the Conatltution of the State of Texas reads as followe:
“The Legislature shall by general law@, authorlee the ia- corporation of corporate bodlee with banking and diecouutiag privileges, and shall provide for a eyatem of State supervl- slon, regulation and control of euch bodies which will ade- quately protect and secure the depositors and creditors thereof.
“No such corporate body shall be chartered until all of the authorized capital stock has been aubecribed and paid for in’ full in cash. Such body corporate shall not be authorized to engage in business at more than one place which shall be des- iepated in its charter.
“NO foreign corporation, other than the national banks of the United States, shall be permitted to exercise banking or discounting privileges in this State.”
Hon. M. B. Rider, Page 3 (O-519)
We respectfully call your attention to that portion of Article 16, 16 of the Constitution which provides, "Such body corporate ahaIl not be authorized to enga.ge in buelness at more than one place which shall be designated in its charter."
It Is the opinion of this Department and you are so advised that the proposed Senate Bill No. 295 is unconstitutional for reason of being In direct conflict with the above quoted provisions of Article Section of the Constitution of the State of Texas.
Trusting that this satisfactorily disposes of your question, ve are
Very truly yours A!PPORNEYGSNERALOFTEXAS By /a/ Lloyd Armstrong Lloyd Armstrong Assistant L4:AW:IM
APPROVED:
/a/ W. F. Moore
First Assistant
ATIOPJiEIGENERALOFTEXAS