A state trust company may exercise fiduciary powers like a comparable trust institution, but it must follow the section’s notice process and cannot use the section to reduce fiduciary duties or avoid consumer protection laws.
Sec. 182.010. PARITY. (a) A state trust company has the same rights and privileges with respect to the exercise of fiduciary powers that are or may be granted to a trust institution that maintains its principal office or a branch or trust office in this state, except that this section may not be used by a state trust company to: (1) diminish its otherwise applicable fiduciary duties to a client under the laws of this state; or (2) avoid otherwise applicable consumer protection laws of this state. (b) A state trust company that intends to exercise a right or privilege with respect to the exercise of fiduciary powers granted to a trust institution described in Subsection (a) that is not authorized for state trust companies under the statutes and rules of this state other than under this section shall submit a letter to the banking commissioner, describing in detail the activity in which the state trust company intends to engage and the specific authority for the trust institution described in Subsection (a) to undertake the proposed activity. The state trust company shall attach copies, if available, of relevant state and federal law, including regulations and interpretive letters. The state trust company may begin to perform the proposed activity after the 30th day after the date the banking commissioner receives the state trust company's letter unless the banking commissioner specifies an earlier or later date or prohibits the activity. The banking commissioner may prohibit the state trust company from performing the activity only if the banking commissioner finds that: (1) a trust institution described in Subsection (a) does not possess the specific right or privilege to perform the activity the state trust company seeks to perform; or (2) the performance of the activity by the state trust company would adversely affect the safety and soundness of the requesting state trust company. (c) The banking commissioner may extend the 30-day period under Subsection (b) if the banking commissioner determines that the state trust company's letter raises issues requiring additional information or additional time for analysis. If the 30-day period is extended, the state trust company may perform the proposed activity only on prior written approval by the banking commissioner, except that the banking commissioner must approve or prohibit the proposed activity or convene a hearing under Section 181.201 not later than the 60th day after the date the commissioner receives the state trust company's letter. If a hearing is convened, the banking commissioner must approve or prohibit the proposed activity not later than the 30th day after the date the hearing is completed. (d) A state trust company that is denied the requested right or privilege to engage in an activity by the banking commissioner under this section may appeal as provided by Sections 181.202 and 181.204 or may resubmit a letter under this section with additional information or authority relevant to the banking commissioner's determination. A denial is immediately final for purposes of appeal. (e) The finance commission may adopt rules implementing the method or manner in which a state trust company exercises specific rights and privileges, including rules regarding the exercise of rights and privileges that would be prohibited to state trust companies under state law except as provided by this section. The finance commission may not adopt rules under this subsection unless it finds that: (1) trust institutions described in Subsection (a) possess the rights or privileges to perform activities the rules would permit state trust companies to perform; and (2) if the rights and privileges would be prohibited to state trust companies under other state law, the rules contain adequate safeguards and controls, consistent with safety and soundness, to address the concern of the legislature evidenced by the state law the rules would impact. (f) The exercise of rights and privileges by a state trust company in compliance with and in the manner authorized by this section is not a violation of any statute of this state. Added by Acts 1999, 76th Leg., ch. 62, Sec. 7.16(a), eff. Sept. 1, 1999. Amended by Acts 2001, 77th Leg., ch. 1420, Sec. 6.010(a), eff. Sept. 1, 2001. Amended by: Acts 2019, 86th Leg., R.S., Ch. 20 (S.B. 614), Sec. 23, eff. September 1, 2019.