Hon. H. B. Rider 

Deputy sanklug Chnl~eloner 

DepartrmcmtofBanking 

Au&in, Teuae 

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<ntionallty 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 538 of the Revleed Cl~ilStatutaa 

60 aa tohereafterread (LB follow: 

"'Art. 538. 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 deposltories 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 orparte of lave lu ooufllot with the 

provlslon~ of thin Aotarehe~~eelprerelJIre~a~d to the 

extent of euah oonfllot. 

*sea. 3. 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 avallable.” 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 manner except by and through the establishment of branch bar&s lu the coumunitiee not now served. 

Article 16, Section 16 of the Conatltution of the State of Texas 

reads as followe: 

“The Legislature shall by general law@, authorlee the iacorporation of corporate bodlee with banking and diecouutiag 

privileges, and shall provide for a eyatem of State supervlslon, regulation and control of euch bodies which will adequately 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 desiepated 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, Section 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 16, Section 

16 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