Mr. James L. Pledger Opinion No. JM-1171 

Commissioner 

Savings and Loan Department Re Applicability of the disof Texas closure requirements of sec2601 North Lamar, Suite 201 tion 5 of article 342-705 of 

Austin, Texas 78705 the Texas Banking Code to a 

savings and loan association 

(RQ-1903) 

Dear Commissioner Pledger: 

Article 342-705, V.T.C.S., limits required disclosure 

by a "financial institution" of "records pertaining to the 

deposits, accounts, loans, or other transactions of a 

depositor, owner, borrower, or customer." V.T.C.S. art. 

342-705, 5 1. Article 342-705 is part of the Texas Banking 

Code of 1943. 

Prior to its amendment in 1989, article 342-705 

contained three sections, the disclosure limitations of 

which applied to "banks" and "bank" records. The 1989 

amendment substituted the phrase "financial institutions" 

for the word "banks" in those sections. S.B. 962, Acts 

1989, 71st Leg., ch. 1196, 5 7, at 4885-06. The bill also 

added a new section defining "financial institution" as used 

in the article to mean 

a state or national bank or state or federal 

savinss and loan association mainthining an 

office, branch, or agency office in this 

state or otherwise engaged in the business of 

lending money or extending credit in this 

state. (Emphasis added.) 

Id. § 4. 

Section 7 of Senate Bill 962 also added a new section 5 

to article 342-705, which repeatedly makes reference to 

"bank": 

(a) This article does not restrict or 

apply to amendment of a depository contract, 

addition of a new term or provision to a 

P- 6177 
Mr. James L. Pledger - Page 2 (JM-1171) 

production of deposits or of records of 

accounts and other &~k records if the 

amendment, addition, or disclosure is made 

under or in substantial compliance with 

;p;cable. federal law, including regulaThis article does not restrict or 

apply'to the use or disclosure by a w of 

information or records pertaining to 

deposits, accounts, or bank transactions if 

the use or disclosure is made in good faith 

in the usual course of the financial business 

of the bank, is made by the bank in the 

course of the litigation affecting its 

interests, or is made with express or implied 

consent of the depositor or customer. This 

article does not apply to the investigation 

or prosecution of criminal offenses. 

(b) Failure of the depositor or &B& 

customer to receive a notice given under this 

article respecting a depository contract or a 

copy of a subpoena, request, or other order 

does not make the notice, subpoena, request, 

or order ineffective if it was mailed or 

served.as provided by this article. (Emphasis added.) 

Your letter suggests 

that in the rush to complete the Bill, the 

drafters simply failed.to substitute the term 

'financial institution' for the term 'bank' 

in Section 5, and that there was no Legislative intent that Section 5 apply only to 

banks. The amendment to Article 342-705 was 

intended, among other .things, to make the 

requirements for production of records 

applicable to all financial institutions. 

You ask for our opinion as to whether section 5 of 

article 342-705 "applies to savings and loan associations as 

well as banks." 

The legislative history of Senate Bill 962 indicates 

that section 7 of that bill, amending sections 1 through 3 

and adding sections 4 and 5 of article 342-705, was added to 

the bill as a house floor amendment. See H.J. of Tex., 71st 

Leg., Reg. Sess. 2679'et sea. (1989). Moreover, it appears 

that the provisions of section 5 of the article, which were 

eventually adopted as part of section 7 of Senate Bill 962, 

had previously appeared in a committee substitute for Senate 

PO 6178 
Mr. James L. Pledger - Page 3 (JM-1171) 

Bill 1099, which was introduced at the same session. Senate 

Bill 1099, as filed originally, would have amended the 

first three sections of article 342-705 and added section 4 

defining "financial institution" in the same manner as 

Senate Bill 962 eventually did in section 7 of the latter 

bill. The provisions of what is now section 5 of article 

342-705 were added to Senate Bill 1099 in a committee 

substitute, and eventually became a part of Senate Bill 962, 

section 7, with the other amendments to article 342-705, by 

way of floor amendment as noted above. See Bill File, 

S.B. 1099, 71st Leg. (1989). 

In Attorney General Opinion JM-1110 (1989), we had 

occasion to consider the provisions of article 342;705, as 

amended in 1989 by Senate Bill 962, in conjunction with the 

provisions of section 8.02 of article 852a, a provision of 

the Savings and Loan Act authorizing the savings and loan 

commissioner to obtain financial records in connection with 

examinations of savings and loan associations. We concluded 

there that although article 342-705 did not itself specifically make an exception to its limitations on disclosures of 

records of financial institutions for records sought to be 

obtained from banks in connection with the commissioner's 

examinations of savings and loan associations, the restrictions on disclosure in article 342-705 did not apply to bank 

records sought in such examinations. Our conclusion in 

Attorney General Opinion JM-1110 was based primarily on our 

understanding that the savings and loan department had long 

construed the record disclosure limitations in article 

342-705 as not applicable to the department's obtaining of 

bank records in connection with, its examinations of savings 

and loan associations. 

Your question here with respect to section 5, however, 

points to no conflict with other provisions or unreasonable 

results which will obtain if the section's provisions are 

taken at face value as applying only to banks and not to 

savings and loan associations. Neither do considerations of 

long-standing agency practice come into play since the 

provisions of section 5 are new, having been added only in 

1989. We find nothing in the relevant bill analyses, tapes, 

or other legislative history available to us showing legislative intent that the provisions of section 5 apply to 

savings and loan associations as well as to banks. 

Where statutory provisions are not ambiguous or in 

conflict with other provisions, and are not unreasonable if 

read literally, the courts generally look to the words of 

such provisions themselves as evidencing the legislature's 

intent. It is not the function of courts to correct 

legislative errors or omissions. They will not SUPPlY 

Pm 6179 
Mr. James L. Pledger - Page 4 (JM-1171) 

language in a provision on the supposition that it was 

omitted by inadvertence. s e. Q Wtrix Inc. V. 

pr ovi de n t American Ins. Co., 6:8- z.W:& 665 (Tex. App. - 

Dallas 1983, no writ); Bavlor Uni V. Medical Center v. 

Borders 581 S.W.2d 731 (Tex. Civ. App. - Dallas 1979, writ 

ref'd n1r.e.); Citv of Fort Worth v. Westchester House, 274 

S.W.2d 732 (Tex. Civ. App. - Fort Worth 1954, writ ref'd 

n.r.e.); 67 Tex. Jur. 3d Statutes 55 94, 98, 112, 115, 117. 

We think that the provisions of section 5 of article 

342-705, making exceptions to the disclosure limitations in 

the article, apply unambiguously on their face only to banks 

and not to savings and loan associations. If the legislature inadvertently omitted savings and loan ass;r$;:ions* 

records from the scope of section 5, we think the 

business of the legislature and not this office to rectify 

such discrepancy. 

SUMMARY 

Section 5 of article 342-705, V.T.C.S., 

making exceptions to the article's limitations on disclosure of financial records, 

applies to banks' records but not to savings 

and loan associations8 records. 

Attorney General of Texas 

MARYKELLER 

First Assistant Attorney General 

JUDGE ZOLLIE STEAKLEY 

Special Assistant Attorney General 

RENEA HICKS 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, opinion Committee 

Prepared by William Walker 

Assistant Attorney General 

PO 6180