Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 1 - FINANCE COMMISSION OF TEXAS › Chapter 3 - STATE BANK REGULATION › Subchapter F - ACCESS TO INFORMATION › Section 3.111 - Confidential Information

Current through Reg. 49, No. 28; July 12, 2024
(a) Policy. The
				  Texas Department of Banking (the department) is committed to the concept of
				  open state government. As a regulator of financial institutions, however, the
				  department recognizes the mandate of the legislature to balance the competing
				  interests of the need of financial institutions for confidentiality regarding
				  their financial condition and business affairs with the general public's need
				  for information. The legislature has determined that confidential information,
				  with limited exceptions, should not be disclosed. See Finance Code, Chapter 31,
				  Subchapter D, Chapter 181, and §§201.007, 204.102(c), 204.117(d) and
				  204.205(d). Inappropriate disclosures can result in substantial harm to
				  financial institutions and to those persons and entities (including other
				  financial institutions) that have relationships with them. In accordance with
				  the historical availability of records of financial institutions and the sound
				  public policy that generally protects them, non-disclosure under this section
				  protects the stability of such institutions by preventing disclosures that
				  could adversely impact financial institutions. For example, the department may
				  criticize a bank in an examination report for a financial weakness that does
				  not currently threaten the solvency of the bank. If improperly disclosed, the
				  criticism can lead to adverse impacts such as the possibility of bank "runs,"
				  short-term liquidity problems, and volatility in costs of funds, which in turn
				  can exacerbate the problem and cause the failure of the bank. Bank failures
				  lead to reduced access to credit and greater risk to depositors. Further,
				  specific loans may be criticized in an examination report, and confidentiality
				  of the information protects the financial privacy of customers. Finally,
				  protecting confidential information from disclosure facilitates the free
				  exchange of information between the financial institution and the regulator,
				  encourages candor, and promotes regulatory responsiveness and effectiveness.
				  Information that does not fall within the meaning of confidential information
				  as defined in this section may be confidential under other definitions and
				  controlled by other laws, and is not subject to this section.
(b) Definitions. The following words and
				  terms, when used in this section, shall have the following meanings, unless the
				  context clearly indicates otherwise.
(1)
				  Affiliate--A company that directly or indirectly controls, is controlled by, or
				  is under common control with a bank or other company.
(2) Confidential information--Written and
				  oral information obtained directly or indirectly by the department relative to
				  the financial condition or business affairs of a financial institution, an
				  applicant, or a present, former, or prospective shareholder, participant,
				  officer, director, manager, affiliate, or service provider of a financial
				  institution or applicant, whether obtained through application, examination, or
				  otherwise, and all related files and records of the department, regardless of
				  the form of the information when obtained or as held by the department or when
				  the department first obtained it, and whether or not the information is part of
				  the department's official files or records. The term does not include:
(A) the public portions of call reports of
				  state banks and public trust companies;
(B) the names of proposed directors of a de
				  novo financial institution or an entity converting to a state financial
				  institution;
(C) information
				  contained in an official document required to be filed with the department in
				  order to have legal effect (Examples of such documents include, without
				  limitation, Certificate of Amendment, Certificate of Merger, or Certificate of
				  Conversion);
(D) information
				  contained in the portion of an application submitted to the department that has
				  been designated as public by the applicant, department or a federal agency;
				  or
(E) information previously
				  disclosed to the public by the person or entity to which the information
				  relates.
(3) Financial
				  institution--As defined in the Finance Code, §
											RSA
				  31.002(a)(25). For purposes
				  of this section only, the term includes a trust company incorporated under the
				  Texas Trust Company Act, Finance Code, Chapters 181
et seq,
or
				  a predecessor statute, and a foreign bank branch, agency or representative
				  office licensed under the Finance Code, Chapter 204
et
				  seq.
(4) Governmental
				  agency--Another department of this state, another state, the United States, a
				  foreign sovereign state, or any related agency or instrumentality.
(5) Court--A court of law or equity or other
				  adjudicatory tribunal with jurisdiction to issue a subpoena or other legal
				  process for the production of documents, including a government agency
				  exercising adjudicatory functions and an alternative dispute resolution
				  mechanism, voluntary or required, under which a party may compel the production
				  of documents.