Hon. H. B. Rider
DeputysanklugChnl~eloner
DepartrmcmtofBanking
Au&in, Teuae
Dear Sir:
opinionNo. O-519
Be: Conetltutlonallty
of SenateBill
No. 295,now penMng.
'~lrie.wiu
wsnowledgereceiptof your *tter of mmb 16, 1939,
invhloh,ou requestthe opinionof thisDepeLrlmntasto taleoon<n-
tionallty of 6sllst.e
BilLI
Boo.295,nov pendln~In the Senateof Tw?ie,a
copy of vhlchyou enoloeedwithyonr letter.
SenateBlllIlo.295 readsae follover
"A BILL
To Be Entitled
“An Aot to emendArtale 538 Of t&e ReYlee6'civllStatut0e
80 (LBto providebank- serviceaend fhoilltiee to em&'&t
hadng auoh service;prmidlnfjoertain'reetridtiini2;~r+iling
all lavsor parteof lawe in conflictherevlth,and declaring
an emergency. ~.
"Be it enactedbythe Legislature
of the Stateof Terse:
"Se&ion 1. AmendArtiole538 of the RevleedCl~ilStatutaa
60 aa tohereafterread(LBfollow:
"'Art.538. Branohbanks. Ipobankingcorporations organlaed
underthe lava of thie State shallever engag>inbveineseatm?re
than one plaae, whichshallbe ~eslgoated in lte oharter,exoept~~~
.underthe con<loaehereinafter set out. Covntqor Statedeposl-
toriesor countydepositories not looatedat the countyaeat;'and
ordhary clearinghousetrensaotione betveembanke,are not affeoted
by thisextiole.
Eon. IL B. Rider,Page 2 (O-519)
nItehallbe lawfulforenybankto ftlrnleh
and engply
banklugeenloee,and faollltlee to areaeor oammltlea in which
nobank la looatedandno bankingeervloee orfaollltleeare
available;provided, however,that the parrmtbank ehallnot
furnlaheuoh servioeeand faollltlee to any area or oornmanlty
looatedeleewhere otherthan +Ae oouutqin vhlohthe pamat
bank is Moated; and providedfurther,thatbeforesuohparent
~JX& e&alleetabllmh and grantsucheenloee and faoilltlea,
the oapltalofeaohparentbank ohallbe rainedten per oenlt.'
“Sea.2. .All lfbwtv
or parteof lave lu ooufllotwith the
provlslon~of thinAotarehe~~eelprerelJIre~a~d to the
extentof euah oonfllot.
*sea.3. l%e faot that- areasawl oammltlee are
extremely at presentby reaeonof the laok of
handioapped
bankingeervioeeand faollltlea,oreateeen -r-y and an
imperative publlaneaeseltythatthe Conet1tut1ona1Bul.e
requiringblllm tobe readon threeeereraldayfs ln eaohHoaee,
be suepended,andthe eeme l~herebyen8peided, and thisAot
a&alltakeeffeatarrdbeIn foroefromand after lta paeeage,
and.It IE 80 ennoted."
The bill as hereinabovequotedpropoaeato authorize any bank “to
furnishand supplybankingservices and facllltieeto areasor coumamltiee
in whichno bank i8 locatedand uo bankingpervicesor facilities are avall-
able.” Althoughthe proposedbill doeenot specifically otatethatbranch
banksare to be eatabllahed,it appear6to be quiteimpoee1bl.e for the
servicespropoaedto be furnlahed to be made availablein any otherman-
ner exceptby and throughthe establishmentof branchbar&slu the coumu-
nitieenot now served.
Article16, Section16 of the Conatltution
of the Stateof Texas
readsas followe:
“TheLegislature shallby generallaw@,authorleethe ia-
corporation
of corporatebodleewithbankingand diecouutiag
privileges,
and shallprovidefor a eyatemof Statesupervl-
slon,regulationand controlof euchbodieswhichwill ade-
quatelyprotectand securethe depositors
and creditorsthereof.
“No such corporatebody shallbe chartereduntilall of the
authorizedcapitalstockhas been aubecribedand paid for in’
full in cash. Suchbody corporateshallnot be authorized to
engagein businessat more than one placewhichshallbe des-
iepatedin its charter.
“NO foreigncorporation,
otherthan the nationalbanksof
the UnitedStates,shallbe permitted to exercisebankingor
discountingprivilegesin this State.”
Hon.M. B. Rider,Page 3 (O-519)
We respectfully
callyourattention
to that portionof Article
16, Section16 of the Constitution
whichprovides,"Suchbody corporate
ahaIlnot be authorizedto enga.ge
in buelnessat morethan one placewhich
shallbe designatedin its charter."
It Is the opinionof thisDepartmentand you are so advisedthat
the proposedSenateBillNo. 295 is unconstitutional for reasonof being
In directconflictwiththe abovequotedprovisions of Article16, Section
16 of the Constitutionof the Stateof Texas.
Trustingthatthis satisfactorily
disposesof your question,
ve are
Very trulyyours
A!PPORNEYGSNERALOFTEXAS
By /a/ LloydArmstrong
LloydArmstrong
Assistant
L4:AW:IM
APPROVED:
/a/ W. F. Moore
FirstAssistant
ATIOPJiEIGENERALOFTEXAS