Untitled Texas Attorney General Opinion ( 1990 )

Mr. James L. Pledger Opinion No. JM-1171
Commissioner
Savings and Loan Department Re Applicability of the dis-
of Texas closure requirements of sec-
2601 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
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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 regula-
This 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. (Em-
phasis 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 Legisla-
tive 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
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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 specifi-
cally 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 restric-
tions 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 legis-
lative 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
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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 legisla-
ture 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 limita-
tions 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
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