Bill > SB621

This bill prohibits political subdivisions in Texas from establishing, operating, or owning a public bank, which means any local government entity (such as a city or county) would be legally prevented from creating or running its own banking institution. The proposed legislation specifically adds Section 140.014 to the Local Government Code, making it clear that regardless of any other existing laws, political subdivisions cannot create an organization designed to engage in banking activities as defined by Section 31.002 of the Finance Code. The bill is set to take effect on September 1, 2025, which provides advance notice to local governments and gives them time to understand and prepare for the new restriction. By preventing local governments from operating their own banks, the bill appears to be aimed at maintaining the traditional banking system and potentially limiting local government's financial autonomy in establishing alternative banking mechanisms.

Government Affairs, Labor and Employment

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=SB621