Bill > HB4778

This bill establishes new regulations for financial institutions in Texas regarding the termination of banking services, creating a comprehensive framework to protect customers from abrupt account closures. The bill defines financial institutions as state-chartered banks, savings and loan associations, state savings banks, credit unions, and trust companies, and specifically applies to those serving Texas residents or businesses. Under the new law, financial institutions must provide customers with written notice and a specific reason before terminating a bank account, line of credit, or other banking instrument, and must allow at least 30 days for voluntary account transfer, with exceptions for dormant accounts, accounts with persistent overdrafts, or when criminal activity is suspected. Customers who receive a termination notice can file an appeal with the Texas Department of Banking within 10 business days, and the department will review the appeal and can direct the financial institution to reverse the termination if it determines the termination is unauthorized. If a customer successfully proves a violation, they may be entitled to declaratory and injunctive relief, including recovery of costs and reasonable attorney's fees. The Finance Commission of Texas is tasked with adopting rules to enforce these provisions, and the law includes a limitation ensuring that financial institutions remain protected under federal law. The bill is set to take effect on September 1, 2025.

Labor and Employment

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB4778