HB 4778

relating to limitations on the termination of banking services by
certain financial institutions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Title 12, Business & Commerce Code, is amended by
adding Chapter 601A to read as follows:
CHAPTER 601A.  LIMITATION ON TERMINATION OF BANKING SERVICES BY
Sec. 601A.001.  DEFINITIONS.  In this chapter:
(1)  "Department" means the Texas Department of
(2)  "Financial institution" means:
(A)  a bank chartered under state law, including
(B)  a savings and loan association chartered
under Chapter 62, Finance Code;
(C)  a state savings bank chartered under Chapter
(D)  a credit union chartered under Chapter 122,
(E)  a trust company chartered under the laws of
Sec. 601A.002.  APPLICABILITY.  This chapter applies only to
a financial institution or other lender that:
(1)  is formed or chartered under the laws of this
(2)  makes loans or other extensions of credit only to
(A)  who are residents of this state; or
(B)  that are businesses organized under the laws
Sec. 601A.003.  NOTICE REQUIRED TO TERMINATE SERVICES.  (a)
A financial institution may not terminate a bank account, line of
credit, or other banking instrument of a customer without:
(1)  providing notice to the customer and a reason for
(2)  subject to Subsection (c), allowing a reasonable
period of at least 30 days after the date of the notice required by
Subdivision (1), for a customer to voluntarily transfer accounts.
(b)  A financial institution may not terminate a bank
account, line of credit, or other banking instrument if a customer
has filed a timely appeal as described by Section 601A.004(b).
(c)  Subsection (a)(2) does not apply if:
(1)  the bank account, line of credit, or other banking
instrument is dormant or has a zero balance;
(2)  the bank account has had persistent overdrafts or
is habitually delinquent in payments; or
(3)  the financial institution has reason to believe
that the customer is engaged in criminal activity.
Sec. 601A.004.  REMEDIES.  (a)  A customer who receives a
notification that the customer's bank account, line of credit, or
other banking instrument will be terminated may file an appeal with
(b)  An appeal is considered timely if filed not later than
the 10th business day after the date of notice for termination of
services described by Section 601A.003(a)(1).
(c)  The department shall review all termination of service
appeals for compliance.  The department shall direct a financial
institution to reverse the termination if the department determines
that the termination is not authorized.
(d)  A customer may bring an action under this section
against a financial institution only after a determination by the
(e)  If the customer proves that a financial institution
violated this chapter, the customer is entitled to recover:
(1)  declaratory relief under Chapter 37, Civil
Practice and Remedies Code, including costs and reasonable
attorney's fees under Section 37.009, Civil Practice and Remedies
Sec. 601A.005.  RULEMAKING AUTHORITY.  The Finance
Commission of Texas shall adopt rules to enforce this chapter.
Sec. 601A.006.  LIMITATION ON EFFECT OF CHAPTER.  This
chapter does not subject a financial institution to damages or
other legal remedies to the extent the financial institution is
protected from those remedies under federal law.
SECTION 2.  This Act takes effect September 1, 2025.