Department of Banking

By: Dick Smith

Type: General Entry

Published: 1952

Updated: August 1, 1995

State-chartered banks were not authorized in Texas until the Texas State Bank Law was enacted by the Twenty-ninth Legislature on August 14, 1905, an act that provided for the supervision of banks. After initially making the Commissioner of Agriculture, Insurance, Statistics, and History responsible for examining every corporation doing business under the act, the legislature the next year established a separate department for agriculture and changed the name of the other department to the Department of Insurance and Banking. In 1923 a separate banking department was established. The present department, established by the legislature in 1943, is supervised by the Finance Commission of Texas, which by the early 1990s was responsible for three agencies: the Department of Banking, the Savings and Loan Department, and the Office of Consumer Credit. The Finance Commission of Texas consists of a board with nine members, appointed by the governor for six-year terms. The board members appoint the banking commissioner as administrator of the Department of Banking. Two of the board members must be banking executives, two must be savings and loan executives, and the other five must be citizen members, one of whom must be a certified public accountant. There is also a three-member State Banking Board composed of the banking commissioner, the state treasurer, and an unsalaried member appointed by the governor for a two-year term. The responsibility of this board is approval or denial of bank and trust company charter applications, change of domicile, and conversion from national to state charters. By the end of 1992 the Department of Banking was responsible for 530 state-chartered banks with total assets of more than $45 billion. The major functions of the Department of Banking are to supervise and regulate all banks chartered by the state and to enforce the state laws pertaining to them. The deposits of such institutions are insured by the Federal Deposit Insurance Corporation. Additional responsibilities of the department include licensing and regulating prepaid-funeral-contract providers, perpetual-care cemeteries, currency-exchange activities, and sale of checks operations. In 1987 all trust companies came under the jurisdiction of the Department of Banking.

The following, adapted from the Chicago Manual of Style, 15th edition, is the preferred citation for this entry.

Dick Smith, “Department of Banking,” Handbook of Texas Online, accessed June 26, 2022,

Published by the Texas State Historical Association.

August 1, 1995