BILL ANALYSIS
C.S.S.B. 752
By: Patterson
Economic Development
04-13-95
Committee Report (Substituted)
BACKGROUND
There are approximately 66 businesses in the Houston areas known as
"giros houses." In Spanish, "giros" means wire, as in "to wire
money." Evidence suggests that giros houses launder money and
provide money transfer services to foreign drug cartels, without
detection by law enforcement.
PURPOSE
As proposed, C.S.S.B. 752 amends the currency transmission
licensing process and places restrictions on the activities of
license holders.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is granted
to the Banking Commissioner of Texas under SECTION 5 (Section
10(c), Article 350, V.T.C.S.) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 1, Article 350, V.T.C.S., by amending
Subdivisions (5) and (6) and adding Subdivision (11) to redefine
"currency exchange, transportation, or transmission business" and
"currency transmission"; defines "currency transportation."
SECTION 2. Amends Section 2, Article 350, V.T.C.S., to prohibit a
person from engaging in the business of currency exchange,
transportation, or transmission in this state without a license
issued under this article, except as provided by Section 3.
SECTION 3. Amends Section 3, Article 350, V.T.C.S., by amending
Subsection (c) and adding Subsection (f), as follows:
(c) Requires a person requesting an exemption under this
subsection to notify the Banking Commissioner of Texas
(commissioner) in writing that the person qualifies for and
intends to assert the exemption. Requires the person to
certify that the person will conduct currency exchange
activities in a manner that maintains eligibility for the
exemption. Deletes language relating to filing for and
granting exemptions. Makes nonsubstantive changes.
(f) Provides that a person engaged in the business of currency
transportation who holds a permit issued under Section 6-dd,
Article 911b, V.T.C.S., is not required to be licensed under
this article, provided that such a permit does not authorize
the person to engage in the business of currency exchange or
transmission without a license issued under this article.
SECTION 4. Amends Section 8, Article 350, V.T.C.S., by adding
Subsection (e), to provide that a person is not eligible for a
license, and a person shall surrender the license to the
commissioner, if the person or a principal of a person has been
convicted of a felony under Chapter 34, Penal Code, another state's
similar law, or federal law involving money laundering that is a
result of criminal activity; or a felony violation of 31 U.S.C.
Section 5313 or 5324 or a rule adopted under those sections.
SECTION 5. Amends Section 10, Article 350, V.T.C.S., by amending
Subsection (a) and adding Subsections (c) and (d), as follows:
(a) Requires a bond or letter of credit that a person licensed
under this article is required to post to be at least $25,000
for a person conducting a currency exchange business and at
least $300,000 for a person conducting a currency transmission
or currency transportation business.
(c) Authorizes a licensee with prior permission from the
Finance Commission of Texas to deposit accepted U.S. currency
or cash equivalent instruments or securities with the
commissioner. Requires the amount of currency or the fair
market value of the instruments to be an amount equal to or
exceeding the amount required for the bond or letter of credit
under Subsection (a) of this section. Authorizes the
commissioner to adopt rules to implement this subsection.
(d) Authorizes a fee under Section 5, expenses under Section
11, or a civil penalty under Section 15 of this article to be
paid out of and collected from the proceeds of a bond, letter
of credit, or deposit.
SECTION 6. Amends Article 350, V.T.C.S., by adding Section 13A, as
follows:
Sec. 13A. FRAUDULENTLY STRUCTURED TRANSACTION. (a)
Prohibits a person, for the purpose of evading a reporting or
record-keeping requirement, from causing a licensee to not
maintain a record or file, maintain a record or file with
misstated or omitted material, or make a fraudulent
transaction.
(b) Provides that a person fraudulently structures a
transaction if the person conducts or attempts to conduct a
transaction in any amount of currency with a licensee with
the intent to evade a record-keeping or reporting
requirement of law, including dividing a single amount of
currency into smaller amounts or conducting one or more
transactions in amounts equal to or less than the reporting
or record-keeping threshold.
(c) Provides that a transaction is not required to exceed a
record-keeping or reporting threshold of a single licensee
on a single day to be a fraudulent transaction.
SECTION 7. Amends Section 14(a), Article 350, V.T.C.S., to provide
that a person commits an offense if the person knowingly violates
a requirement of this article; makes a false, fictitious, or
fraudulent statement, representation, or entry in a record or
required report; or fraudulently structures or attempts to
fraudulently structure a transaction.
SECTION 8. Amends Section 21, Article 350, V.T.C.S., as follows:
Sec. 21. HEARINGS. (a) Prohibits a license from being
denied, revoked, or suspended except after notice and
opportunity for hearing on that action. Requires the notice
to be in the form specified by Section 2001.052, Government
Code; be given by registered certified mail addressed to the
applicant or licensee at the address stated on the application
or license; and fix a date, not less than 10 days after the
date it is mailed, by which the applicant or licensee must
request a hearing.
(b) Provides that if a hearing is not requested by the date
specified in the notice, the proposed action becomes final.
Requires a hearing to be conducted in accordance with
Chapter 2001, Government Code. Deletes language requiring
the commissioner to give notice of the hearing to the
applicant 20 days in advance.
(c) Requires an order of the commissioner denying or
revoking a license to state the grounds on which the denial
or revocation is based and is not effective until 21 days
after written notice has been sent by registered or
certified mail to the applicant or licensee at the address
stated on the application or license, rather than the
principal place of business. Authorizes an applicant or
licensee to appeal a finding or order of the commissioner
under the substantial evidence rule, as provided by Chapter
2001, Government Code. Deletes language providing that
notice under this section is effective on the date the
notice is mailed. Makes a conforming change.
SECTION 9. Effective date: September 1, 1995.
SECTION 10. Emergency clause.