S.B. No. 752
AN ACT
1-1 relating to regulation of businesses conducting currency exchange,
1-2 transportation, or transmission; creating offenses and providing
1-3 penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 1, Article 350, Revised Statutes, is
1-6 amended by amending Subdivisions (5) and (6) and by adding
1-7 Subdivision (11) to read as follows:
1-8 (5) "Currency exchange, transportation, or
1-9 transmission business" means a person who is engaging in currency
1-10 exchange, currency transportation, or currency transmission as a
1-11 service or for profit.
1-12 (6) "Currency transmission" means engaging in the
1-13 business of receiving currency for the purpose of transmitting the
1-14 currency or its equivalent by wire, computer modem, facsimile, or
1-15 other electronic means, or through the use of a financial
1-16 institution, financial intermediary, the federal reserve system, or
1-17 other <a similar electronic or> funds transfer network.
1-18 (11) "Currency transportation" means engaging in the
1-19 business of physically transporting currency from one location to
1-20 another.
1-21 SECTION 2. Subdivision (10), Section 1, Article 350, Revised
1-22 Statutes, is amended to read as follows:
1-23 (10) "Principal" means an owner, officer, director,
1-24 partner, trustee, agent, or other person participating in the
2-1 conduct of the affairs of a licensee or exercising supervisory
2-2 duties.
2-3 SECTION 3. Section 2, Article 350, Revised Statutes, is
2-4 amended to read as follows:
2-5 Sec. 2. LICENSE REQUIRED. Except as provided by Section 3
2-6 of this article, a person may not engage in the business of
2-7 currency exchange, transportation, or transmission in this state
2-8 without a license issued under this article.
2-9 SECTION 4. Section 3, Article 350, Revised Statutes, is
2-10 amended by amending Subsection (c) and by adding Subsection (f) to
2-11 read as follows:
2-12 (c) A retailer, wholesaler, or service provider who, in the
2-13 ordinary course of business, accepts currency of a country or
2-14 government other than the United States in payment for goods sold
2-15 or services provided is eligible for an exemption from licensing
2-16 under this article. A person requesting an exemption under this
2-17 subsection must notify <annually file an application with> the
2-18 commissioner in writing that the person qualifies for and intends
2-19 to take advantage of the exemption and must certify that the
2-20 person's currency exchange activities will be consistent with
2-21 continued eligibility<, accompanied by a nonrefundable license
2-22 exemption application fee in an amount to be set by the
2-23 commissioner to recover the cost of administering this subsection.
2-24 The commissioner shall grant an exemption to a person under this
2-25 subsection if the commissioner determines that the person making
2-26 the request is eligible under this subsection>. The commissioner
2-27 in accordance with the examination provisions of this article may
3-1 examine a person to verify the exempt status. The retailer,
3-2 wholesaler, or service provider is not eligible for an exemption
3-3 <may not be exempted under this subsection or an exemption may be
3-4 suspended or revoked> if:
3-5 (1) the value of the goods or services purchased in a
3-6 single transaction exceeds $10,000;
3-7 (2) the change given or made as a result of the
3-8 transaction exceeds $100;
3-9 (3) an attempt is made to structure transactions in a
3-10 way to evade the licensing requirements of this article or to avoid
3-11 using a licensed currency exchange business;
3-12 (4) the retailer, wholesaler, or service provider is
3-13 engaged in the business of cashing checks, drafts, or other
3-14 monetary instruments for a fee or other consideration and is not
3-15 otherwise exempted from licensing under this article; or
3-16 (5) the retailer, wholesaler, or service provider
3-17 would not be eligible for a license under Section 8 of this
3-18 article.
3-19 (f) A person engaged in the business of currency
3-20 transportation who holds a permit issued under Section 6-dd,
3-21 Chapter 314, Acts of the 41st Legislature, Regular Session, 1929
3-22 (Article 911b, Vernon's Texas Civil Statutes), is not required to
3-23 be licensed under this article, provided that such a permit does
3-24 not authorize the person to engage in the business of currency
3-25 exchange or transmission without a license issued under this
3-26 article.
3-27 SECTION 5. Section 8, Article 350, Revised Statutes, is
4-1 amended by amending Subsections (c) and (d) and by adding
4-2 Subsections (e) and (f) to read as follows:
4-3 (c) A person is not eligible for a license or must surrender
4-4 an existing license if, during the previous 10 years:
4-5 (1) <,> the person or a principal of the person, if a
4-6 business:
4-7 (A) <(1)> has been convicted of a felony or a
4-8 crime involving moral turpitude under the laws of this state, any
4-9 other state, or the United States;
4-10 (B) <(2)> has been convicted of a crime under
4-11 the laws of another country that involves moral turpitude or would
4-12 be a felony if committed in the United States; or
4-13 (C) has been convicted under a state or federal
4-14 law relating to currency exchange or transmission or any state or
4-15 federal monetary instrument reporting requirement; or
4-16 (2) the person, a principal of the person, or the
4-17 spouse of the person or a principal of the person has been
4-18 convicted of an offense under a state or federal law relating to
4-19 drugs, drug trafficking, money laundering, or immigration or a
4-20 reporting requirement of the Bank Secrecy Act (Pub. L. 91-508)
4-21 <(3) owes delinquent taxes to any local, state, or
4-22 federal taxing entity>.
4-23 (d) An applicant for a license or renewal of a license must
4-24 demonstrate that the applicant:
4-25 (1) has not recklessly failed to file or evaded the
4-26 obligation to file a currency transaction report as required by 31
4-27 U.S.C. Section 5313 during the previous three years;
5-1 (2) has not recklessly accepted currency for exchange
5-2 or transmission during the previous three years in which a portion
5-3 of the currency was derived from an illegal transaction or
5-4 activity;
5-5 (3) will conduct its currency exchange or transmission
5-6 business within the bounds of state and federal law; <and>
5-7 (4) warrants the trust of the community;
5-8 (5) has and will maintain a minimum net worth of
5-9 $25,000, computed according to generally accepted accounting
5-10 principles for each location at which currency is accepted for
5-11 transmission, except that an applicant for a license or renewal of
5-12 a license may not be required to maintain a net worth of more than
5-13 $1 million, computed according to generally accepted accounting
5-14 principles; and
5-15 (6) does not owe delinquent taxes, fines, or fees to
5-16 any local, state, or federal taxing authority or governmental
5-17 agency, department, or other political subdivision.
5-18 (e) A person is not eligible for a license, and a person who
5-19 holds a license shall surrender the license to the commissioner, if
5-20 the person or a principal of the person has at any time been
5-21 convicted of:
5-22 (1) a felony under Chapter 34, Penal Code, or a
5-23 similar provision of the laws of another state or the United States
5-24 involving the laundering of money that is the product of or
5-25 proceeds from criminal activity; or
5-26 (2) a felony violation of 31 U.S.C. Section 5313 or
5-27 5324 or a rule adopted under those sections.
6-1 (f) Before approving an application for a license, the
6-2 Banking Department may investigate an applicant or principal of an
6-3 applicant at the sole expense of the applicant and may require the
6-4 applicant to pay a nonrefundable payment of the anticipated
6-5 expenses for conducting the investigation. Failure to make the
6-6 payment or cooperate with the investigation is grounds for denying
6-7 the application.
6-8 SECTION 6. Section 10, Article 350, Revised Statutes, is
6-9 amended by amending Subsection (a) and by adding Subsections (c)
6-10 and (d) to read as follows:
6-11 (a) A person who is licensed under this article shall post a
6-12 bond with a qualified surety company doing business in this state
6-13 that is acceptable to the commissioner or an irrevocable letter of
6-14 credit issued by a qualified financial institution that is
6-15 acceptable to the commissioner. The bond or letter of credit shall
6-16 be in an amount determined by the commissioner. The commissioner
6-17 shall determine the amount of the bond or letter of credit based on
6-18 the dollar volume of the licensee's currency exchange or
6-19 transmission business and the number of locations from which the
6-20 person operates, but the bond or letter of credit must be at least
6-21 $25,000 for a person conducting a currency exchange business and at
6-22 least $300,000 for a person conducting a currency transmission or
6-23 currency transportation business.
6-24 (c) Instead of the bond or letter of credit required under
6-25 Subsection (a) of this section, a licensee, with the prior written
6-26 permission of the commission, may deposit with the commissioner
6-27 United States currency or cash equivalent instruments or securities
7-1 acceptable to the commissioner. The amount of currency or the fair
7-2 market value of the instruments or securities must be an amount
7-3 equal to or exceeding the amount required for the bond or letter of
7-4 credit under Subsection (a) of this section. The commissioner may
7-5 adopt rules to implement this subsection.
7-6 (d) A fee under Section 5 of this article, expenses under
7-7 Section 11 of this article, or a civil penalty under Section 15 of
7-8 this article may be paid out of and collected from the proceeds of
7-9 a bond, letter of credit, or deposit under this section.
7-10 SECTION 7. Article 350, Revised Statutes, is amended by
7-11 adding Section 13A to read as follows:
7-12 Sec. 13A. FRAUDULENTLY STRUCTURED TRANSACTION. (a) A
7-13 person, for the purpose of evading a reporting or record-keeping
7-14 requirement of 31 U.S.C. Section 5313, 31 C.F.R. Part 103, Article
7-15 351, Revised Statutes, this article, or a rule adopted under this
7-16 article, may not with respect to a transaction with a licensee:
7-17 (1) cause or attempt to cause the licensee to:
7-18 (A) not maintain a record or file a report
7-19 required by a law listed by this subsection; or
7-20 (B) maintain a record or file a report required
7-21 by a law listed by this subsection that contains a material
7-22 omission or misstatement of fact; or
7-23 (2) fraudulently structure the transaction.
7-24 (b) For the purposes of this article, a person fraudulently
7-25 structures a transaction if the person conducts or attempts to
7-26 conduct a transaction in any amount of currency with a licensee in
7-27 a manner having the purpose of evading a record-keeping or
8-1 reporting requirement of a law listed by Subsection (a) of this
8-2 section, including the division of a single amount of currency into
8-3 smaller amounts or the conduct of a transaction or series of
8-4 transactions in amounts equal to or less than the reporting or
8-5 record-keeping threshold of a law listed by Subsection (a) of this
8-6 section.
8-7 (c) A transaction is not required to exceed a record-keeping
8-8 or reporting threshold of a single licensee on a single day to be a
8-9 fraudulently structured transaction.
8-10 SECTION 8. Subsection (a), Section 14, Article 350, Revised
8-11 Statutes, is amended to read as follows:
8-12 (a) A person commits an offense if the person knowingly:
8-13 (1) violates a requirement of this article;
8-14 (2) makes a false, fictitious, or fraudulent
8-15 statement, representation, or entry in a record or report required
8-16 under 31 U.S.C. Section 5313, 31 C.F.R. Part 103, Article 351,
8-17 Revised Statutes, this article, or a rule adopted under this
8-18 article; or
8-19 (3) fraudulently structures or attempts to
8-20 fraudulently structure a transaction in violation of Section 13A of
8-21 this article.
8-22 SECTION 9. Section 21, Article 350, Revised Statutes, is
8-23 amended to read as follows:
8-24 Sec. 21. HEARINGS. (a) A license may not be denied,
8-25 revoked, or suspended except after notice and opportunity for <a>
8-26 hearing on that action. The notice must:
8-27 (1) be in the form specified by Section 2001.052,
9-1 Government Code;
9-2 (2) be given by registered or certified mail addressed
9-3 to the applicant or licensee at the address stated on the
9-4 application or license; and
9-5 (3) fix a date, not less than 10 days after the date
9-6 it is mailed, by which the applicant or licensee must request a
9-7 hearing.
9-8 (b) If a hearing is not requested by the date specified in
9-9 the notice, the proposed action becomes final. If a hearing is
9-10 requested, it shall be conducted in accordance with Chapter 2001,
9-11 Government Code (Administrative Procedure Act). <The commissioner
9-12 shall give the applicant or licensee at least 20 days' written
9-13 notice of the time and place of the hearing by registered or
9-14 certified mail addressed to the principal place of business of the
9-15 applicant or licensee.>
9-16 (c) An order of the commissioner denying or revoking a
9-17 license must state the grounds on which the denial or revocation is
9-18 based and is not effective until the 21st day after the date
9-19 written notice has been sent by registered or certified mail to the
9-20 applicant or licensee at the address stated on the application or
9-21 license <principal place of business>. If the commissioner finds
9-22 that an imminent peril to public health, safety, or welfare is
9-23 threatened, the commissioner may make the order effective
9-24 immediately. An applicant or <A> licensee may appeal a finding or
9-25 order of the commissioner under the substantial evidence rule as
9-26 provided by Chapter 2001, Government Code (<the> Administrative
9-27 Procedure <and Texas Register> Act) <(Article 6252-13a, Vernon's
10-1 Texas Civil Statutes). Notice under this section is effective on
10-2 the date the notice is placed in the mail>.
10-3 SECTION 10. Article 350, Revised Statutes, is amended by
10-4 adding Section 22 to read as follows:
10-5 Sec. 22. DECEPTIVE NAME OR ADVERTISING. (a) A licensee who
10-6 advertises the prices to be charged by the currency exchange or
10-7 currency transmission business for services that are governed by
10-8 this article must specifically state in the advertisement all fees
10-9 or commissions to be charged to the consumer.
10-10 (b) The commissioner by rule may establish requirements for
10-11 the size and type of lettering a licensee must use in an
10-12 advertisement for prices or rates.
10-13 (c) A person who violates this section or a rule adopted
10-14 under this section commits a false, misleading, or deceptive act or
10-15 practice within the meaning of Subsections (a) and (b), Section
10-16 17.46, Business & Commerce Code.
10-17 (d) A corporate licensee may not use the same name as, or a
10-18 name deceptively similar to, the name of any domestic corporation
10-19 existing under the laws of this state, or the name of any foreign
10-20 corporation authorized to transact business in this state, except
10-21 as provided by the Texas Business Corporation Act.
10-22 SECTION 11. Section 4, The Sale of Checks Act (Article 489d,
10-23 Vernon's Texas Civil Statutes), is amended to read as follows:
10-24 Sec. 4. Exemption from Licensing. (1) No license to sell
10-25 checks as aforesaid shall be required hereunder of any of the
10-26 following:
10-27 (a) Banks, credit unions, building and loan
11-1 associations, and savings and loan associations, whether organized
11-2 under the laws of this state or of the United States; provided,
11-3 however, that they do not issue or sell checks, other than
11-4 traveler's checks, off premises and that they do not issue or sell
11-5 checks, other than traveler's checks, through agents who are not
11-6 directly or indirectly owned by them;
11-7 (b) Incorporated telegraph companies insofar as they
11-8 receive money at any of their respective offices or agencies for
11-9 immediate transmission by telegraph;
11-10 (c) Agents of a licensee, as provided in Section 11;
11-11 <or>
11-12 (d) The United States or any department or agency of
11-13 the United States;
11-14 (e) With the prior written consent of the
11-15 Commissioner, a person holding a license under Article 350, Revised
11-16 Statutes, if:
11-17 (i) the person has a net worth not less than
11-18 $250,000 and meets all other licensing requirements of this Act;
11-19 (ii) the person maintains a bond in accordance
11-20 with Section 7, except that the minimum principal amount of the
11-21 bond shall be $350,000; and
11-22 (iii) the person sells checks only in
11-23 conjunction with a currency exchange or transmission transaction,
11-24 as defined by Article 350, Revised Statutes, and segregates all
11-25 proceeds from the sale of checks.
11-26 (2) A person governed by Subsection (1)(e) of this section
11-27 is subject to all other provisions of this Act to the extent the
12-1 person engages in the business of selling checks and to rules
12-2 adopted by the Commissioner to administer and carry out Subsection
12-3 (1)(e) of this section, including rules to:
12-4 (a) define or further define terms used in Subsection
12-5 (1)(e) of this section; and
12-6 (b) establish limits or requirements pertaining to
12-7 bonding, net worth, and the sale of checks activities of a person
12-8 under Subsection (1)(e) of this section other than those specified
12-9 by that subsection.
12-10 SECTION 12. This Act takes effect September 1, 1995, except
12-11 that a person is not required to meet the minimum net worth
12-12 requirements of Subdivision (5), Subsection (d), Section 8, Article
12-13 350, Revised Statutes, as amended by this Act, until January 1,
12-14 1996.
12-15 SECTION 13. The importance of this legislation and the
12-16 crowded condition of the calendars in both houses create an
12-17 emergency and an imperative public necessity that the
12-18 constitutional rule requiring bills to be read on three several
12-19 days in each house be suspended, and this rule is hereby suspended.