By: Carona S.B. No. 689
A BILL TO BE ENTITLED
AN ACT
1-1 relating to an exemption from the Sale of Checks Act for electronic
1-2 transfers.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 152.002, Finance Code, is amended to read
1-5 as follows:
1-6 Sec. 152.002. DEFINITIONS. In this chapter:
1-7 (1) "Account" has the meaning assigned by Section 903,
1-8 Electronic Fund Transfer Act (15 U.S.C. Section 1693a).
1-9 (2) "Check" means an instrument for the transmission
1-10 or payment of money, including a draft, traveler's check, or money
1-11 order. The term also includes an instrument for the transmission
1-12 or payment of money in which the purchaser or remitter of the
1-13 instrument appoints or purports to appoint the seller as its agent
1-14 for the receipt, transmission, or handling of money, regardless of
1-15 who signs the instrument.
1-16 (3) [(2)] "Commission" means the Finance Commission of
1-17 Texas.
1-18 (4) [(3)] "Commissioner" means the banking
1-19 commissioner of Texas.
1-20 (5) [(4)] "Deliver" means to deliver a check to the
1-21 first person who in payment for the check remits or purports to
1-22 remit the face amount of the check or makes a remittance or
1-23 purported remittance against the face amount, regardless of whether
1-24 the person who delivers the check:
2-1 (A) signs the check; or
2-2 (B) charges a fee in addition to the face
2-3 amount.
2-4 (6) [(5)] "Department" means the Texas Department of
2-5 Banking.
2-6 (7) [(6)] "Permissible investment" means:
2-7 (A) cash;
2-8 (B) an investment security that is an
2-9 obligation:
2-10 (i) of the United States or an
2-11 instrumentality of the United States;
2-12 (ii) the principal and interest of which
2-13 are fully guaranteed by the United States; or
2-14 (iii) of a state or a political
2-15 subdivision of a state; or
2-16 (C) any other investment approved by the
2-17 commissioner.
2-18 (8) [(7)] "Person" means an individual, partnership,
2-19 joint stock or other association, trust, or corporation. The term
2-20 does not include the United States or this state.
2-21 (9) [(8)] "Sell" includes issue or deliver.
2-22 (10) [(9)] "Traveler's check" means a type of check
2-23 that:
2-24 (A) is a multiple of a denomination;
2-25 (B) provides for the purchaser's signature to be
2-26 completed at the time the instrument is purchased; and
3-1 (C) provides for the purchaser's
3-2 countersignature to be completed when the instrument is negotiated.
3-3 SECTION 2. Section 152.202, Finance Code, is amended by
3-4 amending Subsection (a) and adding Subsections (c) and (d) to read
3-5 as follows:
3-6 (a) Section 152.201 does not apply to:
3-7 (1) a bank, credit union, savings and loan
3-8 association, or savings bank, whether the institution is state or
3-9 federal, if the institution does not sell checks, other than
3-10 traveler's checks:
3-11 (A) off premises; or
3-12 (B) through an agent who is not directly or
3-13 indirectly owned by the institution unless the agent is a federally
3-14 insured bank, credit union, savings and loan association, or
3-15 savings bank;
3-16 (2) an agent or subagent of a license holder unless
3-17 the agent or subagent sells the license holder's checks
3-18 over-the-counter to the public and in the regular conduct of that
3-19 business receives or at any time has access to:
3-20 (A) a check of the license holder that is
3-21 returned after payment for verification, reconciliation, or
3-22 accounting; or
3-23 (B) a bank statement relating to a returned
3-24 check;
3-25 (3) a title company or attorney that issues an escrow
3-26 or trust fund check;
4-1 (4) the United States; [or]
4-2 (5) with the commissioner's prior written consent, a
4-3 person who:
4-4 (A) holds a license issued under Chapter 153;
4-5 (B) has a net worth of at least $250,000 and
4-6 meets the licensing requirements of this chapter;
4-7 (C) maintains a bond under Section 152.206 in
4-8 the minimum principal amount of $350,000; and
4-9 (D) sells checks only in conjunction with a
4-10 currency exchange or transmission transaction, as defined by
4-11 Chapter 153, and separates all proceeds from that transaction from
4-12 the sale of checks; or
4-13 (6) a transfer of funds that is subject to Regulation
4-14 E (12 C.F.R. Part 205), if the person receiving authorization to
4-15 debit or credit an account is:
4-16 (A) subject to audit by:
4-17 (i) a federal regulatory authority; or
4-18 (ii) a depository financial institution;
4-19 (B) considered an acceptable risk under the
4-20 policies of the depository financial institution; and
4-21 (C) registered with the Securities and Exchange
4-22 Commission as a corporation with stockholder equity of not less
4-23 than $100 million.
4-24 (c) The commissioner shall exempt from licensing under this
4-25 chapter a person who submits documents with the commission
4-26 evidencing that:
5-1 (1) the Office of the Comptroller of the Currency has
5-2 determined that the person submitting the documents is engaged in
5-3 transactions subject to Regulation E (12 C.F.R. Part 205);
5-4 (2) the primary liability to consumers for all losses
5-5 arising out of or related to a failed transaction has been assumed
5-6 by a financial institution;
5-7 (3) the person is subject to audit by:
5-8 (A) a federal regulatory authority; or
5-9 (B) a depository financial institution; and
5-10 (4) the person is registered with the Securities and
5-11 Exchange Commission as a corporation with stockholder equity of not
5-12 less than $100 million.
5-13 (d) A person exempted under Subsection (c) is subject to any
5-14 penalties under this chapter for operating without a license if it
5-15 is later determined that the person did not qualify for the
5-16 exemption.
5-17 SECTION 3. This Act takes effect September 1, 1999.
5-18 SECTION 4. The importance of this legislation and the
5-19 crowded condition of the calendars in both houses create an
5-20 emergency and an imperative public necessity that the
5-21 constitutional rule requiring bills to be read on three several
5-22 days in each house be suspended, and this rule is hereby suspended.