By Denny, Giddings H.B. No. 1166
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to regulation of the business of selling checks, including
1-3 electronic checks.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 152.002, Finance Code, is amended to read
1-6 as follows:
1-7 Sec. 152.002. DEFINITIONS. In this chapter:
1-8 (1) "Business of selling checks" means the activity of
1-9 receiving money by any means from a purchaser for the purpose of
1-10 subsequently transferring the money in the form of a check payable
1-11 by the seller to a person designated by the purchaser, for direct
1-12 or indirect compensation, including earnings from money received
1-13 from the purchaser or the purchaser's agent and held pending
1-14 disbursement on a check sold to the purchaser, whether or not the
1-15 activity is conducted on a regular basis or as an organized
1-16 business concern.
1-17 (2) "Check" means an instrument, service, or device
1-18 for the transmission or payment of money, including a draft,
1-19 traveler's check, or money order, or an electronic equivalent to a
1-20 draft, traveler's check, or money order, including an automated
1-21 clearinghouse transfer. The term does not include an instrument,
1-22 service, or device that:
1-23 (A) transfers money directly from the purchaser
1-24 to a creditor of the purchaser or to an agent of the creditor;
2-1 (B) is redeemed by the issuer in goods or
2-2 services under circumstances not designed to evade the obligations
2-3 and responsibilities imposed by this chapter; or
2-4 (C) transfers money in the form of currency to
2-5 another person in a transmission or transportation transaction
2-6 subject to Chapter 153. [The term also includes an instrument for
2-7 the transmission or payment of money in which the purchaser or
2-8 remitter of the instrument appoints or purports to appoint the
2-9 seller as its agent for the receipt, transmission, or handling of
2-10 money, regardless of who signs the instrument.]
2-11 (3) [(2)] "Commission" means the Finance Commission of
2-12 Texas.
2-13 (4) [(3)] "Commissioner" means the banking
2-14 commissioner of Texas.
2-15 (5) [(4)] "Deliver" means to deliver a check to the
2-16 first person who in payment for the check remits or purports to
2-17 remit the face amount of the check or makes a remittance or
2-18 purported remittance against the face amount, regardless of whether
2-19 the person who delivers the check:
2-20 (A) signs the check or is otherwise directly
2-21 liable for obligations evidenced by the check; or
2-22 (B) charges a fee in addition to the face
2-23 amount.
2-24 (6) [(5)] "Department" means the Texas Department of
2-25 Banking.
2-26 (7) "Financial institution" has the meaning assigned
2-27 by Section 201.101.
3-1 (8) "License holder" means a person holding a current
3-2 license issued under Section 152.209. The term includes a person
3-3 exempt from licensing under Section 152.202 to the extent the
3-4 obligations and responsibilities of a license holder under this
3-5 chapter are imposed on the person as a condition of exemption.
3-6 (9) "Money" means a medium of exchange authorized or
3-7 adopted by a domestic or foreign government and includes a monetary
3-8 unit of account established by an intergovernmental organization or
3-9 by agreement between two or more nations. The term also includes
3-10 money represented in digital electronic format, whether or not
3-11 specially encrypted, and stored or capable of storage on electronic
3-12 media in a manner that is retrievable and transferable
3-13 electronically.
3-14 (10) [(6)] "Permissible investment" means:
3-15 (A) cash in demand or interest-bearing accounts
3-16 with a federally insured financial institution, including
3-17 certificates of deposit;
3-18 (B) a marketable [an] investment security
3-19 consisting of [that is an obligation]:
3-20 (i) bonds and other legally created
3-21 general obligations of a state, an agency or political subdivision
3-22 of a state, the United States, or an instrumentality of the United
3-23 States; or
3-24 (ii) obligations that a state or an agency
3-25 or political subdivision [the principal and interest] of a state,
3-26 or [which are fully guaranteed by] the United States or an
3-27 instrumentality of the United States has unconditionally agreed to
4-1 purchase, insure, or guarantee; or
4-2 [(iii) of a state or a political
4-3 subdivision of a state; or]
4-4 (C) other assets or securities that may be
4-5 permitted by rule or [any other investment] approved by the
4-6 commissioner.
4-7 (11) "Principal," in connection with management of a
4-8 license holder or applicant, means a person who performs executive
4-9 functions or otherwise controls the executive affairs of a license
4-10 holder, including an owner, officer, director, partner, trustee, or
4-11 manager of the license holder.
4-12 (12) [(7) "Person" means an individual, partnership,
4-13 joint stock or other association, trust, or corporation. The term
4-14 does not include the United States or this state.]
4-15 [(8)] "Sell" includes issue, transmit, or deliver.
4-16 [(9) "Traveler's check" means a type of check that:]
4-17 [(A) is a multiple of a denomination;]
4-18 [(B) provides for the purchaser's signature to
4-19 be completed at the time the instrument is purchased; and]
4-20 [(C) provides for the purchaser's
4-21 countersignature to be completed when the instrument is
4-22 negotiated.]
4-23 SECTION 2. Subchapter B, Chapter 152, Finance Code, is
4-24 amended to read as follows:
4-25 SUBCHAPTER B. POWERS AND DUTIES OF DEPARTMENT AND COMMISSION
4-26 Sec. 152.101. ADMINISTRATION. The department shall
4-27 administer this chapter.
5-1 Sec. 152.102. RULES. [(a)] The commission may adopt rules
5-2 necessary to enforce and administer this chapter, including rules
5-3 [relating] to:
5-4 (1) implement and clarify this chapter;
5-5 (2) establish fees for applications, licenses,
5-6 notices, and examinations to defray the cost of administering this
5-7 chapter;
5-8 (3) create additional exemptions or reduced
5-9 requirements applicable to specific circumstances, if the exemption
5-10 or reduction is in the public interest and subject to appropriate
5-11 requirements or conditions;
5-12 (4) identify additional permissible investments
5-13 subject to appropriate investment limits; and
5-14 (5) protect the interests of check purchasers [an
5-15 application for a license].
5-16 [(b) The commissioner may adopt and enforce reasonable rules
5-17 to prevent unsafe and unsound practices with respect to a
5-18 permissible investment required by this chapter.]
5-19 Sec. 152.103. EXAMINATIONS [EXCEPTIONS TO REQUIREMENTS. The
5-20 commissioner by rule may exempt a person from this chapter or
5-21 reduce a requirement of Section 152.102(b), 152.104, 152.205,
5-22 152.206, 152.207, 152.208(a), 152.209, 152.304(b), 152.305,
5-23 152.403, 152.503, or 152.504 if:]
5-24 [(1) the person does not engage in the business of
5-25 selling checks to the public and the sale of checks by the person
5-26 is:]
5-27 [(A) ancillary to the person's business; and]
6-1 [(B) limited to commercial contracts in
6-2 interstate commerce; and]
6-3 [(2) the commissioner determines that the exemption or
6-4 reduced requirement is in the public interest.]
6-5 [Sec. 152.104. ANNUAL AUDIT]. (a) The commissioner shall
6-6 examine each license holder annually, on a periodic basis as
6-7 required by any rules adopted under this chapter, or more often as
6-8 the commissioner considers necessary to efficiently enforce this
6-9 chapter and other applicable law [shall conduct a financial audit
6-10 of each license holder at the cost of the license holder].
6-11 (b) The commissioner, in the exercise of discretion and as
6-12 necessary for the efficient enforcement of this chapter or other
6-13 applicable law, may:
6-14 (1) examine a license holder at its primary place of
6-15 business;
6-16 (2) examine off-site documents that the license holder
6-17 furnishes to the department; and
6-18 (3) defer a required examination for not more than six
6-19 months.
6-20 (c) Information in a report of an examination under this
6-21 section is confidential and may be disclosed only under the
6-22 circumstances provided by Section 152.105.
6-23 (d) Disclosure of information to the commissioner under an
6-24 examination request does not waive or otherwise affect or diminish
6-25 a privilege to which the information is otherwise subject [Instead
6-26 of conducting that audit, the commissioner may accept an annual
6-27 report and audit of the affairs of a license holder under this
7-1 chapter made by a nationally recognized certified public accounting
7-2 firm or by a bank commissioner or comparable officer of another
7-3 state].
7-4 Sec. 152.104. REGULATORY COOPERATION. (a) To efficiently
7-5 carry out the purposes of this chapter and reduce the regulatory
7-6 burden on license holders, the commissioner may:
7-7 (1) enter into cooperative, coordinating, or
7-8 information-sharing agreements with another federal, state, or
7-9 foreign governmental agency that regulates persons engaged in the
7-10 business of selling checks or that otherwise has concurrent
7-11 regulatory or supervisory jurisdiction with respect to license
7-12 holders under this chapter;
7-13 (2) with respect to periodic examination or other
7-14 supervision or investigation, accept reports of examination or
7-15 investigation by, and reports submitted to, an agency described by
7-16 Subdivision (1) instead of conducting examinations or
7-17 investigations or receiving reports as might otherwise be required
7-18 or permissible under this chapter;
7-19 (3) enter into contracts with an agency described by
7-20 Subdivision (1) to engage the services of the agency for reasonable
7-21 compensation to assist in connection with the commissioner's
7-22 performance of official duties under this chapter or other law, or
7-23 to provide services to the agency for reasonable compensation in
7-24 connection with the agency's performance of official duties under
7-25 law, except that Chapter 2254, Government Code, does not apply to
7-26 contracts under this subdivision; and
7-27 (4) enter into joint examinations or joint enforcement
8-1 actions with an agency described by Subdivision (1), provided that
8-2 the commissioner may not waive the ability to independently take
8-3 action under this chapter if the commissioner determines that the
8-4 action is necessary to carry out the commissioner's
8-5 responsibilities under this chapter or to enforce compliance with
8-6 the laws of this state.
8-7 (b) Supervisory or examination fees assessed in accordance
8-8 with this chapter may be shared with another federal, state, or
8-9 foreign governmental agency that regulates the activities described
8-10 in this chapter or that otherwise has concurrent regulatory or
8-11 supervisory jurisdiction with respect to license holders under this
8-12 chapter in accordance with an agreement between the commissioner
8-13 and the agency. The commissioner may also receive a portion of
8-14 supervisory or examination fees assessed by a federal, state, or
8-15 foreign governmental agency in accordance with an agreement between
8-16 the commissioner and the agency.
8-17 Sec. 152.105. CONFIDENTIAL INFORMATION; DISCLOSURE. (a)
8-18 Except as provided by Subsection (b), information obtained by the
8-19 commissioner [or the commission] under this chapter and any [from a
8-20 person who holds a license under this chapter or through an
8-21 examination or a] file or record of the department relating to that
8-22 information is confidential and may not be disclosed if the
8-23 information, as determined by the commissioner:
8-24 (1) relates to the financial condition of the license
8-25 holder, a license applicant, a person exempt from licensing under
8-26 Section 152.202, or an affiliate or principal of a person exempt
8-27 from licensing under Section 152.202; [or]
9-1 (2) is proprietary information of the license holder;
9-2 or
9-3 (3) is personal or private information relating to a
9-4 specific purchaser that identifies or can otherwise be associated
9-5 with the purchaser [, as determined by the commissioner].
9-6 (b) The commissioner may release confidential information
9-7 if:
9-8 (1) the commissioner finds that immediate and
9-9 irreparable harm is threatened to a purchaser or potential
9-10 purchaser of a check, or to the public;
9-11 (2) the license holder consents to the release of
9-12 information, other than information described by Subsection (a)(3),
9-13 or has published the information contained in the release;
9-14 (3) the commissioner finds that release of the
9-15 information is required for an administrative hearing, in which
9-16 case the information may be released to the parties to the hearing
9-17 by an order of the hearings officer that requires the parties to
9-18 maintain confidentiality; or
9-19 (4) the commissioner finds that release of the
9-20 information is reasonably necessary to protect the public and is in
9-21 the interest of justice, in which case the information may be
9-22 released only to a representative of an agency, department, or
9-23 instrumentality of this or another state, [or] the United States,
9-24 or a foreign government with whom the United States currently
9-25 maintains diplomatic relations.
9-26 (c) Before releasing information the commissioner determines
9-27 is not proprietary under Subsection (a)(2), the commissioner shall
10-1 notify the license holder unless the notification is prohibited by
10-2 other law.
10-3 SECTION 3. Subchapter C, Chapter 152, Finance Code, is
10-4 amended to read as follows:
10-5 SUBCHAPTER C. APPLICATION FOR AND ISSUANCE OF LICENSE
10-6 Sec. 152.201. LICENSE REQUIRED. (a) Except as provided by
10-7 Section 152.202, a person must hold a license issued under this
10-8 chapter to [:]
10-9 [(1)] engage in the business of selling checks to
10-10 purchasers:
10-11 (1) located in this state [, as a service or for
10-12 consideration]; or
10-13 (2) wherever located if the seller is located in this
10-14 state.
10-15 (b) For purposes of this section, a seller is located in
10-16 this state if the seller:
10-17 (1) employs or otherwise uses an agent that is located
10-18 in this state; or
10-19 (2) maintains, uses [maintain, use], or otherwise
10-20 controls [control] an account at a financial institution office
10-21 located in this state for the purpose of engaging in the business
10-22 of selling checks.
10-23 Sec. 152.202. EXEMPTIONS FROM LICENSING. (a) Section
10-24 152.201 does not apply to:
10-25 (1) a federally insured financial institution [, as
10-26 that term is defined by Section 201.101, if the institution does
10-27 not sell checks, other than traveler's checks, through an agent who
11-1 is not directly or indirectly owned by the institution unless the
11-2 agent is also a federally insured financial institution];
11-3 (2) an agent [or subagent] of a license holder unless
11-4 the agent [or subagent sells the license holder's checks
11-5 over-the-counter to the public and in the regular conduct of that
11-6 business] receives or at any time has access to [:]
11-7 [(A)] a record [check] of the license holder
11-8 that contains information pertaining to [is returned after] payment
11-9 of the license holder's obligations under checks sold by the agent
11-10 for purposes of verification, reconciliation, or accounting; [or]
11-11 [(B) a bank statement relating to a returned
11-12 check;]
11-13 (3) a title company or attorney that issues an escrow
11-14 or trust fund check;
11-15 (4) a state, an agency, political subdivision, or
11-16 instrumentality of a state, the United States, or an agency or
11-17 instrumentality of the United States, including the United States
11-18 Postal Service; [or]
11-19 (5) with the commissioner's prior written consent, a
11-20 person that [who]:
11-21 (A) holds a license issued under Chapter 153;
11-22 (B) [has a net worth of at least $250,000 and]
11-23 meets the licensing requirements of this chapter, including a
11-24 demonstration of net worth as reflected by the financial statements
11-25 required by Section 152.205;
11-26 (C) maintains a bond payable to the commissioner
11-27 or an amount deposited with the commissioner, for the purposes
12-1 specified in both this chapter and Chapter 153, in an amount equal
12-2 to the greater of the amount of bond required by [under] Section
12-3 152.206 or Chapter 153; [in the minimum principal amount of
12-4 $350,000; and]
12-5 (D) sells checks only in conjunction with [a]
12-6 currency exchange or transmission transactions subject to
12-7 [transaction, as defined by] Chapter 153, and separately accounts
12-8 for [separates all] proceeds from transactions under Chapter 153
12-9 and this chapter; and
12-10 (E) complies with Subsection (b);
12-11 (6) with the commissioner's prior written
12-12 determination that the exemption is in the public interest, a
12-13 person that:
12-14 (A) incidentally engages in the sale of checks
12-15 only to the extent reasonable and necessary to accomplish a primary
12-16 business objective that is unrelated to the sale of checks;
12-17 (B) does not advertise or offer to sell checks
12-18 to the public except to the extent reasonable and necessary to
12-19 fairly advertise or offer its primary business services; and
12-20 (C) either:
12-21 (i) sells checks exclusively in connection
12-22 with commercial contracts in interstate commerce; or
12-23 (ii) does not charge a fee for the sale of
12-24 checks or sell checks without fee as an inducement for customer
12-25 participation in its primary business; or
12-26 (7) any other person exempted by rule [that
12-27 transaction from the sale of checks].
13-1 (b) A [Notwithstanding Subsection (a)(5), a] person who
13-2 meets the requirements of Subsection (a)(5) [that subsection] is
13-3 subject to:
13-4 (1) all provisions [any other provision] of this
13-5 chapter other than the license requirement of Section 152.201 to
13-6 the extent the person engages in the business of selling checks;
13-7 and
13-8 (2) rules adopted under this chapter [by the
13-9 commissioner] to administer and carry out that subsection,
13-10 including rules to:
13-11 (A) define a term used in that subsection; and
13-12 (B) establish limits or requirements on the
13-13 bonding and net worth of the person and the person's activities
13-14 relating to the sale of checks other than those specified by that
13-15 subsection.
13-16 Sec. 152.203. QUALIFICATIONS FOR LICENSE. (a) Subject to
13-17 Subsection (b), to [To] qualify for a license under this chapter, a
13-18 person:
13-19 (1) must have a net worth of at least $500,000,
13-20 computed according to generally accepted accounting principles, as
13-21 reflected by the financial statements required by Section 152.205;
13-22 (2) must be in a financial condition that will enable
13-23 the person to safely and soundly engage in the business of selling
13-24 checks;
13-25 (3) [if an individual, may not have been convicted of
13-26 a felony or a crime involving moral turpitude that is reasonably
13-27 related to the person's fitness to hold the license, regardless of
14-1 whether the punishment received was a suspended sentence, community
14-2 supervision, or nonadjudicated conviction;]
14-3 [(4) must respond truthfully and completely to any
14-4 request for information contained in the license application;]
14-5 [(5)] may not be indebted to any local, [this] state,
14-6 or federal government or political subdivision of the government
14-7 for delinquent taxes, fines, penalties, or fees [a fee or penalty
14-8 imposed under this chapter or a rule of the commission;]
14-9 [(6) if an individual, must have a good moral
14-10 character and reputation as a peaceful, law-abiding resident in the
14-11 community in which the person resides]; and
14-12 (4) [(7)] may not be engaged in an activity or
14-13 practice the commissioner finds adversely affects the person's
14-14 financial safety and soundness.
14-15 (b) A [To qualify for a] license may not be issued to an
14-16 applicant unless each person identified under Section
14-17 152.204(b)(1):
14-18 (1) possesses [,] the financial responsibility,
14-19 financial condition, business experience, character, and general
14-20 fitness that would [of the applicant must] reasonably warrant the
14-21 belief that issuance of the license will be in the public interest;
14-22 and
14-23 (2) has not been convicted during the preceding 10
14-24 years of an offense:
14-25 (A) under a state or federal law that involves
14-26 deception, dishonesty, or defalcation, or that relates to currency
14-27 exchange, transportation, or transmission, money laundering, or a
15-1 reporting requirement of the Bank Secrecy Act (12 U.S.C. Section
15-2 1951 et seq.); or
15-3 (B) under the laws of a foreign country that
15-4 involves deception, dishonesty, or defalcation, or that would be a
15-5 felony under state or federal law if committed in the United
15-6 States, unless the applicant demonstrates to the satisfaction of
15-7 the commissioner that the conviction was based on extenuating
15-8 circumstances unrelated to the person's reputation for honesty and
15-9 obedience to law.
15-10 Sec. 152.204. APPLICATION. (a) An application for a license
15-11 must be in writing, sworn to, and filed with the commissioner in
15-12 the form the commissioner prescribes.
15-13 (b) The application must:
15-14 (1) state the full legal name, federal taxpayer
15-15 identification number or social security number, and business
15-16 address of the applicant, and [: (1) the proprietor], if the
15-17 applicant is:
15-18 (A) an individual, the home address of the
15-19 applicant, and the full legal name and federal taxpayer
15-20 identification number or social security number of the applicant's
15-21 spouse; or
15-22 (B) a person other than an individual, the full
15-23 legal name, federal taxpayer identification number or social
15-24 security number, and the business address of:
15-25 (i) each individual who is a principal of
15-26 the applicant; and
15-27 (ii) each individual who is a principal of
16-1 any person that is a principal of the applicant;
16-2 (2) describe in detail the applicant's business plan
16-3 relating to the business of selling checks, including:
16-4 (A) method of operations;
16-5 (B) location of operations and outlets;
16-6 (C) projections regarding the anticipated growth
16-7 in volume of checks sold in dollars and in number of consumers
16-8 during the initial two-year period of operation; and
16-9 (D) other information sufficient to permit the
16-10 commissioner to evaluate the bonding requirements of Section
16-11 152.206 [each member, if the applicant is a partnership or
16-12 association other than an association described by Subdivision
16-13 (3)];
16-14 (3) include an undertaking to increase or supplement
16-15 the bond furnished with the application to equal the aggregate bond
16-16 required by the commissioner before the issuance of the license and
16-17 the start of operations [the association and each officer and
16-18 director of the association, if the applicant is a joint stock
16-19 association having at least 50 members]; and
16-20 (4) disclose any other information that may be
16-21 required by rule or reasonably requested by the commissioner [each
16-22 trustee and officer, if the applicant is a trust; and]
16-23 [(5) the corporation and each officer and director of
16-24 the corporation, if the applicant is a corporation].
16-25 Sec. 152.205. ACCOMPANYING FEE, STATEMENTS, AND BOND. An
16-26 application for a license must be accompanied by:
16-27 (1) a nonrefundable application [investigation] fee in
17-1 an amount established by rule [set by the commissioner] that is
17-2 sufficient to administer this chapter;
17-3 (2) audited financial statements of the applicant that
17-4 are reasonably satisfactory to the commissioner; and
17-5 (3) [a list of the locations at which the business is
17-6 to be conducted; and]
17-7 [(4)] a surety bond or deposit in the amount of
17-8 $100,000, subject to the additional bonding or deposit [that meets
17-9 the] requirements of Section 152.206 or 152.207.
17-10 Sec. 152.206. SURETY BOND. (a) Except as provided by
17-11 Section 152.207, a license holder shall post a surety bond issued
17-12 by a bonding company or insurance company authorized to do business
17-13 in this state that is acceptable to the commissioner.
17-14 (b) The commissioner shall, on application and otherwise
17-15 from time to time, determine the amount of the surety bond but may
17-16 not determine the amount to be less than $100,000 or greater than
17-17 $1 million. In making a determination under this subsection, the
17-18 commissioner shall consider:
17-19 (1) the nature and type of business the license holder
17-20 conducts;
17-21 (2) the license holder's financial condition in
17-22 relation to the dollar volume of the license holder's obligations
17-23 from time to time with respect to outstanding checks sold;
17-24 (3) the nature and degree of liquidity in assets
17-25 legally and beneficially owned by the license holder;
17-26 (4) the competence, character, general fitness, and
17-27 experience of management;
18-1 (5) the extent and adequacy of internal controls
18-2 maintained by the license holder;
18-3 (6) the presence or absence of annual unqualified
18-4 audits by an independent certified public accountant; and
18-5 (7) the existence and adequacy of other insurance
18-6 obtained or held by the license holder to protect its customers.
18-7 [The surety bond must be:]
18-8 [(1) in an amount, except as provided by Subsection
18-9 (c), computed by adding:]
18-10 [(A) $100,000 for the first location at which
18-11 the applicant proposes to sell checks; and]
18-12 [(B) $50,000 for each additional location at
18-13 which the applicant proposes to sell checks, not to exceed
18-14 $400,000;]
18-15 [(2) in a form satisfactory to the commissioner; and]
18-16 [(3) issued by a bonding company or insurance company
18-17 authorized to do business in this state.]
18-18 (c) [(b)] The bond represents money held in trust for the
18-19 benefit of check purchasers. The bond must be payable to the
18-20 commissioner [this state] on behalf of any claimants against the
18-21 license holder or the license holder's agent to secure the faithful
18-22 performance of the obligations of the license holder or agent with
18-23 respect to the receipt, handling, transmission, and payment of
18-24 money in connection with the sale of checks.
18-25 [(c) The commissioner may require a license holder to
18-26 provide the bond in an amount that exceeds the maximum but not more
18-27 than $1 million, taking into consideration the license holder's
19-1 financial condition in relation to the dollar volume of the license
19-2 holder's outstanding checks.]
19-3 (d) The aggregate liability of the bond's surety under this
19-4 chapter may not exceed the principal amount of the bond.
19-5 Sec. 152.207. ALTERNATIVE TO BOND. (a) Instead of
19-6 furnishing all or part of the amount of the surety bond required by
19-7 Section 152.206 [152.205(4)], an applicant or license holder may
19-8 deposit with the commissioner, or with a financial institution
19-9 possessing trust powers that is authorized to conduct a trust
19-10 business [bank, trust company, or national bank] in this state
19-11 [designated by the applicant] and is acceptable to [approved by]
19-12 the commissioner, an aggregate amount, including cash, certificates
19-13 of deposit, and interest-bearing securities, that equals the total
19-14 amount of the required bond or the remaining part of the bond. For
19-15 purposes of this subsection, the value of the securities is the
19-16 lesser of the principal amount or the market value of the
19-17 securities.
19-18 (b) The deposit shall be held in trust for the benefit of
19-19 check purchasers. The deposit secures the same obligations as the
19-20 surety bond. The license holder is entitled:
19-21 (1) to receive all income generated by the assets in
19-22 [interest and dividends on] the deposit; and
19-23 (2) with the commissioner's approval, to substitute
19-24 other permissible assets or securities for those deposited.
19-25 (c) On written order of the commissioner made for good cause
19-26 shown, the license holder shall substitute other assets or
19-27 securities for those deposited.
20-1 (d) In this section, "securities" means marketable
20-2 investment securities consisting of:
20-3 (1) [stocks,] bonds and [, notes, debentures, or]
20-4 other legally created general obligations of a state or an agency
20-5 or political subdivision of a state, or [:]
20-6 [(A) of] the United States or an instrumentality
20-7 of the United States;
20-8 [(B) of this state;]
20-9 [(C) of a municipality, county, school district,
20-10 or instrumentality of this state; or]
20-11 [(D) guaranteed by the United States or this
20-12 state; or]
20-13 (2) obligations that a state or an agency or political
20-14 subdivision of a state, or the United States or an instrumentality
20-15 of the United States has unconditionally agreed to purchase,
20-16 insure, or guarantee; or
20-17 (3) other securities specified by rule [similar
20-18 security devices acceptable to the commissioner].
20-19 Sec. 152.208. INVESTIGATION OF APPLICATION. (a) On the
20-20 filing of an application that meets the requirements of Sections
20-21 152.204 and 152.205, the commissioner shall investigate to
20-22 determine whether the qualifications prescribed by Section 152.203
20-23 have been met.
20-24 (b) To the extent considered advisable by the commissioner,
20-25 the commissioner may investigate and consider the qualifications of
20-26 principals [officers and directors] of an applicant in determining
20-27 whether the qualifications [qualification] prescribed by Section
21-1 152.203(b) have [has] been met.
21-2 Sec. 152.209. ISSUANCE OF LICENSE. (a) The commissioner
21-3 shall issue a license to the applicant if the commissioner[:]
21-4 [(1)] finds that the qualifications prescribed by
21-5 Section 152.203 are met, based on the application and
21-6 investigation, [;]
21-7 [(2) approves the documents;] and
21-8 [(3)] receives an acceptable [finds that the] bond or
21-9 bonds and deposits aggregating to [is in] the [prescribed] amount
21-10 required by the commissioner.
21-11 (b) The applicant on request is entitled to a hearing on the
21-12 denial of the application, to be held not later than the 60th day
21-13 after the date the commissioner receives the request.
21-14 [Sec. 152.210. DENIAL OF LICENSE; HEARING. (a) A hearing
21-15 must be held before a license may be denied.]
21-16 [(b) The commissioner shall give the applicant notice of the
21-17 hearing.]
21-18 SECTION 4. Sections 152.301(b) and (c), Finance Code, are
21-19 amended to read as follows:
21-20 (b) A surety bond or letter of credit required under
21-21 Subsection (a)(3) must be:
21-22 (1) in addition to any other bond or security required
21-23 by this chapter;
21-24 (2) issued by a bonding company or insurance company
21-25 authorized to do business in this state and acceptable to the
21-26 commissioner, in the case of a surety bond;
21-27 (3) issued by a federally insured financial
22-1 institution[, as that term is defined by Section 201.101,] that has
22-2 its main office or a branch in this state and is acceptable to the
22-3 commissioner, in the case of a letter of credit; and
22-4 (4) payable to the commissioner on behalf of any
22-5 claimants against the license holder to secure the faithful
22-6 performance of the obligations of the license holder with respect
22-7 to the receipt, handling, and payment of money in connection with
22-8 the sale of checks.
22-9 (c) The net worth of the license holder for purposes of
22-10 Subsection (a) [(a)(3)] is shown by an audited financial statement
22-11 reasonably satisfactory to the commissioner.
22-12 SECTION 5. Section 152.304(a), Finance Code, is amended to
22-13 read as follows:
22-14 (a) Not later than June 30 [April 15] of each year, a
22-15 license holder shall pay to the commissioner a license renewal fee
22-16 in an amount established by rule [of $500].
22-17 SECTION 6. Section 152.305, Finance Code, is amended to read
22-18 as follows:
22-19 Sec. 152.305. FINANCIAL STATEMENTS AND REPORTS. (a) Unless
22-20 waived by the commissioner, not later than the 45th day after the
22-21 last day of each quarter of the license holder's fiscal year, a
22-22 license holder shall file with the commissioner a certification of
22-23 net worth and a report regarding maintaining permissible
22-24 investments under Section [Sections] 152.301 [and 152.3015] for the
22-25 preceding quarter submitted on forms furnished by the commissioner.
22-26 (b) Not later than June 30 [April 15] of each year, or a
22-27 later date the commissioner approves in writing for good cause
23-1 shown, a license holder shall file an annual audited unconsolidated
23-2 financial statement dated as of the last day of the license
23-3 holder's fiscal year that ended in the immediately preceding
23-4 calendar year.
23-5 SECTION 7. Section 152.307(a), Finance Code, is amended to
23-6 read as follows:
23-7 (a) The commissioner shall give a license holder an
23-8 opportunity for a [A] hearing [must be held] before a license may
23-9 be revoked.
23-10 SECTION 8. Section 152.401, Finance Code, is amended to read
23-11 as follows:
23-12 Sec. 152.401. BUSINESS CONDUCTED BY AGENT [OR SUBAGENT]. (a)
23-13 A license holder may conduct the [license holder's] business of
23-14 selling checks under this chapter from any location within or
23-15 outside of [at one or more locations in] this state, either
23-16 directly or through an agent [or subagent] appointed by the license
23-17 holder.
23-18 (b) A rule adopted under Section 152.102 [152.102(a)] may
23-19 not directly apply to a license holder's agent [or subagent].
23-20 SECTION 9. Section 152.402, Finance Code, is amended to read
23-21 as follows:
23-22 Sec. 152.402. DISCLOSURE OF RESPONSIBILITY. Each check sold
23-23 by a license holder, directly or through an agent, must:
23-24 (1) include the name and mailing address or telephone
23-25 number of the license holder clearly printed or displayed on or in
23-26 connection with sale of the check; or
23-27 (2) be accompanied by a written notice displayed or
24-1 delivered to the purchaser at the time of sale containing that
24-2 information.
24-3 SECTION 10. Section 152.404(b), Finance Code, is amended to
24-4 read as follows:
24-5 (b) Notwithstanding Subsection (a), a license holder's agent
24-6 may remit to the license holder all money due from the sale of a
24-7 check at a later date if the agent maintains on deposit with an
24-8 office of a federally insured financial institution [bank, savings
24-9 and loan association, or savings bank] located in the United States
24-10 an amount that:
24-11 (1) is in an account solely in the name of the license
24-12 holder; and
24-13 (2) for each day by which the period before which the
24-14 remittance is made exceeds 10 business days, is not less than the
24-15 outstanding obligations of the license holder represented by
24-16 [aggregate face amount of] checks issued by the license holder that
24-17 the agent usually sells daily.
24-18 SECTION 11. Section 152.405, Finance Code, is amended to read
24-19 as follows:
24-20 Sec. 152.405. LIABILITY FOR PAYMENT OF CHECK. A license
24-21 holder that sells a check, directly or through an agent, is liable
24-22 for the payment of the check in the same manner as a [the] maker or
24-23 drawer of a negotiable instrument subject to Chapter 3, Business &
24-24 Commerce Code, regardless of whether the license holder signed or
24-25 assumed primary liability for obligations evidenced by the check
24-26 [as the maker or drawer].
24-27 SECTION 12. This Act takes effect September 1, 2001.