79R8988 T
By: McCall H.B. No. 2218
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of money services businesses in Texas
and penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Finance Code, Title 3, Subtitle E, is amended by
adding new Chapter 151 to read as follows:
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 151.001. SHORT TITLE. This chapter may be cited as the
Money Services Act.
Sec. 151.002. DEFINITIONS. (a) This section defines
general terms that apply to an applicant for or holder of a money
services license issued under this chapter, whether a money
transmission license or a currency exchange license. Additional
terms that apply specifically to money transmission are defined in
Section 151.301. Additional terms that apply specifically to
currency exchange are defined in Section 151.501.
(b) In this chapter:
(1) "Applicant" means a person that files an
application for a license under this chapter.
(2) "Commission" means the Finance Commission of
Texas.
(3) "Commissioner" means the Banking Commissioner of
Texas or a person designated by the banking commissioner and acting
under the banking commissioner's direction and authority.
(4) "Control" means ownership of, or the power to
directly or indirectly vote, 25 percent or more of the outstanding
voting interests of a license holder or applicant, and includes an
individual whose ownership is through one or more legal entities.
(5) "Currency exchange license" means a license issued
under Subchapter F.
(6) "Department" means the Texas Department of
Banking.
(7) "Executive officer" means president, chair of the
executive committee, treasurer or chief financial officer, or other
individual who performs similar functions.
(8) "License holder" means a person that holds a money
transmission license or a currency exchange license issued under
this chapter.
(9) "Location" means a place at which activity
regulated by this chapter occurs.
(10) "Material litigation" means any litigation that,
according to generally accepted accounting principles, is deemed
significant to an applicant's or license holder's financial health
and would be required to be referenced in that entity's audited
financial statements, report to shareholders, or similar
documents.
(11) "Money services" means money transmission as
defined in Section 151.301 or currency exchange as defined in
Section 151.501.
(12) "Money transmission license" means a license
issued under Subchapter D.
(13) "Person" means an individual or legal entity.
(14) "Principal" means:
(A) with respect to a sole proprietorship, an
owner; or
(B) with respect to a legal entity other than a
sole proprietorship, an executive officer, director, general
partner, trustee, or manager, as applicable.
(15) "Record" means information inscribed on a
tangible medium or that is stored in an electronic or other medium
and is retrievable in perceivable form.
(16) "Responsible individual" means an individual who
has direct control over or significant management policy and
decision-making authority with respect to a license holder's
ongoing, daily money services operations in this state.
(17) "State" means a state of the United States, the
District of Columbia, Puerto Rico, the United States Virgin
Islands, or any territory or insular possession subject to the
jurisdiction of the United States.
Sec. 151.003. EXCLUSIONS. (a) The following persons are
not required to be licensed under this chapter:
(1) the United States or a department, agency or
instrumentality of the United States, including the United States
Post Office or a contractor acting on behalf of the United States
Post Office;
(2) a state or an agency, political subdivision or
other instrumentality of a state;
(3) a federally insured financial institution, as that
term is defined by Section 201.101, Finance Code, that is organized
under the laws of this state, another state, or the United States;
(4) a foreign bank branch or agency in the United
States established under the federal International Banking Act of
1978;
(5) a person acting as an agent for an entity excluded
under paragraph (3) or (4), to the extent of its actions in that
capacity, provided that:
(A) the entity is liable for satisfying the money
services obligation owed the purchaser upon the person's receipt of
the purchaser's money; and
(B) the entity and the person enter into a
written contract that appoints the person as the entity's agent and
the person acts only within the scope of authority conferred by the
contract;
(6) a person that, on behalf of the United States or a
department, agency or instrumentality of the United States, or a
state or county, city or any other governmental agency or political
subdivision of a state, provides electronic funds transfer services
of governmental benefits for a federal, state, county or local
governmental agency;
(7) a person that acts as an intermediary on behalf of
and at the direction of a license holder in the process by which the
license holder, after receiving money or monetary value from a
purchaser, either directly or through an authorized delegate,
transmits the money or monetary value to the purchaser's designated
recipient, provided that the license holder is liable for
satisfying the obligation owed the purchaser;
(8) an attorney or title company that in connection
with a real property transaction receives and disburses domestic
currency or issues an escrow or trust fund check only on behalf of a
party to the transaction;
(9) a person engaged in the business of currency
transportation who is both a registered motor carrier under Chapter
643, Transportation Code, and a licensed armored car company or
courier company under Chapter 1702, Occupations Code, provided that
the person does not engage in the money transmission or currency
exchange business without a license issued under this chapter; and
(10) any other person, transaction, or class of
persons or transactions exempted by rule or any other person or
transaction exempted by the commissioner's order upon the finding
that the licensing of the person is not necessary to achieve the
objectives of this chapter.
Sec. 151.004. STATUTORY REFERENCES. In this chapter,
unless otherwise expressly provided, a reference to a statute or
rule includes the statute or rule, as amended, whether before or
after the effective date of this chapter, as well as any new statute
or rule substituted for the statute or rule after the effective date
of this chapter.
SUBCHAPTER B. ADMINISTRATIVE PROVISIONS
Sec. 151.101. ADMINISTRATION. The Department shall
administer this chapter.
Sec. 151.102. RULES. (a) The commission may adopt rules to
administer and enforce this chapter, including rules necessary or
appropriate to:
(1) implement and clarify this chapter;
(2) preserve and protect the safety and soundness of
money services businesses;
(3) protect the interests of purchasers of money
services and the public;
(4) protect against drug trafficking, terrorist
funding, and money laundering, structuring or a related financial
crime; and
(5) recover the cost of maintaining and operating the
department and the cost of administering and enforcing this chapter
and other applicable law by imposing and collecting proportionate
and equitable fees and costs for notices, applications,
examinations, investigations and other actions required to achieve
the purposes of this chapter.
(b) The presence or absence of a specific reference in this
chapter to rules regarding a particular subject is not intended to
and shall not limit the general rulemaking authority granted the
commission by this section.
Sec. 151.103. COMMISSIONER'S GENERAL AUTHORITY. (a) The
several powers granted the commissioner under the provisions of
this chapter are in addition to, and not in limitation of, each
other. The fact that the commissioner possesses, or has exercised,
a power under any provision of this chapter shall not preclude the
commissioner from exercising a power under any other provision of
this chapter.
(b) The several powers granted to the commissioner under
this chapter are in addition to, and not in limitation of, the
commissioners powers under other provisions of law. The fact that
the commissioner possesses, or has exercised, a power under any
other provision of law shall not preclude the commissioner from
exercising any power under this chapter; nor shall the fact that the
commissioner possesses, or has exercised, a power under any
provision of this chapter preclude the commissioner from exercising
a power under any other provision of law.
(c) The commissioner may impose on any authority, approval,
exemption, license or order issued or granted under this chapter
any condition the commissioner considers reasonably necessary or
appropriate to carry out the provisions and achieve the purposes of
this chapter.
Sec. 151.104. INVESTIGATIONS. (a) The commissioner may
conduct investigations within or outside this state and the United
States as the commissioner considers necessary or appropriate to
administer and enforce this chapter, including investigations to:
(1) determine whether to approve an application,
renewal or request for approval or exemption filed under this
chapter or a rule adopted or order issued under this chapter;
(2) determine whether a person has violated or is
likely to violate this chapter or a rule adopted or order issued
under this chapter;
(3) determine whether a license or authorized delegate
designation should be revoked or suspended or to otherwise aid in
the enforcement of this chapter or a rule adopted or order issued
under this chapter; and
(4) aid in the adoption of rules or issuance of orders
under this chapter.
(b) For purposes of an investigation, examination or other
proceeding under this chapter, the commissioner may administer or
cause to be administered oaths and affirmations, subpoena
witnesses, compel their attendance, take evidence and require the
production of any documents that the commissioner determines to be
relevant to the inquiry.
(c) In the event a person refuses to obey a subpoena, a
district court of Travis County, upon application by the
commissioner, may issue an order requiring the person to appear
before the commissioner and produce documents or give evidence
regarding the matter under investigation.
(d) The commissioner may employ a third party or ask the
Texas Attorney General, the Texas Department of Public Safety, or
any other state, federal or local law enforcement agency to assist
in enforcing this chapter.
(e) The commissioner may recover the reasonable costs
incurred in connection with an investigation conducted under this
chapter from the person that is the subject of the investigation.
Sec. 151.105. REGULATORY COOPERATION. (a) To efficiently
and effectively administer and enforce this chapter and minimize
regulatory burden, the commissioner may cooperate, coordinate and
share information with another state, federal or foreign
governmental agency that:
(1) regulates or supervises persons engaged in money
services businesses or activities subject to this chapter; or
(2) is authorized to investigate or prosecute
violations of a state, federal or foreign law related to persons
engaged in money services businesses or activities subject to this
chapter, including a state attorney general's office.
(b) The commissioner, with respect to an agency described
and for the purposes set out in subsection (a), may:
(1) enter into a written cooperation, coordination, or
information-sharing contract or agreement with the agency;
(2) share information with the agency, subject to the
confidentiality provisions of Section 151.606(b)(3);
(3) conduct a joint or concurrent on-site examination
or other investigation or enforcement action with the agency;
(4) accept a report of examination or investigation
by, or a report submitted to, the agency, in which event the
accepted report is an official report of the commissioner for all
purposes;
(5) engage the services of the agency to assist the
commissioner in performing or discharging a duty or responsibility
imposed by this chapter or other law and pay a reasonable fee for
the services;
(6) share supervisory or examination fees assessed
against a license holder or authorized delegate under this chapter
with the agency and receive a portion of supervisory or examination
fees assessed by the agency against a license holder or authorized
delegate; and
(7) take such other action as the commissioner
considers reasonably necessary or appropriate to carry out the
provisions of and achieve the purposes of this chapter.
(c) The commissioner may not waive, and nothing in this
section shall constitute a waiver of, the commissioner's authority
to conduct an examination or investigation or otherwise take
independent action authorized by this chapter or a rule adopted or
order issued under this chapter to enforce compliance with
applicable state or federal law.
(d) A joint examination or investigation, or acceptance of
an examination or investigation report, does not waive an
examination assessment provided for in this chapter.
(e) Chapter 2254, Government Code, does not apply to a
contract or agreement entered into under this section.
Sec. 151.106. CONSENT TO SERVICE OF PROCESS. A license
holder, authorized delegate, or a person who knowingly engages in
activities that are regulated and require a license under this
chapter, with or without filing an application for a license or
holding a license under this chapter, is considered to have
consented to the jurisdiction of the courts of this state for all
actions arising under this chapter.
SUBCHAPTER C. GENERAL QUALIFICATIONS AND PROVISIONS APPLICABLE TO
MONEY SERVICES LICENSES
Sec. 151.201. SCOPE. This subchapter sets out the general
qualifications and provisions that apply to a money services
license, whether a money transmission license or a currency
exchange license. Subchapters D and E set out the additional
qualifications and provisions that apply specifically to a money
transmission license. Subchapter F sets out the additional
qualifications and provisions that apply specifically to a currency
exchange license.
Sec. 151.202. QUALIFICATIONS FOR LICENSE. (a) Subject to
subsections (b) and (c), to qualify for a license under this
chapter, an applicant must demonstrate to the satisfaction of the
commissioner that:
(1) the financial responsibility and condition,
financial and business experience, competence, character and
general fitness of the applicant justify the confidence of the
public and warrant the belief that the applicant will conduct
business in compliance with this chapter and the rules adopted
under this chapter and other applicable state and federal law, and
that issuance of the license is in the public interest;
(2) neither the applicant, a principal of the
applicant, nor a person in control of the applicant owes the
department a delinquent fee, assessment, administrative penalty or
other amount imposed under this chapter or a rule adopted or order
issued under this chapter;
(3) neither the applicant nor, if the applicant does
business as a partnership, any partner that would generally be
liable for the obligations of the partnership, owes a delinquent
federal tax;
(4) the applicant, if a corporation, is in good
standing and statutory compliance in the state or country of
incorporation, is authorized to conduct business in Texas, and does
not owe any delinquent franchise or other taxes to the State of
Texas;
(5) the applicant, if not a corporation, is properly
registered under the laws of Texas or another state or country and,
if required, is authorized to do business in Texas; and
(6) neither the applicant, a principal of the
applicant, nor a principal of a person in control of the applicant
is listed on the specifically designated nationals and blocked
persons list prepared by the United States Department of Treasury
or designated successor agency as a potential threat to commit
terrorist acts or to fund terrorist acts.
(b) In determining whether an applicant has demonstrated
satisfaction of the qualifications identified in subsection
(a)(1), the commissioner shall consider the financial
responsibility and condition, financial and business experience,
competence, character and general fitness of each principal, person
in control, principal of a person in control, and proposed
responsible individual of the applicant and may deny approval of
the application on the basis that the applicant has failed to
demonstrate satisfaction of the requisite qualifications with
respect to one or more of such persons.
(c) The commissioner shall not issue a license to an
applicant if the applicant or one of the following persons has been
convicted within the preceding ten years of a criminal offense
identified in subsection (e):
(1) if the applicant is an individual, the spouse or
proposed responsible individual(s) of the applicant;
(2) if the applicant is an entity that is directly or
indirectly wholly owned by one individual, the spouse of the
individual; or
(3) if the applicant is other than an individual, a
principal, person in control, principal of a person in control, or
proposed responsible individual(s) of the applicant.
(d) The commissioner, upon a finding that the conviction
does not reflect adversely upon the present likelihood that the
applicant will conduct business in compliance with this chapter,
rules adopted under this chapter, and other applicable state and
federal law, may waive a disqualification under subsection (c)
based upon the conviction of a spouse or a corporate applicant or
corporate person in control of an applicant.
(e) For purposes of subsection (c), a disqualifying
conviction is a conviction for a felony criminal offense:
(1) under state or federal law that involves or
relates to:
(A) deception, dishonesty, or defalcation;
(B) money transmission or other money services,
including a reporting, recordkeeping or registration requirement
of the Bank Secrecy Act, the U.S.A. Patriot Act, or Chapter 271,
Finance Code;
(C) money laundering, structuring or a related
financial crime;
(D) drug trafficking; or
(E) terrorist funding; and
(2) under similar laws of a foreign country unless the
applicant demonstrates to the satisfaction of the commissioner that
the conviction was based upon extenuating circumstances unrelated
to the person's reputation for honesty and obedience to law.
(f) For purposes of subsection (c), a person is considered
convicted of an offense if the person has been found guilty or
pleaded guilty or nolo contendere to the charge or has been placed
on probation or deferred adjudication without regard to whether a
judgment of conviction has been entered by the court.
Sec. 151.203. APPLICATION FOR LICENSE. (a) An application
for a license under this chapter must be under oath and in the form
and medium required by the commissioner. The application must
state or contain:
(1) the legal name and residential and business
address of the applicant and each principal of the applicant;
(2) the taxpayer identification number, social
security number, driver's license number or other identifying
information the commissioner requires of the applicant and each
principal of the applicant; and
(3) such other information and documentation as the
commissioner reasonably requires to determine whether the
applicant qualifies for and should be issued the license for which
application is made.
(b) The commissioner, at the time the application is
submitted or in connection with an investigation of the application
under Section 151.204, may require the applicant, the spouse of the
applicant, a principal, individual who is a person in control, or
proposed responsible individual of the applicant, or any other
individual associated with the applicant and the proposed licensed
activities, to provide the department a complete set of
fingerprints for purposes of a criminal background investigation.
(c) An applicant must certify in writing on the application
that the applicant and each principal, person in control, and
proposed responsible individual of the applicant:
(1) is familiar with and agrees to fully comply with
all applicable state and federal statutes and regulations
pertaining to the applicant's proposed money services business
including this chapter, relevant portions of the Bank Secrecy Act,
the U.S.A. Patriot Act, and Chapter 271, Finance Code;
(2) has not within the prior three years knowingly
failed to file or evaded the obligation to file a report, including
a currency transaction or suspicious activity report required by
the Bank Secrecy Act, the U.S.A. Patriot Act or Chapter 271, Finance
Code; and
(3) has not knowingly accepted money for transmission
or exchange in which a portion of the money was derived from an
illegal transaction or activity.
(d) The commissioner may waive an application requirement
or permit the submission of substituted information in lieu of the
information generally required in an application, either with
respect to a specific applicant or a category of applicants, if the
commissioner determines that the waiver or substitution is
consistent with achievement of the purposes of this chapter.
Sec. 151.204. PROCESSING AND INVESTIGATION OF APPLICATION.
(a) An application for a license under this chapter shall be
processed and acted upon according to the time periods established
by rule.
(b) Upon receipt of an application that meets the
requirements of Section 151.203 and Section 151.304 or Section
151.504, as applicable, the commissioner shall investigate the
applicant to determine whether the prescribed qualifications have
been met. The commissioner may:
(1) conduct an on-site investigation of the applicant;
(2) employ a third party screening service to assist
with the investigation;
(3) to the extent the commissioner considers
reasonably necessary to evaluate the application and the
applicant's qualifications, investigate the financial
responsibility and condition, financial and business experience,
character and general fitness of each principal, person in control,
principal of a person in control, and proposed responsible
individual of the applicant and any other person that is or will be
associated with the applicant's licensed activities in this state;
and
(4) require such additional information and take such
other action as the commissioner considers reasonably necessary.
(c) The commissioner may collect from the applicant the
reasonable expenses of an on-site examination or third-party
investigation. Additionally, depending upon the nature and extent
of the investigation required in connection with a particular
application, the commissioner may require an applicant to pay a
non-refundable investigation fee in an amount established by rule.
(d) The commissioner may suspend consideration of an
application for a license if the applicant or a principal, person in
control, or proposed responsible individual of the applicant is the
subject of a pending state or federal criminal prosecution, state
or federal government enforcement action, or state or federal asset
forfeiture proceeding until the conclusion of such criminal
prosecution, enforcement action, or forfeiture proceeding.
Sec. 151.205. ISSUANCE OF LICENSE. (a) The commissioner
shall issue a license if the commissioner, with respect to the
license for which application is made, finds that:
(1) the applicant meets the prescribed qualifications
and it is reasonable to believe that the applicant's business will
be conducted fairly and lawfully, according to applicable state and
federal law, and in a manner commanding the public's trust and
confidence, and that issuance of the license is in the public
interest;
(2) the documentation and forms submitted by and
required of the applicant are acceptable; and
(3) the applicant has satisfied all requirements for
licensure.
(b) If the commissioner finds that the applicant for any
reason fails to possess the qualifications or satisfy the
requirements for the license for which application is made, the
commissioner shall inform the applicant in writing that the
application is denied and state the reasons for the denial. The
applicant may appeal the denial by filing a written request for a
hearing with the commissioner not later than the 30th day after the
date the notice is mailed. A hearing on the denial must be held not
later than the 45th day after the date the commissioner receives the
written request unless the administrative law judge extends the
period for good cause or the parties agree to a later hearing. The
hearing is considered a contested case hearing and is subject to
Section 151.801.
Sec. 151.206. TRANSFER OR ASSIGNMENT OF LICENSE. A license
issued under this chapter may not be transferred or assigned.
Sec. 151.207. RENEWAL OF LICENSE. (a) Regardless of the
date on which a license under this chapter is issued, the license
expires on August 15 of each year unless the license is renewed in
accordance with this section or is previously surrendered by the
license holder or suspended or revoked by the commissioner.
(b) As a condition of renewal, a license holder must
continue to possess the qualifications and satisfy the requirements
that apply to an applicant for a new money transmission license or
currency exchange license, as applicable. Additionally, not later
than July 1 of each year, a license holder must:
(1) pay an annual renewal fee in an amount established
by rule; and
(2) submit a renewal report that is under oath, in the
form and medium required by the commissioner, and that states or
contains:
(A) if the license is a money transmission
license issued under Subchapter D, an audited unconsolidated
financial statement dated as of the last day of the license holder's
fiscal year that ended in the immediately preceding calendar year;
or
(B) if the license is a currency exchange license
issued under Subsection F, a financial statement, audited or
unaudited, dated as of the last day of the license holder's fiscal
year that ended in the immediately preceding calendar year; and
(C) such other information, documentation and
certifications as the commissioner reasonably requires to
determine the security, net worth, permissible investments, and
other requirements the license holder must satisfy and whether the
license holder continues to meet the qualifications and
requirements for licensure.
(c) If the department does not receive a license holder's
renewal fee and complete renewal report on or before July 1, the
commissioner shall notify the license holder in writing that:
(1) the license holder has until August 15 to submit
the renewal report and pay the renewal fee; and
(2) the license holder must pay a late fee, in an
amount established by rule and that is not subject to appeal, for
each business day after July 1 that the commissioner does not
receive the complete renewal report and renewal fee.
(d) If the license holder fails to submit the complete
renewal report and pay the renewal fee and any late fee due, the
license expires effective 5:00 p.m. central standard time on August
15, and the license holder must cease and desist from engaging in
the business of money transmission or currency exchange, as
applicable, as of that time. The expiration of a license is not
subject to appeal.
(e) Upon the timely receipt of a license holder's complete
renewal report, renewal fee, and any late fee due, the department
shall review the report and, if necessary, investigate the
business and records of the license holder. Upon completion of the
review and investigation, if any, the commissioner may:
(1) renew the license;
(2) impose such conditions on the renewal of the
license as the commissioner reasonably considers reasonably
necessary or appropriate; or
(3) suspend or revoke the license on the basis of a
ground specified in Section 151.703.
(f) Upon written application and for good cause, the
commissioner may extend the time for filing the fee and report
required under this section.
(g) The holder or principal or person in control of the
holder of an expired license, or the holder or principal or person
in control of the holder of a license surrendered under Section
151.208, that wishes to conduct activities for which a license is
required under this chapter must file a new license application and
satisfy all requirements for licensure that apply at the time the
new application is filed.
Sec. 151.208. SURRENDER OF LICENSE. (a) A license holder
may surrender the license holder's license by delivering the
original license to the commissioner along with a written notice of
surrender that includes the location at which the license holder's
records will be stored and the name, address, telephone number and
other contact information for an individual who is authorized to
provide access to the records.
(b) A license holder shall surrender the license holder's
license if the license holder becomes ineligible for a license
under Section 151.202(c).
(c) The surrender of a license does not reduce or eliminate
a license holder's civil or criminal liability arising from any
acts or omissions prior to the surrender of the license, including
any administrative action undertaken by the commissioner to deny
the renewal of, revoke, or suspend a license, assess an
administrative penalty, order the payment of restitution, or
exercise any other authority under this chapter. Further, the
surrender of a license does not release the security required of the
license holder under Section 151.307 or Section 151.506.
Sec. 151.209. REFUNDS. No fee or cost paid under this
chapter in connection with an application or renewal is refundable.
SUBCHAPTER D. MONEY TRANSMISSION LICENSE
Sec. 151.301. DEFINITIONS. (a) This section defines terms
that apply to an applicant for or holder of a money transmission
license issued under this subchapter.
(b) In this subchapter:
(1) "Authorized delegate" means a person a license
holder designates under Section 151.403 to conduct money
transmission on behalf of the license holder.
(2) "Currency" means the coin and paper money of the
United States or another country that is designated as legal tender
and circulates and is customarily used and accepted as a medium of
exchange in the country of issuance.
(3) "Electronic instrument" means a card or other
tangible object for the transmission, transfer, or payment of money
or monetary value, which contains an electronic chip or strip for
the storage of information or that provides access to information.
(4) "Money" or "monetary value" means currency or a
claim that can be converted into currency through a financial
institution, electronic payments network, or other formal or
informal payment system.
(5) "Money transmission" means to receive money or
monetary value by any means in exchange for a promise to make the
money or monetary value available at a later time or different
location. Money transmission includes:
(A) selling or issuing stored value or payment
instruments, including checks, money orders and travelers checks;
(B) receiving money or monetary value for
transmission, including by payment instrument, wire, facsimile,
electronic transfer or ACH debit;
(C) providing third-party bill paying services;
or
(D) receiving currency or an instrument payable
in currency to physically transport the currency or its equivalent
from one location to another by motor vehicle or other means of
transportation or through the use of the mail or a shipping,
courier, or other delivery service. The term does not include the
provision solely of online or telecommunication services or
connection services to the internet.
(6) "Outstanding" means:
(A) with respect to a payment instrument or
stored value, a payment instrument or stored value that has been
issued and sold in the United States directly by the license holder,
or sold by an authorized delegate of the license holder in the
United States and reported to the license holder, that has not yet
been paid by or for the license holder; or
(B) with respect to transmission, a money
transmission for which the license holder, directly or through its
authorized delegate, has received money or monetary value from the
customer for transmission, but has not yet completed the money
transmission by delivering the money or monetary value to the
person designated by the customer or refunded the money or monetary
value to the customer.
(7) "Payment instrument" means a written or electronic
equivalent of a check, draft, money order, traveler's check or
other written or electronic instrument, service or device for the
transmission or payment of money or monetary value, sold or issued
to one or more persons, whether or not negotiable. The term does
not include an instrument, service or device that:
(A) transfers money directly from a purchaser to
a creditor of the purchaser or to an agent of the creditor;
(B) is redeemed by the issuer in goods or
services or a cash or credit refund under circumstances not
designed to evade the obligations and responsibilities imposed by
this chapter; or
(C) is a credit card voucher or letter of credit.
(8) "Receive" means to obtain possession of money or
monetary value in a manner which cannot be reversed through the
exercise of routine contractual or statutory rights.
(9) "Stored value" means monetary value evidenced by
an electronic record that is prefunded and for which value is
reduced upon each use. The term does not include an electronic
record that is loaded with points, miles or other non-monetary
value or that is not sold to the public but is distributed as a
reward or charitable donation.
(10) "Unsafe or unsound act or practice" means a
practice or conduct by a license holder or its authorized delegate
that creates the likelihood of material loss, insolvency, or
dissipation of the license holder's assets, or otherwise materially
prejudices the interests the license holder or its customers.
Sec. 151.302. LICENSE REQUIRED. (a) A person may not
engage in the business of money transmission or advertise, solicit
or hold itself out as a person that engages in the business of money
transmission unless the person:
(1) is licensed under this subchapter;
(2) is an authorized delegate of a person licensed
under this subchapter, appointed by the license holder in
accordance with Section 151.403;
(3) is excluded under Section 151.003; or
(4) has been granted an exemption under subsection
(c).
(b) For purposes of this chapter:
(1) a person engages in the business of money
transmission if the person conducts money transmission for persons
located in Texas and receives compensation or expects to receive
compensation, directly or indirectly, for conducting the
transmission; and
(2) a person solicits, advertises or holds itself out
as a person that engages in the business of money transmission if
the person represents that it will conduct money transmission for
persons located in Texas.
(c) Upon application and a finding that the exemption is in
the public interest, the commissioner may exempt a person that:
(1) incidentally engages in the money transmission
business only to the extent reasonable and necessary to accomplish
a primary business objective that is unrelated to the money
transmission business;
(2) does not advertise or offer money transmission
services to the public except to the extent reasonable and
necessary to fairly advertise or offer its primary business
services; and
(3) either transmits money exclusively in connection
with commercial contracts in interstate commerce or does not charge
a fee to transmit money or transmits money without a fee as an
inducement for customer participation in its primary business.
(d) A license holder may engage in the money transmission
business at one or more locations in Texas, directly or indirectly
owned by the license holder, or through one or more authorized
delegates, or both, under a single license granted the license
holder.
Sec. 151.303. ADDITIONAL QUALIFICATIONS. (a) In addition
to the general qualifications set out in Section 151.202, an
applicant for a money transmission license must demonstrate to the
satisfaction of the commissioner that:
(1) the applicant has and will maintain the minimum
net worth required under Section 151.307;
(2) the applicant's financial condition will enable
the applicant to safely and soundly engage in the business of money
transmission; and
(3) the applicant does not engage in any activity or
practice that adversely affects its safety and soundness.
Sec. 151.304. APPLICATION AND ACCOMPANYING FEE, STATEMENTS
AND SECURITY. (a) An applicant for a money transmission license
must submit an application in accordance with Section 151.203.
(b) At the time an application for a money transmission
license is submitted, an applicant must file with the department:
(1) an application fee in the amount established by
rule;
(2) audited financial statements that are
satisfactory to the commissioner for purposes of determining
whether the applicant has the minimum net worth required under
Section 151.307 and is likely to maintain the required minimum net
worth if a license is issued; and
(3) security in the amount of $300,000, that meets the
requirements of Section 151.308, and an undertaking or agreement
that the applicant will increase or supplement the security to
equal the aggregate security required by the commissioner under
that section before the issuance of the license and the start of
operations.
Sec. 151.305. INVESTIGATION AND ACTION UPON APPLICATION.
The commissioner shall investigate the applicant and act upon the
application in accordance with Sections 151.204 and 151.205.
Sec. 151.306. TEMPORARY LICENSE. (a) The commissioner may
issue a temporary license to a person that is engaging in money
transmission, but has not obtained a license under this subchapter,
provided the person:
(1) certifies in writing that the person qualifies for
the license and will submit a completed license application not
later than the 60th day after the date the temporary license is
issued;
(2) submits a recent financial statement acceptable to
the commissioner that reflects the minimum net worth required under
Section 151.307;
(3) provides security that meets the requirements of
Section 151.308 in an amount specified by the commissioner, which
amount shall not be less than $300,000;
(4) agrees in writing that, until a permanent license
is issued, the person will engage only in activities being
conducted at existing locations; and
(5) pays the application fee and a nonrefundable
temporary license fee in the amount established by rule.
(b) The effective period for a temporary license may not
exceed 90 days from the date the license is issued, provided that
the commissioner may extend the period for up to an additional 30
days if necessary to complete processing of a timely filed
application for which approval is likely.
Sec. 151.307. NET WORTH. (a) An applicant for a money
transmission license must possess, and a money transmission license
holder must maintain at all times, a minimum net worth computed in
accordance with generally acceptable accounting principles of:
(1) $100,000, if business is proposed to be or is
conducted, directly or through an authorized delegate, at 4 or
fewer locations; or
(2) $500,000, if business is proposed to be or is
conducted, directly or through an authorized delegate, at 5 or more
locations.
(b) The commissioner may increase the amount of net worth
required of an applicant or license holder, up to a maximum of
$1,000,000, if the commissioner determines, with respect to the
applicant or license holder, that a higher net worth is necessary to
achieve the purposes of this chapter based upon:
(1) the nature and volume of the projected or
established business;
(2) the number of locations at or through which money
transmission will be or is conducted;
(3) the amount, nature, quality and liquidity of its
assets;
(4) the amount and nature of its liabilities;
(5) the history of its operations and prospects for
earning and retaining income;
(6) the quality of its operations;
(7) the quality of its management;
(8) the nature and quality of its principals and
persons in control;
(9) the history of its compliance with applicable
state and federal law; and
(10) such other factors as the commissioners considers
relevant.
Sec. 151.308. SECURITY. (a) An applicant for a money
transmission license must provide, and a money transmission license
holder must maintain at all times, a surety bond, irrevocable
letter of credit, or deposit instead of a bond ("security") in
accordance with this section.
(b) The amount of the required security is the greater of
$300,000 or an amount equal to one percent of the license holder's
total yearly dollar volume of money transmission business in Texas
or the applicant's projected total volume of Texas business for the
first year of licensure, up to a maximum of $2,000,000. When the
amount of the required security exceeds $1,000,000, the applicant
or license holder may, in the alternative, provide security in the
amount of $1,000,000, plus a dollar for dollar increase in the net
worth of the applicant or license holder over and above the amount
required under Section 151.307, up to a total amount of $2,000,000.
(c) The security must:
(1) be in a form satisfactory to the commissioner;
(2) be payable to any claimant or to the commissioner,
on behalf of a claimant or the State of Texas, for any liability
arising out of the license holder's money transmission business in
this state, incurred under, subject to, or by virtue of this
chapter;
(3) be conditioned upon the faithful compliance of the
license holder, its principals, responsible individuals, employees
and authorized delegates with this chapter or any rule adopted or
order issued under this chapter; and
(4) if a bond, be issued by a qualified surety company
authorized to do business in Texas and acceptable to the
commissioner or, if an irrevocable letter of credit, be issued by a
financial institution acceptable to the commissioner.
(d) A claimant may bring suit directly on the security, or
the commissioner may bring suit on behalf of the claimant or the
state, either in one action or in successive actions.
(e) The commissioner may collect any delinquent fee,
assessment, cost, penalty or other amount imposed upon and owed by a
license holder from the security or the proceeds of the security.
If the security is a surety bond, the commissioner shall give the
surety reasonable prior notice of a hearing to impose an
administrative penalty against the license holder, provided that a
surety shall not be considered an interested, aggrieved or affected
person for purposes of an administrative proceeding under Section
151.801 or Chapter 2001, Government Code.
(f) The security shall remain in effect until cancelled,
which may occur only after 30 days written notice to the
commissioner. Cancellation shall not affect any liability incurred
or accrued during the period covered by the security.
(g) The security shall cover claims for at least five years
after the license holder surrenders its license or otherwise ceases
to engage in activities for which a license is required under this
subchapter. However, the commissioner may permit the amount of the
security to be reduced or eliminated prior to that time to the
extent that the amount of the license holder's obligations to the
department and to purchasers in Texas is reduced. The commissioner
may permit a license holder to substitute another form of security
at the time the license holder ceases to provide money transmission
in this state.
(h) If the commissioner at any time reasonably determines
that the required security is insecure, deficient in amount, or
exhausted in whole or in part, the commissioner by written order
shall require the license holder to file or make new or additional
security to comply with this section.
(i) Instead of providing all or part of the amount of the
security required by this section, an applicant or license holder
may deposit, with a financial institution possessing trust powers
that is authorized to conduct a trust business in this state and is
acceptable to the commissioner, an aggregate amount of United
States currency, certificates of deposit or other cash equivalents
that equals the total amount of the required security or the
remaining part of the security. The deposit:
(1) must be held in trust in the name of and be pledged
to the commissioner, and must secure the same obligations as the
security; and
(2) is subject to such other conditions and terms as
the commissioner reasonably requires.
(j) The security holder is considered by operation of law to
be held in trust for the benefit of the State of Texas and any
individual to whom an obligation arising under this chapter is
owed, and shall not be considered an asset or property of the
license holder in the event of bankruptcy, receivership or a claim
against the license holder unrelated to its obligations under this
chapter.
Sec. 151.309. PERMISSIBLE INVESTMENTS. (a) A money
transmission license holder must maintain at all times permissible
investments that have an aggregate market value computed in
accordance with generally accepted accounting principles in an
amount not less than:
(1) if the license holder has a net worth of less than
$5 million, the aggregate face amount of the license holder's
average outstanding money transmission obligations in the United
States, calculated in the manner required by rule; or
(2) if the license holder has net worth of $5 million
or more, at least 50 percent of the amount required by subsection
(a)(1).
(b) Except to the extent limited by subsection (d), the
following constitute permissible investments for purposes of this
section:
(1) 40 percent of the receivables due a license holder
from authorized delegates resulting from money transmission under
this chapter that is not past due or doubtful of collection.
(2) cash in demand or interest bearing accounts with a
federally insured depository institution, including certificates
of deposit;
(3) certificates of deposit or senior debt obligations
of a domestic federally insured depository institution that are
readily marketable and insured by an agency of the federal
government;
(4) investment grade bonds and other legally created
general obligations of a state, an agency or political subdivision
of a state, the United States, or an instrumentality of the United
States;
(5) obligations that a state, and agency or political
subdivision of a state, the United States, or an instrumentality of
the United States has unconditionally agreed to purchase, insure or
guarantee that bear a rating of one of the three highest grades as
defined by a nationally recognized organization that rates
securities;
(6) shares in a money market mutual fund if the mutual
fund, under the terms of its governing documents, may only invest in
securities of the type described in paragraphs (4) and (5) or
permitted by rule; and
(7) other assets and investments as may be permitted
by rule or approved by the commissioner in writing, based upon a
determination that the assets or investments have a safety
substantially equivalent to other permissible investments.
(c) In addition to the investments listed in subsection (b),
permissible investments for purposes of subsection (a) include:
(1) the security provided under Section 151.308;
(2) a surety bond or letter of credit in addition to
the security provided under Section 151.308, if the additional
surety bond or letter of credit satisfies the requirements of
Section 151.308; and
(3) that portion of a surety bond maintained for the
benefit of the purchasers of the license holder's outstanding money
transmission obligations in another state that is not in excess of
the amount of such outstanding obligations in that state, provided:
(A) the license holder maintains a surety bond or
letter of credit or has on hand other permissible investments (or a
combination thereof) in an amount sufficient to satisfy the
requirements of subsection (a) with respect to the outstanding
money transmission obligations in Texas; and
(B) the surety bond is issued by a surety rated
within the top two rating categories of a nationally recognized
United States rating service.
(d) The commissioner, with respect to any license holder,
may limit or disallow for purposes of determining compliance with
subsection (a) an investment, surety bond, or letter of credit
otherwise permitted by this section if the commissioner determines
it to be unsatisfactory for investment purposes or to pose
significant supervisory concern.
(e) The permissible investments subject to this section,
even if commingled with other assets of the license holder, are
considered by operation of the law to be held in trust for the
benefit of any individual to whom an obligation arising under this
chapter is owed, and shall not be considered an asset or property of
the license holder in the event of bankruptcy, receivership or a
claim against the license holder unrelated to its obligations under
this chapter.
SUBCHAPTER E. CONDUCT OF MONEY TRANSMISSION BUSINESS
Sec. 151.401. LIABILITY OF LICENSE HOLDER. A money
transmission license holder is liable for the payment of all money
or monetary value received for transmission either directly or
through an authorized delegate appointed in accordance with Section
151.402.
Sec. 151.402. CONDUCT OF BUSINESS THROUGH AUTHORIZED
DELEGATE. (a) A money transmission license holder may conduct
business regulated under this chapter through an authorized
delegate appointed by the license holder in accordance with this
section. A license holder is responsible for the acts of the
authorized delegate, of which the license holder has or reasonably
should have knowledge, conducted pursuant to the authority granted
by the license holder and that relate to the license holder's money
transmission business.
(b) Before a license holder may conduct business through an
authorized delegate or allow a person to act as its authorized
delegate, the license holder must:
(1) adopt, and update as necessary, written procedures
and policies designed to ensure that its authorized delegate
complies with applicable state and federal law;
(2) enter into a written contract that complies with
subsection (c); and
(3) conduct a reasonable risk based background
investigation sufficient for the license holder to determine that
the authorized delegate will comply with applicable state and
federal law.
(c) The written contract required by paragraph (2) of
subsection (b) must be signed by the license holder and the
authorized delegate and, at a minimum:
(1) appoint the person as the license holder's
authorized delegate with the authority to conduct money
transmission on behalf of the license holder;
(2) set out the nature and scope of the relationship
between the license holder and the authorized delegate and the
respective rights and responsibilities of the parties;
(3) require the authorize delegate to certify that the
delegate is familiar with and agrees to fully comply with all
applicable state and federal statutes and regulations pertaining to
money transmission, including this chapter and the rules adopted
under this chapter, relevant portions of the Bank Secrecy Act, the
U.S.A. Patriot Act, and Chapter 271, Finance Code;
(4) require the authorized delegate to remit and
handle money and monetary value in accordance with Section
151.403(b) and (c);
(5) impose a trust on money and monetary value
received in accordance with Section 151.404;
(6) require the authorized delegate to make and keep
such records as required by this chapter or a rule adopted under
this chapter or as the commissioner reasonably requests;
(7) acknowledge that the authorized delegate consents
to examination or investigation by the commissioner;
(8) state that the license holder is subject to
regulation by the commissioner and that, as part of that
regulation, the commissioner may suspend or revoke an authorized
delegate designation or require the license holder to terminate an
authorized delegate designation;
(9) acknowledge receipt of the written procedures and
policies required under subsection (b)(1); and
(10) acknowledge that the authorized delegate has been
provided regulatory website addresses through which the authorized
delegate can access this chapter and the rules adopted under this
chapter, the Bank Secrecy Act, the U.S.A. Patriot Act, and Chapter
271, Finance Code.
(d) A license holder must report to the commissioner the
theft or loss of payment instruments or stored value from the
license holder or an authorized delegate in Texas if the total value
of the instruments or stored value exceeds $10,000. The license
holder must make the report as soon as the license holder has
knowledge of the theft or loss.
(e) A license holder must notify the license holder's
authorized delegates and require the delegates to take such action
as the commissioner requires if the license holder:
(1) fails to renew the license holder's license; or
(2) is subject to an emergency or final order that
affects the conduct of the license holder's business through an
authorized delegate.
(f) A license holder must maintain a current list of
authorized delegates located in Texas that includes the name and
business address of each delegate and must provide the list to the
commissioner upon request. A license holder that does business
through 11 or more authorized delegates located in Texas must
include a list of the Texas authorized delegates and the delegates'
addresses, updated quarterly, on the license holder's website.
(g) The commission, by rule, may exempt an authorized
delegate that is a federally insured financial institution excluded
under Section 151.003(a)(3) or a foreign bank branch or agency
excluded under Section 151.003(a)(4) from one or more of the
requirements of this chapter.
Sec. 151.403. AUTHORIZED DELEGATE CONDUCT. (a) An
authorized delegate:
(1) is under a duty to and must act only as authorized
under the contract with the license holder and in strict compliance
with the license holder's written policies and procedures;
(2) must not commit fraud or misrepresentation, or
make any fraudulent or false statement or misrepresentation to a
license holder or the commissioner;
(3) must cooperate with an investigation or
examination conducted by the commissioner and is deemed to consent
to the commissioner's examination of its books and records;
(4) must not commit an unsafe or unsound act or
practice and or conduct business in an unsafe and unsound manner;
(5) must, upon discovery, immediately report to the
license holder the theft or loss of payment instruments or stored
value;
(6) must prominently display on the form prescribed by
the commissioner a notice that indicates that the authorized
delegate is an authorized delegate of the license holder under this
subchapter; and
(7) must cease to provide money services as an
authorized delegate of a license holder or take other required
action immediately upon receipt of notice from the commissioner or
notice from the license holder as provided for in Section
151.402(e).
(b) An authorized delegate shall remit all money owing to
the license holder:
(1) not later than the 10th business day after the date
the authorized delegate receives the money;
(2) in accordance with the contract between the
license holder and the authorized delegate; or
(3) as directed by the commissioner.
(c) Notwithstanding subsection (b)(1), an authorized
delegate may remit the money at a later date if the authorized
delegate maintains on deposit with an office of a federally insured
financial institution located in the United States an amount that:
(1) is in an account solely in the name of the license
holder; and
(2) for each day by which the period before the
remittance exceeds 10 business days, is not less than the
outstanding obligations of the license holder routinely incurred by
the authorized delegate on a daily basis.
(d) Any business for which a license is required under this
subchapter conducted by an authorized delegate outside the scope of
authority conferred in the contract between the authorized delegate
and the license holder is unlicensed activity.
Sec. 151.404. TRUST IMPOSED. (a) A license holder shall
hold in trust all money received for transmission directly or from
an authorized delegate from the time of receipt until the time the
transmission obligation is discharged. A trust resulting from the
license holder's actions is in favor of the persons to whom the
related money transmission obligations are owed.
(b) A license holder's authorized delegate shall hold in
trust all money received for transmission by or for the license
holder from the time of receipt until the time the money is remitted
by the authorized delegate to the license holder. A trust resulting
from the authorized delegate's actions is in favor of the license
holder.
(c) A license holder's authorized delegate may not
commingle the money received for transmission by or for the license
holder with the authorized delegate's own money or other property,
except to use in the ordinary course of the delegate's business for
the purpose of making change, if the money is accounted for at the
end of each business day.
(d) If a license holder or the license holder's authorized
delegate commingles any money received for transmission with money
or other property owned or controlled by the license holder or
delegate, all commingled money and other property are impressed
with a trust as provided for in this section in an amount equal to
the amount of money so received, less the amount of fees paid for
the transmission.
(e) If the commissioner revokes a license holder's license
under Section 151.703, all money held in trust by the license holder
and the license holder's authorized delegates is assigned to the
commissioner for the benefit of the persons to whom the related
money transmission obligations are owed.
(f) The money of a license holder or authorized delegate
impressed with a trust under this section shall not be considered an
asset or property of the license holder or authorized delegate in
the event of bankruptcy, receivership or a claim against the
license holder or authorized delegate unrelated to its obligations
under this chapter.
Sec. 151.405. DISCLOSURE REQUIREMENTS. (a) A license
holder's name and mailing address or telephone number must be
provided the purchaser in connection with each money transmission
transaction conducted by the license holder directly or through an
authorized delegate.
(b) A license holder that receives currency or an instrument
payable in currency for transmission must comply with Chapter 278,
Finance Code.
SUBCHAPTER F. CURRENCY EXCHANGE LICENSE
Sec. 151.501. DEFINITIONS. (a) The section defines terms
that apply specifically to an applicant for or holder of a currency
exchange license issued under this subchapter.
(b) In this subchapter:
(1) "Currency" means the coin and paper money of the
United States or any country that is designated as legal tender and
circulates and is customarily used and accepted as a medium of
exchange in the country of issuance.
(2) "Currency exchange" means exchanging the currency
of one government for the currency of another government.
Sec. 151.502. LICENSE REQUIRED. (a) A person may not
engage in the business of currency exchange or advertise, solicit
or hold itself out as providing currency exchange unless the
person:
(1) is licensed under this subchapter;
(2) is licensed for money transmission under
Subchapter D;
(3) is an authorized delegate of a person licensed
under Subchapter D;
(4) is excluded under Section 151.003; or
(5) has been granted an exemption under subsection
(d).
(b) For purposes of this chapter, a person engages in the
business of currency exchange if the person exchanges currency and
receives compensation or expects to receive compensation, directly
or indirectly, for the currency exchange.
(c) A license holder may engage in the currency exchange
business at one or more locations in Texas, directly or indirectly
owned by the license holder, under a single license.
(d) Upon application and a finding that the exemption is in
the public interest, the commissioner may exempt a retailer,
wholesaler or service provider that in the ordinary course of
business accepts currency of a foreign country or government as
payment for goods or services, provided that a person is not
eligible for an exemption if:
(1) the value of the goods or services purchased in a
single transaction exceeds $10,000;
(2) the change given or made as a result of the
transaction exceeds $100;
(3) an attempt is made to structure a transaction in a
manner that evades the licensing requirements of this subchapter or
avoids using a business licensed under this chapter;
(4) the person is engaged in the business of cashing
checks, drafts, or other payment instruments for consideration and
is not otherwise exempt from licensing under this chapter; or
(5) the person would not be eligible for a license
under this chapter.
(e) In accordance with the investigation provisions of this
chapter, the commissioner may examine a person to verify the
person's exempt status under subsection (d).
Sec. 151.503. QUALIFICATIONS. An applicant for a currency
exchange license must possess the qualifications set out in Section
151.202.
Sec. 151.504. APPLICATION AND ACCOMPANYING FEE AND
SECURITY. (a) An applicant for a currency exchange license must
submit an application in accordance with Section 151.203.
(b) At the time an application for a currency exchange
license is submitted, an applicant must file with the department:
(1) an application fee in the amount established by
rule; and
(2) security in the amount of $2,500 that meets the
requirements of Section 151.506.
Sec. 151.505. INVESTIGATION AND ACTION UPON APPLICATION.
The commissioner shall investigate the applicant and act upon the
application in accordance with Sections 151.204 and 151.205.
Sec. 151.506. SECURITY. An applicant for a currency
exchange license must provide and a currency exchange license
holder must maintain at all times security in the amount of $2,500
that satisfies the requirements of and is subject to Section
151.308(c)-(j).
SUBCHAPTER G. EXAMINATIONS, REPORTS AND RECORDS
Sec. 151.601. EXAMINATIONS. (a) The commissioner may
examine a license holder or authorized delegate of a license holder
as reasonably necessary or appropriate to administer and enforce
this chapter and rules adopted and orders issued under this
chapter, and other applicable law, including the Bank Secrecy Act,
the U.S.A. Patriot Act, and Chapter 271, Finance Code.
(b) The commissioner may:
(1) conduct an examination annually or at such other
time as the commissioner reasonably requires;
(2) conduct an on-site examination or an off-site
review of records;
(3) conduct an examination in conjunction with an
examination conducted by representatives of other state agencies or
agencies of another state or of the federal government;
(4) accept the examination report of other state
agencies or agencies of another state or of the federal government,
or a report prepared by an independent accounting firm, which
report so accepted is considered for all purposes as an official
report of the commissioner; and
(5) summon and examine under oath a principal,
responsible individual, or employee of a license holder or
authorized delegate and require such person to produce records
regarding any matter related to the condition and business of the
license holder or authorized delegate.
(c) A license holder or authorized delegate shall provide,
and commissioner shall have full and complete access to, all
records the commissioner reasonably requires to conduct a complete
examination. The records must be provided at the location and in
the format specified by the commissioner.
(d) Unless otherwise directed by the commissioner, a
license holder shall pay all costs reasonably incurred in
connection with an examination of the license holder or its
authorized delegate.
(e) Disclosure of information to the commissioner under an
examination request does not waive or otherwise affect or diminish
confidentiality or a privilege to which the information is
otherwise subject. Information disclosed to the commissioner in
connection with an examination confidential under Section 151.606.
Sec. 151.602. RECORDS. (a) A license holder must make,
keep and preserve the following books, accounts and other records
for at least five years or such other period provided by rule:
(1) a record of each money transmission transaction or
currency exchange transaction, as applicable;
(2) a general ledger posted in accordance with
generally accepted accounting principles containing all asset,
liability, capital, income, and expense accounts, unless directed
otherwise by the commissioner;
(3) bank statements and bank reconciliation records;
(4) all records and reports required by applicable
state and federal law, including the reporting and recordkeeping
requirements imposed by Chapter 271, Finance Code, the Bank Secrecy
Act, and the U.S.A. Patriot Act, and other federal and state laws
pertaining to money laundering, drug trafficking or terrorist
funding; and
(5) any other records required by rule or reasonably
requested by the commissioner to determine compliance with this
chapter.
(b) The records required under this section may be
maintained at the license holder's principal place of business or
such other location reasonably requested by the commissioner.
(c) An authorized delegate must make, keep and preserve the
records required by rule or reasonably requested by the
commissioner.
(d) The records required under this section may be
maintained in a photographic, electronic or other similar form, and
are subject to inspection by the commissioner under Section
151.601.
(e) The records required under this section and the reports
required under Section 151.603 must be in English and the financial
information contained in the records and reports must be
denominated in United States dollars.
Sec. 151.603. REPORTS. (a) An applicant or license holder
shall file a written report with the commissioner not later than the
15th day after the applicant or license holder knows or has reason
to know of a material change in the information reported in an
application or renewal report. The report must describe the change
and the anticipated impact of the change on the activities of the
applicant or license holder in this state.
(b) A money transmission license holder shall prepare
written reports and statements as follows:
(1) the renewal report, including an audited
unconsolidated financial statement dated as of the last day of the
license holder's fiscal year that ended in the immediately
preceding calendar year, required by Section 151.207(b)(2);
(2) quarterly interim financial statements and
reports regarding the permissible investments required to be
maintained under Section 151.310 that reflect the license holder's
financial condition and permissible investments as of the last day
of the calendar quarter to which the statement and report relate are
prepared not later than the 45th day after the last day of such
calendar quarter; and
(3) any other reports required by rule or reasonably
requested by the commissioner to determine compliance with this
chapter.
(c) A currency exchange license holder shall prepare
written reports and statements as follows:
(1) the renewal report, including a financial
statement, that may be audited or unaudited, dated as of the last
day of the license holder's fiscal year that ended in the
immediately preceding calendar year, required by Section
151.207(b)(2);
(2) quarterly interim financial statements and
transaction reports that reflect the license holder's financial
condition and currency exchange business as of the last day of the
calendar quarter to which the statement and report relate and that
are prepared not later than the 45th day after the last day of such
calendar quarter; and
(3) any other reports required by rule or reasonably
requested by the commissioner to determine compliance with this
chapter.
(d) A license holder shall file the statements and reports
required under this section with the commissioner as required by
this chapter, by rule, or as requested by the commissioner.
(e) Upon written application and for good cause, the
commissioner may extend the time for preparing or filing a
statement or report required under this section.
Sec. 151.604. EXTRAORDINARY REPORTING REQUIREMENTS. (a) A
license holder shall file a written report with the commissioner
not later than the 15th day after the license holder knows or has
reason to know of a material change in the information reported in
an application or renewal report. The report must describe the
change and the anticipated impact of the change on the license
holder's activities in this state.
(b) A license holder must file a written report with the
commissioner not later than twenty-four hours after the license
holder knows or has reason to know of:
(1) the filing of a petition by or against the license
holder for bankruptcy or reorganization;
(2) the filing of a petition by or against the license
holder for receivership, the commencement of any other judicial or
administrative proceeding for its dissolution or reorganization,
or the making of a general assignment for the benefit of the license
holder's creditors;
(3) the institution of a proceeding to revoke or
suspend the license holder's license, or to enjoin or otherwise
require the license holder to cease and desist from engaging in
activities related to money transmission, in a state or country in
which the license holder engages in business or is licensed;
(4) the felony indictment or conviction of the license
holder or a principal, person in control, responsible individual,
or authorized delegate of the license holder for an offense
identified in Section 151.202(e);
(5) the cancellation or other impairment of the
license holder's security; or
(6) the inability to meet its transmission obligations
under this chapter for a period of twenty-four hours or longer.
Sec. 151.605. CHANGE OF CONTROL. (a) This section applies
to a proposed change of control of a license holder as a result of
which a person or group of persons acting in concert (proposed
person in control), after consummation of the acquisition
transaction, control the license holder or a person in control of a
license holder.
(b) A person shall not directly or indirectly acquire
control of a license holder or a person in control of a license
holder without the prior written approval of the commissioner,
except as provided by this section.
(c) A license holder or proposed person in control shall:
(1) give the commissioner written notice of a proposed
change of control at least 45 days before the date the proposed
transaction is to be consummated;
(2) request approval of the proposed change of
control; and
(3) submit a nonrefundable fee in an amount
established by rule.
(d) A proposed person in control is subject to the same
standards and qualifications that apply to a principal of an
applicant for a new license under this chapter. The commissioner
may require the license holder or proposed person in control to
provide the same type of information, documentation and
certifications and may conduct the same type of investigation that
the commissioner requires and conducts in connection with a new
license application.
(e) The commissioner shall approve a proposed change of
control if the commissioner determines that the proposed person in
control has the financial responsibility, financial condition,
business experience, competence, character and general fitness to
warrant the belief that the business of the license holder will be
conducted in compliance with this chapter and the rules adopted
under this chapter and other applicable state and federal law and
that the change of control will not jeopardize the interest of the
public.
(f) If the commissioner determines that the proposed person
in control fails to meet the qualifications, standards and
requirements of this chapter, the commissioner shall inform the
license holder and the proposed person in control in writing that
the application is denied and state the reasons for the denial. The
license holder or the proposed person in control may appeal the
denial by filing a written request for a hearing with the
commissioner not later than the 30th day after the date the notice
is mailed. A hearing on the denial must be held not later than the
45th day after the date the commissioner receives the written
request unless the administrative law judge extends the period for
good cause or the parties agree to a later hearing. The hearing is
considered a contested case hearing and is subject to Section
151.801.
(g) The following persons are exempt from the requirements
of subsection (a), but the license holder must notify the
commissioner not later than the 15th day after the date the change
of control becomes effective:
(1) a person that acts as proxy for the sole purpose of
voting at a designated meeting of the security holders or holders of
voting interests of a license holder or controlling person;
(2) a person that acquires control of a license holder
by devise or descent;
(3) a person that acquires control as a personal
representative, custodian, guardian, conservator, or trustee, or
as an officer appointed by a court of competent jurisdiction or by
operation of law;
(4) a person exempted in the public interest by rule or
by order of the commissioner; and
(5) a person that has previously complied with and
received approval under this chapter or who was identified as a
person in control in a prior application filed with and approved by
the commissioner.
(h) Subsection (b) does not apply to public offerings of
securities.
(i) Before filing an application for approval of a proposed
change of control, a license holder may submit a written request
asking the commissioner to determine whether a person would be
considered a proposed person in control of the license holder and
whether the requirements of this section apply to the proposed
transaction. The request must be accompanied by a fee in the amount
established by rule, and must correctly and fully represent the
facts relevant to the person and the proposed transaction. If the
commissioner determines that the person would not be a person in
control of the license holder for purposes of this section, the
commissioner will advise the license holder in writing that this
section does not apply to the proposed person and transaction.
Sec. 151.606. CONFIDENTIALITY. (a) Except as otherwise
provided in subsection (b) or by rule, all financial information
and all other personal information obtained by the commissioner
under this chapter through application, examination,
investigation, or otherwise, and any related file or record of the
department, is confidential and is not subject to disclosure.
(b) The commissioner may disclose confidential information
if:
(1) the applicant, license holder or authorized
delegate consents to the release of the information or has
published the information contained in the release;
(2) the commissioner finds that release of the
information is necessary to protect the public or purchasers or
potential purchasers of money services from the license holder or
authorized delegate from immediate and irreparable harm;
(3) the information is disclosed to an agency
identified in Section 151.105(a), in which event the information
remains confidential and the agency must take appropriate measures
to maintain that confidentiality;
(4) the commissioner finds that release of the
information is required for an administrative hearing; or
(5) the commissioner discloses the information to a
third party acting on behalf of or for the commissioner for
regulatory or enforcement purposes, subject to an agreement that
maintains the confidentiality of the information.
(c) This section does not prohibit the commissioner from
disclosing to the public:
(1) a list of license holders or authorized delegates,
including addresses and the names of contact individuals;
(2) the identity of a license holder or authorized
delegate subject to an emergency or final order of the commissioner
and the basis for the commissioner's action; or
(3) information regarding or included in a consumer
complaint against a license holder or authorized delegate.
SUBCHAPTER H. ENFORCEMENT
Sec. 151.701. INJUNCTIVE RELIEF. (a) Whenever it appears
that a person has violated, or that reasonable cause exists to
believe that a person is likely to violate, this chapter or a rule
adopted under this chapter, the following persons may bring an
action for injunctive relief to enjoin the violation or enforce
compliance with the provision:
(1) the commissioner, through the attorney general;
(2) the attorney general;
(3) the district attorney of Travis County; or
(4) the prosecuting attorney of the county in which
the violation is alleged to have occurred.
(b) In addition to the authority granted the commissioner
under subsection (a), the commissioner, through the attorney
general, may bring an action for injunctive relief if the
commissioner has reason to believe that a person has violated or is
likely to violate an order of the commissioner issued under this
chapter.
(c) An action for injunctive relief brought by the
commissioner, the attorney general, or the district attorney of
Travis County under subsection (a), or brought by the commissioner
under subsection (b), must be brought in a district court in Travis
County. An action brought by a prosecuting attorney under
subsection (a)(4) must be brought in a district court in the county
in which all or part of the violation is alleged to have occurred.
(d) Upon a proper showing, the court may issue a restraining
order, an order freezing assets, a preliminary or permanent
injunction or writ of mandate, or may appoint a receiver for the
defendant or the defendant's assets.
(e) A receiver appointed by the court under subsection (d)
may, with approval of the court, exercise all of the powers of the
defendant's directors, officers, partners, trustees, or persons
who exercise similar powers and perform similar duties.
(f) An action brought under this section may include a claim
for ancillary relief, including a claim by the commissioner for
costs or civil penalties authorized under this chapter, or
restitution or damages on behalf of the persons injured by the act
constituting the subject matter of the action, and the court has
jurisdiction to award such relief.
Sec. 151.702. UNLICENSED PERSONS. If the commissioner has
reason to believe that an unlicensed person has engaged or is likely
to engage in activities for which a license is required under this
chapter, the commissioner may order the person to cease and desist
from such violation unless and until the person is issued a license
under this chapter. The commissioner's order is subject to Section
151.709, unless the order is issued as an emergency order. The
commissioner may issue an emergency cease and desist order in
accordance with Section 151.710 if the commissioner finds that the
person's violation or likely violation threatens immediate and
irreparable harm to the public.
Sec. 151.703. SUSPENSION AND REVOCATION OF LICENSE. (a)
The commissioner must revoke a license if the commissioner finds
that:
(1) the net worth of the license holder is less than
the amount required under this chapter; or
(2) the license holder does not provide the security
required under this chapter.
(b) The commissioner may suspend or revoke a license or
order a license holder to revoke the designation of an authorized
delegate if the commissioner has reason to believe that:
(1) the license holder has violated or failed to
comply with this chapter, a rule adopted or order issued under this
chapter, a written agreement entered into with the department or
commissioner, or any other state or federal law applicable to its
money services business;
(2) the license holder has refused to permit or has not
cooperated with an examination or investigation authorized by this
chapter;
(3) the license holder has engaged in fraud, knowing
misrepresentation, deceit or gross negligence in connection with
the operation of its money services business or any transaction
subject to this chapter;
(4) an authorized delegate has knowingly violated this
chapter or a rule adopted or order issued under this chapter, or a
state or federal anti-money laundering or terrorist funding
statute, and the license holder knows or should have known of the
violation and has failed to make a reasonable effort to prevent or
correct the violation;
(5) the competence, experience, character or general
fitness of the license holder or authorized delegate, or a
principal, person in control, or responsible person of a license
holder or authorized delegate, indicates that it is not in the
public interest to permit the license holder or authorized delegate
to provide money services;
(6) the license holder has engaged in an unsafe or
unsound act or practice or has conducted business in an unsafe or
unsound manner;
(7) the license holder has suspended payment of its
obligations, made a general assignment for the benefit of its
creditors, or admitted in writing its inability to pay its debts as
they become due;
(8) the license holder has failed to terminate the
authority of an authorized delegate after the commissioner has
issued and served upon the license holder a final order finding that
the authorized delegate has violated this chapter;
(9) a fact or condition exists that, if it had been
known at the time the license holder applied for its license, would
have been grounds for denying the application;
(10) the license holder has engaged in false,
misleading or deceptive advertising;
(11) the license holder has failed to pay a judgment
entered in favor of a claimant or creditor in an action arising out
of the license holder's activities under this chapter within 30
days after the judgment becomes final or within 30 days after the
expiration or termination of any stay of execution;
(12) the license holder has knowingly made a material
misstatement or suppressed or withheld material information on an
application, request for approval, report, or other document
required to be filed with the department under this chapter; or
(13) the license holder has committed a breach of
trust or of a fiduciary duty.
(c) In determining whether a license holder has engaged in
an unsafe or unsound act or practice or has conducted business in an
unsafe or unsound manner, the commissioner may consider factors
that include the size and condition of the license holder's
provision of money services, the magnitude of the loss or potential
loss, the gravity of the violation of this chapter or rule adopted
or order issued under this chapter, any action taken against the
license holder of this state, another state or the federal
government, and the previous conduct of the license holder.
(d) The commissioner's order suspending or revoking a
license or directing a license holder to revoke the designation of
an authorized delegate is subject to Section 151.709, unless the
order is issued as an emergency order. The commissioner may issue
an emergency order suspending a license or directing a license
holder to revoke the designation of an authorized delegate in
accordance with Section 151.710 if the commissioner finds that the
factors identified in subsection (b) of that section exist.
Sec. 151.704. SUSPENSION AND REVOCATION OF AUTHORIZED
DELEGATE DESIGNATION. (a) The commissioner may suspend or revoke
the designation of an authorized delegate if the commissioner has
reason to believe that:
(1) the authorized delegate has violated or failed to
comply with this chapter, a rule adopted or order issued under this
chapter, a written agreement entered into with the commissioner or
the department, or any other state or federal law applicable to a
money services business;
(2) the authorized delegate has refused to permit or
has not cooperated with an examination or investigation under this
chapter;
(3) the authorized delegate has engaged in fraud,
knowing misrepresentation, deceit, gross negligence, or an unfair
or deceptive act or practice in connection with the operation of its
business on behalf of the license holder or any transaction subject
to this chapter;
(4) the competence, experience, character or general
fitness of the authorized delegate, or a principal, person in
control, or responsible person of the authorized delegate,
indicates that it is not in the public interest to permit the
authorized delegate to provide money services;
(5) the authorized delegate has engaged in an unsafe
or unsound act or practice or conducted business in an unsafe and
unsound manner;
(6) the authorized delegate, or a principal or
responsible person of the authorized delegate, is listed on the
specifically designated nationals and blocked persons list
prepared by the United States Department of Treasury as a potential
threat to commit terrorist acts or to fund terrorist acts; or
(7) the authorized delegate, or a principal or
responsible person of the authorized delegate, has been convicted
of a state or federal anti-money laundering or terrorist funding
statute.
(b) In determining whether an authorized delegate has
engaged in an unsafe or unsound act or practice or conducted
business in an unsafe or unsound manner, the commissioner may
consider factors that include the size and condition of the
authorized delegate's provision of money services, the magnitude of
the loss or potential loss, the gravity of the violation of this
chapter or rule adopted or order issued under this chapter, and any
action against the authorized delegate taken by this state, another
state or the federal government, and the previous conduct of the
authorized delegate.
(c) The commissioner's order suspending or revoking the
designation of an authorized delegate is subject to Section
151.709, unless the order is issued as an emergency order. The
commissioner may issue an emergency order suspending the
designation of an authorized delegate in accordance with Section
151.710 if the commissioner finds that the factors identified in
subsection (b) of that section exist.
Sec. 151.705. CEASE AND DESIST ORDERS. (a) The
commissioner may issue an order to cease and desist if the
commissioner finds that:
(1) an action, violation or condition listed in
Section 151.703 or Section 171.704 exists with respect to a license
holder or authorized delegate; and
(2) a cease and desist order is necessary to protect
the interests of the license holder, the purchasers of the license
holder's money services, or the public.
(b) A cease and desist order may require a license holder or
authorized delegate to cease and desist from the action or
violation or take affirmative action to correct any condition
resulting from or contributing to the action or violation, and the
requirements of the order may apply to a principal or responsible
person of the license holder or authorized delegate.
(c) The commissioner's order to cease and desist is subject
to Section 151.709, unless the order is issued as an emergency
order. The commissioner may issue an emergency cease and desist
order in accordance with Section 151.710 if the commissioner finds
that the factors identified in subsection (b) of that section
exist.
Sec. 151.706. CONSENT ORDERS. (a) The commissioner may
enter into a consent order at any time with a person to resolve a
matter arising under this chapter or a rule adopted or order issued
under this chapter.
(b) A consent order must be signed by the person to whom it
is issued or by the person's authorized representative, and must
indicate agreement with the terms contained in the order. However,
a consent order may provide that it does not constitute an admission
by a person that this chapter or a rule adopted or order issued
under this chapter has been violated.
(c) A consent order is a final order and may not be appealed.
Sec. 151.707. ADMINISTRATIVE PENALTY. (a) After notice
and hearing, the commissioner may assess an administrative penalty
against a person that:
(1) has violated a provision of this chapter or a rule
adopted or order issued under this chapter and failed to correct the
violation not later than the 30th day after the date the department
sends written notice of the violation to the person;
(2) if the person is a license holder, has engaged in
conduct specified in Section 171.703;
(3) has engaged in a pattern of violations; or
(4) has demonstrated wilful disregard for the
requirements of this chapter, the rules adopted under this chapter,
or an order issued under this chapter.
(b) A violation that is corrected after a person receives
written notice from the department may be considered for purposes
of determining whether a person has engaged in a pattern of
violation under subsection (a)(2) or demonstrated wilful disregard
under subsection (a)(3).
(c) The amount of the penalty may not exceed $5,000, for
each violation or, in the case of a continuing violation, $5,000,
for each day that the violation continues. Each transaction in
violation of this chapter and each day that a violation continues is
a separate violation.
(d) In determining the amount of the penalty, the
commissioner shall consider such factors as the seriousness of the
violation, the person's compliance history, and the person's good
faith in attempting to comply with this chapter, provided, however,
that if the person is found to have demonstrated wilful disregard
under subsection (a)(3), the trier of fact shall recommend that the
commissioner impose the maximum administrative penalty permitted
under subsection (c).
(e) A hearing to assess an administrative penalty is
considered a contested case hearing and is subject to Section
151.801.
(f) An order imposing an administrative penalty after
notice and hearing becomes effective and is final for purposes of
collection and appeal immediately upon issuance.
(g) The commissioner may collect an administrative penalty
assessed under this section:
(1) in the same manner that a money judgment is
enforced in court; or
(2) if the penalty is imposed against a license holder
or a license holder's authorized delegate, from the proceeds of the
license holder's security in accordance with Section 151.308(e).
Sec. 151.708. CRIMINAL PENALTY. (a) A person commits an
offense if the person:
(1) intentionally makes a false statement,
misrepresentation or certification in a record or application filed
with the department or required to be maintained under this chapter
or a rule adopted or order issued under this chapter, or
intentionally makes a false entry or omits a material entry in such
a record or application; or
(2) knowingly engages in an activity for which a
license is required under Subchapter D or Subchapter F without
being licensed under this chapter.
(b) An offense under this section is a third degree felony.
(c) If the commissioner has reason to believe that a person
has committed an offense under this section or an offense under any
other state or federal law, the commissioner may file a criminal
referral with the district attorney of Travis County or an
appropriate prosecuting attorney of the county in which the offense
is alleged to have been committed.
(d) Nothing in this section limits the power of the state to
punish a person for any act which constitutes an offense under any
statute.
Sec. 151.709. NOTICE, HEARING AND OTHER PROCEDURES FOR
NON-EMERGENCY ORDERS. (a) This section applies to an order issued
by the commissioner under this subchapter that is not an emergency
order.
(b) An order subject to this section becomes effective only
after notice and an opportunity for hearing. The order must:
(1) state the grounds upon which the order is based;
(2) to the extent applicable, state the action or
violation from which the person subject to the order must cease and
desist or the affirmative action such person must take to correct a
condition resulting from the violation or that is otherwise
appropriate;
(3) be delivered by personal delivery or sent by
certified mail, return receipt requested, to the person against
whom the order is directed at the person's last known address;
(4) state the effective date of the order, which may
not be before the 21st day after the date the order is delivered or
mailed;
(5) include a notice that a person may request a
hearing on the order by filing a written request for hearing with
the commissioner not later than the 20th day after the date the
order is delivered or mailed.
(c) Unless the commissioner receives a written request for
hearing from the person against whom the order is directed not later
than the 20th day after the date the order is delivered or mailed,
the order takes effect as stated in the order and is final and
nonappealable as to that person as of that date.
(d) A hearing on the order must be held not later than the
45th day after the date the commissioner receives the written
request for hearing unless the administrative law judge extends the
period for good cause or the parties agree to a later hearing.
(e) An order that has been affirmed or modified after
hearing becomes effective and is final for purposes of enforcement
and appeal immediately upon issuance. The order may be appealed to
the district court of Travis County as provided in 151.801(b).
Sec. 151.710. REQUIREMENTS AND NOTICE AND HEARING
PROCEDURES FOR EMERGENCY ORDERS. (a) This section applies to an
order issued by the commissioner under this subchapter as an
emergency order.
(b) The commissioner may issue an emergency order, without
prior notice and an opportunity for hearing, if the commissioner
finds that:
(1) the action, violation or condition that is the
basis for the order has or is likely to:
(A) cause the insolvency of the license holder;
(B) cause the substantial dissipation of the
license holder's assets or earnings;
(C) seriously weaken the condition of the license
holder; or
(D) seriously prejudice the interests of the
license holder, purchasers of the license holder's money services,
or the public; and
(2) immediate action is necessary to protect the
interests of the license holder, purchasers of the license holder's
money services, or the public.
(c) In connection with and as directed in an emergency
order, the commissioner may seize the records and assets of a
license holder or authorized delegate that relate to the license
holder's money services business.
(d) An emergency order must:
(1) state the grounds upon which the order is based;
(2) advise the person against whom the order is
directed that the order takes effect immediately, and, to the
extent applicable, require the person to immediately cease and
desist from the conduct or violation that is the subject of the
order or take such affirmative action as is necessary to correct a
condition resulting from the conduct or violation or is otherwise
appropriate;
(3) be delivered by personal delivery or sent by
certified mail, return receipt requested, to the person against
whom the order is directed at the person's last known address;
(4) include a notice that a person may request a
hearing on the order by filing a written request for hearing with
the commissioner not later than the 15th day after the date the
order is delivered or mailed.
(e) An emergency order takes effect as soon as the person
against whom the order is directed has constructive knowledge of
the issuance of the order.
(f) A license holder or authorized delegate against whom an
emergency order is directed must submit a written certification to
the commissioner, signed by the license holder or authorized
delegate, and their principals and responsible individuals, as
applicable, and each person named in the order, stating that each
has received a copy of and has read and understands the order.
(g) Unless the commissioner receives a written request for
hearing from a person against whom an emergency order is directed
not later than the 15th day after the date the order is delivered or
mailed, the order is final and nonappealable as to that person on
the 16th day after the date the order is delivered or mailed.
(h) A request for hearing does not stay an emergency order.
(i) A hearing on an emergency order takes precedence over
other matters pending before the commissioner, and must be held not
later than the 10th day after the date the commissioner receives the
written request for hearing unless the administrative law judge
extends the period for good cause or the parties agree to a later
hearing.
(j) An emergency order that has been affirmed or modified
after hearing is final for purposes of enforcement and appeal. The
order may be appealed to the district court of Travis County as
provided in 151.801(b).
SUBCHAPTER I. ADMINISTRATIVE PROCEDURES AND JUDICIAL REVIEW
Sec. 151.801. ADMINISTRATIVE PROCEDURES. (a) All
administrative proceedings under this chapter must be conducted in
accordance with Chapter 2001, Government Code, and Title 7, Chapter
9, Texas Administrative Code.
(b) A person affected by a final order of the commissioner
issued under this chapter after hearing may appeal the order by
filing a petition for judicial review in a district court of Travis
County. A petition for review filed in the district court does not
stay or vacate the appealed order unless the court, after notice and
hearing, specifically stays or vacates the order.
SECTION 2. EFFECTIVE DATE. This Act takes effect September
1, 2005.
SECTION 3. SAVINGS AND TRANSITIONAL PROVISIONS. (a) A
license issued under Chapter 152, Finance Code, or Chapter 153,
Finance Code, that is in effect on September 1, 2005, remains in
force as a license under Chapter 152, Finance Code, or Chapter 153,
Finance Code, until August 15, 2006. The license expires on August
15, 2006, unless the license holder renews the license in
accordance with this Act. Except as provided in this section, a
license holder that seeks to renew its license must satisfy the net
worth, security, permissible investment, and other substantive
requirements for licensure established in this Act.
(b) A person licensed under Chapter 153, Finance Code, as of
September 1, 2005, to engage in the business of currency
transmission or currency transportation has until August 15, 2011,
to satisfy the net worth and permissible investment requirements
established in this Act. The commissioner may extend the period
beyond that date on a year by year basis for good cause.
(c) A person licensed under Chapter 153, Finance Code, as of
September 1, 2005, to engage in the business of currency
transmission or currency transportation has until August 15, 2007,
to satisfy the security requirements established in this Act.
(d) A contract between a license holder and an authorized
delegate in effect as of September 1, 2005, remains in effect until
the contract is renewed or December 31, 2006, whichever occurs
first. A new or renewal contract entered into between a license
holder and an authorized delegate after the effective date of this
Act must satisfy the contract requirements established in this Act.
(e) The commission may adopt rules to further provide for
the orderly transition to licensing and regulation under this Act.
SECTION 4. REPEALER. The Sale of Checks Act, Chapter 152,
Finance Code, and Chapter 153, Finance Code, relating to currency
exchange, transportation, or transmission, are repealed effective
September 1, 2005.