88R11286 TYPED
 
  By: Lambert H.B. No. 3573
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to modernizing the regulation of money services
  businesses.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle E, Title 3, Finance Code, is amended by
  adding Chapter 151 to read as follows:
  CHAPTER 151. REGULATION OF MONEY SERVICES BUSINESSES
  SUBCHAPTER A. GENERAL PROVISIONS
         Section 151.2000 Short Title. This Act may be cited as the
  Texas Money Services Modernization Act.
         Section 151.002 Definitions. For purposes of this Act, the
  following definitions shall apply:
         (a)  "Acting in concert" means persons knowingly acting
  together with a common goal of jointly acquiring control of a
  licensee whether or not pursuant to an express agreement.
         (b)  "Authorized delegate" means a person a licensee
  designates to engage in money transmission on behalf of the
  licensee.
         (c)  "Average daily money transmission liability" means the
  amount of the licensee's outstanding money transmission
  obligations in this state at the end of each day in a given period of
  time, added together, and divided by the total number of days in the
  given period of time. For purposes of calculating average daily
  money transmission liability under this Act for any licensee
  required to do so, the given period of time shall be the quarters
  ending March 31, June 30, September 30, and December 31 and at any
  other date that may be requested during an examination.
         (d)  "Bank Secrecy Act" means the Bank Secrecy Act, 31 U.S.C.
  Section 5311, et seq. and its implementing regulations, as amended
  and recodified from time to time.
         (e)  "Closed loop stored value" means stored value that is
  redeemable by the issuer only for goods or services provided by the
  issuer or its affiliate or franchisees of the issuer or its
  affiliate, except to the extent required by applicable law to be
  redeemable in cash for its cash value;
         (f)  "Commission" means the Finance Commission of Texas.
         (g)  "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.
         (h)  "Control" means
         (1) (A)  the power to vote, directly or indirectly, at least
  25 percent of the outstanding voting shares or voting interests of a
  licensee or person in control of a licensee;
                     (B)  the power to elect or appoint a majority of
  key individuals or executive officers, managers, directors,
  trustees, or other persons exercising managerial authority of a
  person in control of a licensee; or
                     (C)  the power to exercise, directly or
  indirectly, a controlling influence over the management or policies
  of a licensee or person in control of a licensee.
               (2)  Rebuttable Presumption of Control.
                     (A)  A person is presumed to exercise a
  controlling influence when the person holds the power to vote,
  directly or indirectly, at least 10 percent of the outstanding
  voting shares or voting interests of a licensee or person in control
  of a licensee.
                     (B)  A person presumed to exercise a controlling
  influence as defined by this section can rebut the presumption of
  control if the person is a passive investor.
               (3)  For purposes of determining the percentage of a
  person controlled by any other person, the person's interest shall
  be aggregated with the interest of any other immediate family
  member, including the person's spouse, parents, children,
  siblings, mothers- and fathers-in law, sons- and daughters-in-law,
  brothers- and sisters-in-law, and any other person who shares such
  person's home.
         (i)  "Currency" means the coin and paper money issued by 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.
         (j)  "Currency exchange" means:
               (1)  receiving the currency of one government and
  exchanging it for the currency of another government; or
               (2)  receiving a negotiable instrument and exchanging
  it for the currency of another government.
         (k)  "Department" means the Texas Department of Banking.
         (l)  "Eligible rating" shall mean a credit rating of any of
  the three highest rating categories provided by an eligible rating
  service, whereby each category may include rating category
  modifiers such as "plus" or "minus" for S&P, or the equivalent for
  any other eligible rating service. Long-term credit ratings are
  deemed eligible if the rating is equal to A- or higher by S&P, or the
  equivalent from any other eligible rating service. Short-term
  credit ratings are deemed eligible if the rating is equal to or
  higher than A-2 or SP-2 by S&P, or the equivalent from any other
  eligible rating service. In the event that ratings differ among
  eligible rating services, the highest rating shall apply when
  determining whether a security bears an eligible rating.
         (m)  "Eligible rating service" shall mean any Nationally
  Recognized Statistical Rating Organization (NRSRO) as defined by
  the U.S. Securities and Exchange Commission, and any other
  organization designated by the Commissioner by rule or order.
         (n)  "Federally insured depository financial institution"
  means a bank, credit union, savings and loan association, trust
  company, savings association, savings bank, industrial bank, or
  industrial loan company organized under the laws of the United
  States or any state of the United States, when such bank, credit
  union, savings and loan association, trust company, savings
  association, savings bank, industrial bank, or industrial loan
  company has federally insured deposits.
         (o)  "In this state" means at a physical location within this
  state for a transaction requested in person. For a transaction
  requested electronically or by phone, the provider of money
  transmission may determine if the person requesting the transaction
  is "in this state" by relying on other information provided by the
  person regarding the location of the individual's residential
  address or a business entity's principal place of business or other
  physical address location, and any records associated with the
  person that the provider of money transmission may have that
  indicate such location, including but not limited to an address
  associated with an account.
         (p)  "Individual" means a natural person.
         (q)  "Key individual" means any individual ultimately
  responsible for establishing or directing policies and procedures
  of the licensee, such as an executive officer, manager, director,
  or trustee.
         (r)  "Licensee" means a person licensed under this Act.
         (s)  "Material litigation" means litigation, that according
  to United States generally accepted accounting principles, is
  significant to a person's financial health and would be required to
  be disclosed in the person's annual audited financial statements,
  report to shareholders, or similar records.
         (t)  "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. The term "monetary value" includes:
               (1)  Stablecoin that is fully backed by sovereign
  currency and grants the holder the right to redeem the coin for
  sovereign currency from the issuer.
         (u)  "Money transmission" means any of the following:
               (1)  Selling or issuing payment instruments to a person
  located in this state.
               (2)  Selling or issuing stored value to a person
  located in this state.
               (3)  Receiving money for transmission from a person
  located in this state.
  The term includes payroll processing services. The term does not
  include the provision solely of online or telecommunications
  services or network access.
         (v)  "MSB accredited state" means a state agency that is
  accredited by the Conference of State Bank Supervisors and Money
  Transmitter Regulators Association for money transmission
  licensing and supervision.
         (w)  "Multistate licensing process" means any agreement
  entered into by and among state regulators relating to coordinated
  processing of applications for money transmission licenses,
  applications for the acquisition of control of a licensee, control
  determinations, or notice and information requirements for a change
  of key individuals.
         (x)  "Negotiable instrument" has the meaning assigned by
  Section 3.104, Business & Commerce Code.
         (y)  "NMLS" means the Nationwide Multistate Licensing System
  and Registry developed by the Conference of State Bank Supervisors
  and the American Association of Residential Mortgage Regulators and
  owned and operated by the State Regulatory Registry, LLC, or any
  successor or affiliated entity, for the licensing and registration
  of persons in financial services industries.
         (z)  "Outstanding money transmission obligations" shall be
  established and extinguished in accordance with applicable state
  law and shall mean:
               (1)  Any payment instrument or stored value issued or
  sold by the licensee to a person located in the United States or
  reported as sold by an authorized delegate of the licensee to a
  person that is located in the United States that has not yet been
  paid or refunded by or for the licensee, or escheated in accordance
  with applicable abandoned property laws; or
               (2)  Any money received for transmission by the
  licensee or an authorized delegate in the United States from a
  person located in the United States that has not been received by
  the payee or refunded to the sender, or escheated in accordance with
  applicable abandoned property laws.
               (3)  For purposes of this section, "in the United
  States" shall include, to the extent applicable, a person in any
  state, territory, or possession of the United States; the District
  of Columbia; the Commonwealth of Puerto Rico; or a U.S. military
  installation that is located in a foreign country.
         (aa)  "Passive investor" means a person that:
               (1)  Does not have the power to elect a majority of key
  individuals or executive officers, managers, directors, trustees,
  or other persons exercising managerial authority of a person in
  control of a licensee;
               (2)  Is not employed by and does not have any managerial
  duties of the licensee or person in control of a licensee;
               (3)  Does not have the power to exercise, directly or
  indirectly, a controlling influence over the management or policies
  of a licensee or person in control of a licensee; and
               (4)  Either:
                     (A)  Attests to (1), (2), and (3), in a form and in
  a medium prescribed by the Commissioner; or
                     (B)  Commits to the passivity characteristics of
  (1), (2), and (3), in a written document.
         (bb)  "Payment instrument" means a written or electronic
  check, draft, money order, traveler's check, or other written or
  electronic instrument for the transmission or payment of money or
  monetary value, whether or not negotiable. The term does not
  include stored value or any instrument that (1) is redeemable by the
  issuer only for goods or services provided by the issuer or its
  affiliate or franchisees of the issuer or its affiliate, except to
  the extent required by applicable law to be redeemable in cash for
  its cash value; or (2) not sold to the public but issued and
  distributed as part of a loyalty, rewards, or promotional program.
         (cc)  "Payroll processing services" means receiving money
  for transmission pursuant to a contract with a person to deliver
  wages or salaries, make payment of payroll taxes to state and
  federal agencies, make payments relating to employee benefit plan],
  or make distributions of other authorized deductions from wages or
  salaries. The term payroll processing services does not include an
  employer performing payroll processing services on its own behalf
  or on behalf of its affiliate, or a professional employment
  organization subject to regulation under other applicable state
  law.
         (dd)  "Person" means any individual, general partnership,
  limited partnership, limited liability company, corporation,
  trust, association, joint stock corporation, or other corporate
  entity identified by the Commissioner.
         (ee)  "Receiving money for transmission" or "money received
  for transmission" means receiving money or monetary value in the
  United States for transmission within or outside the United States
  by electronic or other means.
         (ff)  "Stored value" means monetary value representing a
  claim against the issuer evidenced by an electronic or digital
  record, and that is intended and accepted for use as a means of
  redemption for money or monetary value, or payment for goods or
  services. The term includes, but is not limited to, "prepaid
  access" as defined by 31 C.F.R. Section 1010.100, as amended or
  recodified from time to time. Notwithstanding the foregoing, the
  term "stored value" does not include a payment instrument or closed
  loop stored value, or stored value not sold to the public but issued
  and distributed as part of a loyalty, rewards, or promotional
  program.
         (gg)  "Tangible net worth" shall mean the aggregate assets of
  a licensee excluding all intangible assets, less liabilities, as
  determined in accordance with United States generally accepted
  accounting principles.
         (hh)  "Unsafe or unsound act or practice" means a practice of
  or conduct by a licensee or an authorized delegate of the licensee
  that creates the likelihood of material loss, insolvency, or
  dissipation of the licensee's assets, or that otherwise materially
  prejudices the interests of the licensee or the licensee's
  customers.
         Section 151.003 Exemptions. This Act does not apply to:
         (a)  An operator of a payment system to the extent that it
  provides processing, clearing, or settlement services, between or
  among persons exempted by this section or licensees, in connection
  with wire transfers, credit card transactions, debit card
  transactions, stored-value transactions, automated clearing house
  transfers, or similar funds transfers.
         (b)  A person appointed as an agent of a payee to collect and
  process a payment from a payor to the payee for goods or services,
  other than money transmission itself, provided to the payor by the
  payee, provided that:
               (1)  there exists a written agreement between the payee
  and the agent directing the agent to collect and process payments
  from payors on the payee's behalf;
               (2)  the payee holds the agent out to the public as
  accepting payments for goods or services on the payee's behalf; and
               (3)  payment for the goods and services is treated as
  received by the payee upon receipt by the agent so that the payor's
  obligation is extinguished and there is no risk of loss to the payor
  if the agent fails to remit the funds to the payee.
         (c)  A person that acts as an intermediary by processing
  payments between an entity that has directly incurred an
  outstanding money transmission obligation to a sender, and the
  sender's designated recipient, provided that the entity:
               (1)  is properly licensed or exempt from licensing
  requirements under this Act;
               (2)  provides a receipt, electronic record, or other
  written confirmation to the sender identifying the entity as the
  provider of money transmission in the transaction; and
               (3)  bears sole responsibility to satisfy the
  outstanding money transmission obligation to the sender, including
  the obligation to make the sender whole in connection with any
  failure to transmit the funds to the sender's designated recipient.
         (d)  The United States or a department, agency, or
  instrumentality thereof, or its agent.
         (e)  Money transmission by the United States Postal Service
  or by an agent of the United States Postal Service.
         (f)  A state, county, city, or any other governmental agency
  or governmental subdivision or instrumentality of a state, or its
  agent.
         (g)  A federally insured depository financial institution,
  bank holding company, office of an international banking
  corporation, foreign bank that establishes a federal branch
  pursuant to the International Bank Act, 12 U.S.C. Section 3102, as
  amended or recodified from time to time, corporation organized
  pursuant to the Bank Service Corporation Act, 12 U.S.C. Sections
  1861-1867, as amended or recodified from time to time, or
  corporation organized under the Edge Act, 12 U.S.C. Sections
  611-633, as amended or recodified from time to time, under the laws
  of a state or the United States.
         (h)  A trust company, as defined by Section 187.001(a), that
  is organized under the laws of this state.
         (i)  Electronic funds transfer of governmental benefits for
  a federal, state, county, or governmental agency by a contractor on
  behalf of the United States or a department, agency, or
  instrumentality thereof, or on behalf of a state or governmental
  subdivision, agency, or instrumentality thereof.
         (j)  A board of trade designated as a contract market under
  the federal Commodity Exchange Act, 7 U.S.C. Sections 1-25, as
  amended or recodified from time to time, or a person that, in the
  ordinary course of business, provides clearance and settlement
  services for a board of trade to the extent of its operation as or
  for such a board.
         (k)  A registered futures commission merchant under the
  federal commodities laws to the extent of its operation as such a
  merchant.
         (l)  A person registered as a securities broker-dealer under
  federal or state securities laws to the extent of its operation as
  such a broker-dealer.
         (m)  An individual employed by a licensee, authorized
  delegate, or any person exempted from the licensing requirements of
  the Act when acting within the scope of employment and under the
  supervision of the licensee, authorized delegate, or exempted
  person as an employee and not as an independent contractor.
         (n)  A person expressly appointed as a third party service
  provider to or agent of an entity exempt under Section 151.003(g),
  solely to the extent that:
               (1)  such service provider or agent is engaging in
  money transmission on behalf of and pursuant to a written agreement
  with the exempt entity that sets forth the specific functions that
  the service provider or agent is to perform; and
               (2)  the exempt entity assumes all risk of loss and all
  legal responsibility for satisfying the outstanding money
  transmission obligations owed to purchasers and holders of the
  outstanding money transmission obligations upon receipt of the
  purchaser's or holder's money or monetary value by the service
  provider or agent.
         (o)  A person exempt by regulation or order if the
  Commissioner finds such exemption to be in the public interest and
  that the regulation of such person is not necessary for the purposes
  of this Act.
         Section 151.004 Authority to Require Demonstration of
  Exemption. The Commissioner may require that any person claiming to
  be exempt from licensing pursuant to Section 151.003 provide
  information and documentation to the Commissioner demonstrating
  that it qualifies for any claimed exemption.
  SUBCHAPTER B. ADMINISTRATIVE PROVISIONS
         Section 151.101 Administration.
         (a)  The department shall administer this chapter. The
  commission may adopt rules to administer and enforce this chapter,
  including rules necessary or appropriate to:
               (1)  implement and clarify this chapter; and
               (2)  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 chap
         (b)  The presence or absence of a specific reference in this
  chapter to a rule regarding a particular subject is not intended to
  and does not limit the general rulemaking authority granted to the
  commission by this section.
         Section 151.102 Purpose. The purpose of this Act is to
  protect the interests of purchasers of money services and the
  public, preserve and protect the safety and soundness of money
  services businesses, and protect against drug trafficking,
  terrorist funding, and money laundering, structuring, or related
  financial crime.
         Section 151.103 Implementation.
         (a)  In order to carry out the purposes of this Act, the
  Commissioner may, subject to the provisions of Section 151.105(a)
  and(b):
               (1)  Enter into agreements or relationships with other
  government officials or federal and state regulatory agencies and
  regulatory associations in order to improve efficiencies and reduce
  regulatory burden by standardizing methods or procedures, and
  sharing resources, records or related information obtained under
  this Act;
               (2)  Use, hire, contract, or employ analytical systems,
  methods, or software to examine or investigate any person subject
  to this Act.
               (3)  Accept, from other state or federal government
  agencies or officials, licensing, examination, or investigation
  reports made by such other state or federal government agencies or
  officials; and
               (4)  Accept audit reports made by an independent
  certified public accountant or other qualified third-party auditor
  for an applicant or licensee and incorporate the audit report in any
  report of examination or investigation.
         Section 151.104 Commissioner's General Authority.
         (a)  Each power granted to the commissioner under this
  chapter is in addition to, and not in limitation of, each other
  power granted under this chapter. The fact that the commissioner
  possesses, or has exercised, a power under a provision of this
  chapter does not preclude the commissioner from exercising a power
  under any other provision of this chapter.
         (b)  Each power granted to the commissioner under this
  chapter is in addition to, and not in limitation of, powers granted
  to the commissioner under other law. The fact that the commissioner
  possesses, or has exercised, a power under any other provision of
  law does not preclude the commissioner from exercising any power
  under this chapter. The fact that the commissioner possesses, or
  has exercised, a power under a provision of this chapter does not
  preclude the commissioner from exercising a power under any other
  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 and achieve the purposes of this chapter.
         Section 151.105 Confidentiality.
         (a)  Except as otherwise provided in Subsection (b), all
  information or reports obtained by the Commissioner from an
  applicant, licensee, or authorized delegate, and all information
  contained in or related to an examination, investigation, operating
  report, or condition report prepared by, on behalf of, or for the
  use of the Commissioner, or financial statements, balance sheets,
  or authorized delegate information, are confidential and are not
  subject to disclosure under the Public Information Act.
         (b)  The Commissioner may disclose information not otherwise
  subject to disclosure under Subsection (a) to representatives of
  state or federal agencies who promise in a record that they will
  maintain the confidentiality of the information or where the
  Commissioner finds that the release is reasonably necessary for the
  protection and interest of the public in accordance with the Public
  Information Act.
         (c)  This Section 151.105 does not prohibit the Commissioner
  from disclosing to the public a list of all licensees or the
  aggregated financial or transactional data concerning those
  licensees.
         (d)  Information contained in the records of the Department
  that is not confidential and may be made available to the public
  either on the Department's website, upon receipt by the Department
  of a written request, or in NMLS shall include:
               (1)  The name, business address, telephone number, and
  unique identifier of a licensee;
               (2)  The business address of a licensee's registered
  agent for service;
               (3)  The name, business address, and telephone number
  of all authorized delegates;
               (4)  The terms of or a copy of any bond filed by a
  licensee, provided that confidential information, including, but
  not limited to, prices and fees for such bond is redacted;
               (5)  Copies of any non-confidential final orders of the
  Department relating to any violation of this Act or regulations
  implementing this Act; and
               (6)  Imposition of an administrative fine or penalty
  under this Act.
         Section 151.106 Supervision.
         (a)  The Commissioner may conduct an examination or
  investigation of a licensee or authorized delegate or otherwise
  take independent action authorized by this Act or by a rule adopted
  or order issued under this Act as reasonably necessary or
  appropriate to administer and enforce this Act, regulations
  implementing this Act, and other applicable law, including the Bank
  Secrecy Act and the USA PATRIOT ACT. The Commissioner may:
               (1)  conduct an examination either on-site or off-site
  as the Commissioner may reasonably require;
               (2)  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;
               (3)  accept the examination report of another state
  agency or an agency of another state or of the federal government,
  or a report prepared by an independent accounting firm, which on
  being accepted is considered for all purposes as an official report
  of the Commissioner; and
               (4)  summon and examine under oath a key individual or
  employee of a licensee or authorized delegate and require the
  person to produce records regarding any matter related to the
  condition and business of the licensee or authorized delegate.
         (b)  A licensee or authorized delegate shall provide, and the
  Commissioner shall have full and complete access to, all records
  the Commissioner may reasonably require to conduct a complete
  examination. The records must be provided at the location and in the
  format specified by the Commissioner, provided, the Commissioner
  may utilize multistate record production standards and examination
  procedures when such standards will reasonably achieve the
  requirements of this section.
         (c)  Unless otherwise directed by the Commissioner, a
  licensee shall pay all costs reasonably incurred in connection with
  an examination of the licensee or the licensee's authorized
  delegates.
         Section 151.107 Networked Supervision.
         (a)  To efficiently and effectively administer and enforce
  this Act and to minimize regulatory burden, the Commissioner may
  participate in multistate supervisory processes established
  between states and coordinated through the Conference of State Bank
  Supervisors, Money Transmitter Regulators Association, and
  affiliates and successors thereof for all licensees that hold
  licenses in this state and other states. As a participant in
  multistate supervision, the Commissioner will:
               (1)  cooperate, coordinate, and share information with
  other state and federal regulators in accordance with Section
  151.105 of this Act;
               (2)  enter into written cooperation, coordination, or
  information-sharing contracts or agreements with organizations the
  membership of which is made up of state or federal governmental
  agencies; and
               (3)  cooperate, coordinate, and share information with
  organizations the membership of which is made up of state or federal
  governmental agencies, provided that the organizations agree in
  writing to maintain the confidentiality and security of the shared
  information in accordance with Section 151.105 of this Act.
         (b)  The Commissioner may not waive, and nothing in this
  section constitutes a waiver of, the Commissioner's authority to
  conduct an examination or investigation or otherwise take
  independent action authorized by this Act or a rule adopted or order
  issued under this Act to enforce compliance with applicable state
  or federal law.
         (c)  A joint examination or investigation, or acceptance of
  an examination or investigation report, does not waive an
  examination assessment provided for in this Act.
         Section 151.108 Relationship to Federal Law.
         (a)  In the event state money transmission jurisdiction is
  conditioned on a federal law, any inconsistencies between a
  provision of this Act and the federal law governing money
  transmission shall be governed by the applicable federal law to the
  extent of the inconsistency.
         (b)  In the event of any inconsistencies between this Act and
  a federal law that governs pursuant to Subsection (a), the
  Commissioner may provide interpretive guidance that:
               (1)  identifies the inconsistency; and
               (2)  identifies the appropriate means of compliance
  with federal law.
         Section 151.109 Consent To Service Of Process. A licensee, an
  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. MONEY SERVICES LICENSES
         Section 151.201 Money Transmission License Required.
         (a)  A person may not engage in the business of money
  transmission or advertise, solicit, or hold itself out as engaging
  in the business of money transmission unless the person is licensed
  under this Act.
         (b)  For the purposes of this chapter, a person engages in
  the business of money transmission if the person receives
  compensation or expects to receive compensation, directly or
  indirectly, for conducting money transmission.
         (c)  Subsection (a) does not apply to:
               (1)  A person that is an authorized delegate of a person
  licensed under this Act acting within the scope of authority
  conferred by a written contract with the licensee; or
               (2)  A person that is exempt pursuant to Section
  151.003 and does not engage in money transmission outside the scope
  of such exemption.
               (3)  A person that has been granted an exemption under
  Subsection (e).
         (d)  A license issued under Section 151.206 is not
  transferable or assignable.
         (e)  On 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 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 the person's primary
  business services; and
               (3)  transmits money without a fee as an inducement for
  customer participation in the person's primary business.
         Section 151.202  Currency Exchange 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 an authorized delegate of a person licensed for
  money transmission under this subchapter;
               (3)  is excluded under Section 151.003; or 
               (4)  has been granted an exemption under Subsection
  (e).
         (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 licensee may engage in the currency exchange business
  at one or more locations in this state owned, directly or indirectly
  by the licensee, under a single license.
         (d)  A license issued under Section 151.206 is not
  transferable or assignable.
         (e)  On 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 the 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.
         (f)  In accordance with the investigation provisions of this
  chapter, the commissioner may examine a person to verify the
  person's exempt status under Subsection (e).
         Section 151.203  Consistent State Licensing.
         (a)  The commissioner may require that a person submit
  through NMLS in the form and manner prescribed by the commissioner
  and acceptable to the registry any information or document or
  payment of a fee required to be submitted under this chapter or
  rules adopted under this chapter.
         (b)  The commissioner may use NMLS as a channeling agent for
  obtaining information required for licensing purposes under this
  chapter or rules adopted under this chapter, including:
               (1)  criminal history record information from the
  Federal Bureau of Investigation, the United States Department of
  Justice, or any other agency or entity at the commissioner's
  discretion;
               (2)  information related to any administrative, civil,
  or criminal findings by a governmental jurisdiction; and
               (3)  information requested by the commissioner under
  Section 151.204(a)(10) or Section 151.204(b)(11).
         Section 151.204  Application for a Money Services License.
         (a)  Applicants for a license shall apply in a form and in a
  medium as prescribed by the Commissioner. Each such form shall
  contain content as set forth by rule, regulation, instruction or
  procedure of the Commissioner and may be changed or updated by the
  Commissioner in accordance with applicable law in order to carry
  out the purposes of this Act and maintain consistency with NMLS
  licensing standards and practices. The application must state or
  contain, as applicable:
               (1)  the legal name and residential and business
  addresses of the applicant and any fictitious or trade name used by
  the applicant in conducting its business;
               (2)  a list of any criminal convictions of the
  applicant and any material litigation in which the applicant has
  been involved in the 10-year period next preceding the submission
  of the application;
               (3)  a description of any money transmission or
  currency exchange previously provided by the applicant and the
  money transmission or currency exchange that the applicant seeks to
  provide in this state;
               (4)  if applicable, a list of the applicant's proposed
  authorized delegates and the locations in this state where the
  applicant and its authorized delegates propose to engage in money
  transmission;
               (5)  a list of other states in which the applicant is
  licensed to engage in money transmission, currency exchange, or
  both and any license revocations, suspensions, or other
  disciplinary action taken against the applicant in another state;
               (6)  information concerning any bankruptcy or
  receivership proceedings affecting the licensee or a person in
  control of a licensee;
               (7)  a sample form of contract for authorized
  delegates, if applicable;
               (8)  a sample form of payment instrument or stored
  value, as applicable;
               (9)  the name and address of any federally insured
  depository financial institution through which the applicant plans
  to conduct licensable activity; and
               (10)  any other information the Commissioner
  reasonably requires with respect to the applicant.
         (b)  If an applicant is a corporation, limited liability
  company, partnership, or other legal entity, the applicant shall
  also provide:
               (1)  the date of the applicant's incorporation or
  formation and state or country of incorporation or formation;
               (2)  if applicable, a certificate of good standing from
  the state or country in which the applicant is incorporated or
  formed;
               (3)  a brief description of the structure or
  organization of the applicant, including any parents or
  subsidiaries of the applicant, and whether any parents or
  subsidiaries are publicly traded;
               (4)  the legal name, any fictitious or trade name, all
  business and residential addresses, and the employment, as
  applicable, in the 10-year period next preceding the submission of
  the application of each key individual and person in control of the
  applicant;
               (5)  a list of any criminal convictions and material
  litigation in which a person in control of the applicant that is not
  an individual has been involved in the 10-year period preceding the
  submission of the application;
               (6)  if applying for a money transmission license, a
  copy of audited financial statements of the applicant for the most
  recent fiscal year and for the two-year period next preceding the
  submission of the application or, if applying for a currency
  exchange license or if otherwise determined to be acceptable to the
  Commissioner, certified unaudited financial statements for the
  most recent fiscal year or other period acceptable to the
  Commissioner;
               (7)  a certified copy of unaudited financial statements
  of the applicant for the most recent fiscal quarter;
               (8)  if the applicant is a publicly traded corporation,
  a copy of the most recent report filed with the United States
  Securities and Exchange Commission under Section 13 of the federal
  Securities Exchange Act of 1934, 15 U.S.C. Section 78m, as amended
  or recodified from time to time;
               (9)  if the applicant is a wholly owned subsidiary of:
                     (A)  a corporation publicly traded in the United
  States, a copy of audited financial statements for the parent
  corporation for the most recent fiscal year or a copy of the parent
  corporation's most recent report filed under Section 13 of the U.S.
  Securities Exchange Act of 1934, 15 U.S.C. Section 78m, as amended
  or recodified from time to time; or
                     (B)  a corporation publicly traded outside the
  United States, a copy of similar documentation filed with the
  regulator of the parent corporation's domicile outside the United
  States;
               (10)  the name and address of the applicant's
  registered agent in this state; and
               (11)  any other information the Commissioner
  reasonably requires with respect to the applicant.
         (c)  A nonrefundable application fee in the amount
  established by commission rule.
         (d)  The Commissioner may waive one or more requirements of
  Sections 151.204(a) and (b) or permit an applicant to submit other
  information in lieu of the required information.
         Section 151.205  Information Requirements for Certain
  Individuals.
         (a)  Any individual in control of a licensee or applicant,
  any individual that seeks to acquire control of a licensee, and each
  key individual shall furnish to the Commissioner the following
  items:
               (1)  The individual's fingerprints for submission to
  the Federal Bureau of Investigation and the Commissioner for
  purposes of a national criminal history background check unless the
  person currently resides outside of the United States and has
  resided outside of the United States for the last ten years.
               (2)  Personal history and experience in a form and in a
  medium prescribed by the Commissioner, to obtain the following:
                     (A)  An independent credit report from a consumer
  reporting agency unless the individual does not have a Social
  Security number, in which case, this requirement shall be waived;
                     (B)  Information related to any criminal
  convictions or pending charges; and
                     (C)  Information related to any regulatory or
  administrative action and any civil litigation involving claims of
  fraud, misrepresentation, conversion, mismanagement of funds,
  breach of fiduciary duty, or breach of contract.
         (b)  If the individual has resided outside of the United
  States at any time in the last ten years, the individual shall also
  provide an investigative background report prepared by an
  independent search firm that meets the following requirements:
               (1)  At a minimum, the search firm shall:
                     (A)  Demonstrate that it has sufficient
  knowledge, resources, and employs accepted and reasonable
  methodologies to conduct the research of the background report; and
                     (B)  Not be affiliated with or have an interest
  with the individual it is researching.
               (2)  At a minimum, the investigative background report
  shall be written in the English language and shall contain the
  following:
                     (A)  If available in the individual's current
  jurisdiction of residency, a comprehensive credit report, or any
  equivalent information obtained or generated by the independent
  search firm to accomplish such report, including a search of the
  court data in the countries, provinces, states, cities, towns, and
  contiguous areas where the individual resided and worked;
                     (B)  Criminal records information for the past ten
  years, including, but not limited to, felonies, misdemeanors, or
  similar convictions for violations of law in the countries,
  provinces, states, cities, towns, and contiguous areas where the
  individual resided and worked;
                     (C)  Employment history;
                     (D)  Media history, including an electronic
  search of national and local publications, wire services, and
  business applications; and
                     (E)  Financial services-related regulatory
  history, including but not limited to, money transmission,
  securities, banking, insurance, and mortgage-related industries.
         Section 151.206  Issuance of License.
         (a)  When an application for an original license under this
  Act appears to include all the items and addresses all of the
  matters that are required, the application is complete and the
  Commissioner shall promptly notify the applicant in a record of the
  date on which the application is determined to be complete, and:
               (1)  The Commissioner shall approve or deny the
  application within 120 days after the completion date; or
               (2)  if the application is not approved or denied
  within 120 days after the completion date:
                     (A)  the application is approved; and
                     (B)  the license takes effect as of the first
  business day after expiration of the 120-day period.
                     (C)  The Commissioner may for good cause extend
  the application period.
         (b)  A determination by the Commissioner that an application
  is complete and is accepted for processing means only that the
  application, on its face, appears to include all of the items,
  including the Criminal Background Check response from the FBI, and
  address all of the matters that are required, and is not an
  assessment of the substance of the application or of the
  sufficiency of the information provided.
         (c)  When an application is filed and considered complete
  under this section, the Commissioner shall investigate the
  applicant's financial condition and responsibility, financial and
  business experience, character, and general fitness. The
  Commissioner may conduct an on-site investigation of the applicant,
  the reasonable cost of which the applicant must pay. The
  Commissioner shall issue a license to an applicant under this
  section if the Commissioner finds that all of the following
  conditions have been fulfilled:
               (1)  The applicant has complied with Sections 151.204
  and 151.205; and
               (2)  the financial condition and responsibility,
  financial and business experience, competence, character, and
  general fitness of the applicant; and the competence, experience,
  character, and general fitness of the key individuals and persons
  in control of the applicant indicate that it is in the interest of
  the public to permit the applicant to engage in money transmission,
  currency exchange, or both.
         (d)  If an applicant avails itself or is otherwise subject to
  a multistate licensing process:
               (1)  the Commissioner may accept the investigation
  results of a lead investigative state for the purpose of Section
  151.206(c) if the lead investigative state has sufficient staffing,
  expertise, and minimum standards; or
               (2)  if Texas is a lead investigative state, the
  Commissioner may investigate the applicant pursuant to Section
  151.206(c) and the timeframes established by agreement through the
  multistate licensing process, provided however, that in no case
  shall such timeframe be noncompliant with the application period in
  Section 151.206(a)(1).
         (e)  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 date.
  The hearing is considered a contested case hearing and is subject to
  Section 151.801.
         (f)  The initial license term shall begin on the day the
  application is approved.
         Section 151.207  Maintenance of License.
         (a)  If a licensee does not continue to meet the
  qualifications or satisfy the requirements that apply to an
  applicant for a new money transmission license, the Commissioner
  may suspend or revoke the licensee's license in accordance with the
  procedures established by this Act or other applicable state law
  for such suspension or revocation.
         (b)  An applicant for a money transmission license must
  demonstrate that it meets or will meet, and a money transmission
  licensee must at all times meet, the requirements in Sections
  151.701, 151.702, 151.704, and 151.705 of this Act.
         (c)  In addition to complying with Subsection (a), a license
  holder must annually:
               (1)  pay a license fee in an amount established by
  commission rule; and
               (2)  submit a report that is under oath, is in the form
  and medium required by the commissioner, and contains:
                     (A)  if the license is a money transmission
  license, 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;
                     (B)  if the license is a currency exchange
  license, 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)  documentation and certification, or any
  other information 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.
         (d)  If the department does not receive a license holder's
  annual license fee and complete annual report on or before the due
  date prescribed by the commissioner under this section, the
  commissioner shall notify the license holder in writing that:
               (1)  the license holder shall submit the report and pay
  the license fee not later than the 45th day after the due date
  prescribed by the commissioner; and
               (2)  the license holder must pay a late fee, in an
  amount that is established by commission rule and not subject to
  appeal, for each business day after the report due date specified by
  the commissioner that the commissioner does not receive the
  completed report and license fee.
         (e)  If the license holder fails to submit the completed
  annual report and pay the annual license fee and any late fee due
  within the time prescribed by Subsection (d)(1), the license
  expires, and the license holder must cease and desist from engaging
  in the business of money transmission or currency exchange, as
  applicable, as of that date. The expiration of a license is not
  subject to appeal.
         (f)  On timely receipt of a license holder's complete annual
  report, annual license fee, and any late fee due, the department
  shall review the report and, if necessary, investigate the
  business and records of the license holder. On completion of the
  review and investigation, if any, the commissioner may:
               (1)  impose conditions on the license the commissioner
  considers reasonably necessary or appropriate; or
               (2)  suspend or revoke the license on the basis of a
  ground specified in Section 151.803.
         (g)  On written application and for good cause shown, the
  commissioner may extend the due date for filing the annual license
  fee and annual report required under this section.
         (h)  The holder or principal of or the person in control of
  the holder of an expired license, or the holder or principal of 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.
         Section 151.208  Surrender of License.
         (a)  A licensee may surrender the licensee's license by
  delivering the original license to the commissioner along with a
  written notice of surrender that includes the location at which the
  licensee'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 licensee shall surrender the licensee's license if the
  licensee becomes ineligible for a license issued under this
  chapter.
         (c)  The surrender of a license does not reduce or eliminate
  a licensee's civil or criminal liability arising from any acts or
  omissions before the surrender of the license, including any
  administrative action undertaken by the commissioner to revoke or
  suspend a license, to assess an administrative penalty, to order
  the payment of restitution, or to exercise any other authority
  under this chapter. Further, the surrender of a license does not
  release the security required of the licensee under Section 151.702
  or 151.703.
         Section 151.209  Refunds.
         (a)  A fee or cost paid under this chapter is not refundable.
  SUBCHAPTER E. ACQUISITION OF CONTROL AND CHANGE OF KEY INDIVIDUAL
         Section 151.301  Acquisition of Control.
         (a)  Any person, or group of persons acting in concert,
  seeking to acquire control of a licensee shall obtain the written
  approval of the Commissioner prior to acquiring control. An
  individual is not deemed to acquire control of a licensee and is not
  subject to these acquisition of control provisions when that
  individual becomes a key individual in the ordinary course of
  business.
         (b)  A person, or group of persons acting in concert, seeking
  to acquire control of a licensee shall, in cooperation with the
  licensee:
               (1)  Submit an application in a form and in a medium
  prescribed by the Commissioner; and
               (2)  Submit a nonrefundable fee in the amount
  established by commission rule.
         (c)  Upon request, the Commissioner may permit a licensee or
  the person, or group of persons acting in concert, to submit some or
  all information required by the Commissioner pursuant to Subsection
  (b)(1) without using NMLS.
         (d)  The application required by Subsection (b)(1) shall
  include information required by Section 151.205 for any new key
  individuals that have not previously completed the requirements of
  Section 151.205 for a licensee.
         (e)  When an application for acquisition of control under
  this section appears to include all the items and address all of the
  matters that are required, the application shall be considered
  complete and the Commissioner shall promptly notify the applicant
  in a record of the date on which the application was determined to
  be complete and:
               (1)  The Commissioner shall approve or deny the
  application within 60 days after the completion date; or
               (2)  if the application is not approved or denied
  within 60 days after the completion date:
                     (A)  the application is approved; and
                     (B)  the person, or group of persons acting in
  concert, are not prohibited from acquiring control.
               (3)  The Commissioner may for good cause extend the
  application period.
         (f)  A determination by the Commissioner that an application
  is complete and is accepted for processing means only that the
  application, on its face, appears to include all of the items and
  address all of the matters that are required, and is not an
  assessment of the substance of the application or of the
  sufficiency of the information provided.
         (g)  When an application is filed and considered complete
  under Subsection (e), the Commissioner shall investigate the
  financial condition and responsibility, financial and business
  experience, character, and general fitness of the person, or group
  of persons acting in concert, seeking to acquire control. The
  Commissioner shall approve an acquisition of control pursuant to
  this section if the Commissioner finds that all of the following
  conditions have been fulfilled:
               (1)  The requirements of Subsections (b) and (d) have
  been met, as applicable; and
               (2)  the financial condition and responsibility,
  financial and business experience, competence, character, and
  general fitness of the person, or group of persons acting in
  concert, seeking to acquire control; and the competence,
  experience, character, and general fitness of the key individuals
  and persons that would be in control of the licensee after the
  acquisition of control indicate that it is in the interest of the
  public to permit the person, or group of persons acting in concert,
  to control the licensee.
         (h)  If an applicant avails itself or is otherwise subject to
  a multistate licensing process:
               (1)  the Commissioner may accept the investigation
  results of a lead investigative state for the purpose of Subsection
  (g) if the lead investigative state has sufficient staffing,
  expertise, and minimum standards; or
               (2)  if Texas is a lead investigative state, the
  Commissioner may investigate the applicant pursuant to Subsection
  (g) and the timeframes established by agreement through the
  multistate licensing process.
         (i)  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 date. The
  hearing is considered a contested case hearing and is subject to
  Section 151.801.
         (j)  The requirements of Subsections (a) and (b) do not apply
  to any of the following:
               (1)  A person that acts as a proxy for the sole purpose
  of voting at a designated meeting of the shareholders or holders of
  voting shares or voting interests of a licensee or a person in
  control of a licensee;
               (2)  A person that acquires control of a licensee by
  devise or descent;
               (3)  A person that acquires control of a licensee 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 that is exempt under Section 151.003(g);
               (5)  A person that the Commissioner determines is not
  subject to Subsection (a) based on the public interest;
               (6)  A public offering of securities of a licensee or a
  person in control of a licensee; or
               (7)  An internal reorganization of a person in control
  of the licensee where the ultimate person in control of the licensee
  remains the same.
         (k)  Persons in Subsections (j)(2), (3), (4), (6), (7) in
  cooperation with the licensee shall notify the Commissioner within
  15 days after the acquisition of control.
         (l)  Streamlined Acquisition of Control
               (1)  The requirements of Subsections (a) and (b) do not
  apply to a person that has complied with and received approval to
  engage in money transmission under this Act or was identified as a
  person in control in a prior application filed with and approved by
  the Commissioner or by an MSB accredited state pursuant to a
  multistate licensing process, provided that:
                     (A)  the person has not had a license revoked or
  suspended or controlled a licensee that has had a license revoked or
  suspended while the person was in control of the licensee in the
  previous 5-years;
                     (B)  if the person is a licensee, the person is
  well managed and has received at least a satisfactory rating for
  compliance at its most recent examination by an MSB accredited
  state if such rating was given;
                     (C)  the licensee to be acquired is projected to
  meet the requirements of Sections 151.701, 151.702, and 151.705 of
  this Act after the acquisition of control is completed, and if the
  person acquiring control is a licensee, that licensee is also
  projected to meet the requirements of Sections 151.701, 151.702,
  and 151.705 of this Act after the acquisition of control is
  completed;
                     (D)  the licensee to be acquired will not
  implement any material changes to its business plan as a result of
  the acquisition of control, and if the person acquiring control is a
  licensee, that licensee also will not implement any material
  changes to its business plan as a result of the acquisition of
  control; and
                     (E)  the person provides notice of the acquisition
  in cooperation with the licensee and attests to Subsections
  (k)(1)(A), (B), (C), and (D) in a form and in a medium prescribed by
  the Commissioner.
               (2)  If the notice is not disapproved within 30 days
  after the date on which the notice was determined to be complete,
  the notice is deemed approved.
         (m)  Before filing an application for approval to acquire
  control of a licensee a person may request in writing a
  determination from the Commissioner as to whether the person would
  be considered a person in control of a licensee upon consummation of
  a proposed transaction. If the Commissioner determines that the
  person would not be a person in control of a licensee, the proposed
  Person and transaction is not subject to the requirements of
  Subsections (a) and (b).
         (n)  If a multistate licensing process includes a
  determination pursuant to Subsection (m) and an applicant avails
  itself or is otherwise subject to the multistate licensing process:
               (1)  The Commissioner may accept the control
  determination of a lead investigative state with sufficient
  staffing, expertise, and minimum standards for the purpose of
  Subsection (m); or
               (2)  If state is a lead investigative state, the
  Commissioner may investigate the applicant pursuant to Subsection
  (m) and the timeframes established by agreement through the
  multistate licensing process,
         Section 151.302  Notice and Information Requirements for a
  Change of Key Individuals.
         (a)  A licensee adding or replacing any key individual shall:
               (1)  Provide notice in a manner prescribed by the
  Commissioner within 15 days after the effective date of the key
  individual's appointment; and
               (2)  Provide information as required by Section 151.205
  within 45 days of the effective date.
         (b)  Within 90 days of the date on which the notice provided
  pursuant to Subsection (a) was determined to be complete, the
  Commissioner may issue a notice of disapproval of a key individual
  if the competence, experience, character, or integrity of the
  individual would not be in the best interests of the public or the
  customers of the licensee to permit the individual to be a key
  individual of such licensee.
         (c)  A notice of disapproval shall contain a statement of the
  basis for disapproval and shall be sent to the licensee and the
  disapproved individual. A licensee may appeal a notice of
  disapproval 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 date. The
  hearing is considered a contested case hearing and is subject to
  Section 151.901.
         (d)  If the notice provided pursuant to Subsection (a) is not
  disapproved within 90 days after the date on which the notice was
  determined to be complete, the key individual is deemed approved.
         (e)  If a multistate licensing process includes a key
  individual notice review and disapproval process pursuant to this
  section and the licensee avails itself or is otherwise subject to
  the multistate licensing process:
               (1)  the Commissioner may accept the determination of
  another state if the investigating state has sufficient staffing,
  expertise, and minimum standards for the purpose of this section;
  or
               (2)  if Texas is a lead investigative state, the
  Commissioner may investigate the applicant pursuant to Subsection
  (b) and the timeframes established by agreement through the
  multistate licensing process.
  SUBCHAPTER F. REPORTING AND RECORDS
         Section 151.401  Report of Condition.
         (a)  Each money transmission licensee shall submit a report
  of condition within 45 days of the end of the calendar quarter, or
  within any extended time as the Commissioner may prescribe.
         (b)  The report of condition shall include:
               (1)  Financial information at the licensee level;
               (2)  Nationwide and state-specific money transmission
  transaction information in every jurisdiction in the United States
  where the licensee is licensed to engage in money transmission;
               (3)  Permissible investments report;
               (4)  Transaction destination country reporting for
  money received for transmission, if applicable; and
               (5)  Any other information the Commissioner reasonably
  requires with respect to the licensee. The Commissioner may utilize
  NMLS for the submission of the report required by this section and
  is authorized to change or update as necessary the requirements of
  this section to carry out the purposes of this Act and maintain
  consistency with NMLS reporting.
         (c)  The information required by Subsection (b)(4) shall
  only be included in a report of condition submitted within 45 days
  of the end of the fourth calendar quarter.
         Section 151.402  Currency Exchange Report
               (a)  Each currency exchange licensee shall submit a
  quarterly interim financial statement and transaction report that
  reflects the licensee'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 the calendar quarter; and
               (b)  any other report required by rule of the
  commission or reasonably requested by the commissioner to determine
  compliance with this chapter.
               (c)  A licensee shall file the statements and reports
  required under this section with the commissioner as required by
  this chapter, by commission rule, or as requested by the
  commissioner.
               (d)  On written application and for good cause shown,
  the commissioner may extend the time for preparing or filing a
  statement or report required under this section.
         Section 151.403  Financial Statements.
               (a)  Each licensee shall, within 90 days after the end
  of each fiscal year, or within any extended time as the Commissioner
  may prescribe, file with the Commissioner:
                     (1)  If the licensee holds a money transmission
  license, an audited unconsolidated financial statement of the
  licensee for the fiscal year prepared in accordance with United
  States generally accepted accounting principles;
                     (2)  If the licensee holds a currency exchange
  license, a financial statement, audited or unaudited, dated as of
  the last day of the licensee's fiscal year that ended in the
  immediately preceding calendar year; and
                     (3)  Any other information as the Commissioner may
  reasonably require.
               (b)  The audited unconsolidated financial statements
  shall be prepared by an independent certified public accountant or
  independent public accountant who is satisfactory to the
  Commissioner;
               (c)  The audited financial statements shall include or
  be accompanied by a certificate of opinion of the independent
  certified public accountant or independent public accountant that
  is satisfactory in form and content to the Commissioner. If the
  certificate or opinion is qualified, the Commissioner may order the
  licensee to take any action as the Commissioner may find necessary
  to enable the independent or certified public accountant or
  independent public accountant to remove the qualification.
         Section 151.404 Authorized Delegate Reporting.
               (a)  Each licensee shall submit a report of authorized
  delegates within 45 days of the end of the calendar quarter. The
  Commissioner may utilize NMLS for the submission of the report
  required by this section provided that such functionality is
  consistent with the requirements of this section.
               (b)  The authorized delegate report shall include, at a
  minimum, each authorized delegate's:
                     (1)  Company legal name;
                     (2)  Taxpayer employer identification number;
                     (3)  Principal provider identifier;
                     (4)  Physical address;
                     (5)  Mailing address;
                     (6)  Any business conducted in other states;
                     (7)  Any fictitious or trade name;
                     (8)  Contact person name, phone number, and email
                     (9)  Start date as licensee's authorized
  delegate;
                     (10)  End date acting as licensee's authorized
  delegate, if applicable; and
                     (11)  Any other information the Commissioner
  reasonably requires with respect to the authorized delegate.
         Section 151.405  Reports of Certain Events.
               (a)  A licensee shall file a report with the
  Commissioner within one business day after the licensee has reason
  to know of the occurrence of any of the following events:
                     (1)  the filing of a petition by or against the
  licensee under the United States Bankruptcy Code, 11 U.S.C. Section
  101-110, as amended or recodified from time to time, for bankruptcy
  or reorganization;
                     (2)  the filing of a petition by or against the
  licensee 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 its creditors; or
                     (3)  the commencement of a proceeding to revoke or
  suspend its license in a state or country in which the licensee
  engages in business or is licensed.
               (b)  A licensee shall file a report with the
  Commissioner within three business day after the licensee has
  reason to know of the occurrence of any of the following events:
                     (1)  a charge or conviction of the licensee or of a
  key individual or person in control of the licensee for a felony; or
                     (2)  a charge or conviction of an authorized
  delegate for a felony.
         Section 151.406  Bank Secrecy Act Reports.
         A licensee and an authorized delegate shall file all reports
  required by federal currency reporting, record keeping, and
  suspicious activity reporting requirements as set forth in the Bank
  Secrecy Act and other federal and state laws pertaining to money
  laundering. The timely filing of a complete and accurate report
  required under this section with the appropriate federal agency is
  deemed compliant with the requirements of this section.
         Section 151.407  Records.
               (a)  Licensee shall maintain the following records, for
  determining its compliance with this Act for at least five years:
                     (1)  a record of each outstanding money
  transmission obligation sold;
                     (2)  a record of each currency exchange
  transaction;
                     (3)  a general ledger posted at least monthly
  containing all asset, liability, capital, income, and expense
  accounts;
                     (4)  bank statements and bank reconciliation
  records;
                     (5)  records of outstanding money services
  obligations;
                     (6)  records of each outstanding money services
  obligation paid within the five-year period;
                     (7)  a list of the last known names and addresses
  of all of the licensee's authorized delegates; and
                     (8)  any other records the Commissioner
  reasonably requires by rule.
               (b)  The items specified in Subsection (a)(1) may be
  maintained in any form of record.
               (c)  Records specified in Subsection (a) may be
  maintained outside this state if they are made accessible to the
  Commissioner on seven business-days' notice that is sent in a
  record.
               (d)  All records maintained by the licensee as required
  in Subsections (a)-(c) are open to inspection by the Commissioner
  pursuant to Section 151.106(a).
  SUBCHAPTER G. AUTHORIZED DELEGATES
         Section 151.501  Liability of Licensee
         A money transmission licensee is liable for the payment of
  all money or monetary value received for transmission directly or
  by an authorized delegate appointed in accordance with
  Section 151.502.
         Section 151.502  Relationship Between Licensee and
  Authorized Delegate.
               (a)  In this section, "remit" means to make direct
  payments of money to a licensee or its representative authorized to
  receive money or to deposit money in a bank in an account specified
  by the licensee.
               (b)  Before a licensee is authorized to conduct
  business through an authorized delegate or allows a person to act as
  the licensee's authorized delegate, the licensee must:
                     (1)  adopt, and update as necessary, written
  policies and procedures reasonably designed to ensure that the
  licensee's authorized delegates comply with applicable state and
  federal law;
                     (2)  enter into a written contract that complies
  with Subsection (d); and
                     (3)  conduct a reasonable risk-based background
  investigation sufficient for the licensee to determine whether the
  authorized delegate has complied and will likely comply with
  applicable state and federal law.
               (c)  An authorized delegate must operate in full
  compliance with this Act.
               (d)  The written contract required by Subsection (b)
  must be signed by the licensee and the authorized delegate and, at a
  minimum, must:
                     (1)  appoint the person signing the contract as
  the licensee's authorized delegate with the authority to conduct
  money transmission on behalf of the licensee;
                     (2)  set forth the nature and scope of the
  relationship between the licensee and the authorized delegate and
  the respective rights and responsibilities of the parties;
                     (3)  require the authorized delegate to agree to
  fully comply with all applicable state and federal laws, rules, and
  regulations pertaining to money transmission, including this Act
  and regulations implementing this Act, relevant provisions of the
  Bank Secrecy Act and the USA PATRIOT ACT;
                     (4)  require the authorized delegate to remit and
  handle money and monetary value in accordance with the terms of the
  contract between the licensee and the authorized delegate;
                     (5)  impose a trust on money and monetary value
  net of fees received for money transmission for the benefit of the
  licensee;
                     (6)  require the authorized delegate to prepare
  and maintain records as required by this Act or regulations
  implementing this Act, or as reasonably requested by the
  Commissioner;
                     (7)  acknowledge that the authorized delegate
  consents to examination or investigation by the Commissioner;
                     (8)  state that the licensee 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 licensee to terminate an
  authorized delegate designation; and
                     (9)  acknowledge receipt of the written policies
  and procedures required under Subsection (b)(1).
               (e)  If the licensee's license is suspended, revoked,
  surrendered, or expired, the licensee must, within five (5)
  business days, provide documentation to the Commissioner that the
  licensee has notified all applicable authorized delegates of the
  licensee whose names are in a record filed with the Commissioner of
  the suspension, revocation, surrender, or expiration of a license.
  Upon suspension, revocation, surrender, or expiration of a license,
  applicable authorized delegates shall immediately cease to provide
  money transmission as an authorized delegate of the licensee.
               (f)  An authorized delegate of a licensee holds in
  trust for the benefit of the licensee all money net of fees received
  from money transmission. If any authorized delegate commingles any
  funds received from money transmission with any other funds or
  property owned or controlled by the authorized delegate, all
  commingled funds and other property shall be considered held in
  trust in favor of the licensee in an amount equal to the amount of
  money net of fees received from money transmission.
               (g)  An authorized delegate may not use a subdelegate
  to conduct money transmission on behalf of a licensee.
         Section 151.503  Disclosure Requirements
               (a)  A licensee's name and mailing address or telephone
  number must be provided to the purchaser in connection with each
  money transmission transaction conducted by the licensee directly
  or through an authorized delegate.
               (b)  A licensee receiving currency or an instrument
  payable in currency for transmission must comply with Chapter 278.
         Section 151.504  Unauthorized Activities
         A person shall not engage in the business of money
  transmission on behalf of a person not licensed under this Act or
  not exempt pursuant to Section 151.003 of this Act. A person that
  engages in such activity provides money transmission to the same
  extent as if the person were a licensee, and shall be jointly and
  severally liable with the unlicensed or nonexempt person. Any
  business for which a license is required under this chapter that is
  conducted by an authorized delegate outside the scope of authority
  conferred in the contract between the authorized delegate and the
  licensee is unlicensed activity.
  SUBCHAPTER H. TIMELY TRANSMISSION, REFUNDS, AND DISCLOSURES
         Section 151.601  Timely Transmission.
               (a)  Every licensee shall forward all money received
  for transmission in accordance with the terms of the agreement
  between the licensee and the sender unless the licensee has a
  reasonable belief or a reasonable basis to believe that the sender
  may be a victim of fraud or that a crime or violation of law, rule,
  or regulation has occurred, is occurring, or may occur.
               (b)  If a licensee fails to forward money received for
  transmission in accordance with this section, the licensee must
  respond to inquiries by the sender with the reason for the failure
  unless providing a response would violate a state or federal law,
  rule, or regulation.
         Section 151.602  Refunds.
               (a)  This section does not apply to:
                     (1)  money received for transmission subject to
  the federal Remittance Rule (12 C.F.R. Part 1005, Subpart B), as
  amended or recodified from time to time; or
                     (2)  money received for transmission pursuant to a
  written agreement between the licensee and payee to process
  payments for goods or services provided by the payee.
               (b)  Every licensee shall refund to the sender within
  10 days of receipt of the sender's written request for a refund of
  any and all money received for transmission unless any of the
  following occurs:
                     (1)  The money has been forwarded within 10 days
  of the date on which the money was received for transmission;
                     (2)  Instructions have been given committing an
  equivalent amount of money to the person designated by the sender
  within 10 days of the date on which the money was received for
  transmission;
                     (3)  The agreement between the licensee and the
  sender instructs the licensee to forward the money at a time that is
  beyond 10 days of the date on which the money was received for
  transmission. If funds have not yet been forwarded in accordance
  with the terms of the agreement between the licensee and the sender,
  the licensee shall issue a refund in accordance with the other
  provisions of this section; or
                     (4)  The refund is requested for a transaction
  that the licensee has not completed based on a reasonable belief or
  a reasonable basis to believe that a crime or violation of law,
  rule, or regulation has occurred, is occurring, or may occur.
                     (5)  The refund request does not enable the
  licensee to:
                           (A)  Identify the sender's name and address
  or telephone number; or,
                           (B)  Identify the particular transaction to
  be refunded in the event the sender has multiple transactions
  outstanding.
         Section 151.603  Receipts.
               (a)  This section does not apply to:
                     (1)  Money received for transmission subject to
  the federal Remittance Rule (12 C.F.R. Part 1005, Subpart B), as
  amended or recodified from time to time;
                     (2)  money received for transmission that is not
  primarily for personal, family or household purposes;
                     (3)  money received for transmission pursuant to a
  written agreement between the licensee and payee to process
  payments for goods or services provided by the payee; or
                     (4)  payroll processing services.
               (b)  For purposes of this section "receipt" means a
  paper receipt, electronic record or other written confirmation. For
  a transaction conducted in person, the receipt may be provided
  electronically if the sender requests or agrees to receive an
  electronic receipt. For a transaction conducted electronically or
  by phone, a receipt may be provided electronically. All electronic
  receipts shall be provided in a retainable form.
               (c)  Every licensee or its authorized delegate shall
  provide the sender a receipt for money received for transmission.
                     (1)  The receipt shall contain the following
  information, as applicable:
                           (A)  The name of the sender;
                           (B)  The name of the designated recipient;
                           (C)  The date of the transaction;
                           (D)  The unique transaction or
  identification number;
                           (E)  The name of the licensee, NMLS Unique
  ID, the licensee's business address, and the licensee's customer
  service telephone number;
                           (F)  The amount of the transaction in United
  States dollars;
                           (G)  Any fee charged by the licensee to the
  sender for the transaction; and
                           (H)  Any taxes collected by the licensee
  from the sender for the transaction.
                     (2)  The receipt required by this section shall be
  in English and in the language principally used by the licensee or
  authorized delegate to advertise, solicit, or negotiate, either
  orally or in writing, for a transaction conducted in person,
  electronically or by phone, if other than English.
         Section 151.604  Disclosures for Payroll Processing
  Services.
               (a)  A licensee that provides payroll processing
  services shall:
                     (1)  Issue reports to clients detailing client
  payroll obligations in advance of the payroll funds being deducted
  from an account; and
                     (2)  Make available worker paystubs or an
  equivalent statement to workers.
               (b)  Subsection (a) does not apply to a licensee
  providing payroll processing services where the licensee's client
  designates the intended recipients to the licensee and is
  responsible for providing the disclosures required by Subsection
  (a)(2).
  SUBCHAPTER I. PRUDENTIAL STANDARDS.
         Section 151.701  Net Worth.
               (a)  A money transmission licensee under this Act shall
  maintain at all times a tangible net worth of the greater of
  $100,000 or 3 percent of total assets for the first $100 million, 2
  percent of additional assets for $100 million to $1 billion, and 0.5
  percent of additional assets for over $1 billion.
               (b)  Tangible net worth must be demonstrated at initial
  application by the applicant's most recent audited or unaudited
  financial statements pursuant to Section 151.204(b)(6).
               (c)  Notwithstanding the foregoing provisions of this
  section, the Commissioner shall have the authority, for good cause
  shown, to exempt, in-part or in whole, from the requirements of this
  section any applicant or licensee.
         Section 151.702  Security for Money Transmission.
               (a)  An applicant for a money transmission license must
  provide, and a licensee at all times must maintain, security
  consisting of a surety bond in a form satisfactory to the
  Commissioner or, with the Commissioner's approval, a deposit
  instead of a bond in accordance with this section.
               (b)  The amount of the required security shall be:
                     (1)  the greater of $100,000 or an amount equal to
  one hundred percent of the licensee's average daily money
  transmission liability in this state calculated for the most
  recently completed three-month period, up to a maximum of $500,000;
  or
                     (2)  in the event that the licensee's tangible net
  worth exceeds 10% of total assets, the licensee shall maintain a
  surety bond of $100,000.
               (c)  A licensee that maintains a bond in the maximum
  amount provided for in Subsections (b)(1) or (2), as applicable
  shall not be required to calculate its average daily money
  transmission liability in this state for purposes of this section.
               (d)  A licensee may exceed the maximum required bond
  amount pursuant to Section 151.705(a)(5).
         Section 151.703  Security for Currency Exchange.
               (a)  An applicant for a currency exchange license must
  provide and a currency exchange licensee must maintain at all times
  security in the amount applicable to the applicant or licensee
  under this section.
               (b)  An applicant must provide and a licensee must
  maintain security in the amount of $2,500 if the applicant will
  conduct or the licensee conducts business with persons located in
  this state exclusively at one or more physical locations through
  in-person, contemporaneous transactions.
               (c)  Except as provided by Subsection (d), if
  Subsection (b) does not apply to:
                     (1)  the applicant, the applicant must provide
  security in the amount that is the greater of:
                           (A)  $2,500; or
                           (B)  an amount equal to one percent of the
  applicant's projected total dollar volume of currency exchange
  business in this state for the first year of licensure; or
                     (2)  the licensee, the licensee must maintain
  security in the amount that is the greater of:
                           (A)  $2,500; or
                           (B)  an amount equal to one percent of the
  licensee's total dollar volume of currency exchange business in
  this state for the preceding year.
               (d)  The maximum amount of security that may be
  required under Subsection (c) is $1 million.
         Section 151.704  Additional Requirements for Security.
               (a)  Subsections (b)-(i) of this section define
  additional requirements applicable to the security provided
  pursuant to Sections 151.702 and 151.703.
               (b)  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 this state, 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; and
                     (3)  if the security is a bond, be issued by a
  qualified surety company authorized to engage in business in this
  state and acceptable to the commissioner or, if the security is an
  irrevocable letter of credit, be issued by a financial institution
  acceptable to the commissioner.
               (c)  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.
               (d)  The commissioner may collect from the security or
  proceeds of the security any delinquent fee, assessment, cost,
  penalty, or other amount imposed on and owed by a license holder.
  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 may not be considered an interested, aggrieved, or affected
  person for purposes of an administrative proceeding under Section
  151.901 or Chapter 2001, Government Code.
               (e)  The security remains in effect until canceled,
  which may occur only after providing 30 days' written notice to the
  commissioner. Cancellation does not affect any liability incurred
  or accrued during the period covered by the security.
               (f)  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 before that time to the
  extent that the amount of the license holder's obligations to the
  department and to purchasers in this state is reduced. The
  commissioner may permit a license holder to substitute another form
  of security when the license holder ceases to provide money
  transmission in this state.
               (g)  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.
               (h)  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;
                     (2)  must secure the same obligations as the
  security; and
                     (3)  is subject to other conditions and terms the
  commissioner may reasonably require.
         (i)  The security is considered by operation of law to be
  held in trust for the benefit of this state and any individual to
  whom an obligation arising under this chapter is owed, and may 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 the license holder's obligations under this
  chapter.
         Section 151.705  Maintenance of Permissible Investments.
               (a)  A money transmission licensee shall maintain at
  all times permissible investments that have a market value computed
  in accordance with United States generally accepted accounting
  principles of not less than the aggregate amount of all of its
  outstanding money transmission obligations.
               (b)  Except for permissible investments enumerated in
  Section 151.706(a), the Commissioner, with respect to any licensee,
  may limit the extent to which a specific investment maintained by a
  licensee within a class of permissible investments may be
  considered a permissible investment, if the specific investment
  represents undue risk to customers, not reflected in the market
  value of investments.
               (c)  Permissible investments are held in trust for the
  benefit of the purchasers and holders of the licensee's outstanding
  money transmission obligations in the event of insolvency, the
  filing of a petition by or against the licensee under the United
  States Bankruptcy Code, 11 U.S.C. Section 101-110, as amended or
  recodified from time to time, for bankruptcy or reorganization, the
  filing of a petition by or against the licensee for receivership,
  the commencement of any other judicial or administrative proceeding
  for its dissolution or reorganization, or in the event of an action
  by a creditor against the licensee who is not a beneficiary of this
  statutory trust. No permissible investments impressed with a trust
  pursuant to this section shall be subject to attachment, levy of
  execution, or sequestration by order of any court, except for a
  beneficiary of this statutory trust.
               (d)  Upon the establishment of a statutory trust in
  accordance with Subsection (c) or when any funds are drawn on a
  letter of credit pursuant to Section 151.705(a)(4), the
  Commissioner shall notify the applicable regulator of each state in
  which the licensee is licensed to engage in money transmission, if
  any, of the establishment of the trust or the funds drawn on the
  letter of credit, as applicable. Notice shall be deemed satisfied
  if performed pursuant to a multistate agreement or through NMLS.
  Funds drawn on a letter of credit, and any other permissible
  investments held in trust for the benefit of the purchasers and
  holders of the licensee's outstanding money transmission
  obligations, are deemed held in trust for the benefit of such
  purchasers and holders on a pro rata and equitable basis in
  accordance with statutes pursuant to which permissible investments
  are required to be held in this state, and other states, as
  applicable. Any statutory trust established hereunder shall be
  terminated upon extinguishment of all of the licensee's outstanding
  money transmission obligations.
               (e)  The Commissioner may allow other types of
  investments that the Commissioner determines are of sufficient
  liquidity and quality to be a permissible investment. The
  Commissioner is authorized to participate in efforts with other
  state regulators to determine that other types of investments are
  of sufficient liquidity and quality to be a permissible investment.
         Section 151.706  Types of Permissible Investments.
         (a)  The following investments are permissible under Section
  151.705:
               (1)  cash (including demand deposits, savings
  deposits, and funds in such accounts held for the benefit of the
  licensee's customers in a federally insured depository financial
  institution) and cash equivalents including ACH items in transit to
  the licensee and ACH items or international wires in transit to a
  payee, cash in transit via armored car, cash in smart safes, cash in
  licensee-owned locations, debit card or credit card-funded
  transmission receivables owed by any bank, or money market mutual
  funds rated "AAA" by S&P, or the equivalent from any eligible rating
  service;
               (2)  certificates of deposit or senior debt obligations
  of an insured depository institution, as defined in Section 3 of the
  Federal Deposit Insurance Act, 12 U.S.C. Section 1813, as amended
  or recodified from time to time, or as defined under the federal
  Credit Union Act, 12 U.S.C. Section 1781, as amended or recodified
  from time to time;
               (3)  an obligation of the United States or a
  commission, agency, or instrumentality thereof; an obligation that
  is guaranteed fully as to principal and interest by the United
  States; or an obligation of a state or a governmental subdivision,
  agency, or instrumentality thereof;
               (4)  the full drawable amount of an irrevocable standby
  letter of credit for which the stated beneficiary is the
  Commissioner that stipulates that the beneficiary need only draw a
  sight draft under the letter of credit and present it to obtain
  funds up to the letter of credit amount upon presentation of the
  items required by Subsection (a)(4)(C).
                     (A)  The letter of credit must:
                           (i)  Be issued by a federally insured
  depository financial institution, a foreign bank that is authorized
  under federal law to maintain a federal agency or federal branch
  office in a state or states, or a foreign bank that is authorized
  under state law to maintain a branch in a state that (1) bears an
  eligible rating or whose parent company bears an eligible rating;
  (2) is regulated, supervised, and examined by United States federal
  or state authorities having regulatory authority over banks, credit
  unions, and trust companies; and (3) is approved by the
  Commissioner.
                           (ii)  Be irrevocable, unconditional and
  indicate that it is not subject to any condition or qualifications
  outside of the letter of credit;
                           (iii)  Not contain reference to any other
  agreements, documents or entities, or otherwise provide for any
  security interest in the licensee; and
                           (iv)  Contain an issue date and expiration
  date, and expressly provide for automatic extension, without a
  written amendment, for an additional period of one year from the
  present or each future expiration date, unless the issuer of the
  letter of credit notifies the Commissioner in writing by certified
  or registered mail or courier mail or other receipted means, at
  least sixty (60) days prior to any expiration date, that the
  irrevocable letter of credit will not be extended.
                     (B)  In the event of any notice of expiration or
  non-extension of a letter of credit issued under Subsection
  (a)(4)(A)(iv), the licensee shall be required to demonstrate to the
  satisfaction of the Commissioner, 15 days prior to expiration, that
  the licensee maintains and will maintain permissible investments in
  accordance with Section 151.705(a) upon the expiration of the
  letter of credit. If the licensee is not able to do so, the
  Commissioner may draw on the letter of credit in an amount up to the
  amount necessary to meet the licensee's requirements to maintain
  permissible investments in accordance with Section 151.705(a). Any
  such draw shall be offset against the licensee's outstanding money
  transmission obligations. The drawn funds shall be held in trust by
  the Commissioner or the Commissioner's designated agent, to the
  extent authorized by law, as agent for the benefit of the purchasers
  and holders of the licensee's outstanding money transmission
  obligations.
                     (C)  The letter of credit shall provide that the
  issuer of the letter of credit will honor, at sight, a presentation
  made by the beneficiary to the issuer of the following documents on
  or prior to the expiration date of the letter of credit:
                           (i)  The original letter of credit
  (including any amendments); and
                           (ii)  A written statement from the
  beneficiary stating that any of the following events have occurred:
                                 1.  the filing of a petition by or
  against the licensee under the United States Bankruptcy Code, 11
  U.S.C. Section 101-110, as amended or recodified from time to time,
  for bankruptcy or reorganization;
                                 2.  the filing of a petition by or
  against the licensee for receivership, or the commencement of any
  other judicial or administrative proceeding for its dissolution or
  reorganization;
                                 3.  the seizure of assets of a licensee
  by a Commissioner pursuant to an emergency order issued in
  accordance with applicable law, on the basis of an action,
  violation, or condition that has caused or is likely to cause the
  insolvency of the licensee; or
                                 4.  The beneficiary has received
  notice of expiration or non-extension of a letter of credit and the
  licensee failed to demonstrate to the satisfaction of the
  beneficiary that the licensee will maintain permissible
  investments in accordance with Section 151.705(a) upon the
  expiration or non-extension of the letter of credit.
                     (D)  The Commissioner may designate an agent to
  serve on the Commissioner's behalf as beneficiary to a letter of
  credit so long as the agent and letter of credit meet requirements
  established by the Commissioner. The Commissioner's agent may
  serve as agent for multiple licensing authorities for a single
  irrevocable letter of credit if the proceeds of the drawable amount
  for the purposes of Subsection (a)(4) are assigned to the
  Commissioner.
                     (E)  The Commissioner may participate in
  multistate processes designed to facilitate the issuance and
  administration of letters of credit, including but not limited to
  services provided by the NMLS and State Regulatory Registry, LLC.
               (5)  One hundred percent of the surety bond or deposit
  provided for under Section 151.702 that exceeds the average daily
  money transmission liability in this state.
               (6)  Stablecoin but only to the extent of outstanding
  transmission obligations received by the licensee in like kind
  stablecoin.
         (b)  Unless permitted by the Commissioner to exceed the limit
  as set forth herein, the following investments are permissible
  under Section 151.705 to the extent specified:
               (1)  receivables that are payable to a licensee from
  its authorized delegates in the ordinary course of business that
  are less than seven days old, up to 50% of the aggregate value of the
  licensee's total permissible investments;
               (2)  of the receivables permissible under Subsection
  (b)(1), receivables that are payable to a licensee from a single
  authorized delegate in the ordinary course of business may not
  exceed 10% of the aggregate value of the licensee's total
  permissible investments.
               (3)  the following investments are permissible up to
  20% per category and combined up to 50% of the aggregate value of
  the licensee's total permissible investments:
                     (A)  A short-term (up to six months) investment
  bearing an eligible rating;
                     (B)  Commercial paper bearing an eligible rating;
                     (C)  A bill, note, bond, or debenture bearing an
  eligible rating;
                     (D)  U.S. tri-party repurchase agreements
  collateralized at 100% or more with U.S. government or agency
  securities, municipal bonds, or other securities bearing an
  eligible rating;
                     (E)  Money market mutual funds rated less than
  "AAA" and equal to or higher than "A-" by S&P, or the equivalent
  from any other eligible rating service; and
                     (F)  A mutual fund or other investment fund
  composed solely and exclusively of one or more permissible
  investments listed in Subsections (a)(1)-(3).
               (4)  cash (including demand deposits, savings
  deposits, and funds in such accounts held for the benefit of the
  licensee's customers) at foreign depository institutions are
  permissible up to 10% of the aggregate value of the licensee's total
  permissible investments if the licensee has received a satisfactory
  rating in its most recent examination and the foreign depository
  institution:
                     (A)  has an eligible rating;
                     (B)  is registered under the Foreign Account Tax
  Compliance Act;
                     (C)  is not located in any country subject to
  sanctions from the Office of Foreign Asset Control; and
                     (D)  is not located in a high-risk or
  non-cooperative jurisdiction as designated by the Financial Action
  Task Force.
  SUBCHAPTER J. Enforcement
         Section 151.801  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 to 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)  On a proper showing, the court may issue a restraining
  order, an order freezing assets, a preliminary or permanent
  injunction, or a 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 for
  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 that relief.
         Section 151.802  Cease and Desist Orders for Unlicensed
  Persons.
         (a)  If the commissioner has reason to believe that an
  unlicensed person has engaged or is likely to engage in an activity
  for which a license is required under this chapter, the
  commissioner may order the person to cease and desist from the
  violation 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.
         (b)  A cease and desist order under this section may require
  the unlicensed person to take affirmative action to correct any
  condition resulting from or contributing to the activity or
  violation, including the payment of restitution to each resident of
  this state damaged by the violation.
         Section 151.803  Suspension and Revocation of License.
         (a)  The commissioner must revoke a license if the
  commissioner finds that:
               (1)  the net worth of the licensee is less than the
  amount required under this chapter; or
               (2)  the licensee does not provide the security
  required under this chapter.
         (b)  The commissioner may suspend or revoke a license or
  order a licensee to revoke the designation of an authorized
  delegate if the commissioner has reason to believe that:
               (1)  the licensee has violated 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 the licensee's money services
  business;
               (2)  the licensee has refused to permit or has not
  cooperated with an examination or investigation authorized by this
  chapter;
               (3)  the licensee has engaged in fraud, knowing
  misrepresentation, deceit, or gross negligence in connection with
  the operation of the licensee's money services business or any
  transaction subject to this chapter;
               (4)  an authorized delegate of the licensee has
  knowingly violated this chapter, a rule adopted or order issued
  under this chapter, or a state or federal anti-money-laundering or
  terrorist funding law, and the licensee 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 licensee or an authorized delegate of the licensee,
  or a principal of, person in control of, or responsible person of a
  licensee or authorized delegate, indicates that it is not in the
  public interest to permit the licensee or authorized delegate to
  provide money services;
               (6)  the licensee has engaged in an unsafe or unsound
  act or practice or has conducted business in an unsafe or unsound
  manner;
               (7)  the licensee has suspended payment of the
  licensee's obligations, made a general assignment for the benefit
  of the licensee's creditors, or admitted in writing the licensee's
  inability to pay debts of the licensee as they become due;
               (8)  the licensee has failed to terminate the authority
  of an authorized delegate after the commissioner has issued and
  served on the licensee 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 licensee applied for the license, would have
  been grounds for denying the application;
               (10)  the licensee has engaged in false, misleading, or
  deceptive advertising;
               (11)  the licensee has failed to pay a judgment entered
  in favor of a claimant or creditor in an action arising out of the
  licensee's activities under this chapter not later than the 30th
  day after the date the judgment becomes final or not later than the
  30th day after the date the stay of execution expires or is
  terminated, as applicable;
               (12)  the licensee has knowingly made a material
  misstatement or has 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 licensee has committed a breach of trust or of
  a fiduciary duty.
         (c)  In determining whether a licensee 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:
               (1)  the size and condition of the licensee's provision
  of money services;
               (2)  the magnitude of the loss or potential loss;
               (3)  the gravity of the violation of this chapter or
  rule adopted or order issued under this chapter;
               (4)  any action taken against the licensee by this
  state, another state, or the federal government; and
               (5)  the previous conduct of the licensee.
         (d)  The commissioner's order suspending or revoking a
  license or directing a licensee 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 licensee to
  revoke the designation of an authorized delegate in accordance with
  Section 151.810 if the commissioner finds that the factors
  identified in Section 151.810(b) exist.
         Section 151.804  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 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 the
  delegate's business on behalf of the licensee or any transaction
  subject to this chapter;
               (4)  the competence, experience, character, or general
  fitness of the authorized delegate, or a principal of, person in
  control of, 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 the 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
  law.
         (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:
               (1)  the size and condition of the authorized
  delegate's provision of money services;
               (2)  the magnitude of the loss or potential loss;
               (3)  the gravity of the violation of this chapter or
  rule adopted or order issued under this chapter;
               (4)  any action taken against the authorized delegate
  by this state, another state, or the federal government; and
               (5)  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
  Section 151.710(b) exist.
         Section 151.805  Cease and Desist Orders for Licensees or
  Authorized Delegates.
         (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 151.803 or 151.804 exists with respect to a licensee or
  authorized delegate; and
               (2)  a cease and desist order is necessary to protect
  the interests of the licensee, the purchasers of the licensee's
  money services, or the public.
         (b)  A cease and desist order may require a licensee or
  authorized delegate to cease and desist from the action or
  violation or to 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 licensee or authorized delegate.
         (c)  The cease and desist order is subject to Section
  151.809, unless the order is issued as an emergency order. The
  commissioner may issue an emergency cease and desist order in
  accordance with Section 151.810 if the commissioner finds that the
  factors identified in Section 151.810(b) exist.
         Section 151.806  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 the
  order 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 the order 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.
         Section 151.807  Administrative Penalty.
         (a)  After notice and hearing, the commissioner may assess an
  administrative penalty against a person that:
               (1)  has violated this chapter or a rule adopted or
  order issued under this chapter and has 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 licensee, has engaged in conduct
  specified in Section 151.803;
               (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 corrected after a person receives written
  notice from the department of the violation may be considered for
  purposes of determining whether a person has engaged in a pattern of
  violations under Subsection (a)(3) or demonstrated wilful
  disregard under Subsection (a)(4).
         (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 factors that include the seriousness of
  the violation, the person's compliance history, and the person's
  good faith in attempting to comply with this chapter, provided that
  if the person is found to have demonstrated wilful disregard under
  Subsection (a)(4), the trier of fact may 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 on 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 licensee or a
  licensee's authorized delegate, from the proceeds of the licensee's
  security in accordance with Section 151.308(e).
         Section 151.808  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 the
  record or application; or
               (2)  knowingly engages in an activity for which a
  license is required under Subchapter D or F without being licensed
  under this chapter.
         (b)  An offense under this section is a felony of the third
  degree.
         (c)  An offense under this section may be prosecuted in
  Travis County or in 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 an act that constitutes an offense under this or
  any other law.
         Section 151.809  Notice, Hearing, and Other Procedures for
  Nonemergency Orders.
         (a)  This section applies to an order issued by the
  commissioner under this subchapter that is not an emergency order.
         (b)  An order to which this section applies becomes effective
  only after notice and an opportunity for hearing. The order must:
               (1)  state the grounds on 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 the 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; and
               (5)  include a notice that a person may file a written
  request for a hearing on the order 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 against
  and nonappealable by that person from 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 the hearing unless the administrative law judge extends
  the period for good cause or the parties agree to a later hearing
  date.
         (e)  An order that has been affirmed or modified after a
  hearing becomes effective and is final for purposes of enforcement
  and appeal immediately on issuance. The order may be appealed to
  the district court of Travis County as provided by Section
  151.901(b).
         Section 151.810  Requirements and Notice and Hearing
  Procedures for Emergency Orders.
         (a)  This section applies to an emergency order issued by the
  commissioner under this subchapter.
         (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
                     (A)  has caused or is likely to cause the
  insolvency of the licensee;
                     (B)  has caused or is likely to cause the
  substantial dissipation of the licensee's assets or earnings;
                     (C)  has seriously weakened or is likely to
  seriously weaken the condition of the licensee; or
                     (D)  has seriously prejudiced or is likely to
  seriously prejudice the interests of the licensee, a purchaser of
  the licensee's money services, or the public; and
               (2)  immediate action is necessary to protect the
  interests of the licensee, a purchaser of the licensee's money
  services, or the public.
         (c)  In connection with and as directed by an emergency
  order, the commissioner may seize the records and assets of a
  licensee or authorized delegate that relate to the licensee's money
  services business.
         (d)  An emergency order must:
               (1)  state the grounds on 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 to take the affirmative action stated in the order as
  necessary to correct a condition resulting from the conduct or
  violation or as 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; and
               (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 actual or constructive
  knowledge of the issuance of the order.
         (f)  A licensee or authorized delegate against whom an
  emergency order is directed must submit a written certification to
  the commissioner, signed by the licensee or authorized delegate,
  and their principals and responsible individuals, as applicable,
  and each person named in the order, stating that each person has
  received a copy of and has read and understands the order.
         (g)  Unless the commissioner receives a written request for a
  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 a hearing does not stay an emergency
  order.
         (i)  A hearing on an emergency order takes precedence over
  any other matter 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 date.
         (j)  An emergency order that has been affirmed or modified
  after a hearing is final for purposes of enforcement and appeal.
  The order may be appealed to the district court of Travis County as
  provided in Section 151.901(b).
  SUBCHAPTER K. MISCELLANEOUS PROVISIONS
         Section 151.901  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 a hearing may appeal the order by
  filing a petition for judicial review in a district court of Travis
  County. A petition for judicial review filed in the district court
  under this subsection does not stay or vacate the appealed order
  unless the court, after notice and hearing, specifically stays or
  vacates the order.
         Section 151.902  Uniformity of Application and
  Construction.
         In applying and construing this Act, consideration must be
  given to the need to promote uniformity of the law with respect to
  its subject matter among states that enact it.
         Section 151.903  Severability Clause.
         If any provision of this Act or its application to any person
  or circumstance is held invalid, the invalidity does not affect
  other provisions or applications of this Act which can be given
  effect without the invalid provision or application, and to this
  end the provisions of this Act are severable.
         SECTION 2.  (a) A license issued under Chapter 151, Finance
  Code, that is in effect on September 1, 2023, remains in force as a
  license under Chapter 151, Finance Code. By September 1, 2024, a
  licensee must satisfy the minimum requirements to maintain a
  license established in Chapter 151, Finance Code, as added by this
  Act.
         (b)  A contract between a licensee and an authorized delegate
  that is in effect on September 1, 2023, remains in effect until the
  earlier of the date the contract is renewed or December 31, 2024. A
  new or renewal contract entered into between a licensee and an
  authorized delegate after the effective date of this Act must
  satisfy the contract requirements established in Chapter 151,
  Finance Code, as added by this Act.
         (e)  The Finance Commission of Texas may adopt rules to
  further provide for the orderly transition to licensing and
  regulation under this Act.
         SECTION 3.  Chapter 151, Finance Code, is repealed.
         SECTION 4.  Section 278.001(1), Finance Code, is amended to
  read as follows:
               (1)  "Currency" means the coin and paper money issued
  by 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.
         SECTION 5.  This Act takes effect September 1, 2023