By: Carona S.B. No. 1005
(In the Senate - Filed March 1, 2013; March 12, 2013, read
first time and referred to Committee on Business and Commerce;
March 20, 2013, reported favorably by the following vote: Yeas 9,
Nays 0; March 20, 2013, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of money services businesses.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subdivision (3), Subsection (b), Section
151.002, Finance Code, is amended to read as follows:
(3) "Bank Secrecy Act" means the Bank Secrecy Act (31
U.S.C. Section 5311 et seq.), and its implementing regulations [set
forth at 31 C.F.R. Part 103].
SECTION 2. Subsection (a), Section 151.104, Finance Code,
is amended to read as follows:
(a) The commissioner may conduct investigations in or
outside this state and the United States as the commissioner
considers necessary or appropriate to administer and enforce this
chapter, including investigations to:
(1) determine whether to approve an application for
[or renewal of] a license or a request for approval or exemption
filed under this chapter or a rule adopted or order issued under
this chapter;
(2) determine whether a person has violated or is
likely to violate this chapter or a rule adopted or order issued
under this chapter;
(3) determine whether a license or authorized delegate
designation should be revoked or suspended;
(4) otherwise aid in the enforcement of this chapter
or a rule adopted or order issued under this chapter; and
(5) aid in the adoption of rules or issuance of orders
under this chapter.
SECTION 3. Section 151.105, Finance Code, is amended by
adding Subsection (b-1) to read as follows:
(b-1) To efficiently and effectively administer and enforce
this chapter and to minimize regulatory burden, the commissioner
may cooperate, coordinate, and share information with an
organization the membership of which is made up of state or federal
governmental agencies described by Subsection (a). The
commissioner may:
(1) enter into a written cooperation, coordination, or
information-sharing contract or agreement with the organization;
and
(2) share information, provided that the organization
agrees in writing to maintain the confidentiality and security of
the shared information.
SECTION 4. Subchapter C, Chapter 151, Finance Code, is
amended by adding Section 151.2031 to read as follows:
Sec. 151.2031. USE OF NATIONWIDE MORTGAGE LICENSING SYSTEM
AND REGISTRY. (a) In this section, "Nationwide Mortgage Licensing
System and Registry" or "nationwide registry" means a licensing
system developed and maintained by the Conference of State Bank
Supervisors or an affiliated organization to manage mortgage
licenses and other financial services licenses, or a successor
registry.
(b) The commissioner may require that a person submit
through the Nationwide Mortgage Licensing System and Registry 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.
(c) The commissioner may use the nationwide registry 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 151.203(a)(3).
SECTION 5. The heading to Section 151.207, Finance Code, is
amended to read as follows:
Sec. 151.207. CONTINUATION [RENEWAL] OF LICENSE; ANNUAL
REPORT AND FEE.
SECTION 6. Subsections (a), (b), (c), (d), (e), and (f),
Section 151.207, Finance Code, are amended to read as follows:
(a) If a [Regardless of the date on which a license under
this chapter is issued, the license expires on August 15 of each
year unless the license is renewed in accordance with this section
or is previously surrendered by the license holder or suspended or
revoked by the commissioner.
[(b) As a condition of renewal, a] license holder does not
[must] continue to meet [possess] the qualifications or [and]
satisfy the requirements that apply to an applicant for a new money
transmission license or currency exchange license, as applicable,
the commissioner may suspend or revoke the license holder's
license.
(b) In addition to complying with Subsection (a)
[Additionally, not later than July 1 of each year], a license holder
must annually:
(1) pay a license [an annual renewal] fee in an amount
established by commission rule; and
(2) submit a [renewal] 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.
(c) If the department does not receive a license holder's
annual license [renewal] fee and complete annual [renewal] report
on or before the due date prescribed by the commissioner under this
section [July 1], the commissioner shall notify the license holder
in writing that:
(1) the license holder shall [has until August 15 to]
submit the [renewal] report and pay the license [renewal] 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 [July 1] that the commissioner does not receive
the completed [renewal] report and license [renewal] fee.
(d) If the license holder fails to submit the completed
annual [renewal] report and pay the annual license [renewal] fee
and any late fee due within the time prescribed by Subsection
(c)(1), the license expires [effective 5 p.m. central daylight time
on August 15], and the license holder must cease and desist from
engaging in the business of money transmission or currency
exchange, as applicable, as of that date [time]. The expiration of
a license is not subject to appeal.
(e) On timely receipt of a license holder's complete annual
[renewal] report, annual license [renewal] fee, and any late fee
due, the department shall review the report and, if necessary,
investigate the business and records of the license holder. On
completion of the review and investigation, if any, the
commissioner may:
(1) [renew the license;
[(2)] impose conditions on the [renewal of the]
license the commissioner considers [may consider] reasonably
necessary or appropriate; or
(2) [(3)] suspend or revoke the license on the basis
of a ground specified in Section 151.703.
(f) On written application and for good cause shown, the
commissioner may extend the due date [time] for filing the annual
license fee and annual report required under this section.
SECTION 7. Subsection (c), Section 151.208, Finance Code,
is amended to read as follows:
(c) The surrender of a license does not reduce or eliminate
a license holder's civil or criminal liability arising from any
acts or omissions before the surrender of the license, including
any administrative action undertaken by the commissioner to [deny
the renewal of a license, 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
license holder under Section 151.308 or 151.506.
SECTION 8. Section 151.209, Finance Code, is amended to
read as follows:
Sec. 151.209. REFUNDS. A fee or cost paid under this
chapter [in connection with an application or renewal] is not
refundable.
SECTION 9. Subdivision (8), Subsection (b), Section
151.301, Finance Code, is amended to read as follows:
(8) "Stored value" means monetary value evidenced by
an electronic record that is prefunded and for which value is
reduced on each use. The term includes prepaid access as defined by
31 C.F.R. Section 1010.100(ww). The term does not include an
electronic record that is:
(A) loaded with points, miles, or other
nonmonetary value; [or]
(B) not sold to the public but distributed as a
reward or charitable donation; or
(C) redeemable only for goods or services from a
specified merchant or set of affiliated merchants, such as:
(i) a specified retailer or retail chain;
(ii) a set of affiliated companies under
common ownership;
(iii) a college campus; or
(iv) a mass transportation system.
SECTION 10. Subsection (b), Section 151.306, Finance Code,
is amended to read as follows:
(b) The effective period for a temporary license may not
exceed 90 days from the date the license is issued, provided that
the commissioner may extend the period for not more than an
additional 90 [30] days if necessary to complete the processing of a
timely filed application for which approval is likely.
SECTION 11. Subsection (c), Section 151.308, Finance Code,
is amended to read as follows:
(c) The security must:
(1) be in a form satisfactory to the commissioner;
(2) be payable to any claimant or to the commissioner,
on behalf of a claimant or 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) [be conditioned on the faithful compliance of the
license holder or the principals, responsible individuals,
employees and authorized delegates of the license holder with this
chapter or any rule adopted or order issued under this chapter; and
[(4)] 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.
SECTION 12. Section 151.401, Finance Code, is amended to
read as follows:
Sec. 151.401. LIABILITY OF LICENSE HOLDER. A money
transmission license holder is liable for the payment of all money
or monetary value received for transmission [either] directly or by
[through] an authorized delegate appointed in accordance with
Section 151.402.
SECTION 13. Subsections (e) and (f), Section 151.402,
Finance Code, are amended to read as follows:
(e) A license holder must notify the license holder's
authorized delegates and require the delegates to take any action
required by the commissioner if [the license holder]:
(1) the license holder's license expired or is
surrendered or revoked [fails to renew the license holder's
license]; or
(2) the license holder is subject to an emergency or
final order that affects the conduct of the license holder's
business through an authorized delegate.
(f) A license holder must maintain a current list of
authorized delegates located in this state or doing business with
persons located in this state that includes the name and business
address of each delegate and must provide the list to the
commissioner on request. A license holder that engages in business
through 11 or more authorized delegates located in this state must
include on the license holder's website a list of the names and
addresses of the authorized delegates of the license holder located
in this state and the delegates' business addresses. The license
holder must update the list quarterly.
SECTION 14. Subsection (b), Section 151.501, Finance Code,
is amended by amending Subdivision (2) and adding Subdivision (3)
to read as follows:
(2) "Currency exchange" means:
(A) receiving [exchanging] the currency of one
government and exchanging it for the currency of another
government; or
(B) receiving a negotiable instrument and
exchanging it for the currency of another government.
(3) "Negotiable instrument" has the meaning assigned
by Section 3.104, Business & Commerce Code.
SECTION 15. Subsections (a), (b), and (c), Section 151.603,
Finance Code, are amended to read as follows:
(a) An applicant or license holder shall file a written
report with the commissioner not later than the 15th day after the
date the applicant or license holder knows or has reason to know of
a material change in the information reported in an application or
annual [renewal] report required under Section 151.207(b)(2). The
report must describe the change and the anticipated impact of the
change on the activities of the applicant or license holder in this
state.
(b) A money transmission license holder shall prepare
written reports and statements as follows:
(1) the annual [renewal] report required by Section
151.207(b)(2), including an audited unconsolidated financial
statement that is dated as of the last day of the license holder's
fiscal year that ended in the immediately preceding calendar year;
(2) a quarterly interim financial statement and report
regarding the permissible investments required to be maintained
under Section 151.309 that reflect the license holder's financial
condition and permissible investments as of the last day of the
calendar quarter to which the statement and report relate and that
are prepared not later than the 45th day after the last day of the
calendar quarter; and
(3) any other report required by rule of the
commission or reasonably requested by the commissioner to determine
compliance with this chapter.
(c) A currency exchange license holder shall prepare a
written report or statement as follows:
(1) the annual [renewal] report required by Section
151.207(b)(2), including a financial statement that may be audited
or unaudited and that is dated as of the last day of the license
holder's fiscal year that ended in the immediately preceding
calendar year;
(2) a quarterly interim financial statement and
transaction report that reflects the license holder's financial
condition and currency exchange business as of the last day of the
calendar quarter to which the statement and report relate and that
are prepared not later than the 45th day after the last day of the
calendar quarter; and
(3) any other report required by rule of the
commission or reasonably requested by the commissioner to determine
compliance with this chapter.
SECTION 16. Subsection (a), Section 151.604, Finance Code,
is amended to read as follows:
(a) A license holder shall file a written report with the
commissioner not later than the 15th day after the date the license
holder knows or has reason to know of a material change in the
information reported in an application or annual [renewal] report
required under Section 151.207(b)(2). The report must describe
the change and the anticipated impact of the change on the license
holder's activities in this state.
SECTION 17. Subdivision (1), Section 278.001, Finance Code,
is amended to read as follows:
(1) "Currency" has the meaning assigned by Section
151.501 [153.001].
SECTION 18. Section 278.053, Finance Code, is repealed.
SECTION 19. As soon as practicable after the effective date
of this Act, the Finance Commission of Texas shall adopt rules
necessary to implement the changes in law made by this Act.
SECTION 20. Subsection (a), Section 151.104, Finance Code,
as amended by this Act, applies only to an investigation commenced
on or after the effective date of this Act. An investigation
commenced before the effective date of this Act is governed by the
law in effect on the date the investigation was commenced, and the
former law is continued in effect for that purpose.
SECTION 21. This Act takes effect September 1, 2013.
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