Texas 2017 - 85th Regular

Texas House Bill HB3233 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	85R18078 TSR-F
2	2	By: Burrows H.B. No. 3233
3	3	Substitute the following for H.B. No. 3233:
4	4	By: Holland C.S.H.B. No. 3233
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the regulation of money services businesses.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 151.002(b), Finance Code, is amended by
12	12	adding Subdivision (20-a) to read as follows:
13	13	(20-a) "Tangible net worth" means the total value of
14	14	all assets, minus any liabilities and intangible assets.
15	15	SECTION 2. Section 151.003, Finance Code, as amended by
16	16	Chapters 1000 (H.B. 483) and 75 (S.B. 899), Acts of the 84th
17	17	Legislature, Regular Session, 2015, is reenacted and amended to
18	18	read as follows:
19	19	Sec. 151.003. EXCLUSIONS. Subject to Subchapter J, the
20	20	following persons are not required to be licensed under this
21	21	chapter:
22	22	(1) the United States or an instrumentality of the
23	23	United States, including the United States Post Office or a
24	24	contractor acting on behalf of the United States Post Office;
25	25	(2) a state or an agency, political subdivision, or
26	26	other instrumentality of a state;
27	27	(3) a federally insured financial institution, as that
28	28	term is defined by Section 201.101, that is organized under the laws
29	29	of this state, another state, or the United States;
30	30	(4) a foreign bank branch or agency in the United
31	31	States established under the federal International Banking Act of
32	32	1978 (12 U.S.C. Section 3101 et seq.);
33	33	(5) a person acting as an agent for an entity excluded
34	34	under Subdivision (3) or (4), to the extent of the person's actions
35	35	in that capacity, provided that:
36	36	(A) the entity is liable for satisfying the money
37	37	services obligation owed to the purchaser on the person's receipt
38	38	of the purchaser's money; and
39	39	(B) the entity and person enter into a written
40	40	contract that appoints the person as the entity's agent and the
41	41	person acts only within the scope of authority conferred by the
42	42	contract;
43	43	(6) a person that, on behalf of the United States or a
44	44	department, agency, or instrumentality of the United States, or a
45	45	state or county, city, or any other governmental agency or
46	46	political subdivision of a state, provides electronic funds
47	47	transfer services of governmental benefits for a federal, state,
48	48	county, or local governmental agency;
49	49	(7) a person that acts as an intermediary on behalf of
50	50	and at the direction of a license holder in the process by which the
51	51	license holder, after receiving money or monetary value from a
52	52	purchaser, either directly or through an authorized delegate,
53	53	transmits the money or monetary value to the purchaser's designated
54	54	recipient, provided that the license holder is liable for
55	55	satisfying the obligation owed to the purchaser;
56	56	(8) an attorney or title company that in connection
57	57	with a real property transaction receives and disburses domestic
58	58	currency or issues an escrow or trust fund check only on behalf of a
59	59	party to the transaction;
60	60	(9) a person engaged in the business of currency
61	61	transportation who is both a registered motor carrier under Chapter
62	62	643, Transportation Code, and a licensed armored car company or
63	63	courier company under Chapter 1702, Occupations Code, provided that
64	64	the person:
65	65	(A) only transports currency [from a person to]:
66	66	(i) from a person to the same person at
67	67	another location; [or]
68	68	(ii) from a person to a financial
69	69	institution to be deposited in an account belonging to the same
70	70	person; or
71	71	(iii) to a person from a financial
72	72	institution after being withdrawn from an account belonging to the
73	73	same person; and
74	74	(B) does not otherwise engage in the money
75	75	transmission or currency exchange business or depository agent
76	76	services business without a license issued under this chapter;
77	77	(9-a) a trust company, as defined by Section
78	78	187.001(a), that is organized under the laws of this state; and
79	79	(10) any other person, transaction, or class of
80	80	persons or transactions exempted by commission rule or any other
81	81	person or transaction exempted by the commissioner's order on a
82	82	finding that the licensing of the person is not necessary to achieve
83	83	the purposes of this chapter.
84	84	SECTION 3. The heading to Section 151.2031, Finance Code,
85	85	is amended to read as follows:
86	86	Sec. 151.2031. USE OF NATIONWIDE MULTISTATE [MORTGAGE]
87	87	LICENSING SYSTEM AND REGISTRY.
88	88	SECTION 4. Sections 151.2031(a) and (b), Finance Code, are
89	89	amended to read as follows:
90	90	(a) In this section, "Nationwide Multistate [Mortgage]
91	91	Licensing System and Registry" or "nationwide registry" means a
92	92	licensing system developed and maintained by the Conference of
93	93	State Bank Supervisors or an affiliated organization to manage
94	94	mortgage licenses and other financial services licenses, or a
95	95	successor registry.
96	96	(b) The commissioner may require that a person submit
97	97	through the Nationwide Multistate [Mortgage] Licensing System and
98	98	Registry in the form and manner prescribed by the commissioner and
99	99	acceptable to the registry any information or document or payment
100	100	of a fee required to be submitted under this chapter or rules
101	101	adopted under this chapter.
102	102	SECTION 5. Section 151.302(c), Finance Code, is amended to
103	103	read as follows:
104	104	(c) On application and a finding that the exemption is in
105	105	the public interest, the commissioner may exempt a person that:
106	106	(1) incidentally engages in the money transmission
107	107	business only to the extent reasonable and necessary to accomplish
108	108	a primary business objective unrelated to the money transmission
109	109	business;
110	110	(2) does not advertise or offer money transmission
111	111	services to the public except to the extent reasonable and
112	112	necessary to fairly advertise or offer the person's primary
113	113	business services; and
114	114	(3) [either transmits money exclusively in connection
115	115	with commercial contracts in interstate commerce or does not charge
116	116	a fee to transmit money or] transmits money without a fee as an
117	117	inducement for customer participation in the person's primary
118	118	business.
119	119	SECTION 6. Section 151.304(b), Finance Code, is amended to
120	120	read as follows:
121	121	(b) At the time an application for a money transmission
122	122	license is submitted, an applicant must file with the department:
123	123	(1) an application fee in the amount established by
124	124	commission rule;
125	125	(2) audited financial statements that are
126	126	satisfactory to the commissioner for purposes of determining
127	127	whether the applicant has the minimum net worth required under
128	128	Section 151.307 and is likely to maintain the required minimum net
129	129	worth if a license is issued; and
130	130	(3) security [in the amount of $300,000,] that meets
131	131	the requirements of Section 151.308, and an undertaking or
132	132	agreement that the applicant will increase or supplement the
133	133	security to equal the aggregate security required by the
134	134	commissioner under that section before the issuance of the license
135	135	and the start of operations.
136	136	SECTION 7. Section 151.307, Finance Code, is amended by
137	137	amending Subsection (a) and adding Subsection (c) to read as
138	138	follows:
139	139	(a) An applicant for a money transmission license must
140	140	possess, and a money transmission license holder must maintain at
141	141	all times, a minimum net worth computed in accordance with
142	142	generally accepted accounting principles of:
143	143	(1) $100,000, if business is proposed to be or is
144	144	conducted, directly or through an authorized delegate, at four or
145	145	fewer locations; or
146	146	(2) $500,000, if business is proposed to be or is
147	147	conducted, directly or through an authorized delegate, at five or
148	148	more locations or over the Internet.
149	149	(c) At least 50 percent of the applicant's or license
150	150	holder's total net worth under this section must be tangible net
151	151	worth.
152	152	SECTION 8. Section 151.308, Finance Code, is amended by
153	153	amending Subsection (b) and adding Subsections (b-1) and (b-2) to
154	154	read as follows:
155	155	(b) The amount of the required security is the greater of
156	156	$300,000 or an amount equal to one percent of the license holder's
157	157	total yearly dollar volume of money transmission business in this
158	158	state or the applicant's projected total volume of business in this
159	159	state for the first year of licensure, up to a maximum of $2
160	160	million.
161	161	(b-1) The commissioner may increase the amount of security
162	162	required of an applicant who intends to provide, or a license holder
163	163	who is providing, third-party bill payments in conjunction with
164	164	loan acceleration services, up to a total amount of $2 million, by
165	165	multiplying the amount of security required under this section by a
166	166	factor of up to two, if the commissioner determines, with respect to
167	167	the applicant or license holder, that a higher amount of the
168	168	required security is necessary to achieve the purposes of this
169	169	chapter based on the factors listed under Section 151.307(b).
170	170	(b-2) When the amount of the required security exceeds $1
171	171	million, the applicant or license holder may, in the alternative,
172	172	provide security in the amount of $1 million, plus a dollar for
173	173	dollar increase in the net worth of the applicant or license holder
174	174	over the amount required under Section 151.307, up to a total amount
175	175	of $2 million.
176	176	SECTION 9. Section 151.702, Finance Code, is amended to
177	177	read as follows:
178	178	Sec. 151.702. CEASE AND DESIST ORDERS FOR UNLICENSED
179	179	PERSONS. (a) If the commissioner has reason to believe that an
180	180	unlicensed person has engaged or is likely to engage in an activity
181	181	for which a license is required under this chapter, the
182	182	commissioner may order the person to cease and desist from the
183	183	violation until the person is issued a license under this chapter.
184	184	The commissioner's order is subject to Section 151.709, unless the
185	185	order is issued as an emergency order. The commissioner may issue
186	186	an emergency cease and desist order in accordance with Section
187	187	151.710 if the commissioner finds that the person's violation or
188	188	likely violation threatens immediate and irreparable harm to the
189	189	public.
190	190	(b) A cease and desist order under this section may require
191	191	the unlicensed person to take affirmative action to correct any
192	192	condition resulting from or contributing to the activity or
193	193	violation, including the payment of restitution to each resident of
194	194	this state damaged by the violation.
195	195	SECTION 10. The heading to Section 151.705, Finance Code,
196	196	is amended to read as follows:
197	197	Sec. 151.705. CEASE AND DESIST ORDERS FOR LICENSE HOLDERS
198	198	OR AUTHORIZED DELEGATES.
199	199	SECTION 11. Section 151.707(d), Finance Code, is amended to
200	200	read as follows:
201	201	(d) In determining the amount of the penalty, the
202	202	commissioner shall consider factors that include the seriousness of
203	203	the violation, the person's compliance history, and the person's
204	204	good faith in attempting to comply with this chapter, provided that
205	205	if the person is found to have demonstrated wilful disregard under
206	206	Subsection (a)(4), the trier of fact may [shall] recommend that the
207	207	commissioner impose the maximum administrative penalty permitted
208	208	under Subsection (c).
209	209	SECTION 12. (a) Sections 151.304, 151.307, and 151.308,
210	210	Finance Code, as amended by this Act, apply to a new application for
211	211	a money transmission license only if the application was submitted
212	212	on or after the effective date of this Act. An application for a
213	213	license submitted before the effective date of this Act is governed
214	214	by the law in effect on the date the application was submitted, and
215	215	the former law is continued in effect for that purpose.
216	216	(b) A person holding a money transmission license on
217	217	September 1, 2017, who is not in compliance with the net worth
218	218	requirements of Section 151.307, Finance Code, as amended by this
219	219	Act, shall comply with the net worth requirements of that section
220	220	not later than September 1, 2022. On written application and for
221	221	good cause shown, the banking commissioner of Texas may extend the
222	222	period for compliance under this section for the money transmission
223	223	license holder.
224	224	(c) Not later than July 1, 2018, a person holding a money
225	225	transmission license on September 1, 2017, shall comply with the
226	226	security requirements of Section 151.308, Finance Code, as amended
227	227	by this Act.
228	228	(d) Sections 151.702 and 151.707, Finance Code, as amended
229	229	by this Act, apply only to a violation that occurs on or after the
230	230	effective date of this Act. A violation that occurs before that
231	231	date is governed by the law in effect immediately before the
232	232	effective date of this Act, and that law is continued in effect for
233	233	that purpose.
234	234	SECTION 13. This Act takes effect September 1, 2017.