Texas 2017 - 85th Regular

Texas Senate Bill SB1403 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	By: Campbell S.B. No. 1403
2		-	(Burrows)
	1	+	S.B. No. 1403
3	2
4	3
5		-	A BILL TO BE ENTITLED
6	4		AN ACT
7	5		relating to the regulation of money services businesses.
8	6		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	7		SECTION 1. Section 151.002(b), Finance Code, is amended by
10	8		adding Subdivision (20-a) to read as follows:
11	9		(20-a) "Tangible net worth" means the total value of
12	10		all assets, minus any liabilities and intangible assets.
13	11		SECTION 2. Section 151.003, Finance Code, as amended by
14	12		Chapters 1000 (H.B. 483) and 75 (S.B. 899), Acts of the 84th
15	13		Legislature, Regular Session, 2015, is reenacted and amended to
16	14		read as follows:
17	15		Sec. 151.003. EXCLUSIONS. Subject to Subchapter J, the
18	16		following persons are not required to be licensed under this
19	17		chapter:
20	18		(1) the United States or an instrumentality of the
21	19		United States, including the United States Post Office or a
22	20		contractor acting on behalf of the United States Post Office;
23	21		(2) a state or an agency, political subdivision, or
24	22		other instrumentality of a state;
25	23		(3) a federally insured financial institution, as that
26	24		term is defined by Section 201.101, that is organized under the laws
27	25		of this state, another state, or the United States;
28	26		(4) a foreign bank branch or agency in the United
29	27		States established under the federal International Banking Act of
30	28		1978 (12 U.S.C. Section 3101 et seq.);
31	29		(5) a person acting as an agent for an entity excluded
32	30		under Subdivision (3) or (4), to the extent of the person's actions
33	31		in that capacity, provided that:
34	32		(A) the entity is liable for satisfying the money
35	33		services obligation owed to the purchaser on the person's receipt
36	34		of the purchaser's money; and
37	35		(B) the entity and person enter into a written
38	36		contract that appoints the person as the entity's agent and the
39	37		person acts only within the scope of authority conferred by the
40	38		contract;
41	39		(6) a person that, on behalf of the United States or a
42	40		department, agency, or instrumentality of the United States, or a
43	41		state or county, city, or any other governmental agency or
44	42		political subdivision of a state, provides electronic funds
45	43		transfer services of governmental benefits for a federal, state,
46	44		county, or local governmental agency;
47	45		(7) a person that acts as an intermediary on behalf of
48	46		and at the direction of a license holder in the process by which the
49	47		license holder, after receiving money or monetary value from a
50	48		purchaser, either directly or through an authorized delegate,
51	49		transmits the money or monetary value to the purchaser's designated
52	50		recipient, provided that the license holder is liable for
53	51		satisfying the obligation owed to the purchaser;
54	52		(8) an attorney or title company that in connection
55	53		with a real property transaction receives and disburses domestic
56	54		currency or issues an escrow or trust fund check only on behalf of a
57	55		party to the transaction;
58	56		(9) a person engaged in the business of currency
59	57		transportation who is both a registered motor carrier under Chapter
60	58		643, Transportation Code, and a licensed armored car company or
61	59		courier company under Chapter 1702, Occupations Code, provided that
62	60		the person:
63	61		(A) only transports currency [from a person to]:
64	62		(i) from a person to the same person at
65	63		another location; [or]
66	64		(ii) from a person to a financial
67	65		institution to be deposited in an account belonging to the same
68	66		person; or
69	67		(iii) to a person from a financial
70	68		institution after being withdrawn from an account belonging to the
71	69		same person; and
72	70		(B) does not otherwise engage in the money
73	71		transmission or currency exchange business or depository agent
74	72		services business without a license issued under this chapter;
75	73		(9-a) a trust company, as defined by Section
76	74		187.001(a), that is organized under the laws of this state; and
77	75		(10) any other person, transaction, or class of
78	76		persons or transactions exempted by commission rule or any other
79	77		person or transaction exempted by the commissioner's order on a
80	78		finding that the licensing of the person is not necessary to achieve
81	79		the purposes of this chapter.
82	80		SECTION 3. The heading to Section 151.2031, Finance Code,
83	81		is amended to read as follows:
84	82		Sec. 151.2031. USE OF NATIONWIDE MULTISTATE [MORTGAGE]
85	83		LICENSING SYSTEM AND REGISTRY.
86	84		SECTION 4. Sections 151.2031(a) and (b), Finance Code, are
87	85		amended to read as follows:
88	86		(a) In this section, "Nationwide Multistate [Mortgage]
89	87		Licensing System and Registry" or "nationwide registry" means a
90	88		licensing system developed and maintained by the Conference of
91	89		State Bank Supervisors or an affiliated organization to manage
92	90		mortgage licenses and other financial services licenses, or a
93	91		successor registry.
94	92		(b) The commissioner may require that a person submit
95	93		through the Nationwide Multistate [Mortgage] Licensing System and
96	94		Registry in the form and manner prescribed by the commissioner and
97	95		acceptable to the registry any information or document or payment
98	96		of a fee required to be submitted under this chapter or rules
99	97		adopted under this chapter.
100	98		SECTION 5. Section 151.302(c), Finance Code, is amended to
101	99		read as follows:
102	100		(c) On application and a finding that the exemption is in
103	101		the public interest, the commissioner may exempt a person that:
104	102		(1) incidentally engages in the money transmission
105	103		business only to the extent reasonable and necessary to accomplish
106	104		a primary business objective unrelated to the money transmission
107	105		business;
108	106		(2) does not advertise or offer money transmission
109	107		services to the public except to the extent reasonable and
110	108		necessary to fairly advertise or offer the person's primary
111	109		business services; and
112	110		(3) [either transmits money exclusively in connection
113	111		with commercial contracts in interstate commerce or does not charge
114	112		a fee to transmit money or] transmits money without a fee as an
115	113		inducement for customer participation in the person's primary
116	114		business.
117	115		SECTION 6. Section 151.304(b), Finance Code, is amended to
118	116		read as follows:
119	117		(b) At the time an application for a money transmission
120	118		license is submitted, an applicant must file with the department:
121	119		(1) an application fee in the amount established by
122	120		commission rule;
123	121		(2) audited financial statements that are
124	122		satisfactory to the commissioner for purposes of determining
125	123		whether the applicant has the minimum net worth required under
126	124		Section 151.307 and is likely to maintain the required minimum net
127	125		worth if a license is issued; and
128	126		(3) security [in the amount of $300,000,] that meets
129	127		the requirements of Section 151.308, and an undertaking or
130	128		agreement that the applicant will increase or supplement the
131	129		security to equal the aggregate security required by the
132	130		commissioner under that section before the issuance of the license
133	131		and the start of operations.
134	132		SECTION 7. Section 151.307, Finance Code, is amended by
135	133		amending Subsection (a) and adding Subsection (c) to read as
136	134		follows:
137	135		(a) An applicant for a money transmission license must
138	136		possess, and a money transmission license holder must maintain at
139	137		all times, a minimum net worth computed in accordance with
140	138		generally accepted accounting principles of:
141	139		(1) $100,000, if business is proposed to be or is
142	140		conducted, directly or through an authorized delegate, at four or
143	141		fewer locations; or
144	142		(2) $500,000, if business is proposed to be or is
145	143		conducted, directly or through an authorized delegate, at five or
146	144		more locations or over the Internet.
147	145		(c) At least 50 percent of the applicant's or license
148	146		holder's total net worth under this section must be tangible net
149	147		worth.
150	148		SECTION 8. Section 151.308, Finance Code, is amended by
151	149		amending Subsection (b) and adding Subsections (b-1) and (b-2) to
152	150		read as follows:
153	151		(b) The amount of the required security is the greater of
154	152		$300,000 or an amount equal to one percent of the license holder's
155	153		total yearly dollar volume of money transmission business in this
156	154		state or the applicant's projected total volume of business in this
157	155		state for the first year of licensure, up to a maximum of $2
158	156		million.
159	157		(b-1) The commissioner may increase the amount of security
160	158		required of an applicant who intends to provide, or a license holder
161	159		who is providing, third-party bill payments in conjunction with
162	160		loan acceleration services, up to a total amount of $2 million, by
163	161		multiplying the amount of security required under this section by a
164	162		factor of up to two, if the commissioner determines, with respect to
165	163		the applicant or license holder, that a higher amount of the
166	164		required security is necessary to achieve the purposes of this
167	165		chapter based on the factors listed under Section 151.307(b).
168	166		(b-2) When the amount of the required security exceeds $1
169	167		million, the applicant or license holder may, in the alternative,
170	168		provide security in the amount of $1 million, plus a dollar for
171	169		dollar increase in the net worth of the applicant or license holder
172	170		over the amount required under Section 151.307, up to a total amount
173	171		of $2 million.
174	172		SECTION 9. Section 151.702, Finance Code, is amended to
175	173		read as follows:
176	174		Sec. 151.702. CEASE AND DESIST ORDERS FOR UNLICENSED
177	175		PERSONS. (a) If the commissioner has reason to believe that an
178	176		unlicensed person has engaged or is likely to engage in an activity
179	177		for which a license is required under this chapter, the
180	178		commissioner may order the person to cease and desist from the
181	179		violation until the person is issued a license under this chapter.
182	180		The commissioner's order is subject to Section 151.709, unless the
183	181		order is issued as an emergency order. The commissioner may issue
184	182		an emergency cease and desist order in accordance with Section
185	183		151.710 if the commissioner finds that the person's violation or
186	184		likely violation threatens immediate and irreparable harm to the
187	185		public.
188	186		(b) A cease and desist order under this section may require
189	187		the unlicensed person to take affirmative action to correct any
190	188		condition resulting from or contributing to the activity or
191	189		violation, including the payment of restitution to each resident of
192	190		this state damaged by the violation.
193	191		SECTION 10. The heading to Section 151.705, Finance Code,
194	192		is amended to read as follows:
195	193		Sec. 151.705. CEASE AND DESIST ORDERS FOR LICENSE HOLDERS
196	194		OR AUTHORIZED DELEGATES.
197	195		SECTION 11. Section 151.707(d), Finance Code, is amended to
198	196		read as follows:
199	197		(d) In determining the amount of the penalty, the
200	198		commissioner shall consider factors that include the seriousness of
201	199		the violation, the person's compliance history, and the person's
202	200		good faith in attempting to comply with this chapter, provided that
203	201		if the person is found to have demonstrated wilful disregard under
204	202		Subsection (a)(4), the trier of fact may [shall] recommend that the
205	203		commissioner impose the maximum administrative penalty permitted
206	204		under Subsection (c).
207	205		SECTION 12. (a) Sections 151.304, 151.307, and 151.308,
208	206		Finance Code, as amended by this Act, apply to a new application for
209	207		a money transmission license only if the application was submitted
210	208		on or after the effective date of this Act. An application for a
211	209		license submitted before the effective date of this Act is governed
212	210		by the law in effect on the date the application was submitted, and
213	211		the former law is continued in effect for that purpose.
214	212		(b) A person holding a money transmission license on
215	213		September 1, 2017, who is not in compliance with the net worth
216	214		requirements of Section 151.307, Finance Code, as amended by this
217	215		Act, shall comply with the net worth requirements of that section
218	216		not later than September 1, 2022. On written application and for
219	217		good cause shown, the banking commissioner of Texas may extend the
220	218		period for compliance under this section for the money transmission
221	219		license holder.
222	220		(c) Not later than July 1, 2018, a person holding a money
223	221		transmission license on September 1, 2017, shall comply with the
224	222		security requirements of Section 151.308, Finance Code, as amended
225	223		by this Act.
226	224		(d) Sections 151.702 and 151.707, Finance Code, as amended
227	225		by this Act, apply only to a violation that occurs on or after the
228	226		effective date of this Act. A violation that occurs before that
229	227		date is governed by the law in effect immediately before the
230	228		effective date of this Act, and that law is continued in effect for
231	229		that purpose.
232	230		SECTION 13. This Act takes effect September 1, 2017.
	231	+	______________________________ ______________________________
	232	+	President of the Senate Speaker of the House
	233	+	I hereby certify that S.B. No. 1403 passed the Senate on
	234	+	April 19, 2017, by the following vote: Yeas 31, Nays 0.
	235	+	______________________________
	236	+	Secretary of the Senate
	237	+	I hereby certify that S.B. No. 1403 passed the House on
	238	+	May 19, 2017, by the following vote: Yeas 144, Nays 0, two
	239	+	present not voting.
	240	+	______________________________
	241	+	Chief Clerk of the House
	242	+	Approved:
	243	+	______________________________
	244	+	Date
	245	+	______________________________
	246	+	Governor