Texas 2023 - 88th Regular

Texas House Bill HB3573 Compare Versions

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1	1	88R11286 TYPED
2	2	By: Lambert H.B. No. 3573
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to modernizing the regulation of money services
8	8	businesses.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subtitle E, Title 3, Finance Code, is amended by
11	11	adding Chapter 151 to read as follows:
12	12	CHAPTER 151. REGULATION OF MONEY SERVICES BUSINESSES
13	13	SUBCHAPTER A. GENERAL PROVISIONS
14	14	Section 151.2000 Short Title. This Act may be cited as the
15	15	Texas Money Services Modernization Act.
16	16	Section 151.002 Definitions. For purposes of this Act, the
17	17	following definitions shall apply:
18	18	(a) "Acting in concert" means persons knowingly acting
19	19	together with a common goal of jointly acquiring control of a
20	20	licensee whether or not pursuant to an express agreement.
21	21	(b) "Authorized delegate" means a person a licensee
22	22	designates to engage in money transmission on behalf of the
23	23	licensee.
24	24	(c) "Average daily money transmission liability" means the
25	25	amount of the licensee's outstanding money transmission
26	26	obligations in this state at the end of each day in a given period of
27	27	time, added together, and divided by the total number of days in the
28	28	given period of time. For purposes of calculating average daily
29	29	money transmission liability under this Act for any licensee
30	30	required to do so, the given period of time shall be the quarters
31	31	ending March 31, June 30, September 30, and December 31 and at any
32	32	other date that may be requested during an examination.
33	33	(d) "Bank Secrecy Act" means the Bank Secrecy Act, 31 U.S.C.
34	34	Section 5311, et seq. and its implementing regulations, as amended
35	35	and recodified from time to time.
36	36	(e) "Closed loop stored value" means stored value that is
37	37	redeemable by the issuer only for goods or services provided by the
38	38	issuer or its affiliate or franchisees of the issuer or its
39	39	affiliate, except to the extent required by applicable law to be
40	40	redeemable in cash for its cash value;
41	41	(f) "Commission" means the Finance Commission of Texas.
42	42	(g) "Commissioner" means the Banking Commissioner of Texas
43	43	or a person designated by the banking commissioner and acting under
44	44	the banking commissioner's direction and authority.
45	45	(h) "Control" means
46	46	(1) (A) the power to vote, directly or indirectly, at least
47	47	25 percent of the outstanding voting shares or voting interests of a
48	48	licensee or person in control of a licensee;
49	49	(B) the power to elect or appoint a majority of
50	50	key individuals or executive officers, managers, directors,
51	51	trustees, or other persons exercising managerial authority of a
52	52	person in control of a licensee; or
53	53	(C) the power to exercise, directly or
54	54	indirectly, a controlling influence over the management or policies
55	55	of a licensee or person in control of a licensee.
56	56	(2) Rebuttable Presumption of Control.
57	57	(A) A person is presumed to exercise a
58	58	controlling influence when the person holds the power to vote,
59	59	directly or indirectly, at least 10 percent of the outstanding
60	60	voting shares or voting interests of a licensee or person in control
61	61	of a licensee.
62	62	(B) A person presumed to exercise a controlling
63	63	influence as defined by this section can rebut the presumption of
64	64	control if the person is a passive investor.
65	65	(3) For purposes of determining the percentage of a
66	66	person controlled by any other person, the person's interest shall
67	67	be aggregated with the interest of any other immediate family
68	68	member, including the person's spouse, parents, children,
69	69	siblings, mothers- and fathers-in law, sons- and daughters-in-law,
70	70	brothers- and sisters-in-law, and any other person who shares such
71	71	person's home.
72	72	(i) "Currency" means the coin and paper money issued by the
73	73	United States or another country that is designated as legal tender
74	74	and circulates and is customarily used and accepted as a medium of
75	75	exchange in the country of issuance.
76	76	(j) "Currency exchange" means:
77	77	(1) receiving the currency of one government and
78	78	exchanging it for the currency of another government; or
79	79	(2) receiving a negotiable instrument and exchanging
80	80	it for the currency of another government.
81	81	(k) "Department" means the Texas Department of Banking.
82	82	(l) "Eligible rating" shall mean a credit rating of any of
83	83	the three highest rating categories provided by an eligible rating
84	84	service, whereby each category may include rating category
85	85	modifiers such as "plus" or "minus" for S&P, or the equivalent for
86	86	any other eligible rating service. Long-term credit ratings are
87	87	deemed eligible if the rating is equal to A- or higher by S&P, or the
88	88	equivalent from any other eligible rating service. Short-term
89	89	credit ratings are deemed eligible if the rating is equal to or
90	90	higher than A-2 or SP-2 by S&P, or the equivalent from any other
91	91	eligible rating service. In the event that ratings differ among
92	92	eligible rating services, the highest rating shall apply when
93	93	determining whether a security bears an eligible rating.
94	94	(m) "Eligible rating service" shall mean any Nationally
95	95	Recognized Statistical Rating Organization (NRSRO) as defined by
96	96	the U.S. Securities and Exchange Commission, and any other
97	97	organization designated by the Commissioner by rule or order.
98	98	(n) "Federally insured depository financial institution"
99	99	means a bank, credit union, savings and loan association, trust
100	100	company, savings association, savings bank, industrial bank, or
101	101	industrial loan company organized under the laws of the United
102	102	States or any state of the United States, when such bank, credit
103	103	union, savings and loan association, trust company, savings
104	104	association, savings bank, industrial bank, or industrial loan
105	105	company has federally insured deposits.
106	106	(o) "In this state" means at a physical location within this
107	107	state for a transaction requested in person. For a transaction
108	108	requested electronically or by phone, the provider of money
109	109	transmission may determine if the person requesting the transaction
110	110	is "in this state" by relying on other information provided by the
111	111	person regarding the location of the individual's residential
112	112	address or a business entity's principal place of business or other
113	113	physical address location, and any records associated with the
114	114	person that the provider of money transmission may have that
115	115	indicate such location, including but not limited to an address
116	116	associated with an account.
117	117	(p) "Individual" means a natural person.
118	118	(q) "Key individual" means any individual ultimately
119	119	responsible for establishing or directing policies and procedures
120	120	of the licensee, such as an executive officer, manager, director,
121	121	or trustee.
122	122	(r) "Licensee" means a person licensed under this Act.
123	123	(s) "Material litigation" means litigation, that according
124	124	to United States generally accepted accounting principles, is
125	125	significant to a person's financial health and would be required to
126	126	be disclosed in the person's annual audited financial statements,
127	127	report to shareholders, or similar records.
128	128	(t) "Money" or "monetary value" means currency or a claim
129	129	that can be converted into currency through a financial
130	130	institution, electronic payments network, or other formal or
131	131	informal payment system. The term "monetary value" includes:
132	132	(1) Stablecoin that is fully backed by sovereign
133	133	currency and grants the holder the right to redeem the coin for
134	134	sovereign currency from the issuer.
135	135	(u) "Money transmission" means any of the following:
136	136	(1) Selling or issuing payment instruments to a person
137	137	located in this state.
138	138	(2) Selling or issuing stored value to a person
139	139	located in this state.
140	140	(3) Receiving money for transmission from a person
141	141	located in this state.
142	142	The term includes payroll processing services. The term does not
143	143	include the provision solely of online or telecommunications
144	144	services or network access.
145	145	(v) "MSB accredited state" means a state agency that is
146	146	accredited by the Conference of State Bank Supervisors and Money
147	147	Transmitter Regulators Association for money transmission
148	148	licensing and supervision.
149	149	(w) "Multistate licensing process" means any agreement
150	150	entered into by and among state regulators relating to coordinated
151	151	processing of applications for money transmission licenses,
152	152	applications for the acquisition of control of a licensee, control
153	153	determinations, or notice and information requirements for a change
154	154	of key individuals.
155	155	(x) "Negotiable instrument" has the meaning assigned by
156	156	Section 3.104, Business & Commerce Code.
157	157	(y) "NMLS" means the Nationwide Multistate Licensing System
158	158	and Registry developed by the Conference of State Bank Supervisors
159	159	and the American Association of Residential Mortgage Regulators and
160	160	owned and operated by the State Regulatory Registry, LLC, or any
161	161	successor or affiliated entity, for the licensing and registration
162	162	of persons in financial services industries.
163	163	(z) "Outstanding money transmission obligations" shall be
164	164	established and extinguished in accordance with applicable state
165	165	law and shall mean:
166	166	(1) Any payment instrument or stored value issued or
167	167	sold by the licensee to a person located in the United States or
168	168	reported as sold by an authorized delegate of the licensee to a
169	169	person that is located in the United States that has not yet been
170	170	paid or refunded by or for the licensee, or escheated in accordance
171	171	with applicable abandoned property laws; or
172	172	(2) Any money received for transmission by the
173	173	licensee or an authorized delegate in the United States from a
174	174	person located in the United States that has not been received by
175	175	the payee or refunded to the sender, or escheated in accordance with
176	176	applicable abandoned property laws.
177	177	(3) For purposes of this section, "in the United
178	178	States" shall include, to the extent applicable, a person in any
179	179	state, territory, or possession of the United States; the District
180	180	of Columbia; the Commonwealth of Puerto Rico; or a U.S. military
181	181	installation that is located in a foreign country.
182	182	(aa) "Passive investor" means a person that:
183	183	(1) Does not have the power to elect a majority of key
184	184	individuals or executive officers, managers, directors, trustees,
185	185	or other persons exercising managerial authority of a person in
186	186	control of a licensee;
187	187	(2) Is not employed by and does not have any managerial
188	188	duties of the licensee or person in control of a licensee;
189	189	(3) Does not have the power to exercise, directly or
190	190	indirectly, a controlling influence over the management or policies
191	191	of a licensee or person in control of a licensee; and
192	192	(4) Either:
193	193	(A) Attests to (1), (2), and (3), in a form and in
194	194	a medium prescribed by the Commissioner; or
195	195	(B) Commits to the passivity characteristics of
196	196	(1), (2), and (3), in a written document.
197	197	(bb) "Payment instrument" means a written or electronic
198	198	check, draft, money order, traveler's check, or other written or
199	199	electronic instrument for the transmission or payment of money or
200	200	monetary value, whether or not negotiable. The term does not
201	201	include stored value or any instrument that (1) is redeemable by the
202	202	issuer only for goods or services provided by the issuer or its
203	203	affiliate or franchisees of the issuer or its affiliate, except to
204	204	the extent required by applicable law to be redeemable in cash for
205	205	its cash value; or (2) not sold to the public but issued and
206	206	distributed as part of a loyalty, rewards, or promotional program.
207	207	(cc) "Payroll processing services" means receiving money
208	208	for transmission pursuant to a contract with a person to deliver
209	209	wages or salaries, make payment of payroll taxes to state and
210	210	federal agencies, make payments relating to employee benefit plan],
211	211	or make distributions of other authorized deductions from wages or
212	212	salaries. The term payroll processing services does not include an
213	213	employer performing payroll processing services on its own behalf
214	214	or on behalf of its affiliate, or a professional employment
215	215	organization subject to regulation under other applicable state
216	216	law.
217	217	(dd) "Person" means any individual, general partnership,
218	218	limited partnership, limited liability company, corporation,
219	219	trust, association, joint stock corporation, or other corporate
220	220	entity identified by the Commissioner.
221	221	(ee) "Receiving money for transmission" or "money received
222	222	for transmission" means receiving money or monetary value in the
223	223	United States for transmission within or outside the United States
224	224	by electronic or other means.
225	225	(ff) "Stored value" means monetary value representing a
226	226	claim against the issuer evidenced by an electronic or digital
227	227	record, and that is intended and accepted for use as a means of
228	228	redemption for money or monetary value, or payment for goods or
229	229	services. The term includes, but is not limited to, "prepaid
230	230	access" as defined by 31 C.F.R. Section 1010.100, as amended or
231	231	recodified from time to time. Notwithstanding the foregoing, the
232	232	term "stored value" does not include a payment instrument or closed
233	233	loop stored value, or stored value not sold to the public but issued
234	234	and distributed as part of a loyalty, rewards, or promotional
235	235	program.
236	236	(gg) "Tangible net worth" shall mean the aggregate assets of
237	237	a licensee excluding all intangible assets, less liabilities, as
238	238	determined in accordance with United States generally accepted
239	239	accounting principles.
240	240	(hh) "Unsafe or unsound act or practice" means a practice of
241	241	or conduct by a licensee or an authorized delegate of the licensee
242	242	that creates the likelihood of material loss, insolvency, or
243	243	dissipation of the licensee's assets, or that otherwise materially
244	244	prejudices the interests of the licensee or the licensee's
245	245	customers.
246	246	Section 151.003 Exemptions. This Act does not apply to:
247	247	(a) An operator of a payment system to the extent that it
248	248	provides processing, clearing, or settlement services, between or
249	249	among persons exempted by this section or licensees, in connection
250	250	with wire transfers, credit card transactions, debit card
251	251	transactions, stored-value transactions, automated clearing house
252	252	transfers, or similar funds transfers.
253	253	(b) A person appointed as an agent of a payee to collect and
254	254	process a payment from a payor to the payee for goods or services,
255	255	other than money transmission itself, provided to the payor by the
256	256	payee, provided that:
257	257	(1) there exists a written agreement between the payee
258	258	and the agent directing the agent to collect and process payments
259	259	from payors on the payee's behalf;
260	260	(2) the payee holds the agent out to the public as
261	261	accepting payments for goods or services on the payee's behalf; and
262	262	(3) payment for the goods and services is treated as
263	263	received by the payee upon receipt by the agent so that the payor's
264	264	obligation is extinguished and there is no risk of loss to the payor
265	265	if the agent fails to remit the funds to the payee.
266	266	(c) A person that acts as an intermediary by processing
267	267	payments between an entity that has directly incurred an
268	268	outstanding money transmission obligation to a sender, and the
269	269	sender's designated recipient, provided that the entity:
270	270	(1) is properly licensed or exempt from licensing
271	271	requirements under this Act;
272	272	(2) provides a receipt, electronic record, or other
273	273	written confirmation to the sender identifying the entity as the
274	274	provider of money transmission in the transaction; and
275	275	(3) bears sole responsibility to satisfy the
276	276	outstanding money transmission obligation to the sender, including
277	277	the obligation to make the sender whole in connection with any
278	278	failure to transmit the funds to the sender's designated recipient.
279	279	(d) The United States or a department, agency, or
280	280	instrumentality thereof, or its agent.
281	281	(e) Money transmission by the United States Postal Service
282	282	or by an agent of the United States Postal Service.
283	283	(f) A state, county, city, or any other governmental agency
284	284	or governmental subdivision or instrumentality of a state, or its
285	285	agent.
286	286	(g) A federally insured depository financial institution,
287	287	bank holding company, office of an international banking
288	288	corporation, foreign bank that establishes a federal branch
289	289	pursuant to the International Bank Act, 12 U.S.C. Section 3102, as
290	290	amended or recodified from time to time, corporation organized
291	291	pursuant to the Bank Service Corporation Act, 12 U.S.C. Sections
292	292	1861-1867, as amended or recodified from time to time, or
293	293	corporation organized under the Edge Act, 12 U.S.C. Sections
294	294	611-633, as amended or recodified from time to time, under the laws
295	295	of a state or the United States.
296	296	(h) A trust company, as defined by Section 187.001(a), that
297	297	is organized under the laws of this state.
298	298	(i) Electronic funds transfer of governmental benefits for
299	299	a federal, state, county, or governmental agency by a contractor on
300	300	behalf of the United States or a department, agency, or
301	301	instrumentality thereof, or on behalf of a state or governmental
302	302	subdivision, agency, or instrumentality thereof.
303	303	(j) A board of trade designated as a contract market under
304	304	the federal Commodity Exchange Act, 7 U.S.C. Sections 1-25, as
305	305	amended or recodified from time to time, or a person that, in the
306	306	ordinary course of business, provides clearance and settlement
307	307	services for a board of trade to the extent of its operation as or
308	308	for such a board.
309	309	(k) A registered futures commission merchant under the
310	310	federal commodities laws to the extent of its operation as such a
311	311	merchant.
312	312	(l) A person registered as a securities broker-dealer under
313	313	federal or state securities laws to the extent of its operation as
314	314	such a broker-dealer.
315	315	(m) An individual employed by a licensee, authorized
316	316	delegate, or any person exempted from the licensing requirements of
317	317	the Act when acting within the scope of employment and under the
318	318	supervision of the licensee, authorized delegate, or exempted
319	319	person as an employee and not as an independent contractor.
320	320	(n) A person expressly appointed as a third party service
321	321	provider to or agent of an entity exempt under Section 151.003(g),
322	322	solely to the extent that:
323	323	(1) such service provider or agent is engaging in
324	324	money transmission on behalf of and pursuant to a written agreement
325	325	with the exempt entity that sets forth the specific functions that
326	326	the service provider or agent is to perform; and
327	327	(2) the exempt entity assumes all risk of loss and all
328	328	legal responsibility for satisfying the outstanding money
329	329	transmission obligations owed to purchasers and holders of the
330	330	outstanding money transmission obligations upon receipt of the
331	331	purchaser's or holder's money or monetary value by the service
332	332	provider or agent.
333	333	(o) A person exempt by regulation or order if the
334	334	Commissioner finds such exemption to be in the public interest and
335	335	that the regulation of such person is not necessary for the purposes
336	336	of this Act.
337	337	Section 151.004 Authority to Require Demonstration of
338	338	Exemption. The Commissioner may require that any person claiming to
339	339	be exempt from licensing pursuant to Section 151.003 provide
340	340	information and documentation to the Commissioner demonstrating
341	341	that it qualifies for any claimed exemption.
342	342	SUBCHAPTER B. ADMINISTRATIVE PROVISIONS
343	343	Section 151.101 Administration.
344	344	(a) The department shall administer this chapter. The
345	345	commission may adopt rules to administer and enforce this chapter,
346	346	including rules necessary or appropriate to:
347	347	(1) implement and clarify this chapter; and
348	348	(2) recover the cost of maintaining and operating the
349	349	department and the cost of administering and enforcing this chapter
350	350	and other applicable law by imposing and collecting proportionate
351	351	and equitable fees and costs for notices, applications,
352	352	examinations, investigations, and other actions required to
353	353	achieve the purposes of this chap
354	354	(b) The presence or absence of a specific reference in this
355	355	chapter to a rule regarding a particular subject is not intended to
356	356	and does not limit the general rulemaking authority granted to the
357	357	commission by this section.
358	358	Section 151.102 Purpose. The purpose of this Act is to
359	359	protect the interests of purchasers of money services and the
360	360	public, preserve and protect the safety and soundness of money
361	361	services businesses, and protect against drug trafficking,
362	362	terrorist funding, and money laundering, structuring, or related
363	363	financial crime.
364	364	Section 151.103 Implementation.
365	365	(a) In order to carry out the purposes of this Act, the
366	366	Commissioner may, subject to the provisions of Section 151.105(a)
367	367	and(b):
368	368	(1) Enter into agreements or relationships with other
369	369	government officials or federal and state regulatory agencies and
370	370	regulatory associations in order to improve efficiencies and reduce
371	371	regulatory burden by standardizing methods or procedures, and
372	372	sharing resources, records or related information obtained under
373	373	this Act;
374	374	(2) Use, hire, contract, or employ analytical systems,
375	375	methods, or software to examine or investigate any person subject
376	376	to this Act.
377	377	(3) Accept, from other state or federal government
378	378	agencies or officials, licensing, examination, or investigation
379	379	reports made by such other state or federal government agencies or
380	380	officials; and
381	381	(4) Accept audit reports made by an independent
382	382	certified public accountant or other qualified third-party auditor
383	383	for an applicant or licensee and incorporate the audit report in any
384	384	report of examination or investigation.
385	385	Section 151.104 Commissioner's General Authority.
386	386	(a) Each power granted to the commissioner under this
387	387	chapter is in addition to, and not in limitation of, each other
388	388	power granted under this chapter. The fact that the commissioner
389	389	possesses, or has exercised, a power under a provision of this
390	390	chapter does not preclude the commissioner from exercising a power
391	391	under any other provision of this chapter.
392	392	(b) Each power granted to the commissioner under this
393	393	chapter is in addition to, and not in limitation of, powers granted
394	394	to the commissioner under other law. The fact that the commissioner
395	395	possesses, or has exercised, a power under any other provision of
396	396	law does not preclude the commissioner from exercising any power
397	397	under this chapter. The fact that the commissioner possesses, or
398	398	has exercised, a power under a provision of this chapter does not
399	399	preclude the commissioner from exercising a power under any other
400	400	law.
401	401	(c) The commissioner may impose on any authority, approval,
402	402	exemption, license, or order issued or granted under this chapter
403	403	any condition the commissioner considers reasonably necessary or
404	404	appropriate to carry out and achieve the purposes of this chapter.
405	405	Section 151.105 Confidentiality.
406	406	(a) Except as otherwise provided in Subsection (b), all
407	407	information or reports obtained by the Commissioner from an
408	408	applicant, licensee, or authorized delegate, and all information
409	409	contained in or related to an examination, investigation, operating
410	410	report, or condition report prepared by, on behalf of, or for the
411	411	use of the Commissioner, or financial statements, balance sheets,
412	412	or authorized delegate information, are confidential and are not
413	413	subject to disclosure under the Public Information Act.
414	414	(b) The Commissioner may disclose information not otherwise
415	415	subject to disclosure under Subsection (a) to representatives of
416	416	state or federal agencies who promise in a record that they will
417	417	maintain the confidentiality of the information or where the
418	418	Commissioner finds that the release is reasonably necessary for the
419	419	protection and interest of the public in accordance with the Public
420	420	Information Act.
421	421	(c) This Section 151.105 does not prohibit the Commissioner
422	422	from disclosing to the public a list of all licensees or the
423	423	aggregated financial or transactional data concerning those
424	424	licensees.
425	425	(d) Information contained in the records of the Department
426	426	that is not confidential and may be made available to the public
427	427	either on the Department's website, upon receipt by the Department
428	428	of a written request, or in NMLS shall include:
429	429	(1) The name, business address, telephone number, and
430	430	unique identifier of a licensee;
431	431	(2) The business address of a licensee's registered
432	432	agent for service;
433	433	(3) The name, business address, and telephone number
434	434	of all authorized delegates;
435	435	(4) The terms of or a copy of any bond filed by a
436	436	licensee, provided that confidential information, including, but
437	437	not limited to, prices and fees for such bond is redacted;
438	438	(5) Copies of any non-confidential final orders of the
439	439	Department relating to any violation of this Act or regulations
440	440	implementing this Act; and
441	441	(6) Imposition of an administrative fine or penalty
442	442	under this Act.
443	443	Section 151.106 Supervision.
444	444	(a) The Commissioner may conduct an examination or
445	445	investigation of a licensee or authorized delegate or otherwise
446	446	take independent action authorized by this Act or by a rule adopted
447	447	or order issued under this Act as reasonably necessary or
448	448	appropriate to administer and enforce this Act, regulations
449	449	implementing this Act, and other applicable law, including the Bank
450	450	Secrecy Act and the USA PATRIOT ACT. The Commissioner may:
451	451	(1) conduct an examination either on-site or off-site
452	452	as the Commissioner may reasonably require;
453	453	(2) conduct an examination in conjunction with an
454	454	examination conducted by representatives of other state agencies or
455	455	agencies of another state or of the federal government;
456	456	(3) accept the examination report of another state
457	457	agency or an agency of another state or of the federal government,
458	458	or a report prepared by an independent accounting firm, which on
459	459	being accepted is considered for all purposes as an official report
460	460	of the Commissioner; and
461	461	(4) summon and examine under oath a key individual or
462	462	employee of a licensee or authorized delegate and require the
463	463	person to produce records regarding any matter related to the
464	464	condition and business of the licensee or authorized delegate.
465	465	(b) A licensee or authorized delegate shall provide, and the
466	466	Commissioner shall have full and complete access to, all records
467	467	the Commissioner may reasonably require to conduct a complete
468	468	examination. The records must be provided at the location and in the
469	469	format specified by the Commissioner, provided, the Commissioner
470	470	may utilize multistate record production standards and examination
471	471	procedures when such standards will reasonably achieve the
472	472	requirements of this section.
473	473	(c) Unless otherwise directed by the Commissioner, a
474	474	licensee shall pay all costs reasonably incurred in connection with
475	475	an examination of the licensee or the licensee's authorized
476	476	delegates.
477	477	Section 151.107 Networked Supervision.
478	478	(a) To efficiently and effectively administer and enforce
479	479	this Act and to minimize regulatory burden, the Commissioner may
480	480	participate in multistate supervisory processes established
481	481	between states and coordinated through the Conference of State Bank
482	482	Supervisors, Money Transmitter Regulators Association, and
483	483	affiliates and successors thereof for all licensees that hold
484	484	licenses in this state and other states. As a participant in
485	485	multistate supervision, the Commissioner will:
486	486	(1) cooperate, coordinate, and share information with
487	487	other state and federal regulators in accordance with Section
488	488	151.105 of this Act;
489	489	(2) enter into written cooperation, coordination, or
490	490	information-sharing contracts or agreements with organizations the
491	491	membership of which is made up of state or federal governmental
492	492	agencies; and
493	493	(3) cooperate, coordinate, and share information with
494	494	organizations the membership of which is made up of state or federal
495	495	governmental agencies, provided that the organizations agree in
496	496	writing to maintain the confidentiality and security of the shared
497	497	information in accordance with Section 151.105 of this Act.
498	498	(b) The Commissioner may not waive, and nothing in this
499	499	section constitutes a waiver of, the Commissioner's authority to
500	500	conduct an examination or investigation or otherwise take
501	501	independent action authorized by this Act or a rule adopted or order
502	502	issued under this Act to enforce compliance with applicable state
503	503	or federal law.
504	504	(c) A joint examination or investigation, or acceptance of
505	505	an examination or investigation report, does not waive an
506	506	examination assessment provided for in this Act.
507	507	Section 151.108 Relationship to Federal Law.
508	508	(a) In the event state money transmission jurisdiction is
509	509	conditioned on a federal law, any inconsistencies between a
510	510	provision of this Act and the federal law governing money
511	511	transmission shall be governed by the applicable federal law to the
512	512	extent of the inconsistency.
513	513	(b) In the event of any inconsistencies between this Act and
514	514	a federal law that governs pursuant to Subsection (a), the
515	515	Commissioner may provide interpretive guidance that:
516	516	(1) identifies the inconsistency; and
517	517	(2) identifies the appropriate means of compliance
518	518	with federal law.
519	519	Section 151.109 Consent To Service Of Process. A licensee, an
520	520	authorized delegate, or a person who knowingly engages in
521	521	activities that are regulated and require a license under this
522	522	chapter, with or without filing an application for a license or
523	523	holding a license under this chapter, is considered to have
524	524	consented to the jurisdiction of the courts of this state for all
525	525	actions arising under this chapter.
526	526	SUBCHAPTER C. MONEY SERVICES LICENSES
527	527	Section 151.201 Money Transmission License Required.
528	528	(a) A person may not engage in the business of money
529	529	transmission or advertise, solicit, or hold itself out as engaging
530	530	in the business of money transmission unless the person is licensed
531	531	under this Act.
532	532	(b) For the purposes of this chapter, a person engages in
533	533	the business of money transmission if the person receives
534	534	compensation or expects to receive compensation, directly or
535	535	indirectly, for conducting money transmission.
536	536	(c) Subsection (a) does not apply to:
537	537	(1) A person that is an authorized delegate of a person
538	538	licensed under this Act acting within the scope of authority
539	539	conferred by a written contract with the licensee; or
540	540	(2) A person that is exempt pursuant to Section
541	541	151.003 and does not engage in money transmission outside the scope
542	542	of such exemption.
543	543	(3) A person that has been granted an exemption under
544	544	Subsection (e).
545	545	(d) A license issued under Section 151.206 is not
546	546	transferable or assignable.
547	547	(e) On application and a finding that the exemption is in
548	548	the public interest, the commissioner may exempt a person that:
549	549	(1) incidentally engages in the money transmission
550	550	business only to the extent reasonable and necessary to accomplish
551	551	a primary business objective unrelated to the money transmission
552	552	business;
553	553	(2) does not advertise or offer money transmission
554	554	services to the public except to the extent reasonable and
555	555	necessary to fairly advertise or offer the person's primary
556	556	business services; and
557	557	(3) transmits money without a fee as an inducement for
558	558	customer participation in the person's primary business.
559	559	Section 151.202 Currency Exchange License Required.
560	560	(a) A person may not engage in the business of currency
561	561	exchange or advertise, solicit, or hold itself out as providing
562	562	currency exchange unless the person:
563	563	(1) is licensed under this subchapter;
564	564	(2) is an authorized delegate of a person licensed for
565	565	money transmission under this subchapter;
566	566	(3) is excluded under Section 151.003; or
567	567	(4) has been granted an exemption under Subsection
568	568	(e).
569	569	(b) For purposes of this chapter, a person engages in the
570	570	business of currency exchange if the person exchanges currency and
571	571	receives compensation or expects to receive compensation, directly
572	572	or indirectly, for the currency exchange.
573	573	(c) A licensee may engage in the currency exchange business
574	574	at one or more locations in this state owned, directly or indirectly
575	575	by the licensee, under a single license.
576	576	(d) A license issued under Section 151.206 is not
577	577	transferable or assignable.
578	578	(e) On application and a finding that the exemption is in
579	579	the public interest, the commissioner may exempt a retailer,
580	580	wholesaler, or service provider that in the ordinary course of
581	581	business accepts currency of a foreign country or government as
582	582	payment for goods or services, provided that a person is not
583	583	eligible for the exemption if:
584	584	(1) the value of the goods or services purchased in a
585	585	single transaction exceeds $10,000;
586	586	(2) the change given or made as a result of the
587	587	transaction exceeds $100;
588	588	(3) an attempt is made to structure a transaction in a
589	589	manner that evades the licensing requirements of this subchapter or
590	590	avoids using a business licensed under this chapter;
591	591	(4) the person is engaged in the business of cashing
592	592	checks, drafts, or other payment instruments for consideration and
593	593	is not otherwise exempt from licensing under this chapter; or
594	594	(5) the person would not be eligible for a license
595	595	under this chapter.
596	596	(f) In accordance with the investigation provisions of this
597	597	chapter, the commissioner may examine a person to verify the
598	598	person's exempt status under Subsection (e).
599	599	Section 151.203 Consistent State Licensing.
600	600	(a) The commissioner may require that a person submit
601	601	through NMLS in the form and manner prescribed by the commissioner
602	602	and acceptable to the registry any information or document or
603	603	payment of a fee required to be submitted under this chapter or
604	604	rules adopted under this chapter.
605	605	(b) The commissioner may use NMLS as a channeling agent for
606	606	obtaining information required for licensing purposes under this
607	607	chapter or rules adopted under this chapter, including:
608	608	(1) criminal history record information from the
609	609	Federal Bureau of Investigation, the United States Department of
610	610	Justice, or any other agency or entity at the commissioner's
611	611	discretion;
612	612	(2) information related to any administrative, civil,
613	613	or criminal findings by a governmental jurisdiction; and
614	614	(3) information requested by the commissioner under
615	615	Section 151.204(a)(10) or Section 151.204(b)(11).
616	616	Section 151.204 Application for a Money Services License.
617	617	(a) Applicants for a license shall apply in a form and in a
618	618	medium as prescribed by the Commissioner. Each such form shall
619	619	contain content as set forth by rule, regulation, instruction or
620	620	procedure of the Commissioner and may be changed or updated by the
621	621	Commissioner in accordance with applicable law in order to carry
622	622	out the purposes of this Act and maintain consistency with NMLS
623	623	licensing standards and practices. The application must state or
624	624	contain, as applicable:
625	625	(1) the legal name and residential and business
626	626	addresses of the applicant and any fictitious or trade name used by
627	627	the applicant in conducting its business;
628	628	(2) a list of any criminal convictions of the
629	629	applicant and any material litigation in which the applicant has
630	630	been involved in the 10-year period next preceding the submission
631	631	of the application;
632	632	(3) a description of any money transmission or
633	633	currency exchange previously provided by the applicant and the
634	634	money transmission or currency exchange that the applicant seeks to
635	635	provide in this state;
636	636	(4) if applicable, a list of the applicant's proposed
637	637	authorized delegates and the locations in this state where the
638	638	applicant and its authorized delegates propose to engage in money
639	639	transmission;
640	640	(5) a list of other states in which the applicant is
641	641	licensed to engage in money transmission, currency exchange, or
642	642	both and any license revocations, suspensions, or other
643	643	disciplinary action taken against the applicant in another state;
644	644	(6) information concerning any bankruptcy or
645	645	receivership proceedings affecting the licensee or a person in
646	646	control of a licensee;
647	647	(7) a sample form of contract for authorized
648	648	delegates, if applicable;
649	649	(8) a sample form of payment instrument or stored
650	650	value, as applicable;
651	651	(9) the name and address of any federally insured
652	652	depository financial institution through which the applicant plans
653	653	to conduct licensable activity; and
654	654	(10) any other information the Commissioner
655	655	reasonably requires with respect to the applicant.
656	656	(b) If an applicant is a corporation, limited liability
657	657	company, partnership, or other legal entity, the applicant shall
658	658	also provide:
659	659	(1) the date of the applicant's incorporation or
660	660	formation and state or country of incorporation or formation;
661	661	(2) if applicable, a certificate of good standing from
662	662	the state or country in which the applicant is incorporated or
663	663	formed;
664	664	(3) a brief description of the structure or
665	665	organization of the applicant, including any parents or
666	666	subsidiaries of the applicant, and whether any parents or
667	667	subsidiaries are publicly traded;
668	668	(4) the legal name, any fictitious or trade name, all
669	669	business and residential addresses, and the employment, as
670	670	applicable, in the 10-year period next preceding the submission of
671	671	the application of each key individual and person in control of the
672	672	applicant;
673	673	(5) a list of any criminal convictions and material
674	674	litigation in which a person in control of the applicant that is not
675	675	an individual has been involved in the 10-year period preceding the
676	676	submission of the application;
677	677	(6) if applying for a money transmission license, a
678	678	copy of audited financial statements of the applicant for the most
679	679	recent fiscal year and for the two-year period next preceding the
680	680	submission of the application or, if applying for a currency
681	681	exchange license or if otherwise determined to be acceptable to the
682	682	Commissioner, certified unaudited financial statements for the
683	683	most recent fiscal year or other period acceptable to the
684	684	Commissioner;
685	685	(7) a certified copy of unaudited financial statements
686	686	of the applicant for the most recent fiscal quarter;
687	687	(8) if the applicant is a publicly traded corporation,
688	688	a copy of the most recent report filed with the United States
689	689	Securities and Exchange Commission under Section 13 of the federal
690	690	Securities Exchange Act of 1934, 15 U.S.C. Section 78m, as amended
691	691	or recodified from time to time;
692	692	(9) if the applicant is a wholly owned subsidiary of:
693	693	(A) a corporation publicly traded in the United
694	694	States, a copy of audited financial statements for the parent
695	695	corporation for the most recent fiscal year or a copy of the parent
696	696	corporation's most recent report filed under Section 13 of the U.S.
697	697	Securities Exchange Act of 1934, 15 U.S.C. Section 78m, as amended
698	698	or recodified from time to time; or
699	699	(B) a corporation publicly traded outside the
700	700	United States, a copy of similar documentation filed with the
701	701	regulator of the parent corporation's domicile outside the United
702	702	States;
703	703	(10) the name and address of the applicant's
704	704	registered agent in this state; and
705	705	(11) any other information the Commissioner
706	706	reasonably requires with respect to the applicant.
707	707	(c) A nonrefundable application fee in the amount
708	708	established by commission rule.
709	709	(d) The Commissioner may waive one or more requirements of
710	710	Sections 151.204(a) and (b) or permit an applicant to submit other
711	711	information in lieu of the required information.
712	712	Section 151.205 Information Requirements for Certain
713	713	Individuals.
714	714	(a) Any individual in control of a licensee or applicant,
715	715	any individual that seeks to acquire control of a licensee, and each
716	716	key individual shall furnish to the Commissioner the following
717	717	items:
718	718	(1) The individual's fingerprints for submission to
719	719	the Federal Bureau of Investigation and the Commissioner for
720	720	purposes of a national criminal history background check unless the
721	721	person currently resides outside of the United States and has
722	722	resided outside of the United States for the last ten years.
723	723	(2) Personal history and experience in a form and in a
724	724	medium prescribed by the Commissioner, to obtain the following:
725	725	(A) An independent credit report from a consumer
726	726	reporting agency unless the individual does not have a Social
727	727	Security number, in which case, this requirement shall be waived;
728	728	(B) Information related to any criminal
729	729	convictions or pending charges; and
730	730	(C) Information related to any regulatory or
731	731	administrative action and any civil litigation involving claims of
732	732	fraud, misrepresentation, conversion, mismanagement of funds,
733	733	breach of fiduciary duty, or breach of contract.
734	734	(b) If the individual has resided outside of the United
735	735	States at any time in the last ten years, the individual shall also
736	736	provide an investigative background report prepared by an
737	737	independent search firm that meets the following requirements:
738	738	(1) At a minimum, the search firm shall:
739	739	(A) Demonstrate that it has sufficient
740	740	knowledge, resources, and employs accepted and reasonable
741	741	methodologies to conduct the research of the background report; and
742	742	(B) Not be affiliated with or have an interest
743	743	with the individual it is researching.
744	744	(2) At a minimum, the investigative background report
745	745	shall be written in the English language and shall contain the
746	746	following:
747	747	(A) If available in the individual's current
748	748	jurisdiction of residency, a comprehensive credit report, or any
749	749	equivalent information obtained or generated by the independent
750	750	search firm to accomplish such report, including a search of the
751	751	court data in the countries, provinces, states, cities, towns, and
752	752	contiguous areas where the individual resided and worked;
753	753	(B) Criminal records information for the past ten
754	754	years, including, but not limited to, felonies, misdemeanors, or
755	755	similar convictions for violations of law in the countries,
756	756	provinces, states, cities, towns, and contiguous areas where the
757	757	individual resided and worked;
758	758	(C) Employment history;
759	759	(D) Media history, including an electronic
760	760	search of national and local publications, wire services, and
761	761	business applications; and
762	762	(E) Financial services-related regulatory
763	763	history, including but not limited to, money transmission,
764	764	securities, banking, insurance, and mortgage-related industries.
765	765	Section 151.206 Issuance of License.
766	766	(a) When an application for an original license under this
767	767	Act appears to include all the items and addresses all of the
768	768	matters that are required, the application is complete and the
769	769	Commissioner shall promptly notify the applicant in a record of the
770	770	date on which the application is determined to be complete, and:
771	771	(1) The Commissioner shall approve or deny the
772	772	application within 120 days after the completion date; or
773	773	(2) if the application is not approved or denied
774	774	within 120 days after the completion date:
775	775	(A) the application is approved; and
776	776	(B) the license takes effect as of the first
777	777	business day after expiration of the 120-day period.
778	778	(C) The Commissioner may for good cause extend
779	779	the application period.
780	780	(b) A determination by the Commissioner that an application
781	781	is complete and is accepted for processing means only that the
782	782	application, on its face, appears to include all of the items,
783	783	including the Criminal Background Check response from the FBI, and
784	784	address all of the matters that are required, and is not an
785	785	assessment of the substance of the application or of the
786	786	sufficiency of the information provided.
787	787	(c) When an application is filed and considered complete
788	788	under this section, the Commissioner shall investigate the
789	789	applicant's financial condition and responsibility, financial and
790	790	business experience, character, and general fitness. The
791	791	Commissioner may conduct an on-site investigation of the applicant,
792	792	the reasonable cost of which the applicant must pay. The
793	793	Commissioner shall issue a license to an applicant under this
794	794	section if the Commissioner finds that all of the following
795	795	conditions have been fulfilled:
796	796	(1) The applicant has complied with Sections 151.204
797	797	and 151.205; and
798	798	(2) the financial condition and responsibility,
799	799	financial and business experience, competence, character, and
800	800	general fitness of the applicant; and the competence, experience,
801	801	character, and general fitness of the key individuals and persons
802	802	in control of the applicant indicate that it is in the interest of
803	803	the public to permit the applicant to engage in money transmission,
804	804	currency exchange, or both.
805	805	(d) If an applicant avails itself or is otherwise subject to
806	806	a multistate licensing process:
807	807	(1) the Commissioner may accept the investigation
808	808	results of a lead investigative state for the purpose of Section
809	809	151.206(c) if the lead investigative state has sufficient staffing,
810	810	expertise, and minimum standards; or
811	811	(2) if Texas is a lead investigative state, the
812	812	Commissioner may investigate the applicant pursuant to Section
813	813	151.206(c) and the timeframes established by agreement through the
814	814	multistate licensing process, provided however, that in no case
815	815	shall such timeframe be noncompliant with the application period in
816	816	Section 151.206(a)(1).
817	817	(e) If the commissioner finds that the applicant for any
818	818	reason fails to possess the qualifications or satisfy the
819	819	requirements for the license for which application is made, the
820	820	commissioner shall inform the applicant in writing that the
821	821	application is denied and state the reasons for the denial. The
822	822	applicant may appeal the denial by filing a written request for a
823	823	hearing with the commissioner not later than the 30th day after the
824	824	date the notice is mailed. A hearing on the denial must be held not
825	825	later than the 45th day after the date the commissioner receives the
826	826	written request unless the administrative law judge extends the
827	827	period for good cause or the parties agree to a later hearing date.
828	828	The hearing is considered a contested case hearing and is subject to
829	829	Section 151.801.
830	830	(f) The initial license term shall begin on the day the
831	831	application is approved.
832	832	Section 151.207 Maintenance of License.
833	833	(a) If a licensee does not continue to meet the
834	834	qualifications or satisfy the requirements that apply to an
835	835	applicant for a new money transmission license, the Commissioner
836	836	may suspend or revoke the licensee's license in accordance with the
837	837	procedures established by this Act or other applicable state law
838	838	for such suspension or revocation.
839	839	(b) An applicant for a money transmission license must
840	840	demonstrate that it meets or will meet, and a money transmission
841	841	licensee must at all times meet, the requirements in Sections
842	842	151.701, 151.702, 151.704, and 151.705 of this Act.
843	843	(c) In addition to complying with Subsection (a), a license
844	844	holder must annually:
845	845	(1) pay a license fee in an amount established by
846	846	commission rule; and
847	847	(2) submit a report that is under oath, is in the form
848	848	and medium required by the commissioner, and contains:
849	849	(A) if the license is a money transmission
850	850	license, an audited unconsolidated financial statement dated as of
851	851	the last day of the license holder's fiscal year that ended in the
852	852	immediately preceding calendar year;
853	853	(B) if the license is a currency exchange
854	854	license, a financial statement, audited or unaudited, dated as of
855	855	the last day of the license holder's fiscal year that ended in the
856	856	immediately preceding calendar year; and
857	857	(C) documentation and certification, or any
858	858	other information the commissioner reasonably requires to
859	859	determine the security, net worth, permissible investments, and
860	860	other requirements the license holder must satisfy and whether the
861	861	license holder continues to meet the qualifications and
862	862	requirements for licensure.
863	863	(d) If the department does not receive a license holder's
864	864	annual license fee and complete annual report on or before the due
865	865	date prescribed by the commissioner under this section, the
866	866	commissioner shall notify the license holder in writing that:
867	867	(1) the license holder shall submit the report and pay
868	868	the license fee not later than the 45th day after the due date
869	869	prescribed by the commissioner; and
870	870	(2) the license holder must pay a late fee, in an
871	871	amount that is established by commission rule and not subject to
872	872	appeal, for each business day after the report due date specified by
873	873	the commissioner that the commissioner does not receive the
874	874	completed report and license fee.
875	875	(e) If the license holder fails to submit the completed
876	876	annual report and pay the annual license fee and any late fee due
877	877	within the time prescribed by Subsection (d)(1), the license
878	878	expires, and the license holder must cease and desist from engaging
879	879	in the business of money transmission or currency exchange, as
880	880	applicable, as of that date. The expiration of a license is not
881	881	subject to appeal.
882	882	(f) On timely receipt of a license holder's complete annual
883	883	report, annual license fee, and any late fee due, the department
884	884	shall review the report and, if necessary, investigate the
885	885	business and records of the license holder. On completion of the
886	886	review and investigation, if any, the commissioner may:
887	887	(1) impose conditions on the license the commissioner
888	888	considers reasonably necessary or appropriate; or
889	889	(2) suspend or revoke the license on the basis of a
890	890	ground specified in Section 151.803.
891	891	(g) On written application and for good cause shown, the
892	892	commissioner may extend the due date for filing the annual license
893	893	fee and annual report required under this section.
894	894	(h) The holder or principal of or the person in control of
895	895	the holder of an expired license, or the holder or principal of or
896	896	person in control of the holder of a license surrendered under
897	897	Section 151.208, that wishes to conduct activities for which a
898	898	license is required under this chapter must file a new license
899	899	application and satisfy all requirements for licensure that apply
900	900	at the time the new application is filed.
901	901	Section 151.208 Surrender of License.
902	902	(a) A licensee may surrender the licensee's license by
903	903	delivering the original license to the commissioner along with a
904	904	written notice of surrender that includes the location at which the
905	905	licensee's records will be stored and the name, address, telephone
906	906	number, and other contact information for an individual who is
907	907	authorized to provide access to the records.
908	908	(b) A licensee shall surrender the licensee's license if the
909	909	licensee becomes ineligible for a license issued under this
910	910	chapter.
911	911	(c) The surrender of a license does not reduce or eliminate
912	912	a licensee's civil or criminal liability arising from any acts or
913	913	omissions before the surrender of the license, including any
914	914	administrative action undertaken by the commissioner to revoke or
915	915	suspend a license, to assess an administrative penalty, to order
916	916	the payment of restitution, or to exercise any other authority
917	917	under this chapter. Further, the surrender of a license does not
918	918	release the security required of the licensee under Section 151.702
919	919	or 151.703.
920	920	Section 151.209 Refunds.
921	921	(a) A fee or cost paid under this chapter is not refundable.
922	922	SUBCHAPTER E. ACQUISITION OF CONTROL AND CHANGE OF KEY INDIVIDUAL
923	923	Section 151.301 Acquisition of Control.
924	924	(a) Any person, or group of persons acting in concert,
925	925	seeking to acquire control of a licensee shall obtain the written
926	926	approval of the Commissioner prior to acquiring control. An
927	927	individual is not deemed to acquire control of a licensee and is not
928	928	subject to these acquisition of control provisions when that
929	929	individual becomes a key individual in the ordinary course of
930	930	business.
931	931	(b) A person, or group of persons acting in concert, seeking
932	932	to acquire control of a licensee shall, in cooperation with the
933	933	licensee:
934	934	(1) Submit an application in a form and in a medium
935	935	prescribed by the Commissioner; and
936	936	(2) Submit a nonrefundable fee in the amount
937	937	established by commission rule.
938	938	(c) Upon request, the Commissioner may permit a licensee or
939	939	the person, or group of persons acting in concert, to submit some or
940	940	all information required by the Commissioner pursuant to Subsection
941	941	(b)(1) without using NMLS.
942	942	(d) The application required by Subsection (b)(1) shall
943	943	include information required by Section 151.205 for any new key
944	944	individuals that have not previously completed the requirements of
945	945	Section 151.205 for a licensee.
946	946	(e) When an application for acquisition of control under
947	947	this section appears to include all the items and address all of the
948	948	matters that are required, the application shall be considered
949	949	complete and the Commissioner shall promptly notify the applicant
950	950	in a record of the date on which the application was determined to
951	951	be complete and:
952	952	(1) The Commissioner shall approve or deny the
953	953	application within 60 days after the completion date; or
954	954	(2) if the application is not approved or denied
955	955	within 60 days after the completion date:
956	956	(A) the application is approved; and
957	957	(B) the person, or group of persons acting in
958	958	concert, are not prohibited from acquiring control.
959	959	(3) The Commissioner may for good cause extend the
960	960	application period.
961	961	(f) A determination by the Commissioner that an application
962	962	is complete and is accepted for processing means only that the
963	963	application, on its face, appears to include all of the items and
964	964	address all of the matters that are required, and is not an
965	965	assessment of the substance of the application or of the
966	966	sufficiency of the information provided.
967	967	(g) When an application is filed and considered complete
968	968	under Subsection (e), the Commissioner shall investigate the
969	969	financial condition and responsibility, financial and business
970	970	experience, character, and general fitness of the person, or group
971	971	of persons acting in concert, seeking to acquire control. The
972	972	Commissioner shall approve an acquisition of control pursuant to
973	973	this section if the Commissioner finds that all of the following
974	974	conditions have been fulfilled:
975	975	(1) The requirements of Subsections (b) and (d) have
976	976	been met, as applicable; and
977	977	(2) the financial condition and responsibility,
978	978	financial and business experience, competence, character, and
979	979	general fitness of the person, or group of persons acting in
980	980	concert, seeking to acquire control; and the competence,
981	981	experience, character, and general fitness of the key individuals
982	982	and persons that would be in control of the licensee after the
983	983	acquisition of control indicate that it is in the interest of the
984	984	public to permit the person, or group of persons acting in concert,
985	985	to control the licensee.
986	986	(h) If an applicant avails itself or is otherwise subject to
987	987	a multistate licensing process:
988	988	(1) the Commissioner may accept the investigation
989	989	results of a lead investigative state for the purpose of Subsection
990	990	(g) if the lead investigative state has sufficient staffing,
991	991	expertise, and minimum standards; or
992	992	(2) if Texas is a lead investigative state, the
993	993	Commissioner may investigate the applicant pursuant to Subsection
994	994	(g) and the timeframes established by agreement through the
995	995	multistate licensing process.
996	996	(i) If the commissioner determines that the proposed person
997	997	in control fails to meet the qualifications, standards, and
998	998	requirements of this chapter, the commissioner shall inform the
999	999	license holder and the proposed person in control in writing that
1000	1000	the application is denied and state the reasons for the denial. The
1001	1001	license holder or the proposed person in control may appeal the
1002	1002	denial by filing a written request for a hearing with the
1003	1003	commissioner not later than the 30th day after the date the notice
1004	1004	is mailed. A hearing on the denial must be held not later than the
1005	1005	45th day after the date the commissioner receives the written
1006	1006	request unless the administrative law judge extends the period for
1007	1007	good cause or the parties agree to a later hearing date. The
1008	1008	hearing is considered a contested case hearing and is subject to
1009	1009	Section 151.801.
1010	1010	(j) The requirements of Subsections (a) and (b) do not apply
1011	1011	to any of the following:
1012	1012	(1) A person that acts as a proxy for the sole purpose
1013	1013	of voting at a designated meeting of the shareholders or holders of
1014	1014	voting shares or voting interests of a licensee or a person in
1015	1015	control of a licensee;
1016	1016	(2) A person that acquires control of a licensee by
1017	1017	devise or descent;
1018	1018	(3) A person that acquires control of a licensee as a
1019	1019	personal representative, custodian, guardian, conservator, or
1020	1020	trustee, or as an officer appointed by a court of competent
1021	1021	jurisdiction or by operation of law;
1022	1022	(4) A person that is exempt under Section 151.003(g);
1023	1023	(5) A person that the Commissioner determines is not
1024	1024	subject to Subsection (a) based on the public interest;
1025	1025	(6) A public offering of securities of a licensee or a
1026	1026	person in control of a licensee; or
1027	1027	(7) An internal reorganization of a person in control
1028	1028	of the licensee where the ultimate person in control of the licensee
1029	1029	remains the same.
1030	1030	(k) Persons in Subsections (j)(2), (3), (4), (6), (7) in
1031	1031	cooperation with the licensee shall notify the Commissioner within
1032	1032	15 days after the acquisition of control.
1033	1033	(l) Streamlined Acquisition of Control
1034	1034	(1) The requirements of Subsections (a) and (b) do not
1035	1035	apply to a person that has complied with and received approval to
1036	1036	engage in money transmission under this Act or was identified as a
1037	1037	person in control in a prior application filed with and approved by
1038	1038	the Commissioner or by an MSB accredited state pursuant to a
1039	1039	multistate licensing process, provided that:
1040	1040	(A) the person has not had a license revoked or
1041	1041	suspended or controlled a licensee that has had a license revoked or
1042	1042	suspended while the person was in control of the licensee in the
1043	1043	previous 5-years;
1044	1044	(B) if the person is a licensee, the person is
1045	1045	well managed and has received at least a satisfactory rating for
1046	1046	compliance at its most recent examination by an MSB accredited
1047	1047	state if such rating was given;
1048	1048	(C) the licensee to be acquired is projected to
1049	1049	meet the requirements of Sections 151.701, 151.702, and 151.705 of
1050	1050	this Act after the acquisition of control is completed, and if the
1051	1051	person acquiring control is a licensee, that licensee is also
1052	1052	projected to meet the requirements of Sections 151.701, 151.702,
1053	1053	and 151.705 of this Act after the acquisition of control is
1054	1054	completed;
1055	1055	(D) the licensee to be acquired will not
1056	1056	implement any material changes to its business plan as a result of
1057	1057	the acquisition of control, and if the person acquiring control is a
1058	1058	licensee, that licensee also will not implement any material
1059	1059	changes to its business plan as a result of the acquisition of
1060	1060	control; and
1061	1061	(E) the person provides notice of the acquisition
1062	1062	in cooperation with the licensee and attests to Subsections
1063	1063	(k)(1)(A), (B), (C), and (D) in a form and in a medium prescribed by
1064	1064	the Commissioner.
1065	1065	(2) If the notice is not disapproved within 30 days
1066	1066	after the date on which the notice was determined to be complete,
1067	1067	the notice is deemed approved.
1068	1068	(m) Before filing an application for approval to acquire
1069	1069	control of a licensee a person may request in writing a
1070	1070	determination from the Commissioner as to whether the person would
1071	1071	be considered a person in control of a licensee upon consummation of
1072	1072	a proposed transaction. If the Commissioner determines that the
1073	1073	person would not be a person in control of a licensee, the proposed
1074	1074	Person and transaction is not subject to the requirements of
1075	1075	Subsections (a) and (b).
1076	1076	(n) If a multistate licensing process includes a
1077	1077	determination pursuant to Subsection (m) and an applicant avails
1078	1078	itself or is otherwise subject to the multistate licensing process:
1079	1079	(1) The Commissioner may accept the control
1080	1080	determination of a lead investigative state with sufficient
1081	1081	staffing, expertise, and minimum standards for the purpose of
1082	1082	Subsection (m); or
1083	1083	(2) If state is a lead investigative state, the
1084	1084	Commissioner may investigate the applicant pursuant to Subsection
1085	1085	(m) and the timeframes established by agreement through the
1086	1086	multistate licensing process,
1087	1087	Section 151.302 Notice and Information Requirements for a
1088	1088	Change of Key Individuals.
1089	1089	(a) A licensee adding or replacing any key individual shall:
1090	1090	(1) Provide notice in a manner prescribed by the
1091	1091	Commissioner within 15 days after the effective date of the key
1092	1092	individual's appointment; and
1093	1093	(2) Provide information as required by Section 151.205
1094	1094	within 45 days of the effective date.
1095	1095	(b) Within 90 days of the date on which the notice provided
1096	1096	pursuant to Subsection (a) was determined to be complete, the
1097	1097	Commissioner may issue a notice of disapproval of a key individual
1098	1098	if the competence, experience, character, or integrity of the
1099	1099	individual would not be in the best interests of the public or the
1100	1100	customers of the licensee to permit the individual to be a key
1101	1101	individual of such licensee.
1102	1102	(c) A notice of disapproval shall contain a statement of the
1103	1103	basis for disapproval and shall be sent to the licensee and the
1104	1104	disapproved individual. A licensee may appeal a notice of
1105	1105	disapproval by filing a written request for a hearing with the
1106	1106	commissioner not later than the 30th day after the date the notice
1107	1107	is mailed. A hearing on the denial must be held not later than the
1108	1108	45th day after the date the commissioner receives the written
1109	1109	request unless the administrative law judge extends the period for
1110	1110	good cause or the parties agree to a later hearing date. The
1111	1111	hearing is considered a contested case hearing and is subject to
1112	1112	Section 151.901.
1113	1113	(d) If the notice provided pursuant to Subsection (a) is not
1114	1114	disapproved within 90 days after the date on which the notice was
1115	1115	determined to be complete, the key individual is deemed approved.
1116	1116	(e) If a multistate licensing process includes a key
1117	1117	individual notice review and disapproval process pursuant to this
1118	1118	section and the licensee avails itself or is otherwise subject to
1119	1119	the multistate licensing process:
1120	1120	(1) the Commissioner may accept the determination of
1121	1121	another state if the investigating state has sufficient staffing,
1122	1122	expertise, and minimum standards for the purpose of this section;
1123	1123	or
1124	1124	(2) if Texas is a lead investigative state, the
1125	1125	Commissioner may investigate the applicant pursuant to Subsection
1126	1126	(b) and the timeframes established by agreement through the
1127	1127	multistate licensing process.
1128	1128	SUBCHAPTER F. REPORTING AND RECORDS
1129	1129	Section 151.401 Report of Condition.
1130	1130	(a) Each money transmission licensee shall submit a report
1131	1131	of condition within 45 days of the end of the calendar quarter, or
1132	1132	within any extended time as the Commissioner may prescribe.
1133	1133	(b) The report of condition shall include:
1134	1134	(1) Financial information at the licensee level;
1135	1135	(2) Nationwide and state-specific money transmission
1136	1136	transaction information in every jurisdiction in the United States
1137	1137	where the licensee is licensed to engage in money transmission;
1138	1138	(3) Permissible investments report;
1139	1139	(4) Transaction destination country reporting for
1140	1140	money received for transmission, if applicable; and
1141	1141	(5) Any other information the Commissioner reasonably
1142	1142	requires with respect to the licensee. The Commissioner may utilize
1143	1143	NMLS for the submission of the report required by this section and
1144	1144	is authorized to change or update as necessary the requirements of
1145	1145	this section to carry out the purposes of this Act and maintain
1146	1146	consistency with NMLS reporting.
1147	1147	(c) The information required by Subsection (b)(4) shall
1148	1148	only be included in a report of condition submitted within 45 days
1149	1149	of the end of the fourth calendar quarter.
1150	1150	Section 151.402 Currency Exchange Report
1151	1151	(a) Each currency exchange licensee shall submit a
1152	1152	quarterly interim financial statement and transaction report that
1153	1153	reflects the licensee's financial condition and currency exchange
1154	1154	business as of the last day of the calendar quarter to which the
1155	1155	statement and report relate and that are prepared not later than the
1156	1156	45th day after the last day of the calendar quarter; and
1157	1157	(b) any other report required by rule of the
1158	1158	commission or reasonably requested by the commissioner to determine
1159	1159	compliance with this chapter.
1160	1160	(c) A licensee shall file the statements and reports
1161	1161	required under this section with the commissioner as required by
1162	1162	this chapter, by commission rule, or as requested by the
1163	1163	commissioner.
1164	1164	(d) On written application and for good cause shown,
1165	1165	the commissioner may extend the time for preparing or filing a
1166	1166	statement or report required under this section.
1167	1167	Section 151.403 Financial Statements.
1168	1168	(a) Each licensee shall, within 90 days after the end
1169	1169	of each fiscal year, or within any extended time as the Commissioner
1170	1170	may prescribe, file with the Commissioner:
1171	1171	(1) If the licensee holds a money transmission
1172	1172	license, an audited unconsolidated financial statement of the
1173	1173	licensee for the fiscal year prepared in accordance with United
1174	1174	States generally accepted accounting principles;
1175	1175	(2) If the licensee holds a currency exchange
1176	1176	license, a financial statement, audited or unaudited, dated as of
1177	1177	the last day of the licensee's fiscal year that ended in the
1178	1178	immediately preceding calendar year; and
1179	1179	(3) Any other information as the Commissioner may
1180	1180	reasonably require.
1181	1181	(b) The audited unconsolidated financial statements
1182	1182	shall be prepared by an independent certified public accountant or
1183	1183	independent public accountant who is satisfactory to the
1184	1184	Commissioner;
1185	1185	(c) The audited financial statements shall include or
1186	1186	be accompanied by a certificate of opinion of the independent
1187	1187	certified public accountant or independent public accountant that
1188	1188	is satisfactory in form and content to the Commissioner. If the
1189	1189	certificate or opinion is qualified, the Commissioner may order the
1190	1190	licensee to take any action as the Commissioner may find necessary
1191	1191	to enable the independent or certified public accountant or
1192	1192	independent public accountant to remove the qualification.
1193	1193	Section 151.404 Authorized Delegate Reporting.
1194	1194	(a) Each licensee shall submit a report of authorized
1195	1195	delegates within 45 days of the end of the calendar quarter. The
1196	1196	Commissioner may utilize NMLS for the submission of the report
1197	1197	required by this section provided that such functionality is
1198	1198	consistent with the requirements of this section.
1199	1199	(b) The authorized delegate report shall include, at a
1200	1200	minimum, each authorized delegate's:
1201	1201	(1) Company legal name;
1202	1202	(2) Taxpayer employer identification number;
1203	1203	(3) Principal provider identifier;
1204	1204	(4) Physical address;
1205	1205	(5) Mailing address;
1206	1206	(6) Any business conducted in other states;
1207	1207	(7) Any fictitious or trade name;
1208	1208	(8) Contact person name, phone number, and email
1209	1209	(9) Start date as licensee's authorized
1210	1210	delegate;
1211	1211	(10) End date acting as licensee's authorized
1212	1212	delegate, if applicable; and
1213	1213	(11) Any other information the Commissioner
1214	1214	reasonably requires with respect to the authorized delegate.
1215	1215	Section 151.405 Reports of Certain Events.
1216	1216	(a) A licensee shall file a report with the
1217	1217	Commissioner within one business day after the licensee has reason
1218	1218	to know of the occurrence of any of the following events:
1219	1219	(1) the filing of a petition by or against the
1220	1220	licensee under the United States Bankruptcy Code, 11 U.S.C. Section
1221	1221	101-110, as amended or recodified from time to time, for bankruptcy
1222	1222	or reorganization;
1223	1223	(2) the filing of a petition by or against the
1224	1224	licensee for receivership, the commencement of any other judicial
1225	1225	or administrative proceeding for its dissolution or
1226	1226	reorganization, or the making of a general assignment for the
1227	1227	benefit of its creditors; or
1228	1228	(3) the commencement of a proceeding to revoke or
1229	1229	suspend its license in a state or country in which the licensee
1230	1230	engages in business or is licensed.
1231	1231	(b) A licensee shall file a report with the
1232	1232	Commissioner within three business day after the licensee has
1233	1233	reason to know of the occurrence of any of the following events:
1234	1234	(1) a charge or conviction of the licensee or of a
1235	1235	key individual or person in control of the licensee for a felony; or
1236	1236	(2) a charge or conviction of an authorized
1237	1237	delegate for a felony.
1238	1238	Section 151.406 Bank Secrecy Act Reports.
1239	1239	A licensee and an authorized delegate shall file all reports
1240	1240	required by federal currency reporting, record keeping, and
1241	1241	suspicious activity reporting requirements as set forth in the Bank
1242	1242	Secrecy Act and other federal and state laws pertaining to money
1243	1243	laundering. The timely filing of a complete and accurate report
1244	1244	required under this section with the appropriate federal agency is
1245	1245	deemed compliant with the requirements of this section.
1246	1246	Section 151.407 Records.
1247	1247	(a) Licensee shall maintain the following records, for
1248	1248	determining its compliance with this Act for at least five years:
1249	1249	(1) a record of each outstanding money
1250	1250	transmission obligation sold;
1251	1251	(2) a record of each currency exchange
1252	1252	transaction;
1253	1253	(3) a general ledger posted at least monthly
1254	1254	containing all asset, liability, capital, income, and expense
1255	1255	accounts;
1256	1256	(4) bank statements and bank reconciliation
1257	1257	records;
1258	1258	(5) records of outstanding money services
1259	1259	obligations;
1260	1260	(6) records of each outstanding money services
1261	1261	obligation paid within the five-year period;
1262	1262	(7) a list of the last known names and addresses
1263	1263	of all of the licensee's authorized delegates; and
1264	1264	(8) any other records the Commissioner
1265	1265	reasonably requires by rule.
1266	1266	(b) The items specified in Subsection (a)(1) may be
1267	1267	maintained in any form of record.
1268	1268	(c) Records specified in Subsection (a) may be
1269	1269	maintained outside this state if they are made accessible to the
1270	1270	Commissioner on seven business-days' notice that is sent in a
1271	1271	record.
1272	1272	(d) All records maintained by the licensee as required
1273	1273	in Subsections (a)-(c) are open to inspection by the Commissioner
1274	1274	pursuant to Section 151.106(a).
1275	1275	SUBCHAPTER G. AUTHORIZED DELEGATES
1276	1276	Section 151.501 Liability of Licensee
1277	1277	A money transmission licensee is liable for the payment of
1278	1278	all money or monetary value received for transmission directly or
1279	1279	by an authorized delegate appointed in accordance with
1280	1280	Section 151.502.
1281	1281	Section 151.502 Relationship Between Licensee and
1282	1282	Authorized Delegate.
1283	1283	(a) In this section, "remit" means to make direct
1284	1284	payments of money to a licensee or its representative authorized to
1285	1285	receive money or to deposit money in a bank in an account specified
1286	1286	by the licensee.
1287	1287	(b) Before a licensee is authorized to conduct
1288	1288	business through an authorized delegate or allows a person to act as
1289	1289	the licensee's authorized delegate, the licensee must:
1290	1290	(1) adopt, and update as necessary, written
1291	1291	policies and procedures reasonably designed to ensure that the
1292	1292	licensee's authorized delegates comply with applicable state and
1293	1293	federal law;
1294	1294	(2) enter into a written contract that complies
1295	1295	with Subsection (d); and
1296	1296	(3) conduct a reasonable risk-based background
1297	1297	investigation sufficient for the licensee to determine whether the
1298	1298	authorized delegate has complied and will likely comply with
1299	1299	applicable state and federal law.
1300	1300	(c) An authorized delegate must operate in full
1301	1301	compliance with this Act.
1302	1302	(d) The written contract required by Subsection (b)
1303	1303	must be signed by the licensee and the authorized delegate and, at a
1304	1304	minimum, must:
1305	1305	(1) appoint the person signing the contract as
1306	1306	the licensee's authorized delegate with the authority to conduct
1307	1307	money transmission on behalf of the licensee;
1308	1308	(2) set forth the nature and scope of the
1309	1309	relationship between the licensee and the authorized delegate and
1310	1310	the respective rights and responsibilities of the parties;
1311	1311	(3) require the authorized delegate to agree to
1312	1312	fully comply with all applicable state and federal laws, rules, and
1313	1313	regulations pertaining to money transmission, including this Act
1314	1314	and regulations implementing this Act, relevant provisions of the
1315	1315	Bank Secrecy Act and the USA PATRIOT ACT;
1316	1316	(4) require the authorized delegate to remit and
1317	1317	handle money and monetary value in accordance with the terms of the
1318	1318	contract between the licensee and the authorized delegate;
1319	1319	(5) impose a trust on money and monetary value
1320	1320	net of fees received for money transmission for the benefit of the
1321	1321	licensee;
1322	1322	(6) require the authorized delegate to prepare
1323	1323	and maintain records as required by this Act or regulations
1324	1324	implementing this Act, or as reasonably requested by the
1325	1325	Commissioner;
1326	1326	(7) acknowledge that the authorized delegate
1327	1327	consents to examination or investigation by the Commissioner;
1328	1328	(8) state that the licensee is subject to
1329	1329	regulation by the Commissioner and that, as part of that
1330	1330	regulation, the Commissioner may suspend or revoke an authorized
1331	1331	delegate designation or require the licensee to terminate an
1332	1332	authorized delegate designation; and
1333	1333	(9) acknowledge receipt of the written policies
1334	1334	and procedures required under Subsection (b)(1).
1335	1335	(e) If the licensee's license is suspended, revoked,
1336	1336	surrendered, or expired, the licensee must, within five (5)
1337	1337	business days, provide documentation to the Commissioner that the
1338	1338	licensee has notified all applicable authorized delegates of the
1339	1339	licensee whose names are in a record filed with the Commissioner of
1340	1340	the suspension, revocation, surrender, or expiration of a license.
1341	1341	Upon suspension, revocation, surrender, or expiration of a license,
1342	1342	applicable authorized delegates shall immediately cease to provide
1343	1343	money transmission as an authorized delegate of the licensee.
1344	1344	(f) An authorized delegate of a licensee holds in
1345	1345	trust for the benefit of the licensee all money net of fees received
1346	1346	from money transmission. If any authorized delegate commingles any
1347	1347	funds received from money transmission with any other funds or
1348	1348	property owned or controlled by the authorized delegate, all
1349	1349	commingled funds and other property shall be considered held in
1350	1350	trust in favor of the licensee in an amount equal to the amount of
1351	1351	money net of fees received from money transmission.
1352	1352	(g) An authorized delegate may not use a subdelegate
1353	1353	to conduct money transmission on behalf of a licensee.
1354	1354	Section 151.503 Disclosure Requirements
1355	1355	(a) A licensee's name and mailing address or telephone
1356	1356	number must be provided to the purchaser in connection with each
1357	1357	money transmission transaction conducted by the licensee directly
1358	1358	or through an authorized delegate.
1359	1359	(b) A licensee receiving currency or an instrument
1360	1360	payable in currency for transmission must comply with Chapter 278.
1361	1361	Section 151.504 Unauthorized Activities
1362	1362	A person shall not engage in the business of money
1363	1363	transmission on behalf of a person not licensed under this Act or
1364	1364	not exempt pursuant to Section 151.003 of this Act. A person that
1365	1365	engages in such activity provides money transmission to the same
1366	1366	extent as if the person were a licensee, and shall be jointly and
1367	1367	severally liable with the unlicensed or nonexempt person. Any
1368	1368	business for which a license is required under this chapter that is
1369	1369	conducted by an authorized delegate outside the scope of authority
1370	1370	conferred in the contract between the authorized delegate and the
1371	1371	licensee is unlicensed activity.
1372	1372	SUBCHAPTER H. TIMELY TRANSMISSION, REFUNDS, AND DISCLOSURES
1373	1373	Section 151.601 Timely Transmission.
1374	1374	(a) Every licensee shall forward all money received
1375	1375	for transmission in accordance with the terms of the agreement
1376	1376	between the licensee and the sender unless the licensee has a
1377	1377	reasonable belief or a reasonable basis to believe that the sender
1378	1378	may be a victim of fraud or that a crime or violation of law, rule,
1379	1379	or regulation has occurred, is occurring, or may occur.
1380	1380	(b) If a licensee fails to forward money received for
1381	1381	transmission in accordance with this section, the licensee must
1382	1382	respond to inquiries by the sender with the reason for the failure
1383	1383	unless providing a response would violate a state or federal law,
1384	1384	rule, or regulation.
1385	1385	Section 151.602 Refunds.
1386	1386	(a) This section does not apply to:
1387	1387	(1) money received for transmission subject to
1388	1388	the federal Remittance Rule (12 C.F.R. Part 1005, Subpart B), as
1389	1389	amended or recodified from time to time; or
1390	1390	(2) money received for transmission pursuant to a
1391	1391	written agreement between the licensee and payee to process
1392	1392	payments for goods or services provided by the payee.
1393	1393	(b) Every licensee shall refund to the sender within
1394	1394	10 days of receipt of the sender's written request for a refund of
1395	1395	any and all money received for transmission unless any of the
1396	1396	following occurs:
1397	1397	(1) The money has been forwarded within 10 days
1398	1398	of the date on which the money was received for transmission;
1399	1399	(2) Instructions have been given committing an
1400	1400	equivalent amount of money to the person designated by the sender
1401	1401	within 10 days of the date on which the money was received for
1402	1402	transmission;
1403	1403	(3) The agreement between the licensee and the
1404	1404	sender instructs the licensee to forward the money at a time that is
1405	1405	beyond 10 days of the date on which the money was received for
1406	1406	transmission. If funds have not yet been forwarded in accordance
1407	1407	with the terms of the agreement between the licensee and the sender,
1408	1408	the licensee shall issue a refund in accordance with the other
1409	1409	provisions of this section; or
1410	1410	(4) The refund is requested for a transaction
1411	1411	that the licensee has not completed based on a reasonable belief or
1412	1412	a reasonable basis to believe that a crime or violation of law,
1413	1413	rule, or regulation has occurred, is occurring, or may occur.
1414	1414	(5) The refund request does not enable the
1415	1415	licensee to:
1416	1416	(A) Identify the sender's name and address
1417	1417	or telephone number; or,
1418	1418	(B) Identify the particular transaction to
1419	1419	be refunded in the event the sender has multiple transactions
1420	1420	outstanding.
1421	1421	Section 151.603 Receipts.
1422	1422	(a) This section does not apply to:
1423	1423	(1) Money received for transmission subject to
1424	1424	the federal Remittance Rule (12 C.F.R. Part 1005, Subpart B), as
1425	1425	amended or recodified from time to time;
1426	1426	(2) money received for transmission that is not
1427	1427	primarily for personal, family or household purposes;
1428	1428	(3) money received for transmission pursuant to a
1429	1429	written agreement between the licensee and payee to process
1430	1430	payments for goods or services provided by the payee; or
1431	1431	(4) payroll processing services.
1432	1432	(b) For purposes of this section "receipt" means a
1433	1433	paper receipt, electronic record or other written confirmation. For
1434	1434	a transaction conducted in person, the receipt may be provided
1435	1435	electronically if the sender requests or agrees to receive an
1436	1436	electronic receipt. For a transaction conducted electronically or
1437	1437	by phone, a receipt may be provided electronically. All electronic
1438	1438	receipts shall be provided in a retainable form.
1439	1439	(c) Every licensee or its authorized delegate shall
1440	1440	provide the sender a receipt for money received for transmission.
1441	1441	(1) The receipt shall contain the following
1442	1442	information, as applicable:
1443	1443	(A) The name of the sender;
1444	1444	(B) The name of the designated recipient;
1445	1445	(C) The date of the transaction;
1446	1446	(D) The unique transaction or
1447	1447	identification number;
1448	1448	(E) The name of the licensee, NMLS Unique
1449	1449	ID, the licensee's business address, and the licensee's customer
1450	1450	service telephone number;
1451	1451	(F) The amount of the transaction in United
1452	1452	States dollars;
1453	1453	(G) Any fee charged by the licensee to the
1454	1454	sender for the transaction; and
1455	1455	(H) Any taxes collected by the licensee
1456	1456	from the sender for the transaction.
1457	1457	(2) The receipt required by this section shall be
1458	1458	in English and in the language principally used by the licensee or
1459	1459	authorized delegate to advertise, solicit, or negotiate, either
1460	1460	orally or in writing, for a transaction conducted in person,
1461	1461	electronically or by phone, if other than English.
1462	1462	Section 151.604 Disclosures for Payroll Processing
1463	1463	Services.
1464	1464	(a) A licensee that provides payroll processing
1465	1465	services shall:
1466	1466	(1) Issue reports to clients detailing client
1467	1467	payroll obligations in advance of the payroll funds being deducted
1468	1468	from an account; and
1469	1469	(2) Make available worker paystubs or an
1470	1470	equivalent statement to workers.
1471	1471	(b) Subsection (a) does not apply to a licensee
1472	1472	providing payroll processing services where the licensee's client
1473	1473	designates the intended recipients to the licensee and is
1474	1474	responsible for providing the disclosures required by Subsection
1475	1475	(a)(2).
1476	1476	SUBCHAPTER I. PRUDENTIAL STANDARDS.
1477	1477	Section 151.701 Net Worth.
1478	1478	(a) A money transmission licensee under this Act shall
1479	1479	maintain at all times a tangible net worth of the greater of
1480	1480	$100,000 or 3 percent of total assets for the first $100 million, 2
1481	1481	percent of additional assets for $100 million to $1 billion, and 0.5
1482	1482	percent of additional assets for over $1 billion.
1483	1483	(b) Tangible net worth must be demonstrated at initial
1484	1484	application by the applicant's most recent audited or unaudited
1485	1485	financial statements pursuant to Section 151.204(b)(6).
1486	1486	(c) Notwithstanding the foregoing provisions of this
1487	1487	section, the Commissioner shall have the authority, for good cause
1488	1488	shown, to exempt, in-part or in whole, from the requirements of this
1489	1489	section any applicant or licensee.
1490	1490	Section 151.702 Security for Money Transmission.
1491	1491	(a) An applicant for a money transmission license must
1492	1492	provide, and a licensee at all times must maintain, security
1493	1493	consisting of a surety bond in a form satisfactory to the
1494	1494	Commissioner or, with the Commissioner's approval, a deposit
1495	1495	instead of a bond in accordance with this section.
1496	1496	(b) The amount of the required security shall be:
1497	1497	(1) the greater of $100,000 or an amount equal to
1498	1498	one hundred percent of the licensee's average daily money
1499	1499	transmission liability in this state calculated for the most
1500	1500	recently completed three-month period, up to a maximum of $500,000;
1501	1501	or
1502	1502	(2) in the event that the licensee's tangible net
1503	1503	worth exceeds 10% of total assets, the licensee shall maintain a
1504	1504	surety bond of $100,000.
1505	1505	(c) A licensee that maintains a bond in the maximum
1506	1506	amount provided for in Subsections (b)(1) or (2), as applicable
1507	1507	shall not be required to calculate its average daily money
1508	1508	transmission liability in this state for purposes of this section.
1509	1509	(d) A licensee may exceed the maximum required bond
1510	1510	amount pursuant to Section 151.705(a)(5).
1511	1511	Section 151.703 Security for Currency Exchange.
1512	1512	(a) An applicant for a currency exchange license must
1513	1513	provide and a currency exchange licensee must maintain at all times
1514	1514	security in the amount applicable to the applicant or licensee
1515	1515	under this section.
1516	1516	(b) An applicant must provide and a licensee must
1517	1517	maintain security in the amount of $2,500 if the applicant will
1518	1518	conduct or the licensee conducts business with persons located in
1519	1519	this state exclusively at one or more physical locations through
1520	1520	in-person, contemporaneous transactions.
1521	1521	(c) Except as provided by Subsection (d), if
1522	1522	Subsection (b) does not apply to:
1523	1523	(1) the applicant, the applicant must provide
1524	1524	security in the amount that is the greater of:
1525	1525	(A) $2,500; or
1526	1526	(B) an amount equal to one percent of the
1527	1527	applicant's projected total dollar volume of currency exchange
1528	1528	business in this state for the first year of licensure; or
1529	1529	(2) the licensee, the licensee must maintain
1530	1530	security in the amount that is the greater of:
1531	1531	(A) $2,500; or
1532	1532	(B) an amount equal to one percent of the
1533	1533	licensee's total dollar volume of currency exchange business in
1534	1534	this state for the preceding year.
1535	1535	(d) The maximum amount of security that may be
1536	1536	required under Subsection (c) is $1 million.
1537	1537	Section 151.704 Additional Requirements for Security.
1538	1538	(a) Subsections (b)-(i) of this section define
1539	1539	additional requirements applicable to the security provided
1540	1540	pursuant to Sections 151.702 and 151.703.
1541	1541	(b) The security must:
1542	1542	(1) be in a form satisfactory to the
1543	1543	commissioner;
1544	1544	(2) be payable to any claimant or to the
1545	1545	commissioner, on behalf of a claimant or this state, for any
1546	1546	liability arising out of the license holder's money transmission
1547	1547	business in this state, incurred under, subject to, or by virtue of
1548	1548	this chapter; and
1549	1549	(3) if the security is a bond, be issued by a
1550	1550	qualified surety company authorized to engage in business in this
1551	1551	state and acceptable to the commissioner or, if the security is an
1552	1552	irrevocable letter of credit, be issued by a financial institution
1553	1553	acceptable to the commissioner.
1554	1554	(c) A claimant may bring suit directly on the
1555	1555	security, or the commissioner may bring suit on behalf of the
1556	1556	claimant or the state, either in one action or in successive
1557	1557	actions.
1558	1558	(d) The commissioner may collect from the security or
1559	1559	proceeds of the security any delinquent fee, assessment, cost,
1560	1560	penalty, or other amount imposed on and owed by a license holder.
1561	1561	If the security is a surety bond, the commissioner shall give the
1562	1562	surety reasonable prior notice of a hearing to impose an
1563	1563	administrative penalty against the license holder, provided that a
1564	1564	surety may not be considered an interested, aggrieved, or affected
1565	1565	person for purposes of an administrative proceeding under Section
1566	1566	151.901 or Chapter 2001, Government Code.
1567	1567	(e) The security remains in effect until canceled,
1568	1568	which may occur only after providing 30 days' written notice to the
1569	1569	commissioner. Cancellation does not affect any liability incurred
1570	1570	or accrued during the period covered by the security.
1571	1571	(f) The security shall cover claims for at least five
1572	1572	years after the license holder surrenders its license or otherwise
1573	1573	ceases to engage in activities for which a license is required under
1574	1574	this subchapter. However, the commissioner may permit the amount
1575	1575	of the security to be reduced or eliminated before that time to the
1576	1576	extent that the amount of the license holder's obligations to the
1577	1577	department and to purchasers in this state is reduced. The
1578	1578	commissioner may permit a license holder to substitute another form
1579	1579	of security when the license holder ceases to provide money
1580	1580	transmission in this state.
1581	1581	(g) If the commissioner at any time reasonably
1582	1582	determines that the required security is insecure, deficient in
1583	1583	amount, or exhausted in whole or in part, the commissioner by
1584	1584	written order shall require the license holder to file or make new
1585	1585	or additional security to comply with this section.
1586	1586	(h) Instead of providing all or part of the amount of
1587	1587	the security required by this section, an applicant or license
1588	1588	holder may deposit, with a financial institution possessing trust
1589	1589	powers that is authorized to conduct a trust business in this state
1590	1590	and is acceptable to the commissioner, an aggregate amount of
1591	1591	United States currency, certificates of deposit, or other cash
1592	1592	equivalents that equals the total amount of the required security
1593	1593	or the remaining part of the security. The deposit:
1594	1594	(1) must be held in trust in the name of and be
1595	1595	pledged to the commissioner;
1596	1596	(2) must secure the same obligations as the
1597	1597	security; and
1598	1598	(3) is subject to other conditions and terms the
1599	1599	commissioner may reasonably require.
1600	1600	(i) The security is considered by operation of law to be
1601	1601	held in trust for the benefit of this state and any individual to
1602	1602	whom an obligation arising under this chapter is owed, and may not
1603	1603	be considered an asset or property of the license holder in the
1604	1604	event of bankruptcy, receivership, or a claim against the license
1605	1605	holder unrelated to the license holder's obligations under this
1606	1606	chapter.
1607	1607	Section 151.705 Maintenance of Permissible Investments.
1608	1608	(a) A money transmission licensee shall maintain at
1609	1609	all times permissible investments that have a market value computed
1610	1610	in accordance with United States generally accepted accounting
1611	1611	principles of not less than the aggregate amount of all of its
1612	1612	outstanding money transmission obligations.
1613	1613	(b) Except for permissible investments enumerated in
1614	1614	Section 151.706(a), the Commissioner, with respect to any licensee,
1615	1615	may limit the extent to which a specific investment maintained by a
1616	1616	licensee within a class of permissible investments may be
1617	1617	considered a permissible investment, if the specific investment
1618	1618	represents undue risk to customers, not reflected in the market
1619	1619	value of investments.
1620	1620	(c) Permissible investments are held in trust for the
1621	1621	benefit of the purchasers and holders of the licensee's outstanding
1622	1622	money transmission obligations in the event of insolvency, the
1623	1623	filing of a petition by or against the licensee under the United
1624	1624	States Bankruptcy Code, 11 U.S.C. Section 101-110, as amended or
1625	1625	recodified from time to time, for bankruptcy or reorganization, the
1626	1626	filing of a petition by or against the licensee for receivership,
1627	1627	the commencement of any other judicial or administrative proceeding
1628	1628	for its dissolution or reorganization, or in the event of an action
1629	1629	by a creditor against the licensee who is not a beneficiary of this
1630	1630	statutory trust. No permissible investments impressed with a trust
1631	1631	pursuant to this section shall be subject to attachment, levy of
1632	1632	execution, or sequestration by order of any court, except for a
1633	1633	beneficiary of this statutory trust.
1634	1634	(d) Upon the establishment of a statutory trust in
1635	1635	accordance with Subsection (c) or when any funds are drawn on a
1636	1636	letter of credit pursuant to Section 151.705(a)(4), the
1637	1637	Commissioner shall notify the applicable regulator of each state in
1638	1638	which the licensee is licensed to engage in money transmission, if
1639	1639	any, of the establishment of the trust or the funds drawn on the
1640	1640	letter of credit, as applicable. Notice shall be deemed satisfied
1641	1641	if performed pursuant to a multistate agreement or through NMLS.
1642	1642	Funds drawn on a letter of credit, and any other permissible
1643	1643	investments held in trust for the benefit of the purchasers and
1644	1644	holders of the licensee's outstanding money transmission
1645	1645	obligations, are deemed held in trust for the benefit of such
1646	1646	purchasers and holders on a pro rata and equitable basis in
1647	1647	accordance with statutes pursuant to which permissible investments
1648	1648	are required to be held in this state, and other states, as
1649	1649	applicable. Any statutory trust established hereunder shall be
1650	1650	terminated upon extinguishment of all of the licensee's outstanding
1651	1651	money transmission obligations.
1652	1652	(e) The Commissioner may allow other types of
1653	1653	investments that the Commissioner determines are of sufficient
1654	1654	liquidity and quality to be a permissible investment. The
1655	1655	Commissioner is authorized to participate in efforts with other
1656	1656	state regulators to determine that other types of investments are
1657	1657	of sufficient liquidity and quality to be a permissible investment.
1658	1658	Section 151.706 Types of Permissible Investments.
1659	1659	(a) The following investments are permissible under Section
1660	1660	151.705:
1661	1661	(1) cash (including demand deposits, savings
1662	1662	deposits, and funds in such accounts held for the benefit of the
1663	1663	licensee's customers in a federally insured depository financial
1664	1664	institution) and cash equivalents including ACH items in transit to
1665	1665	the licensee and ACH items or international wires in transit to a
1666	1666	payee, cash in transit via armored car, cash in smart safes, cash in
1667	1667	licensee-owned locations, debit card or credit card-funded
1668	1668	transmission receivables owed by any bank, or money market mutual
1669	1669	funds rated "AAA" by S&P, or the equivalent from any eligible rating
1670	1670	service;
1671	1671	(2) certificates of deposit or senior debt obligations
1672	1672	of an insured depository institution, as defined in Section 3 of the
1673	1673	Federal Deposit Insurance Act, 12 U.S.C. Section 1813, as amended
1674	1674	or recodified from time to time, or as defined under the federal
1675	1675	Credit Union Act, 12 U.S.C. Section 1781, as amended or recodified
1676	1676	from time to time;
1677	1677	(3) an obligation of the United States or a
1678	1678	commission, agency, or instrumentality thereof; an obligation that
1679	1679	is guaranteed fully as to principal and interest by the United
1680	1680	States; or an obligation of a state or a governmental subdivision,
1681	1681	agency, or instrumentality thereof;
1682	1682	(4) the full drawable amount of an irrevocable standby
1683	1683	letter of credit for which the stated beneficiary is the
1684	1684	Commissioner that stipulates that the beneficiary need only draw a
1685	1685	sight draft under the letter of credit and present it to obtain
1686	1686	funds up to the letter of credit amount upon presentation of the
1687	1687	items required by Subsection (a)(4)(C).
1688	1688	(A) The letter of credit must:
1689	1689	(i) Be issued by a federally insured
1690	1690	depository financial institution, a foreign bank that is authorized
1691	1691	under federal law to maintain a federal agency or federal branch
1692	1692	office in a state or states, or a foreign bank that is authorized
1693	1693	under state law to maintain a branch in a state that (1) bears an
1694	1694	eligible rating or whose parent company bears an eligible rating;
1695	1695	(2) is regulated, supervised, and examined by United States federal
1696	1696	or state authorities having regulatory authority over banks, credit
1697	1697	unions, and trust companies; and (3) is approved by the
1698	1698	Commissioner.
1699	1699	(ii) Be irrevocable, unconditional and
1700	1700	indicate that it is not subject to any condition or qualifications
1701	1701	outside of the letter of credit;
1702	1702	(iii) Not contain reference to any other
1703	1703	agreements, documents or entities, or otherwise provide for any
1704	1704	security interest in the licensee; and
1705	1705	(iv) Contain an issue date and expiration
1706	1706	date, and expressly provide for automatic extension, without a
1707	1707	written amendment, for an additional period of one year from the
1708	1708	present or each future expiration date, unless the issuer of the
1709	1709	letter of credit notifies the Commissioner in writing by certified
1710	1710	or registered mail or courier mail or other receipted means, at
1711	1711	least sixty (60) days prior to any expiration date, that the
1712	1712	irrevocable letter of credit will not be extended.
1713	1713	(B) In the event of any notice of expiration or
1714	1714	non-extension of a letter of credit issued under Subsection
1715	1715	(a)(4)(A)(iv), the licensee shall be required to demonstrate to the
1716	1716	satisfaction of the Commissioner, 15 days prior to expiration, that
1717	1717	the licensee maintains and will maintain permissible investments in
1718	1718	accordance with Section 151.705(a) upon the expiration of the
1719	1719	letter of credit. If the licensee is not able to do so, the
1720	1720	Commissioner may draw on the letter of credit in an amount up to the
1721	1721	amount necessary to meet the licensee's requirements to maintain
1722	1722	permissible investments in accordance with Section 151.705(a). Any
1723	1723	such draw shall be offset against the licensee's outstanding money
1724	1724	transmission obligations. The drawn funds shall be held in trust by
1725	1725	the Commissioner or the Commissioner's designated agent, to the
1726	1726	extent authorized by law, as agent for the benefit of the purchasers
1727	1727	and holders of the licensee's outstanding money transmission
1728	1728	obligations.
1729	1729	(C) The letter of credit shall provide that the
1730	1730	issuer of the letter of credit will honor, at sight, a presentation
1731	1731	made by the beneficiary to the issuer of the following documents on
1732	1732	or prior to the expiration date of the letter of credit:
1733	1733	(i) The original letter of credit
1734	1734	(including any amendments); and
1735	1735	(ii) A written statement from the
1736	1736	beneficiary stating that any of the following events have occurred:
1737	1737	1. the filing of a petition by or
1738	1738	against the licensee under the United States Bankruptcy Code, 11
1739	1739	U.S.C. Section 101-110, as amended or recodified from time to time,
1740	1740	for bankruptcy or reorganization;
1741	1741	2. the filing of a petition by or
1742	1742	against the licensee for receivership, or the commencement of any
1743	1743	other judicial or administrative proceeding for its dissolution or
1744	1744	reorganization;
1745	1745	3. the seizure of assets of a licensee
1746	1746	by a Commissioner pursuant to an emergency order issued in
1747	1747	accordance with applicable law, on the basis of an action,
1748	1748	violation, or condition that has caused or is likely to cause the
1749	1749	insolvency of the licensee; or
1750	1750	4. The beneficiary has received
1751	1751	notice of expiration or non-extension of a letter of credit and the
1752	1752	licensee failed to demonstrate to the satisfaction of the
1753	1753	beneficiary that the licensee will maintain permissible
1754	1754	investments in accordance with Section 151.705(a) upon the
1755	1755	expiration or non-extension of the letter of credit.
1756	1756	(D) The Commissioner may designate an agent to
1757	1757	serve on the Commissioner's behalf as beneficiary to a letter of
1758	1758	credit so long as the agent and letter of credit meet requirements
1759	1759	established by the Commissioner. The Commissioner's agent may
1760	1760	serve as agent for multiple licensing authorities for a single
1761	1761	irrevocable letter of credit if the proceeds of the drawable amount
1762	1762	for the purposes of Subsection (a)(4) are assigned to the
1763	1763	Commissioner.
1764	1764	(E) The Commissioner may participate in
1765	1765	multistate processes designed to facilitate the issuance and
1766	1766	administration of letters of credit, including but not limited to
1767	1767	services provided by the NMLS and State Regulatory Registry, LLC.
1768	1768	(5) One hundred percent of the surety bond or deposit
1769	1769	provided for under Section 151.702 that exceeds the average daily
1770	1770	money transmission liability in this state.
1771	1771	(6) Stablecoin but only to the extent of outstanding
1772	1772	transmission obligations received by the licensee in like kind
1773	1773	stablecoin.
1774	1774	(b) Unless permitted by the Commissioner to exceed the limit
1775	1775	as set forth herein, the following investments are permissible
1776	1776	under Section 151.705 to the extent specified:
1777	1777	(1) receivables that are payable to a licensee from
1778	1778	its authorized delegates in the ordinary course of business that
1779	1779	are less than seven days old, up to 50% of the aggregate value of the
1780	1780	licensee's total permissible investments;
1781	1781	(2) of the receivables permissible under Subsection
1782	1782	(b)(1), receivables that are payable to a licensee from a single
1783	1783	authorized delegate in the ordinary course of business may not
1784	1784	exceed 10% of the aggregate value of the licensee's total
1785	1785	permissible investments.
1786	1786	(3) the following investments are permissible up to
1787	1787	20% per category and combined up to 50% of the aggregate value of
1788	1788	the licensee's total permissible investments:
1789	1789	(A) A short-term (up to six months) investment
1790	1790	bearing an eligible rating;
1791	1791	(B) Commercial paper bearing an eligible rating;
1792	1792	(C) A bill, note, bond, or debenture bearing an
1793	1793	eligible rating;
1794	1794	(D) U.S. tri-party repurchase agreements
1795	1795	collateralized at 100% or more with U.S. government or agency
1796	1796	securities, municipal bonds, or other securities bearing an
1797	1797	eligible rating;
1798	1798	(E) Money market mutual funds rated less than
1799	1799	"AAA" and equal to or higher than "A-" by S&P, or the equivalent
1800	1800	from any other eligible rating service; and
1801	1801	(F) A mutual fund or other investment fund
1802	1802	composed solely and exclusively of one or more permissible
1803	1803	investments listed in Subsections (a)(1)-(3).
1804	1804	(4) cash (including demand deposits, savings
1805	1805	deposits, and funds in such accounts held for the benefit of the
1806	1806	licensee's customers) at foreign depository institutions are
1807	1807	permissible up to 10% of the aggregate value of the licensee's total
1808	1808	permissible investments if the licensee has received a satisfactory
1809	1809	rating in its most recent examination and the foreign depository
1810	1810	institution:
1811	1811	(A) has an eligible rating;
1812	1812	(B) is registered under the Foreign Account Tax
1813	1813	Compliance Act;
1814	1814	(C) is not located in any country subject to
1815	1815	sanctions from the Office of Foreign Asset Control; and
1816	1816	(D) is not located in a high-risk or
1817	1817	non-cooperative jurisdiction as designated by the Financial Action
1818	1818	Task Force.
1819	1819	SUBCHAPTER J. Enforcement
1820	1820	Section 151.801 Injunctive Relief.
1821	1821	(a) Whenever it appears that a person has violated, or that
1822	1822	reasonable cause exists to believe that a person is likely to
1823	1823	violate, this chapter or a rule adopted under this chapter, the
1824	1824	following persons may bring an action for injunctive relief to
1825	1825	enjoin the violation or enforce compliance with the provision:
1826	1826	(1) the commissioner, through the attorney general;
1827	1827	(2) the attorney general;
1828	1828	(3) the district attorney of Travis County; or
1829	1829	(4) the prosecuting attorney of the county in which
1830	1830	the violation is alleged to have occurred.
1831	1831	(b) In addition to the authority granted to the commissioner
1832	1832	under Subsection (a), the commissioner, through the attorney
1833	1833	general, may bring an action for injunctive relief if the
1834	1834	commissioner has reason to believe that a person has violated or is
1835	1835	likely to violate an order of the commissioner issued under this
1836	1836	chapter.
1837	1837	(c) An action for injunctive relief brought by the
1838	1838	commissioner, the attorney general, or the district attorney of
1839	1839	Travis County under Subsection (a), or brought by the commissioner
1840	1840	under Subsection (b), must be brought in a district court in Travis
1841	1841	County. An action brought by a prosecuting attorney under
1842	1842	Subsection (a)(4) must be brought in a district court in the county
1843	1843	in which all or part of the violation is alleged to have occurred.
1844	1844	(d) On a proper showing, the court may issue a restraining
1845	1845	order, an order freezing assets, a preliminary or permanent
1846	1846	injunction, or a writ of mandate, or may appoint a receiver for the
1847	1847	defendant or the defendant's assets.
1848	1848	(e) A receiver appointed by the court under Subsection (d)
1849	1849	may, with approval of the court, exercise all of the powers of the
1850	1850	defendant's directors, officers, partners, trustees, or persons
1851	1851	who exercise similar powers and perform similar duties.
1852	1852	(f) An action brought under this section may include a claim
1853	1853	for ancillary relief, including a claim by the commissioner for
1854	1854	costs or civil penalties authorized under this chapter, or for
1855	1855	restitution or damages on behalf of the persons injured by the act
1856	1856	constituting the subject matter of the action, and the court has
1857	1857	jurisdiction to award that relief.
1858	1858	Section 151.802 Cease and Desist Orders for Unlicensed
1859	1859	Persons.
1860	1860	(a) If the commissioner has reason to believe that an
1861	1861	unlicensed person has engaged or is likely to engage in an activity
1862	1862	for which a license is required under this chapter, the
1863	1863	commissioner may order the person to cease and desist from the
1864	1864	violation until the person is issued a license under this chapter.
1865	1865	The commissioner's order is subject to Section 151.709, unless the
1866	1866	order is issued as an emergency order. The commissioner may issue
1867	1867	an emergency cease and desist order in accordance with Section
1868	1868	151.710 if the commissioner finds that the person's violation or
1869	1869	likely violation threatens immediate and irreparable harm to the
1870	1870	public.
1871	1871	(b) A cease and desist order under this section may require
1872	1872	the unlicensed person to take affirmative action to correct any
1873	1873	condition resulting from or contributing to the activity or
1874	1874	violation, including the payment of restitution to each resident of
1875	1875	this state damaged by the violation.
1876	1876	Section 151.803 Suspension and Revocation of License.
1877	1877	(a) The commissioner must revoke a license if the
1878	1878	commissioner finds that:
1879	1879	(1) the net worth of the licensee is less than the
1880	1880	amount required under this chapter; or
1881	1881	(2) the licensee does not provide the security
1882	1882	required under this chapter.
1883	1883	(b) The commissioner may suspend or revoke a license or
1884	1884	order a licensee to revoke the designation of an authorized
1885	1885	delegate if the commissioner has reason to believe that:
1886	1886	(1) the licensee has violated this chapter, a rule
1887	1887	adopted or order issued under this chapter, a written agreement
1888	1888	entered into with the department or commissioner, or any other
1889	1889	state or federal law applicable to the licensee's money services
1890	1890	business;
1891	1891	(2) the licensee has refused to permit or has not
1892	1892	cooperated with an examination or investigation authorized by this
1893	1893	chapter;
1894	1894	(3) the licensee has engaged in fraud, knowing
1895	1895	misrepresentation, deceit, or gross negligence in connection with
1896	1896	the operation of the licensee's money services business or any
1897	1897	transaction subject to this chapter;
1898	1898	(4) an authorized delegate of the licensee has
1899	1899	knowingly violated this chapter, a rule adopted or order issued
1900	1900	under this chapter, or a state or federal anti-money-laundering or
1901	1901	terrorist funding law, and the licensee knows or should have known
1902	1902	of the violation and has failed to make a reasonable effort to
1903	1903	prevent or correct the violation;
1904	1904	(5) the competence, experience, character, or general
1905	1905	fitness of the licensee or an authorized delegate of the licensee,
1906	1906	or a principal of, person in control of, or responsible person of a
1907	1907	licensee or authorized delegate, indicates that it is not in the
1908	1908	public interest to permit the licensee or authorized delegate to
1909	1909	provide money services;
1910	1910	(6) the licensee has engaged in an unsafe or unsound
1911	1911	act or practice or has conducted business in an unsafe or unsound
1912	1912	manner;
1913	1913	(7) the licensee has suspended payment of the
1914	1914	licensee's obligations, made a general assignment for the benefit
1915	1915	of the licensee's creditors, or admitted in writing the licensee's
1916	1916	inability to pay debts of the licensee as they become due;
1917	1917	(8) the licensee has failed to terminate the authority
1918	1918	of an authorized delegate after the commissioner has issued and
1919	1919	served on the licensee a final order finding that the authorized
1920	1920	delegate has violated this chapter;
1921	1921	(9) a fact or condition exists that, if it had been
1922	1922	known at the time the licensee applied for the license, would have
1923	1923	been grounds for denying the application;
1924	1924	(10) the licensee has engaged in false, misleading, or
1925	1925	deceptive advertising;
1926	1926	(11) the licensee has failed to pay a judgment entered
1927	1927	in favor of a claimant or creditor in an action arising out of the
1928	1928	licensee's activities under this chapter not later than the 30th
1929	1929	day after the date the judgment becomes final or not later than the
1930	1930	30th day after the date the stay of execution expires or is
1931	1931	terminated, as applicable;
1932	1932	(12) the licensee has knowingly made a material
1933	1933	misstatement or has suppressed or withheld material information on
1934	1934	an application, request for approval, report, or other document
1935	1935	required to be filed with the department under this chapter; or
1936	1936	(13) the licensee has committed a breach of trust or of
1937	1937	a fiduciary duty.
1938	1938	(c) In determining whether a licensee has engaged in an
1939	1939	unsafe or unsound act or practice or has conducted business in an
1940	1940	unsafe or unsound manner, the commissioner may consider factors
1941	1941	that include:
1942	1942	(1) the size and condition of the licensee's provision
1943	1943	of money services;
1944	1944	(2) the magnitude of the loss or potential loss;
1945	1945	(3) the gravity of the violation of this chapter or
1946	1946	rule adopted or order issued under this chapter;
1947	1947	(4) any action taken against the licensee by this
1948	1948	state, another state, or the federal government; and
1949	1949	(5) the previous conduct of the licensee.
1950	1950	(d) The commissioner's order suspending or revoking a
1951	1951	license or directing a licensee to revoke the designation of an
1952	1952	authorized delegate is subject to Section 151.709, unless the order
1953	1953	is issued as an emergency order. The commissioner may issue an
1954	1954	emergency order suspending a license or directing a licensee to
1955	1955	revoke the designation of an authorized delegate in accordance with
1956	1956	Section 151.810 if the commissioner finds that the factors
1957	1957	identified in Section 151.810(b) exist.
1958	1958	Section 151.804 Suspension and Revocation of Authorized
1959	1959	Delegate Designation.
1960	1960	(a) The commissioner may suspend or revoke the designation
1961	1961	of an authorized delegate if the commissioner has reason to believe
1962	1962	that:
1963	1963	(1) the authorized delegate has violated this chapter,
1964	1964	a rule adopted or order issued under this chapter, a written
1965	1965	agreement entered into with the commissioner or the department, or
1966	1966	any other state or federal law applicable to a money services
1967	1967	business;
1968	1968	(2) the authorized delegate has refused to permit or
1969	1969	has not cooperated with an examination or investigation under this
1970	1970	chapter;
1971	1971	(3) the authorized delegate has engaged in fraud,
1972	1972	knowing misrepresentation, deceit, gross negligence, or an unfair
1973	1973	or deceptive act or practice in connection with the operation of the
1974	1974	delegate's business on behalf of the licensee or any transaction
1975	1975	subject to this chapter;
1976	1976	(4) the competence, experience, character, or general
1977	1977	fitness of the authorized delegate, or a principal of, person in
1978	1978	control of, or responsible person of the authorized delegate,
1979	1979	indicates that it is not in the public interest to permit the
1980	1980	authorized delegate to provide money services;
1981	1981	(5) the authorized delegate has engaged in an unsafe
1982	1982	or unsound act or practice or conducted business in an unsafe and
1983	1983	unsound manner;
1984	1984	(6) the authorized delegate, or a principal or
1985	1985	responsible person of the authorized delegate, is listed on the
1986	1986	specifically designated nationals and blocked persons list
1987	1987	prepared by the United States Department of the Treasury as a
1988	1988	potential threat to commit terrorist acts or to fund terrorist
1989	1989	acts; or
1990	1990	(7) the authorized delegate, or a principal or
1991	1991	responsible person of the authorized delegate, has been convicted
1992	1992	of a state or federal anti-money-laundering or terrorist funding
1993	1993	law.
1994	1994	(b) In determining whether an authorized delegate has
1995	1995	engaged in an unsafe or unsound act or practice or conducted
1996	1996	business in an unsafe or unsound manner, the commissioner may
1997	1997	consider factors that include:
1998	1998	(1) the size and condition of the authorized
1999	1999	delegate's provision of money services;
2000	2000	(2) the magnitude of the loss or potential loss;
2001	2001	(3) the gravity of the violation of this chapter or
2002	2002	rule adopted or order issued under this chapter;
2003	2003	(4) any action taken against the authorized delegate
2004	2004	by this state, another state, or the federal government; and
2005	2005	(5) the previous conduct of the authorized delegate.
2006	2006	(c) The commissioner's order suspending or revoking the
2007	2007	designation of an authorized delegate is subject to Section
2008	2008	151.709, unless the order is issued as an emergency order. The
2009	2009	commissioner may issue an emergency order suspending the
2010	2010	designation of an authorized delegate in accordance with Section
2011	2011	151.710 if the commissioner finds that the factors identified in
2012	2012	Section 151.710(b) exist.
2013	2013	Section 151.805 Cease and Desist Orders for Licensees or
2014	2014	Authorized Delegates.
2015	2015	(a) The commissioner may issue an order to cease and desist
2016	2016	if the commissioner finds that:
2017	2017	(1) an action, violation, or condition listed in
2018	2018	Section 151.803 or 151.804 exists with respect to a licensee or
2019	2019	authorized delegate; and
2020	2020	(2) a cease and desist order is necessary to protect
2021	2021	the interests of the licensee, the purchasers of the licensee's
2022	2022	money services, or the public.
2023	2023	(b) A cease and desist order may require a licensee or
2024	2024	authorized delegate to cease and desist from the action or
2025	2025	violation or to take affirmative action to correct any condition
2026	2026	resulting from or contributing to the action or violation, and the
2027	2027	requirements of the order may apply to a principal or responsible
2028	2028	person of the licensee or authorized delegate.
2029	2029	(c) The cease and desist order is subject to Section
2030	2030	151.809, unless the order is issued as an emergency order. The
2031	2031	commissioner may issue an emergency cease and desist order in
2032	2032	accordance with Section 151.810 if the commissioner finds that the
2033	2033	factors identified in Section 151.810(b) exist.
2034	2034	Section 151.806 Consent Orders.
2035	2035	(a) The commissioner may enter into a consent order at any
2036	2036	time with a person to resolve a matter arising under this chapter or
2037	2037	a rule adopted or order issued under this chapter.
2038	2038	(b) A consent order must be signed by the person to whom the
2039	2039	order is issued or by the person's authorized representative and
2040	2040	must indicate agreement with the terms contained in the order.
2041	2041	However, a consent order may provide that the order does not
2042	2042	constitute an admission by a person that this chapter or a rule
2043	2043	adopted or order issued under this chapter has been violated.
2044	2044	(c) A consent order is a final order and may not be appealed.
2045	2045	Section 151.807 Administrative Penalty.
2046	2046	(a) After notice and hearing, the commissioner may assess an
2047	2047	administrative penalty against a person that:
2048	2048	(1) has violated this chapter or a rule adopted or
2049	2049	order issued under this chapter and has failed to correct the
2050	2050	violation not later than the 30th day after the date the department
2051	2051	sends written notice of the violation to the person;
2052	2052	(2) if the person is a licensee, has engaged in conduct
2053	2053	specified in Section 151.803;
2054	2054	(3) has engaged in a pattern of violations; or
2055	2055	(4) has demonstrated wilful disregard for the
2056	2056	requirements of this chapter, the rules adopted under this chapter,
2057	2057	or an order issued under this chapter.
2058	2058	(b) A violation corrected after a person receives written
2059	2059	notice from the department of the violation may be considered for
2060	2060	purposes of determining whether a person has engaged in a pattern of
2061	2061	violations under Subsection (a)(3) or demonstrated wilful
2062	2062	disregard under Subsection (a)(4).
2063	2063	(c) The amount of the penalty may not exceed $5,000 for each
2064	2064	violation or, in the case of a continuing violation, $5,000 for each
2065	2065	day that the violation continues. Each transaction in violation of
2066	2066	this chapter and each day that a violation continues is a separate
2067	2067	violation.
2068	2068	(d) In determining the amount of the penalty, the
2069	2069	commissioner shall consider factors that include the seriousness of
2070	2070	the violation, the person's compliance history, and the person's
2071	2071	good faith in attempting to comply with this chapter, provided that
2072	2072	if the person is found to have demonstrated wilful disregard under
2073	2073	Subsection (a)(4), the trier of fact may recommend that the
2074	2074	commissioner impose the maximum administrative penalty permitted
2075	2075	under Subsection (c).
2076	2076	(e) A hearing to assess an administrative penalty is
2077	2077	considered a contested case hearing and is subject to Section
2078	2078	151.801.
2079	2079	(f) An order imposing an administrative penalty after
2080	2080	notice and hearing becomes effective and is final for purposes of
2081	2081	collection and appeal immediately on issuance.
2082	2082	(g) The commissioner may collect an administrative penalty
2083	2083	assessed under this section:
2084	2084	(1) in the same manner that a money judgment is
2085	2085	enforced in court; or
2086	2086	(2) if the penalty is imposed against a licensee or a
2087	2087	licensee's authorized delegate, from the proceeds of the licensee's
2088	2088	security in accordance with Section 151.308(e).
2089	2089	Section 151.808 Criminal Penalty.
2090	2090	(a) A person commits an offense if the person:
2091	2091	(1) intentionally makes a false statement,
2092	2092	misrepresentation, or certification in a record or application
2093	2093	filed with the department or required to be maintained under this
2094	2094	chapter or a rule adopted or order issued under this chapter, or
2095	2095	intentionally makes a false entry or omits a material entry in the
2096	2096	record or application; or
2097	2097	(2) knowingly engages in an activity for which a
2098	2098	license is required under Subchapter D or F without being licensed
2099	2099	under this chapter.
2100	2100	(b) An offense under this section is a felony of the third
2101	2101	degree.
2102	2102	(c) An offense under this section may be prosecuted in
2103	2103	Travis County or in the county in which the offense is alleged to
2104	2104	have been committed.
2105	2105	(d) Nothing in this section limits the power of the state to
2106	2106	punish a person for an act that constitutes an offense under this or
2107	2107	any other law.
2108	2108	Section 151.809 Notice, Hearing, and Other Procedures for
2109	2109	Nonemergency Orders.
2110	2110	(a) This section applies to an order issued by the
2111	2111	commissioner under this subchapter that is not an emergency order.
2112	2112	(b) An order to which this section applies becomes effective
2113	2113	only after notice and an opportunity for hearing. The order must:
2114	2114	(1) state the grounds on which the order is based;
2115	2115	(2) to the extent applicable, state the action or
2116	2116	violation from which the person subject to the order must cease and
2117	2117	desist or the affirmative action the person must take to correct a
2118	2118	condition resulting from the violation or that is otherwise
2119	2119	appropriate;
2120	2120	(3) be delivered by personal delivery or sent by
2121	2121	certified mail, return receipt requested, to the person against
2122	2122	whom the order is directed at the person's last known address;
2123	2123	(4) state the effective date of the order, which may
2124	2124	not be before the 21st day after the date the order is delivered or
2125	2125	mailed; and
2126	2126	(5) include a notice that a person may file a written
2127	2127	request for a hearing on the order with the commissioner not later
2128	2128	than the 20th day after the date the order is delivered or mailed.
2129	2129	(c) Unless the commissioner receives a written request for
2130	2130	hearing from the person against whom the order is directed not later
2131	2131	than the 20th day after the date the order is delivered or mailed,
2132	2132	the order takes effect as stated in the order and is final against
2133	2133	and nonappealable by that person from that date.
2134	2134	(d) A hearing on the order must be held not later than the
2135	2135	45th day after the date the commissioner receives the written
2136	2136	request for the hearing unless the administrative law judge extends
2137	2137	the period for good cause or the parties agree to a later hearing
2138	2138	date.
2139	2139	(e) An order that has been affirmed or modified after a
2140	2140	hearing becomes effective and is final for purposes of enforcement
2141	2141	and appeal immediately on issuance. The order may be appealed to
2142	2142	the district court of Travis County as provided by Section
2143	2143	151.901(b).
2144	2144	Section 151.810 Requirements and Notice and Hearing
2145	2145	Procedures for Emergency Orders.
2146	2146	(a) This section applies to an emergency order issued by the
2147	2147	commissioner under this subchapter.
2148	2148	(b) The commissioner may issue an emergency order, without
2149	2149	prior notice and an opportunity for hearing, if the commissioner
2150	2150	finds that:
2151	2151	(1) the action, violation, or condition that is the
2152	2152	basis for the order
2153	2153	(A) has caused or is likely to cause the
2154	2154	insolvency of the licensee;
2155	2155	(B) has caused or is likely to cause the
2156	2156	substantial dissipation of the licensee's assets or earnings;
2157	2157	(C) has seriously weakened or is likely to
2158	2158	seriously weaken the condition of the licensee; or
2159	2159	(D) has seriously prejudiced or is likely to
2160	2160	seriously prejudice the interests of the licensee, a purchaser of
2161	2161	the licensee's money services, or the public; and
2162	2162	(2) immediate action is necessary to protect the
2163	2163	interests of the licensee, a purchaser of the licensee's money
2164	2164	services, or the public.
2165	2165	(c) In connection with and as directed by an emergency
2166	2166	order, the commissioner may seize the records and assets of a
2167	2167	licensee or authorized delegate that relate to the licensee's money
2168	2168	services business.
2169	2169	(d) An emergency order must:
2170	2170	(1) state the grounds on which the order is based;
2171	2171	(2) advise the person against whom the order is
2172	2172	directed that the order takes effect immediately, and, to the
2173	2173	extent applicable, require the person to immediately cease and
2174	2174	desist from the conduct or violation that is the subject of the
2175	2175	order or to take the affirmative action stated in the order as
2176	2176	necessary to correct a condition resulting from the conduct or
2177	2177	violation or as otherwise appropriate;
2178	2178	(3) be delivered by personal delivery or sent by
2179	2179	certified mail, return receipt requested, to the person against
2180	2180	whom the order is directed at the person's last known address; and
2181	2181	(4) include a notice that a person may request a
2182	2182	hearing on the order by filing a written request for hearing with
2183	2183	the commissioner not later than the 15th day after the date the
2184	2184	order is delivered or mailed.
2185	2185	(e) An emergency order takes effect as soon as the person
2186	2186	against whom the order is directed has actual or constructive
2187	2187	knowledge of the issuance of the order.
2188	2188	(f) A licensee or authorized delegate against whom an
2189	2189	emergency order is directed must submit a written certification to
2190	2190	the commissioner, signed by the licensee or authorized delegate,
2191	2191	and their principals and responsible individuals, as applicable,
2192	2192	and each person named in the order, stating that each person has
2193	2193	received a copy of and has read and understands the order.
2194	2194	(g) Unless the commissioner receives a written request for a
2195	2195	hearing from a person against whom an emergency order is directed
2196	2196	not later than the 15th day after the date the order is delivered or
2197	2197	mailed, the order is final and nonappealable as to that person on
2198	2198	the 16th day after the date the order is delivered or mailed.
2199	2199	(h) A request for a hearing does not stay an emergency
2200	2200	order.
2201	2201	(i) A hearing on an emergency order takes precedence over
2202	2202	any other matter pending before the commissioner, and must be held
2203	2203	not later than the 10th day after the date the commissioner receives
2204	2204	the written request for hearing unless the administrative law judge
2205	2205	extends the period for good cause or the parties agree to a later
2206	2206	hearing date.
2207	2207	(j) An emergency order that has been affirmed or modified
2208	2208	after a hearing is final for purposes of enforcement and appeal.
2209	2209	The order may be appealed to the district court of Travis County as
2210	2210	provided in Section 151.901(b).
2211	2211	SUBCHAPTER K. MISCELLANEOUS PROVISIONS
2212	2212	Section 151.901 Administrative Procedures.
2213	2213	(a) All administrative proceedings under this chapter must
2214	2214	be conducted in accordance with Chapter 2001, Government Code, and
2215	2215	Title 7, Chapter 9, Texas Administrative Code.
2216	2216	(b) A person affected by a final order of the commissioner
2217	2217	issued under this chapter after a hearing may appeal the order by
2218	2218	filing a petition for judicial review in a district court of Travis
2219	2219	County. A petition for judicial review filed in the district court
2220	2220	under this subsection does not stay or vacate the appealed order
2221	2221	unless the court, after notice and hearing, specifically stays or
2222	2222	vacates the order.
2223	2223	Section 151.902 Uniformity of Application and
2224	2224	Construction.
2225	2225	In applying and construing this Act, consideration must be
2226	2226	given to the need to promote uniformity of the law with respect to
2227	2227	its subject matter among states that enact it.
2228	2228	Section 151.903 Severability Clause.
2229	2229	If any provision of this Act or its application to any person
2230	2230	or circumstance is held invalid, the invalidity does not affect
2231	2231	other provisions or applications of this Act which can be given
2232	2232	effect without the invalid provision or application, and to this
2233	2233	end the provisions of this Act are severable.
2234	2234	SECTION 2. (a) A license issued under Chapter 151, Finance
2235	2235	Code, that is in effect on September 1, 2023, remains in force as a
2236	2236	license under Chapter 151, Finance Code. By September 1, 2024, a
2237	2237	licensee must satisfy the minimum requirements to maintain a
2238	2238	license established in Chapter 151, Finance Code, as added by this
2239	2239	Act.
2240	2240	(b) A contract between a licensee and an authorized delegate
2241	2241	that is in effect on September 1, 2023, remains in effect until the
2242	2242	earlier of the date the contract is renewed or December 31, 2024. A
2243	2243	new or renewal contract entered into between a licensee and an
2244	2244	authorized delegate after the effective date of this Act must
2245	2245	satisfy the contract requirements established in Chapter 151,
2246	2246	Finance Code, as added by this Act.
2247	2247	(e) The Finance Commission of Texas may adopt rules to
2248	2248	further provide for the orderly transition to licensing and
2249	2249	regulation under this Act.
2250	2250	SECTION 3. Chapter 151, Finance Code, is repealed.
2251	2251	SECTION 4. Section 278.001(1), Finance Code, is amended to
2252	2252	read as follows:
2253	2253	(1) "Currency" means the coin and paper money issued
2254	2254	by the United States or another country that is designated as legal
2255	2255	tender and circulates and is customarily used and accepted as a
2256	2256	medium of exchange in the country of issuance.
2257	2257	SECTION 5. This Act takes effect September 1, 2023