89R18476 PRL-D
By: Lambert H.B. No. 3805
A BILL TO BE ENTITLED
AN ACT
relating to certain enforcement powers of the banking commissioner
regarding the regulation of money services businesses.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter I, Chapter 152, Finance Code, is
amended by adding Sections 152.411, 152.412, and 152.413 to read as
follows:
Sec. 152.411. REMOVAL OR PROHIBITION ORDER. (a) The
commissioner may remove or prohibit a current or former key
individual or employee of a money services licensee from office or
employment in, or prohibit a control person or other person
participating in the affairs of a money services licensee from
further participation in a money services licensee or any other
entity chartered, registered, permitted, or licensed by the
commissioner if the commissioner determines from examination or
other credible evidence that:
(1) the person:
(A) intentionally committed or participated in
the commission of an act described by Section 152.408;
(B) intentionally committed, participated in the
commission of, or caused a money services licensee to commit, an act
described by Section 152.403;
(C) violated a final cease and desist order
issued by a state or federal regulatory agency against the person or
an entity in which the person is or was a key individual, employee,
or control person; or
(D) made, or caused to be made, false entries in
the records of a money services licensee;
(2) because of this action by the person:
(A) the money services licensee has suffered or
will probably suffer financial loss or expense or other damage;
(B) the interests of the customers, creditors, or
shareholders of the money services licensee, including purchasers
and holders of a money transmission licensee's outstanding money
transmission obligations, have been or could be prejudiced; or
(C) the person has received financial gain or
other benefit by reason of the action, or likely would have if the
action had not been discovered; and
(3) the action:
(A) involves personal dishonesty on the part of
the person; or
(B) demonstrates wilful or continuing disregard
for the safety or soundness of the money services licensee.
(b) If the commissioner has grounds for action under
Subsection (a) and finds that a removal or prohibition order
appears to be necessary and in the best interest of the public, the
commissioner may serve a proposed removal or prohibition order on a
person alleged to have committed or participated in the action. An
order issued under this section is subject to Section 152.409.
(c) The commissioner may make a removal or prohibition order
perpetual or effective for a specific period of time, may probate
the order, or may impose other conditions on the order.
(d) The order takes effect if the person against whom the
proposed order is directed does not request a hearing in writing
before the effective date. If the person does not request a hearing
before the effective date, the order is final and not appealable as
to that person.
Sec. 152.412. REMOVAL OR PROHIBITION ORDERS IN RESPONSE TO
CERTAIN CRIMINAL OFFENSES. (a) For purposes of this section, a
person is considered to have been finally convicted of an offense if
the person's case is not subject to further appellate review and:
(1) a sentence was imposed on the person;
(2) the person received probation or community
supervision, including deferred adjudication community
supervision; or
(3) the court deferred final disposition of the
person's case.
(b) The commissioner may remove or prohibit a current or
former key individual or employee of a money services licensee from
office or employment in, or prohibit a control person or other
person participating in the affairs of a money services licensee
from further participation in the affairs of a money services
licensee, or any other entity chartered, registered, permitted, or
licensed by the commissioner if the person has been finally
convicted of a felony offense involving:
(1) a business engaged in money services;
(2) dishonesty; or
(3) breach of trust.
(c) If the commissioner has grounds for action under
Subsection (b), the commissioner may serve a removal or prohibition
order, as appropriate, on the person who has been finally convicted
of a felony offense. The commissioner shall also serve a copy of
the order on any money services licensee that the person is
affiliated with at the time of service of the order.
(d) Notwithstanding Section 152.409, an order issued under
this section becomes effective immediately on service and continues
in effect unless the order is:
(1) stayed or terminated by the commissioner;
(2) set aside by the commissioner after a hearing; or
(3) stayed or vacated on appeal.
(e) Not later than the 30th day after the date an order is
served under this section, the person against whom the order is
issued may request in writing a hearing before the commissioner to
show that the person's continued service to a money services
licensee or participation in the affairs of a money services
licensee does not, or is unlikely to, threaten the interests of the
money services licensee, the money services licensee's customers,
or the public confidence in the money services licensee.
(f) Not later than the 30th day after the date the request
for a hearing is received under this section, the commissioner
shall hold the hearing, unless the party requesting the hearing
requests a later date. At the hearing, the party requesting the
hearing has the burden of proof.
(g) After the hearing, the commissioner may affirm, modify,
or set aside, in whole or in part, the order. An order affirming or
modifying the order is immediately final for purposes of
enforcement and appeal. The order may be appealed as provided by
Section 152.409.
Sec. 152.413. APPLICATION FOR RELEASE FROM FINAL REMOVAL OR
PROHIBITION ORDER. (a) After the expiration of 10 years from the
date of issuance, a person who is subject to a removal or
prohibition order issued under this subchapter, regardless of the
order's stated duration or date of issuance, may apply to the
commissioner to be released from the order.
(b) The application must be made under oath and in the form
required by the commissioner. The application must be accompanied
by any required fees.
(c) The commissioner, in the exercise of discretion, may
approve or deny an application filed under this section.
(d) The commissioner's decision under Subsection (c) is
final and not appealable.
SECTION 2. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2025.