Texas 2025 - 89th Regular

Texas House Bill HB3833 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	~~89R18477~~ MLH-F
	1	+	89R11040 MLH-F
2	2		By: Lambert H.B. No. 3833
3		-	Substitute the following for H.B. No. 3833:
4		-	By: Plesa C.S.H.B. No. 3833
5	3
6	4
7	5
8	6
9	7		A BILL TO BE ENTITLED
10	8		AN ACT
11	9		relating to the regulation of money services businesses.
12	10		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13		-	SECTION 1. Sections 152.105(a) and (b), Finance Code, are
14		-	amended to read as follows:
15		-	(a) An [In addition to the requirements of Section 152.104,
16		-	an applicant shall provide additional information to the
17		-	commissioner if the applicant is an] individual who[:
18		-	[(1)] is in control of a money services licensee or
19		-	applicant, who[;
20		-	[(2)] seeks to acquire control of a money services
21		-	licensee,[;] or who
22		-	[(3)] is a key individual of a money services licensee
23		-	or applicant shall provide[.
24		-	[(b) Additional information provided] to the commissioner
25		-	[by an individual under this section must include] the
26		-	individual's:
27		-	(1) fingerprints for submission to the Federal Bureau
28		-	of Investigation and the commissioner for purposes of a national
29		-	criminal history background check unless the person currently
30		-	resides outside of the United States and has resided outside of the
31		-	United States for the 10-year period preceding the submission of
32		-	the application; and
33		-	(2) personal history and experience, in a form and
34		-	medium prescribed by the commissioner, that contains the following
35		-	information:
36		-	(A) if the individual has a social security
37		-	number, an independent credit report for the individual from a
38		-	consumer reporting agency;
39		-	(B) information related to any criminal
40		-	convictions or pending charges against the individual; and
41		-	(C) information related to any regulatory or
42		-	administrative action and any civil litigation against the
43		-	individual involving claims of fraud, misrepresentation,
44		-	conversion, mismanagement of funds, breach of fiduciary duty, or
45		-	breach of contract.
46		-	SECTION 2. Section 152.106(c), Finance Code, is amended to
	11	+	SECTION 1. Section 152.105(a), Finance Code, is amended to
47	12		read as follows:
48		-	(c) A determination by the commissioner under Subsection
49		-	(a) that an application is complete and is accepted for processing
50		-	is not an assessment of the substance of the application or of the
51		-	sufficiency of the information provided, and means only that the
52		-	application, on its face, appears to include all of the items,
53		-	including the national criminal history background check response
54		-	from the Federal Bureau of Investigation under Section 152.105
55		-	[152.105(b)], and address all of the matters that are required
56		-	under Sections 152.104 and 152.105.
57		-	SECTION 3. Sections 152.107(c) and (i), Finance Code, are
	13	+	(a) The following individuals [In addition to the
	14	+	requirements of Section 152.104, an applicant] shall provide
	15	+	additional information to the commissioner [if the applicant is an
	16	+	individual who]:
	17	+	(1) an individual who is in control of a money services
	18	+	licensee or applicant;
	19	+	(2) an individual who seeks to acquire control of a
	20	+	money services licensee; or
	21	+	(3) [is] a key individual of a money services licensee
	22	+	or applicant.
	23	+	SECTION 2. Sections 152.107(c) and (i), Finance Code, are
58	24		amended to read as follows:
59	25		(c) An applicant for a currency exchange license must
60	26		demonstrate that it meets or will meet the requirements in Sections
61	27		152.353 and[,] 152.354[, and 152.355]. A currency exchange
62	28		licensee must at all times continue to meet the requirements of
63	29		those sections.
64		-	(i) The holder, a key individual [principal], or a person in
	30	+	(i) The holder, key individual [principal], or person in
65	31		control of the holder of a license issued under this chapter that
66	32		has expired or that the holder has surrendered under Section
67	33		152.108 that wishes to conduct activities for which a license is
68	34		required under this chapter must file a new license application
69	35		under Section 152.104 and satisfy all requirements for licensure
70	36		that apply at the time the new application is filed.
71		-	SECTION 4. Section 152.152(a), Finance Code, is amended to
	37	+	SECTION 3. Section 152.152(a), Finance Code, is amended to
72	38		read as follows:
73	39		(a) The requirements of Section 152.151 do not apply to a
74	40		person who has complied with and received approval to engage in
75	41		money services under this chapter or was identified as a person in
76	42		control in a previous application filed with and approved by the
77	43		commissioner or by an MSB-accredited state under a multistate
78	44		licensing process, provided that:
79	45		(1) the person has not:
80	46		(A) had a money services license revoked or
81	47		suspended; or
82	48		(B) controlled a money services licensee that has
83	49		had a money services license revoked or suspended while the person
84	50		was in control of the licensee in the previous five years;
85	51		(2) if the person is a money services licensee, the
86	52		person:
87	53		(A) is well managed; and
88	54		(B) if a rating for compliance has been given to
89	55		the person by an MSB-accredited state, received a satisfactory
90	56		rating in its most recent examination;
91	57		(3) in the case of a money transmission licensee, the
92	58		person to be acquired is [and the person acquiring control are both
93	59		money transmission licensees] projected to meet the requirements of
94	60		Sections 152.351, 152.352, 152.354, and 152.355, and if the person
95	61		acquiring control is a money transmission licensee, that person
96	62		acquiring control is also projected to meet the requirements of
97	63		those sections, after the acquisition of control is completed;
98	64		(4) in the case of a currency exchange licensee, the
99	65		person to be acquired is [and the person acquiring control are both
100	66		currency exchange licensees] projected to meet the requirements of
101	67		Sections 152.353 and 152.354, and if the person acquiring control
102	68		is a currency exchange licensee, that person acquiring control is
103	69		also projected to meet the requirements of those sections, after
104	70		the acquisition of control is completed;
105	71		(5) the money services licensee to be acquired will
106	72		not implement any material changes to the licensee's business plan
107	73		as a result of the acquisition of control, and if the person
108	74		acquiring control is a money services licensee, the acquiring
109	75		licensee also will not implement any material changes to its
110	76		business plan as a result of the acquisition of control; and
111	77		(6) the person provides notice of the acquisition in
112	78		cooperation with the money services licensee and attests to
113	79		Subdivisions (1) through (5), as applicable, in a form and medium
114	80		prescribed by the commissioner.
115		-	SECTION 5. Section 152.203(a), Finance Code, is amended to
	81	+	SECTION 4. Section 152.203(a), Finance Code, is amended to
116	82		read as follows:
117	83		(a) A money services licensee shall, not later than the 90th
118	84		day after the end of each fiscal year, or within an extended time
119	85		prescribed by the commissioner, file with the commissioner:
120	86		(1) for a money transmission licensee, an audited
121	87		unconsolidated financial statement of the licensee for the fiscal
122	88		year prepared in accordance with United States generally accepted
123	89		accounting principles;
124	90		(2) for a currency exchange licensee, a financial
125	91		statement, audited or unaudited, dated as of the last day of the
126	92		licensee's fiscal year that ended in the immediately preceding
127	93		calendar year, prepared in accordance with United States generally
128	94		accepted accounting principles; and
129	95		(3) any other information as the commissioner may
130	96		reasonably require.
131		-	SECTION 6. Section 152.351(b), Finance Code, is amended to
	97	+	SECTION 5. Section 152.351(b), Finance Code, is amended to
132	98		read as follows:
133	99		(b) Tangible net worth under this section must be
134	100		demonstrated at the initial application by the applicant's most
135	101		recent audited or unaudited financial statements pursuant to
136	102		[under] Section 152.104(c)(6) or (7).
137		-	SECTION 7. Section 152.353(a), Finance Code, is amended to
	103	+	SECTION 6. Section 152.353(a), Finance Code, is amended to
138	104		read as follows:
139	105		(a) A currency exchange licensee shall at all times maintain
140	106		security in the amount applicable to the licensee under this
141	107		section consisting of a surety bond in a form satisfactory to the
142	108		commissioner. The security must satisfy the requirements of and is
143	109		subject to Section 152.354. With the commissioner's approval, a
144	110		currency exchange licensee may maintain a deposit in lieu of a bond
145	111		under this section.
146		-	SECTION 8. Sections 152.354(a) and (g), Finance Code, are
	112	+	SECTION 7. Sections 152.354(a) and (g), Finance Code, are
147	113		amended to read as follows:
148	114		(a) In addition to the requirements of Section 152.352 or
149	115		152.353, a security under this subchapter must:
150	116		(1) be in a form satisfactory to the commissioner;
151	117		(2) be payable to any claimant or to the commissioner,
152	118		on behalf of a claimant or this state, for any liability arising out
153	119		of a money transmission licensee's money transmission business in
154	120		this state, incurred under, subject to, or by virtue of this
155	121		chapter; and
156	122		(3) if the security is a bond, be issued by a qualified
157	123		surety company authorized to engage in business in this state and
158	124		acceptable to the commissioner [or, if the security is an
159	125		irrevocable letter of credit, be issued by a financial institution
160	126		acceptable to the commissioner].
161	127		(g) Instead of providing all or part of the amount of the
162	128		security required by this section, an applicant for a money
163	129		services license or a money services licensee may, with the prior
164	130		approval of the commissioner, deposit, with a financial institution
165	131		possessing trust powers that is authorized to conduct a trust
166	132		business in this state and is acceptable to the commissioner, an
167	133		aggregate amount of United States currency, certificates of
168	134		deposit, or other cash equivalents that equals the total amount of
169	135		the required security or the remaining part of the security.
170		-	SECTION 9. Section 152.356, Finance Code, is amended by
171		-	amending ~~Subsections~~ (a~~) and (b~~) and adding Subsection (a-1) to
172		-	~~read as~~ follows:
	136	+	SECTION 8. Section 152.356, Finance Code, is amended by
	137	+	amending Subsection (a) and adding Subsection (a-1) to read as
	138	+	follows:
173	139		(a) The following investments are permissible under Section
174	140		152.355:
175	141		(1) cash, including:
176	142		(A) demand deposits held in a federally insured
177	143		depository financial institution;
178	144		(B) savings deposits held in a federally insured
179	145		depository financial institution;
180	146		(C) funds in accounts under Paragraphs (A) and
181	147		(B) held for the benefit of the [a] money transmission licensee's
182	148		customers in a federally insured depository financial institution;
183	149		(D) cash equivalents, including automated
184	150		clearing house items:
185	151		(i) in transit to the money transmission
186	152		licensee; and
187	153		(ii) in transit to a payee;
188	154		(E) international wires in transit to a payee;
189	155		(F) cash in transit via armored car;
190	156		(G) cash in smart safes;
191	157		(H) cash in money transmission licensee-owned
192	158		locations;
193	159		(I) debit card or credit card-funded
194	160		transmission receivables owed by a bank; or
195	161		(J) money market mutual funds rated "AAA" by S&P
196	162		Global or an equivalent rating from an eligible rating service;
197	163		(2) certificates of deposit or senior debt obligations
198	164		of an insured depository institution, as defined by Section 3,
199	165		Federal Deposit Insurance Act (12 U.S.C. Section 1813) or the
200	166		Federal Credit Union Act (12 U.S.C. Section 1781);
201	167		(3) an obligation:
202	168		(A) of the United States or a commission, agency,
203	169		or instrumentality of the United States;
204	170		(B) that is guaranteed fully as to principal and
205	171		interest by the United States; or
206	172		(C) of a state or a governmental subdivision,
207	173		agency, or instrumentality of the United States;
208	174		(4) the full drawable amount of an irrevocable standby
209	175		letter of credit for which the stated beneficiary is the
210	176		commissioner that stipulates that the commissioner need only draw a
211	177		sight draft under the letter of credit and present it to obtain
212	178		funds up to the letter of credit amount on presentation of the items
213	179		required by Subsection (f);
214	180		(5) 100 percent of the surety bond or deposit provided
215	181		for under Section 152.352 that exceeds the average daily money
216	182		transmission liability in this state; or
217	183		(6) stablecoin, to the extent of outstanding
218	184		transmission obligations received by the licensee in the same kind
219	185		of stablecoin.
220	186		(a-1) For purposes of Subsection (a)(6), stablecoin must be
221	187		held, stored, or kept in custody of the licensee directly or by a
222	188		third-party custodian that meets the qualifications prescribed by
223	189		the commissioner.
224		-	(b) Unless permitted by the commissioner to exceed the limit
225		-	provided, the following investments are permissible under Section
226		-	152.355 to the extent specified:
227		-	(1) receivables that are payable to a money
228		-	transmission licensee from its authorized delegates in the ordinary
229		-	course of business that are less than seven days old are permissible
230		-	up to the amount of 50 percent of the aggregate value of the
231		-	licensee's total permissible investments;
232		-	(2) receivables under Subdivision (1) that are payable
233		-	to a money transmission licensee from a single authorized delegate
234		-	in the ordinary course of business are permissible up to the amount
235		-	of 10 percent of the aggregate value of the licensee's total
236		-	permissible investments;
237		-	(3) the following investments are permissible up to
238		-	the amount of 20 percent of the aggregate value of a money
239		-	transmission licensee's total permissible investments for the
240		-	amount under each paragraph and the amount of 50 percent of the
241		-	aggregate value of the licensee's total permissible investments for
242		-	the total amount under this subdivision:
243		-	(A) a short-term investment of not more than six
244		-	months bearing an eligible rating;
245		-	(B) commercial paper bearing an eligible rating;
246		-	(C) a bill, note, bond, or debenture bearing an
247		-	eligible rating;
248		-	(D) a United States tri-party repurchase
249		-	agreement collateralized at 100 percent or more with United States
250		-	or agency security, municipal bonds, or other security bearing an
251		-	eligible rating;
252		-	(E) a money market mutual fund rated less than
253		-	"AAA" and not less than "A-" by S&P Global, or the equivalent from
254		-	an eligible rating service; and
255		-	(F) a mutual fund or other investment fund
256		-	composed solely and exclusively of one or more permissible
257		-	investments listed in Subsections (a)(1)-(3); and
258		-	(4) cash, including demand deposits, savings
259		-	deposits, and funds in an account held for the benefit of the [a]
260		-	money transmission licensee's customers at a foreign depository
261		-	institution is permissible up to the amount of 10 percent of the
262		-	aggregate value of the licensee's total permissible investments if:
263		-	(A) the licensee has received a satisfactory
264		-	rating in its most recent examination; and
265		-	(B) the foreign depository institution:
266		-	(i) has an eligible rating;
267		-	(ii) is registered under the Foreign
268		-	Account Tax Compliance Act (Pub. L. No. 111-147);
269		-	(iii) is not located in a country subject to
270		-	sanctions from the Office of Foreign Assets Control; and
271		-	(iv) is not located in a jurisdiction
272		-	designated high-risk or uncooperative by the Financial Action Task
273		-	Force.
274		-	SECTION 10. Section 152.403(b), Finance Code, is amended to
	190	+	SECTION 9. Section 152.403(b), Finance Code, is amended to
275	191		read as follows:
276	192		(b) The commissioner may suspend or revoke a money services
277	193		license or order a money transmission licensee to revoke the
278	194		designation of an authorized delegate if the commissioner has
279	195		reason to believe that:
280	196		(1) the money services licensee has violated this
281	197		chapter, a rule adopted or order issued under this chapter, a
282	198		written agreement entered into with the department or commissioner,
283	199		or any other state or federal law applicable to the licensee's money
284	200		services business;
285	201		(2) the money services licensee has refused to permit
286	202		or has not cooperated with an examination or investigation
287	203		authorized by this chapter;
288	204		(3) the money services licensee has engaged in fraud,
289	205		knowing misrepresentation, deceit, or gross negligence in
290	206		connection with the operation of the licensee's money services
291	207		business or any transaction subject to this chapter;
292	208		(4) an authorized delegate of the money transmission
293	209		licensee has knowingly violated this chapter, a rule adopted or
294	210		order issued under this chapter, or a state or federal
295	211		anti-money-laundering or terrorist funding law, and the licensee
296	212		knows or should have known of the violation and has failed to make a
297	213		reasonable effort to prevent or correct the violation;
298	214		(5) the competence, experience, character, or general
299	215		fitness of the money services licensee or the authorized delegate
300	216		of a money transmission licensee, or a key individual [principal]
301	217		of or[,] person in control [of, or responsible person] of a money
302	218		services licensee or authorized delegate of a money transmission
303	219		licensee, indicates that it is not in the public interest to permit
304	220		the licensee or authorized delegate to provide money services;
305	221		(6) the money services licensee has engaged in an
306	222		unsafe or unsound act or practice or has conducted business in an
307	223		unsafe or unsound manner;
308	224		(7) the money services licensee has suspended payment
309	225		of the licensee's obligations, made a general assignment for the
310	226		benefit of the licensee's creditors, or admitted in writing the
311	227		licensee's inability to pay debts of the licensee as they become
312	228		due;
313	229		(8) the money transmission licensee has failed to
314	230		terminate the authority of an authorized delegate after the
315	231		commissioner has issued and served on the licensee a final order
316	232		finding that the authorized delegate has violated this chapter;
317	233		(9) a fact or condition exists that, if it had been
318	234		known at the time the money services licensee applied for the
319	235		license, would have been grounds for denying the application;
320	236		(10) the money services licensee has engaged in false,
321	237		misleading, or deceptive advertising;
322	238		(11) the money services licensee has failed to pay a
323	239		judgment entered in favor of a claimant or creditor in an action
324	240		arising out of the licensee's activities under this chapter not
325	241		later than the 30th day after the date the judgment becomes final or
326	242		not later than the 30th day after the date the stay of execution
327	243		expires or is terminated, as applicable;
328	244		(12) the money services licensee has knowingly made a
329	245		material misstatement or has suppressed or withheld material
330	246		information on an application, request for approval, report, or
331	247		other document required to be filed with the department under this
332	248		chapter; or
333	249		(13) the money services licensee has committed a
334	250		breach of trust or of a fiduciary duty.
335		-	SECTION 11. Section 152.404(a), Finance Code, is amended to
	251	+	SECTION 10. Section 152.404(a), Finance Code, is amended to
336	252		read as follows:
337	253		(a) The commissioner may suspend or revoke the designation
338	254		of an authorized delegate by a money transmission licensee if the
339	255		commissioner has reason to believe that:
340	256		(1) the authorized delegate has violated this chapter,
341	257		a rule adopted or order issued under this chapter, a written
342	258		agreement entered into with the commissioner or the department, or
343	259		any other state or federal law applicable to a money transmission
344	260		business;
345	261		(2) the authorized delegate has refused to permit or
346	262		has not cooperated with an examination or investigation under this
347	263		chapter;
348	264		(3) the authorized delegate has engaged in fraud,
349	265		knowing misrepresentation, deceit, gross negligence, or an unfair
350	266		or deceptive act or practice in connection with the operation of the
351	267		delegate's business on behalf of the money transmission licensee or
352	268		any transaction subject to this chapter;
353	269		(4) the competence, experience, character, or general
354	270		fitness of the authorized delegate, or a key individual [principal]
355	271		of or[,] person in control [of, or responsible person] of the
356	272		authorized delegate, indicates that it is not in the public
357	273		interest to permit the authorized delegate to provide money
358	274		transmission;
359	275		(5) the authorized delegate has engaged in an unsafe
360	276		or unsound act or practice or conducted business in an unsafe and
361	277		unsound manner;
362	278		(6) the authorized delegate, or a key individual
363	279		[principal or responsible person] of the authorized delegate, is
364	280		listed on the Specially Designated Nationals and Blocked Persons
365	281		List prepared by the United States Department of the Treasury as a
366	282		potential threat to commit terrorist acts or to fund terrorist
367	283		acts; or
368	284		(7) the authorized delegate, or a key individual
369	285		[principal or responsible person] of the authorized delegate, has
370	286		been convicted of a state or federal anti-money-laundering or
371	287		terrorist funding law.
372		-	SECTION 12. Section 152.405(b), Finance Code, is amended to
	288	+	SECTION 11. Section 152.405(b), Finance Code, is amended to
373	289		read as follows:
374	290		(b) A cease and desist order may require a money services
375	291		licensee or authorized delegate to cease and desist from the action
376	292		or violation or to take affirmative action to correct any condition
377	293		resulting from or contributing to the action or violation, and the
378	294		requirements of the order may apply to a key individual [principal
379	295		or responsible person] of the licensee or authorized delegate.
380		-	SECTION 13. Section 152.410(f), Finance Code, is amended to
	296	+	SECTION 12. Section 152.410(f), Finance Code, is amended to
381	297		read as follows:
382	298		(f) A money services licensee or authorized delegate
383	299		against whom an emergency order is directed must submit a written
384	300		certification to the commissioner, signed by the licensee or
385	301		authorized delegate, and their key [principals and responsible]
386	302		individuals, as applicable, and each person named in the order,
387	303		stating that each person has received a copy of and has read and
388	304		understands the order.
389		-	SECTION 14. This Act takes effect September 1, 2025.
	305	+	SECTION 13. This Act takes effect September 1, 2025.