BILL ANALYSIS Senate Research Center S.B. 2371 89R9338 BCH-F By: Nichols Criminal Justice 4/14/2025 As Filed AUTHOR'S / SPONSOR'S STATEMENT OF INTENT The Financial Crimes Intelligence Center (FCIC), which operates under the Texas Department of Licensing and Regulation (TDLR), was established in 2021 to combat card skimming at motor fuel payment terminals. The FCIC serves as the state's lead entity for coordinating law enforcement and agency responses to card fraud involving skimmers. Its mission is to strengthen the ability of state and local agencies to prevent and respond to these crimes, which are increasingly committed by sophisticated, transnational criminal organizations. Current law outlines reporting procedures when a skimmer is discovered on a motor fuel payment terminal. However, criminals are increasingly targeting other types of electronic terminals, such as point-of-sale terminals, virtual currency terminals, and ATMs. S.B. 2371 addresses this growing threat by establishing a similar reporting structure for skimmers found on these devices. Under the bill, when a skimmer is discovered on an electronic terminal, the terminal must be disabled and reported to both law enforcement and the FCIC, who may then inspect the device and conduct an investigation. S.B. 2371 ensures law enforcement and the FCIC are equipped to address card skimming across a broader range of devices, helping Texas stay ahead of evolving financial crimes. As proposed, S.B. 2371 amends current law relating to skimmers on electronic terminals, authorizes a civil penalty, and creates criminal offenses. RULEMAKING AUTHORITY Rulemaking authority is expressly granted to the financial crimes intelligence center in SECTION 1 (Section 607A.003, Business & Commerce Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Title 12, Business & Commerce Code, by adding Chapter 607A, as follows: CHAPTER 607A. PAYMENT CARD SKIMMERS ON ELECTRONIC TERMINALS SUBCHAPTER A. GENERAL PROVISIONS Sec. 607A.001. DEFINITIONS. Defines "automated teller machine," "center," "electronic terminal," "financial institution," "institution of higher education," "merchant," "payment card," "payment card issuer," "payment card network," "service company," "service technician," "skimmer," and "virtual currency." Sec. 607A.002. ADMINISTRATION AND ENFORCEMENT OF CHAPTER. Requires the financial crimes intelligence center (center) to administer and enforce this chapter. Sec. 607A.003. RULES. Requires the center to adopt rules for administering this chapter. SUBCHAPTER B. DUTIES FOR USE OF CERTAIN ELECTRONIC TERMINALS Sec. 607A.051. REQUIRED NOTICE OF SKIMMER DISCOVERY. (a) Requires a service technician or service company that employs the technician, if the service technician discovers a skimmer in or on an electronic terminal, to notify the center and the merchant of the skimmer in the manner prescribed by center rule. (b) Requires a merchant, if the merchant discovers a skimmer in or on an electronic terminal or is notified of the presence of a skimmer, in the manner prescribed by center rule, to disable, or cause to be disabled, the electronic terminal on which the skimmer was discovered, notify a law enforcement agency and the center that a skimmer has been detected, and take appropriate measures to protect the electronic terminal from tampering until the center or law enforcement agency arrives and the skimmer is removed. Sec. 607A.052. REPORT TO CENTER. Authorizes the center to accept a report of a suspected skimmer from any interested person, including a law enforcement agency, a financial institution, a payment card issuer, a service technician or service company, a member of the public, and a payment card network. Sec. 607A.053. INVESTIGATION OF SKIMMER REPORT. (a) Authorizes the center, on receipt of a report under Section 607A.051 or 607A.052, to conduct an inspection for the presence of suspected skimmers. (b) Requires the center to coordinate with law enforcement agencies in conducting an investigation of the report. (c) Authorizes the center, if the skimmer is reported to be located on an electronic terminal, to inspect, directly or in coordination with a law enforcement agency, the electronic terminal that is the subject of the report and any other electronic terminal located at the same place of business if the electronic terminal is not affiliated with a federally insured financial institution. (d) Requires a merchant to cooperate with the center or law enforcement agency during an investigation of a skimmer discovered or reported at the merchant's place of business and allow the inspection and alteration of an electronic terminal at the place of business as necessary. Sec. 607A.054. CONFIDENTIALITY. (a) Provides that, except as otherwise provided by this section, information is confidential and not subject to disclosure under Chapter 552 (Public Information), Government Code, if the information is from a report received by the center under Section 607A.051 or 607A.052 or prepared or compiled by the center in connection with the report or an investigation conducted under this subchapter. (b) Authorizes information described by Subsection (a) to be disclosed to certain persons or entities. (c) Provides that the disclosure of information under Subsection (b) is not a voluntary disclosure for purposes of Section 552.007 (Voluntary Disclosure of Certain Information When Disclosure Not Required), Government Code. (d) Provides that, on the dismissal or final resolution of a report by the center, information described by Subsection (a) is subject to disclosure under Chapter 552, Government Code, unless the information is subject to Section 31.301 (Disclosure by Department Prohibited), Finance Code, or can be classified as confidential information under applicable rules. (e) Provides that, notwithstanding Subsection (a), a law enforcement agency or the center: (1) subject to Subdivision (2), is authorized to disclose to the public information made confidential by that subdivision if the law enforcement agency or the chief intelligence coordinator for the center determines the disclosure of the information furthers a law enforcement purpose; and (2) is prohibited from disclosing to the public the identity of a person who submits a report of a suspected skimmer to the center under Section 607A.051 or 607A.052. SUBCHAPTER C. ENFORCEMENT Sec. 607A.101. CIVIL PENALTY. (a) Provides that a person who violates this chapter or a rule adopted under this chapter is liable to this state for a civil penalty. Prohibits a civil penalty assessed under this subsection from exceeding $5,000 per day for each violation. (b) Authorizes the attorney general to bring an action to collect a civil penalty under this section. (c) Requires that an action filed under this section be filed in a district court in Travis County. (d) Authorizes the attorney general and the department to recover reasonable expenses incurred in obtaining injunctive relief under this section, including court costs, reasonable attorney's fees, investigative costs, witness fees, and deposition expenses. Sec. 607A.102. CRIMINAL OFFENSES. (a) Provides that a person commits an offense if the person refuses to allow an inspection of an electronic terminal at the merchant's place of business in violation of Section 607A.053. Provides that an offense under this subsection is a Class C misdemeanor. (b) Provides that a person commits an offense if the person negligently or recklessly disposes of a skimmer that was installed on an electronic terminal by another person. Provides that an offense under this subsection is a Class B misdemeanor. (c) Provides that a person commits an offense if, knowing that an investigation is ongoing or that a criminal proceeding has been commenced and is pending, the person disposes of a skimmer installed on an electronic terminal by another person. Provides that an offense under this subsection is a felony of the third degree. SECTION 2. Effective date: upon passage or September 1, 2025.
BILL ANALYSIS
Senate Research Center S.B. 2371
89R9338 BCH-F By: Nichols
Criminal Justice
4/14/2025
As Filed
Senate Research Center
S.B. 2371
89R9338 BCH-F
By: Nichols
Criminal Justice
4/14/2025
As Filed
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
The Financial Crimes Intelligence Center (FCIC), which operates under the Texas Department of Licensing and Regulation (TDLR), was established in 2021 to combat card skimming at motor fuel payment terminals.
The FCIC serves as the state's lead entity for coordinating law enforcement and agency responses to card fraud involving skimmers. Its mission is to strengthen the ability of state and local agencies to prevent and respond to these crimes, which are increasingly committed by sophisticated, transnational criminal organizations.
Current law outlines reporting procedures when a skimmer is discovered on a motor fuel payment terminal. However, criminals are increasingly targeting other types of electronic terminals, such as point-of-sale terminals, virtual currency terminals, and ATMs. S.B. 2371 addresses this growing threat by establishing a similar reporting structure for skimmers found on these devices. Under the bill, when a skimmer is discovered on an electronic terminal, the terminal must be disabled and reported to both law enforcement and the FCIC, who may then inspect the device and conduct an investigation.
S.B. 2371 ensures law enforcement and the FCIC are equipped to address card skimming across a broader range of devices, helping Texas stay ahead of evolving financial crimes.
As proposed, S.B. 2371 amends current law relating to skimmers on electronic terminals, authorizes a civil penalty, and creates criminal offenses.
RULEMAKING AUTHORITY
Rulemaking authority is expressly granted to the financial crimes intelligence center in SECTION 1 (Section 607A.003, Business & Commerce Code) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Title 12, Business & Commerce Code, by adding Chapter 607A, as follows:
CHAPTER 607A. PAYMENT CARD SKIMMERS ON ELECTRONIC TERMINALS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 607A.001. DEFINITIONS. Defines "automated teller machine," "center," "electronic terminal," "financial institution," "institution of higher education," "merchant," "payment card," "payment card issuer," "payment card network," "service company," "service technician," "skimmer," and "virtual currency."
Sec. 607A.002. ADMINISTRATION AND ENFORCEMENT OF CHAPTER. Requires the financial crimes intelligence center (center) to administer and enforce this chapter.
Sec. 607A.003. RULES. Requires the center to adopt rules for administering this chapter.
SUBCHAPTER B. DUTIES FOR USE OF CERTAIN ELECTRONIC TERMINALS
Sec. 607A.051. REQUIRED NOTICE OF SKIMMER DISCOVERY. (a) Requires a service technician or service company that employs the technician, if the service technician discovers a skimmer in or on an electronic terminal, to notify the center and the merchant of the skimmer in the manner prescribed by center rule.
(b) Requires a merchant, if the merchant discovers a skimmer in or on an electronic terminal or is notified of the presence of a skimmer, in the manner prescribed by center rule, to disable, or cause to be disabled, the electronic terminal on which the skimmer was discovered, notify a law enforcement agency and the center that a skimmer has been detected, and take appropriate measures to protect the electronic terminal from tampering until the center or law enforcement agency arrives and the skimmer is removed.
Sec. 607A.052. REPORT TO CENTER. Authorizes the center to accept a report of a suspected skimmer from any interested person, including a law enforcement agency, a financial institution, a payment card issuer, a service technician or service company, a member of the public, and a payment card network.
Sec. 607A.053. INVESTIGATION OF SKIMMER REPORT. (a) Authorizes the center, on receipt of a report under Section 607A.051 or 607A.052, to conduct an inspection for the presence of suspected skimmers.
(b) Requires the center to coordinate with law enforcement agencies in conducting an investigation of the report.
(c) Authorizes the center, if the skimmer is reported to be located on an electronic terminal, to inspect, directly or in coordination with a law enforcement agency, the electronic terminal that is the subject of the report and any other electronic terminal located at the same place of business if the electronic terminal is not affiliated with a federally insured financial institution.
(d) Requires a merchant to cooperate with the center or law enforcement agency during an investigation of a skimmer discovered or reported at the merchant's place of business and allow the inspection and alteration of an electronic terminal at the place of business as necessary.
Sec. 607A.054. CONFIDENTIALITY. (a) Provides that, except as otherwise provided by this section, information is confidential and not subject to disclosure under Chapter 552 (Public Information), Government Code, if the information is from a report received by the center under Section 607A.051 or 607A.052 or prepared or compiled by the center in connection with the report or an investigation conducted under this subchapter.
(b) Authorizes information described by Subsection (a) to be disclosed to certain persons or entities.
(c) Provides that the disclosure of information under Subsection (b) is not a voluntary disclosure for purposes of Section 552.007 (Voluntary Disclosure of Certain Information When Disclosure Not Required), Government Code.
(d) Provides that, on the dismissal or final resolution of a report by the center, information described by Subsection (a) is subject to disclosure under Chapter 552, Government Code, unless the information is subject to Section 31.301 (Disclosure by Department Prohibited), Finance Code, or can be classified as confidential information under applicable rules.
(e) Provides that, notwithstanding Subsection (a), a law enforcement agency or the center:
(1) subject to Subdivision (2), is authorized to disclose to the public information made confidential by that subdivision if the law enforcement agency or the chief intelligence coordinator for the center determines the disclosure of the information furthers a law enforcement purpose; and
(2) is prohibited from disclosing to the public the identity of a person who submits a report of a suspected skimmer to the center under Section 607A.051 or 607A.052.
SUBCHAPTER C. ENFORCEMENT
Sec. 607A.101. CIVIL PENALTY. (a) Provides that a person who violates this chapter or a rule adopted under this chapter is liable to this state for a civil penalty. Prohibits a civil penalty assessed under this subsection from exceeding $5,000 per day for each violation.
(b) Authorizes the attorney general to bring an action to collect a civil penalty under this section.
(c) Requires that an action filed under this section be filed in a district court in Travis County.
(d) Authorizes the attorney general and the department to recover reasonable expenses incurred in obtaining injunctive relief under this section, including court costs, reasonable attorney's fees, investigative costs, witness fees, and deposition expenses.
Sec. 607A.102. CRIMINAL OFFENSES. (a) Provides that a person commits an offense if the person refuses to allow an inspection of an electronic terminal at the merchant's place of business in violation of Section 607A.053. Provides that an offense under this subsection is a Class C misdemeanor.
(b) Provides that a person commits an offense if the person negligently or recklessly disposes of a skimmer that was installed on an electronic terminal by another person. Provides that an offense under this subsection is a Class B misdemeanor.
(c) Provides that a person commits an offense if, knowing that an investigation is ongoing or that a criminal proceeding has been commenced and is pending, the person disposes of a skimmer installed on an electronic terminal by another person. Provides that an offense under this subsection is a felony of the third degree.
SECTION 2. Effective date: upon passage or September 1, 2025.