HB3805 - Relating to certain enforcement powers of the banking commissioner regarding the regulation of money services businesses.

      H.B. No. 3805         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.       ______________________________ ______________________________      President of the Senate Speaker of the House                   I certify that H.B. No. 3805 was passed by the House on April   30, 2025, by the following vote:  Yeas 135, Nays 0, 2 present, not   voting.     ______________________________   Chief Clerk of the House                 I certify that H.B. No. 3805 was passed by the Senate on May   19, 2025, by the following vote:  Yeas 31, Nays 0.     ______________________________   Secretary of the Senate       APPROVED:  _____________________                      Date                           _____________________                    Governor