HB3833 - Relating to the regulation of money services businesses.

      H.B. No. 3833         AN ACT   relating to the regulation of money services businesses.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Sections 152.105(a) and (b), Finance Code, are   amended to read as follows:          (a)   An  [ In addition to the requirements of Section 152.104,   an applicant shall provide additional information to the   commissioner if the applicant is an ] individual who[ :                [ (1) ]  is in control of a money services licensee or   applicant , who [ ;                [ (2) ]  seeks to acquire control of a money services   licensee , [ ; ] or who                [ (3) ]  is a key individual of a money services licensee   or applicant shall provide [ .          [ (b)  Additional information provided ] to the commissioner   [ by an individual under this section must include ] the   individual's:                (1)  fingerprints for submission to the Federal Bureau   of Investigation and the commissioner for purposes of a national   criminal history background check unless the person currently   resides outside of the United States and has resided outside of the   United States for the 10-year period preceding the submission of   the application; and                (2)  personal history and experience, in a form and   medium prescribed by the commissioner, that contains the following   information:                      (A)  if the individual has a social security   number, an independent credit report for the individual from a   consumer reporting agency;                      (B)  information related to any criminal   convictions or pending charges against the individual; and                      (C)  information related to any regulatory or   administrative action and any civil litigation against the   individual involving claims of fraud, misrepresentation,   conversion, mismanagement of funds, breach of fiduciary duty, or   breach of contract.          SECTION 2.  Section 152.106(c), Finance Code, is amended to   read as follows:          (c)  A determination by the commissioner under Subsection   (a) that an application is complete and is accepted for processing   is not an assessment of the substance of the application or of the   sufficiency of the information provided, and means only that the   application, on its face, appears to include all of the items,   including the national criminal history background check response   from the Federal Bureau of Investigation under Section 152.105   [ 152.105(b) ], and address all of the matters that are required   under Sections 152.104 and 152.105.          SECTION 3.  Sections 152.107(c) and (i), Finance Code, are   amended to read as follows:          (c)  An applicant for a currency exchange license must   demonstrate that it meets or will meet the requirements in Sections   152.353 and [ , ] 152.354[ , and 152.355 ].  A currency exchange   licensee must at all times continue to meet the requirements of   those sections.          (i)  The holder, a key individual [ principal ], or a person in   control of the holder of a license issued under this chapter that   has expired or that the holder has surrendered under Section   152.108 that wishes to conduct activities for which a license is   required under this chapter must file a new license application   under Section 152.104 and satisfy all requirements for licensure   that apply at the time the new application is filed.          SECTION 4.  Section 152.152(a), Finance Code, is amended to   read as follows:          (a)  The requirements of Section 152.151 do not apply to a   person who has complied with and received approval to engage in   money services under this chapter or was identified as a person in   control in a previous application filed with and approved by the   commissioner or by an MSB-accredited state under a multistate   licensing process, provided that:                (1)  the person has not:                      (A)  had a money services license revoked or   suspended; or                      (B)  controlled a money services licensee that has   had a money services license revoked or suspended while the person   was in control of the licensee in the previous five years;                (2)  if the person is a money services licensee, the   person:                      (A)  is well managed; and                      (B)  if a rating for compliance has been given to   the person by an MSB-accredited state, received a satisfactory   rating in its most recent examination;                (3)  in the case of a money transmission licensee, the   person to be acquired is [ and the person acquiring control are both   money transmission licensees ] projected to meet the requirements of   Sections 152.351, 152.352, 152.354, and 152.355 , and if the person   acquiring control is a money transmission licensee, that person   acquiring control is also projected to meet the requirements of   those sections, after the acquisition of control is completed;                (4)  in the case of a currency exchange licensee, the   person to be acquired is [ and the person acquiring control are both   currency exchange licensees ] projected to meet the requirements of   Sections 152.353 and 152.354 , and if the person acquiring control   is a currency exchange licensee, that person acquiring control is   also projected to meet the requirements of those sections, after   the acquisition of control is completed;                (5)  the money services licensee to be acquired will   not implement any material changes to the licensee's business plan   as a result of the acquisition of control, and if the person   acquiring control is a money services licensee, the acquiring   licensee also will not implement any material changes to its   business plan as a result of the acquisition of control; and                (6)  the person provides notice of the acquisition in   cooperation with the money services licensee and attests to   Subdivisions (1) through (5), as applicable, in a form and medium   prescribed by the commissioner.          SECTION 5.  Section 152.203(a), Finance Code, is amended to   read as follows:          (a)  A money services licensee shall, not later than the 90th   day after the end of each fiscal year, or within an extended time   prescribed by the commissioner, file with the commissioner:                (1)  for a money transmission licensee, an audited   unconsolidated financial statement of the licensee for the fiscal   year prepared in accordance with United States generally accepted   accounting principles;                (2)  for a currency exchange licensee, a financial   statement, audited or unaudited, dated as of the last day of the   licensee's fiscal year that ended in the immediately preceding   calendar year , prepared in accordance with United States generally   accepted accounting principles ; and                (3)  any other information as the commissioner may   reasonably require.          SECTION 6.  Section 152.351(b), Finance Code, is amended to   read as follows:          (b)  Tangible net worth under this section must be   demonstrated at the initial application by the applicant's most   recent audited or unaudited financial statements pursuant to   [ under ] Section 152.104(c)(6) or (7) .          SECTION 7.  Section 152.353(a), Finance Code, is amended to   read as follows:          (a)  A currency exchange licensee shall at all times maintain   security in the amount applicable to the licensee under this   section consisting of a surety bond in a form satisfactory to the   commissioner .  The security must satisfy the requirements of and is   subject to Section 152.354.   With the commissioner's approval, a   currency exchange licensee may maintain a deposit in lieu of a bond   under this section.          SECTION 8.  Sections 152.354(a) and (g), Finance Code, are   amended to read as follows:          (a)  In addition to the requirements of Section 152.352 or   152.353, a security under this subchapter must:                (1)  be in a form satisfactory to the commissioner;                (2)  be payable to any claimant or to the commissioner,   on behalf of a claimant or this state, for any liability arising out   of a money transmission licensee's money transmission business in   this state, incurred under, subject to, or by virtue of this   chapter; and                (3)  if the security is a bond, be issued by a qualified   surety company authorized to engage in business in this state and   acceptable to the commissioner [ or, if the security is an   irrevocable letter of credit, be issued by a financial institution   acceptable to the commissioner ].          (g)  Instead of providing all or part of the amount of the   security required by this section, an applicant for a money   services license or a money services licensee may , with the prior   approval of the commissioner, deposit, with a financial institution   possessing trust powers that is authorized to conduct a trust   business in this state and is acceptable to the commissioner, an   aggregate amount of United States currency, certificates of   deposit, or other cash equivalents that equals the total amount of   the required security or the remaining part of the security.          SECTION 9.  Section 152.356, Finance Code, is amended by   amending Subsections (a) and (b) and adding Subsection (a-1) to   read as follows:          (a)  The following investments are permissible under Section   152.355:                (1)  cash, including:                      (A)  demand deposits held in a federally insured   depository financial institution ;                      (B)  savings deposits held in a federally insured   depository financial institution ;                      (C)  funds in accounts under Paragraphs (A) and   (B) held for the benefit of the [ a ] money transmission licensee's   customers in a federally insured depository financial institution;                      (D)  cash equivalents, including automated   clearing house items:                            (i)  in transit to the money transmission   licensee; and                            (ii)  in transit to a payee; &# [Text truncated for display. 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