Relating to the regulation of money services businesses.

89(R) HB 3833 - Enrolled version - Bill Text

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;

(E) international wires in transit to a payee;

(F) cash in transit via armored car;

(G) cash in smart safes;

(H) cash in money transmission licensee-owned

locations;

(I) debit card or credit card-funded

transmission receivables owed by a bank; or

(J) money market mutual funds rated "AAA" by S&P

Global or an equivalent rating from an eligible rating service;

(2) certificates of deposit or senior debt obligations

of an insured depository institution, as defined by Section 3,

Federal Deposit Insurance Act (12 U.S.C. Section 1813) or the

Federal Credit Union Act (12 U.S.C. Section 1781);

(3) an obligation:

(A) of the United States or a commission, agency,

or instrumentality of the United States;

(B) that is guaranteed fully as to principal and

interest by the United States; or

(C) of a state or a governmental subdivision,

agency, or instrumentality of the United States;

(4) the full drawable amount of an irrevocable standby

letter of credit for which the stated beneficiary is the

commissioner that stipulates that the commissioner need only draw a

sight draft under the letter of credit and present it to obtain

funds up to the letter of credit amount on presentation of the items

required by Subsection (f);

(5) 100 percent of the surety bond or deposit provided

for under Section 152.352 that exceeds the average daily money

transmission liability in this state; or

(6) stablecoin, to the extent of outstanding

transmission obligations received by the licensee in the same kind

of stablecoin.

(a-1)

For purposes of Subsection (a)(6), stablecoin must be

held, stored, or kept in custody of the licensee directly or by a

third-party custodian that meets the qualifications prescribed by

the commissioner.

(b) Unless permitted by the commissioner to exceed the limit

provided, the following investments are permissible under Section

152.355 to the extent specified:

(1) receivables that are payable to a money

transmission licensee from its authorized delegates in the ordinary

course of business that are less than seven days old are permissible

up to the amount of 50 percent of the aggregate value of the

licensee's total permissible investments;

(2) receivables under Subdivision (1) that are payable

to a money transmission licensee from a single authorized delegate

in the ordinary course of business are permissible up to the amount

of 10 percent of the aggregate value of the licensee's total

permissible investments;

(3) the following investments are permissible up to

the amount of 20 percent of the aggregate value of a money

transmission licensee's total permissible investments for the

amount under each paragraph and the amount of 50 percent of the

aggregate value of the licensee's total permissible investments for

the total amount under this subdivision:

(A) a short-term investment of not more than six

months bearing an eligible rating;

(B) commercial paper bearing an eligible rating;

(C) a bill, note, bond, or debenture bearing an

eligible rating;

(D) a United States tri-party repurchase

agreement collateralized at 100 percent or more with United States

or agency security, municipal bonds, or other security bearing an

eligible rating;

(E) a money market mutual fund rated less than

"AAA" and not less than "A-" by S&P Global, or the equivalent from

an eligible rating service; and

(F) a mutual fund or other investment fund

composed solely and exclusively of one or more permissible

investments listed in Subsections (a)(1)-(3); and

(4) cash, including demand deposits, savings

deposits, and funds in an account held for the benefit of
the
[
a
]

money transmission licensee's customers at a foreign depository

institution is permissible up to the amount of 10 percent of the

aggregate value of the licensee's total permissible investments if:

(A) the licensee has received a satisfactory

rating in its most recent examination; and

(B) the foreign depository institution:

(i) has an eligible rating;

(ii) is registered under the Foreign

Account Tax Compliance Act (Pub. L. No. 111-147);

(iii) is not located in a country subject to

sanctions from the Office of Foreign Assets Control; and

(iv) is not located in a jurisdiction

designated high-risk or uncooperative by the Financial Action Task

Force.

SECTION 10. Section 152.403(b), Finance Code, is amended to

read as follows:

(b) The commissioner may suspend or revoke a money services

license or order a money transmission licensee to revoke the

designation of an authorized delegate if the commissioner has

reason to believe that:

(1) the money services licensee has violated this

chapter, a rule adopted or order issued under this chapter, a

written agreement entered into with the department or commissioner,

or any other state or federal law applicable to the licensee's money

services business;

(2) the money services licensee has refused to permit

or has not cooperated with an examination or investigation

authorized by this chapter;

(3) the money services licensee has engaged in fraud,

knowing misrepresentation, deceit, or gross negligence in

connection with the operation of the licensee's money services

business or any transaction subject to this chapter;

(4) an authorized delegate of the money transmission

licensee has knowingly violated this chapter, a rule adopted or

order issued under this chapter, or a state or federal

anti-money-laundering or terrorist funding law, and the licensee

knows or should have known of the violation and has failed to make a

reasonable effort to prevent or correct the violation;

(5) the competence, experience, character, or general

fitness of the money services licensee or the authorized delegate

of a money transmission licensee, or a
key individual
[
principal
]

of
or
[
,
] person in control [
of, or responsible person
] of a money

services licensee or authorized delegate of a money transmission

licensee, indicates that it is not in the public interest to permit

the licensee or authorized delegate to provide money services;

(6) the money services licensee has engaged in an

unsafe or unsound act or practice or has conducted business in an

unsafe or unsound manner;

(7) the money services licensee has suspended payment

of the licensee's obligations, made a general assignment for the

benefit of the licensee's creditors, or admitted in writing the

licensee's inability to pay debts of the licensee as they become

due;

(8) the money transmission licensee has failed to

terminate the authority of an authorized delegate after the

commissioner has issued and served on the licensee a final order

finding that the authorized delegate has violated this chapter;

(9) a fact or condition exists that, if it had been

known at the time the money services licensee applied for the

license, would have been grounds for denying the application;

(10) the money services licensee has engaged in false,

misleading, or deceptive advertising;

(11) the money services licensee has failed to pay a

judgment entered in favor of a claimant or creditor in an action

arising out of the licensee's activities under this chapter not

later than the 30th day after the date the judgment becomes final or

not later than the 30th day after the date the stay of execution

expires or is terminated, as applicable;

(12) the money services licensee has knowingly made a

material misstatement or has suppressed or withheld material

information on an application, request for approval, report, or

other document required to be filed with the department under this

chapter; or

(13) the money services licensee has committed a

breach of trust or of a fiduciary duty.

SECTION 11. Section 152.404(a), Finance Code, is amended to

read as follows:

(a) The commissioner may suspend or revoke the designation

of an authorized delegate by a money transmission licensee if the

commissioner has reason to believe that:

(1) the authorized delegate has violated this chapter,

a rule adopted or order issued under this chapter, a written

agreement entered into with the commissioner or the department, or

any other state or federal law applicable to a money transmission

business;

(2) the authorized delegate has refused to permit or

has not cooperated with an examination or investigation under this

chapter;

(3) the authorized delegate has engaged in fraud,

knowing misrepresentation, deceit, gross negligence, or an unfair

or deceptive act or practice in connection with the operation of the

delegate's business on behalf of the money transmission licensee or

any transaction subject to this chapter;

(4) the competence, experience, character, or general

fitness of the authorized delegate, or a
key individual
[
principal
]

of
or
[
,
] person in control [
of, or responsible person
] of the

authorized delegate, indicates that it is not in the public

interest to permit the authorized delegate to provide money

transmission;

(5) the authorized delegate has engaged in an unsafe

or unsound act or practice or conducted business in an unsafe and

unsound manner;

(6) the authorized delegate, or a
key individual

[
principal or responsible person
] of the authorized delegate, is

listed on the Specially Designated Nationals and Blocked Persons

List prepared by the United States Department of the Treasury as a

potential threat to commit terrorist acts or to fund terrorist

acts; or

(7) the authorized delegate, or a
key individual

[
principal or responsible person
] of the authorized delegate, has

been convicted of a state or federal anti-money-laundering or

terrorist funding law.

SECTION 12. Section 152.405(b), Finance Code, is amended to

read as follows:

(b) A cease and desist order may require a money services

licensee or authorized delegate to cease and desist from the action

or violation or to take affirmative action to correct any condition

resulting from or contributing to the action or violation, and the

requirements of the order may apply to a
key individual
[
principal

or responsible person
] of the licensee or authorized delegate.

SECTION 13. Section 152.410(f), Finance Code, is amended to

read as follows:

(f) A money services licensee or authorized delegate

against whom an emergency order is directed must submit a written

certification to the commissioner, signed by the licensee or

authorized delegate, and their
key
[
principals and responsible
]

individuals, as applicable, and each person named in the order,

stating that each person has received a copy of and has read and

understands the order.

SECTION 14. This Act takes effect September 1, 2025.

______________________________

______________________________

President of the Senate

Speaker of the House

I certify that H.B. No. 3833 was passed by the House on May

16, 2025, by the following vote: Yeas 130, Nays 2, 2 present, not

voting.

______________________________

Chief Clerk of the House

I certify that H.B. No. 3833 was passed by the Senate on May

25, 2025, by the following vote: Yeas 31, Nays 0.

______________________________

Secretary of the Senate

APPROVED: _____________________

Date

_____________________

Governor