84(R) - 2015
House Investments & Financial Services
House Investments & Financial Services
Business, Industry, & Commerce
Investment & Financial Services
Relating to the regulation of money services businesses; affecting the prosecution of a criminal offense.
A fiscal note dated March 23, 2015 anticipates no fiscal implication to the State or to units of local government.
Money services businesses are regulated under Chapter 151 of the Finance Code.
House Bill 2676 would make several changes to the regulation requirements.
It would amend Section 151.003 (9) on exclusions to clarify that person engaged in the business of currency transportation under this subsection only transports currency from a person to the same person at another location or to a financial institution to be deposited in an account belonging to the same person, and does not otherwise engage in the money transmission or currency exchange business without a license issued under this chapter.
It would amend Section 151.302 regarding the requirement of a license to specify that a person may not engage in the business of money transmission in Texas or represent that the person engages in the business of money transmission in Texas unless requirements are fulfilled. It would also simplify the definition of a person that engages in the business of money transmission, for the purpose of this chapter, being a person that receives compensation or expects to receive compensation, directly or indirectly, for conducting money transmission.
For the purpose of the currency exchange licence, House Bill 2676 would require that an applicant provide and a license holder maintain security in the amount of $2,500 if the applicant will conduct or the license holder conducts business with persons located in this state exclusively at one or more physical locations through in-person, contemporaneous transactions. If this does not apply to the applicant, the applicant would have to provide security in the amount that is the greater of $2,500 or an amount equal to one percent of the applicant's projected total dollar volume of currency exchange business in this state for the first year of licensure. If this does not apply to the license holder, the license holder would have to maintain security in the amount that is the greater of $2,500 or an amount equal to one percent of the license holder's total dollar volume of currency exchange business in this state for the preceding year. The maximum amount of security that could be required in such cases would be $1 million.
House Bill 2676 would remove, as a person exempt from the requirements under subsection 151.605(a) a person that acquires control as a personal representative, custodian, guardian, conservator, or trustee, or as an officer appointed by a court or by operation of law.
In cases there are reasons to believe a person has committed an offense subject to a criminal penalty, instead of filing a criminal referral with the district attorney of Travis County or an appropriate prosecuting attorney of the appropriate county, the bill would provide that the offense could be prosecuted.
Vote Recommendation Notes
While most of the changes made by House Bill 2676 are clarification changes, we are concerned by the provision that would require, in certain cases, a more important security amount from an applicant or a license holder. The current amount of $2,500 could be increased in some cases to one percent of an applicant's projected total dollar volume of currency exchange business in this state for the first year of licensure, or one percent of a license holder's total dollar volume of currency exchange business in this state for the preceding year, up to $1 million. This would lead to a stricter regulation of the industry.
Since this provision would increase the scope of government and impede the free market system, we oppose House Bill 2676.