FINANCE CODE
SUBTITLE E. OTHER FINANCIAL BUSINESSES
CHAPTER 152. CHECK SELLERS
SUBCHAPTER A. GENERAL PROVISIONS
§ 152.001. SHORT TITLE. This chapter may be cited as
the Sale of Checks Act.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 152.002. DEFINITIONS. In this chapter:
(1) "Business of selling checks" means the activity of
receiving money by any means from a purchaser for the purpose of
subsequently transferring the money in the form of a check payable
by the seller to a person designated by the purchaser, for direct or
indirect compensation, including earnings from money received from
the purchaser or the purchaser's agent and held pending
disbursement on a check sold to the purchaser, whether or not the
activity is conducted on a regular basis or as an organized business
concern.
(2) "Check" means an instrument, service, or device
for the transmission or payment of money, including a draft,
traveler's check, or money order, or an electronic equivalent to a
draft, traveler's check, or money order, including an automated
clearinghouse transfer. The term does not include an instrument,
service, or device that:
(A) transfers money directly from the purchaser
to a creditor of the purchaser or to an agent of the creditor;
(B) is redeemed by the issuer in goods or
services under circumstances not designed to evade the obligations
and responsibilities imposed by this chapter; or
(C) transfers money in the form of currency to
another person in a transmission or transportation transaction
subject to Chapter 153.
(3) "Commission" means the Finance Commission of
Texas.
(4) "Commissioner" means the banking commissioner of
Texas.
(5) "Deliver" means to deliver a check to the first
person who in payment for the check remits or purports to remit the
face amount of the check or makes a remittance or purported
remittance against the face amount, regardless of whether the
person who delivers the check:
(A) signs the check or is otherwise directly
liable for obligations evidenced by the check; or
(B) charges a fee in addition to the face amount.
(6) "Department" means the Texas Department of
Banking.
(7) "Financial institution" has the meaning assigned
by Section 201.101.
(8) "License holder" means a person holding a current
license issued under Section 152.209. The term includes a person
exempt from licensing under Section 152.202 to the extent the
obligations and responsibilities of a license holder under this
chapter are imposed on the person as a condition of exemption.
(9) "Money" means a medium of exchange authorized or
adopted by a domestic or foreign government and includes a monetary
unit of account established by an intergovernmental organization or
by agreement between two or more nations. The term also includes
money represented in digital electronic format, whether or not
specially encrypted, and stored or capable of storage on electronic
media in a manner that is retrievable and transferable
electronically.
(10) "Permissible investment" means:
(A) cash in demand or interest-bearing accounts
with a federally insured financial institution, including
certificates of deposit;
(B) a marketable investment security consisting
of:
(i) bonds and other legally created general
obligations of a state, an agency or political subdivision of a
state, the United States, or an instrumentality of the United
States; or
(ii) obligations that a state or an agency
or political subdivision of a state, or the United States or an
instrumentality of the United States has unconditionally agreed to
purchase, insure, or guarantee; or
(C) other assets or securities that may be
permitted by rule or approved by the commissioner.
(11) "Principal," in connection with management of a
license holder or applicant, means a person who performs executive
functions or otherwise controls the executive affairs of a license
holder, including an owner, officer, director, partner, trustee, or
manager of the license holder.
(12) "Sell" includes issue, transmit, or deliver.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 1, eff. Sept. 1, 2001.
SUBCHAPTER B. POWERS AND DUTIES OF DEPARTMENT AND COMMISSION
§ 152.101. ADMINISTRATION. The department shall
administer this chapter.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 2, eff. Sept. 1, 2001.
§ 152.102. RULES. The commission may adopt rules
necessary to enforce and administer this chapter, including rules
to:
(1) implement and clarify this chapter;
(2) establish fees for applications, licenses,
notices, and examinations to defray the cost of administering this
chapter;
(3) create additional exemptions or reduced
requirements applicable to specific circumstances, if the
exemption or reduction is in the public interest and subject to
appropriate requirements or conditions;
(4) identify additional permissible investments
subject to appropriate investment limits; and
(5) protect the interests of check purchasers.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 2, eff. Sept. 1, 2001; Acts
2001, 77th Leg., ch. 867, § 65, eff. Sept. 1, 2001; Acts 2003,
78th Leg., ch. 1276, § 8.002(a), eff. Sept. 1, 2003.
§ 152.103. EXAMINATIONS. (a) The commissioner shall
examine each license holder annually, on a periodic basis as
required by any rules adopted under this chapter, or more often as
the commissioner considers necessary to efficiently enforce this
chapter and other applicable law.
(b) The commissioner, in the exercise of discretion and as
necessary for the efficient enforcement of this chapter or other
applicable law, may:
(1) examine a license holder at its primary place of
business;
(2) examine off-site documents that the license holder
furnishes to the department; and
(3) defer a required examination for not more than six
months.
(c) Information in a report of an examination under this
section is confidential and may be disclosed only under the
circumstances provided by Section 152.105.
(d) Disclosure of information to the commissioner under an
examination request does not waive or otherwise affect or diminish
a privilege to which the information is otherwise subject.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 867, § 66, eff. Sept. 1, 2001; Acts
2001, 77th Leg., ch. 1012, § 2, eff. Sept. 1, 2001; Acts 2001,
77th Leg., ch. 867, § 66, eff. Sept. 1, 2001; Acts 2003, 78th
Leg., ch. 1276, § 8.002(b), eff. Sept. 1, 2003.
§ 152.104. REGULATORY COOPERATION. (a) To efficiently
carry out the purposes of this chapter and reduce the regulatory
burden on license holders, the commissioner may:
(1) enter into cooperative, coordinating, or
information-sharing agreements with another federal, state, or
foreign governmental agency that regulates persons engaged in the
business of selling checks or that otherwise has concurrent
regulatory or supervisory jurisdiction with respect to license
holders under this chapter;
(2) with respect to periodic examination or other
supervision or investigation, accept reports of examination or
investigation by, and reports submitted to, an agency described by
Subdivision (1) instead of conducting examinations or
investigations or receiving reports as might otherwise be required
or permissible under this chapter;
(3) enter into contracts with an agency described by
Subdivision (1) to engage the services of the agency for reasonable
compensation to assist in connection with the commissioner's
performance of official duties under this chapter or other law, or
to provide services to the agency for reasonable compensation in
connection with the agency's performance of official duties under
law, except that Chapter 2254, Government Code, does not apply to
contracts under this subdivision; and
(4) enter into joint examinations or joint enforcement
actions with an agency described by Subdivision (1), provided that
the commissioner may not waive the ability to independently take
action under this chapter if the commissioner determines that the
action is necessary to carry out the commissioner's
responsibilities under this chapter or to enforce compliance with
the laws of this state.
(b) Supervisory or examination fees assessed in accordance
with this chapter may be shared with another federal, state, or
foreign governmental agency that regulates the activities
described in this chapter or that otherwise has concurrent
regulatory or supervisory jurisdiction with respect to license
holders under this chapter in accordance with an agreement between
the commissioner and the agency. The commissioner may also receive
a portion of supervisory or examination fees assessed by a federal,
state, or foreign governmental agency in accordance with an
agreement between the commissioner and the agency.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 2, eff. Sept. 1, 2001.
§ 152.105. CONFIDENTIAL INFORMATION;
DISCLOSURE. (a) Except as provided by Subsection (b),
information obtained by the commissioner under this chapter and any
file or record of the department relating to that information is
confidential and may not be disclosed if the information, as
determined by the commissioner:
(1) relates to the financial condition of the license
holder, a license applicant, a person exempt from licensing under
Section 152.202, or an affiliate or principal of a person exempt
from licensing under Section 152.202;
(2) is proprietary information of the license holder;
or
(3) is personal or private information relating to a
specific purchaser that identifies or can otherwise be associated
with the purchaser.
(b) The commissioner may release confidential information
if:
(1) the commissioner finds that immediate and
irreparable harm is threatened to a purchaser or potential
purchaser of a check, or to the public;
(2) the license holder consents to the release of
information, other than information described by Subsection
(a)(3), or has published the information contained in the release;
(3) the commissioner finds that release of the
information is required for an administrative hearing, in which
case the information may be released to the parties to the hearing
by an order of the hearings officer that requires the parties to
maintain confidentiality; or
(4) the commissioner finds that release of the
information is reasonably necessary to protect the public and is in
the interest of justice, in which case the information may be
released only to a representative of an agency, department, or
instrumentality of this or another state, the United States, or a
foreign government with whom the United States currently maintains
diplomatic relations.
(c) Before releasing information the commissioner
determines is not proprietary under Subsection (a)(2), the
commissioner shall notify the license holder unless the
notification is prohibited by other law.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 2, eff. Sept. 1, 2001.
SUBCHAPTER C. APPLICATION FOR AND ISSUANCE OF LICENSE
§ 152.201. LICENSE REQUIRED. (a) Except as provided
by Section 152.202, a person must hold a license issued under this
chapter to engage in the business of selling checks to purchasers:
(1) located in this state; or
(2) wherever located if the seller is located in this
state.
(b) For purposes of this section, a seller is located in
this state if the seller:
(1) employs or otherwise uses an agent that is located
in this state; or
(2) maintains, uses, or otherwise controls an account
at a financial institution office located in this state for the
purpose of engaging in the business of selling checks.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 62, § 7.37(a), eff. Sept. 1, 1999;
Acts 2001, 77th Leg., ch. 1012, § 3, eff. Sept. 1, 2001.
§ 152.202. EXEMPTIONS FROM LICENSING. (a) Section
152.201 does not apply to:
(1) a federally insured financial institution;
(2) an agent of a license holder unless the agent
receives or at any time has access to a record of the license holder
that contains information pertaining to payment of the license
holder's obligations under checks sold by the agent for purposes of
verification, reconciliation, or accounting;
(3) a title company or attorney that issues an escrow
or trust fund check;
(4) a state, an agency, political subdivision, or
instrumentality of a state, the United States, or an agency or
instrumentality of the United States, including the United States
Postal Service;
(5) with the commissioner's prior written consent, a
person that:
(A) holds a license issued under Chapter 153;
(B) meets the licensing requirements of this
chapter, including a demonstration of net worth as reflected by the
financial statements required by Section 152.205;
(C) maintains a bond payable to the commissioner
or an amount deposited with the commissioner, for the purposes
specified in both this chapter and Chapter 153, in an amount equal
to the greater of the amount of bond required by Section 152.206 or
Chapter 153;
(D) sells checks only in conjunction with
currency exchange or transmission transactions subject to Chapter
153, and separately accounts for proceeds from transactions under
Chapter 153 and this chapter; and
(E) complies with Subsection (b);
(6) with the commissioner's prior written
determination that the exemption is in the public interest, a
person that:
(A) incidentally engages in the sale of checks
only to the extent reasonable and necessary to accomplish a primary
business objective that is unrelated to the sale of checks;
(B) does not advertise or offer to sell checks to
the public except to the extent reasonable and necessary to fairly
advertise or offer its primary business services; and
(C) either:
(i) sells checks exclusively in connection
with commercial contracts in interstate commerce; or
(ii) does not charge a fee for the sale of
checks or sell checks without fee as an inducement for customer
participation in its primary business; or
(7) any other person exempted by rule.
(b) A person who meets the requirements of Subsection (a)(5)
is subject to:
(1) all provisions of this chapter other than the
license requirement of Section 152.201 to the extent the person
engages in the business of selling checks; and
(2) rules adopted under this chapter to administer and
carry out that subsection, including rules to:
(A) define a term used in that subsection; and
(B) establish limits or requirements on the
bonding and net worth of the person and the person's activities
relating to the sale of checks other than those specified by that
subsection.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 344, § 2.020, eff. Sept. 1, 1999;
Acts 2001, 77th Leg., ch. 867, § 67, eff. Sept. 1, 2001; Acts
2001, 77th Leg., ch. 1012, § 3, eff. Sept. 1, 2001; Acts 2003,
78th Leg., ch. 1276, § 8.002(c), eff. Sept. 1, 2003.
§ 152.203. QUALIFICATIONS FOR LICENSE. (a) Subject to
Subsection (b), to qualify for a license under this chapter, a
person:
(1) must have a net worth of at least $500,000,
computed according to generally accepted accounting principles, as
reflected by the financial statements required by Section 152.205;
(2) must be in a financial condition that will enable
the person to safely and soundly engage in the business of selling
checks;
(3) may not be indebted to any local, state, or
federal government or political subdivision of the government for
delinquent taxes, fines, penalties, or fees
(4) may not be engaged in an activity or practice the
commissioner finds adversely affects the person's financial safety
and soundness.
(b) A license may not be issued to an applicant unless each
person identified under Section 152.204(b)(1):
(1) possesses the financial responsibility, financial
condition, business experience, character, and general fitness
that would reasonably warrant the belief that issuance of the
license will be in the public interest; and
(2) has not been convicted during the preceding 10
years of an offense:
(A) under a state or federal law that involves
deception, dishonesty, or defalcation, or that relates to currency
exchange, transportation, or transmission, money laundering, or a
reporting requirement of the Bank Secrecy Act (12 U.S.C. Section
1951 et seq.); or
(B) under the laws of a foreign country that
involves deception, dishonesty, or defalcation, or that would be a
felony under state or federal law if committed in the United States,
unless the applicant demonstrates to the satisfaction of the
commissioner that the conviction was based on extenuating
circumstances unrelated to the person's reputation for honesty and
obedience to law.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 3, eff. Sept. 1, 2001.
§ 152.204. APPLICATION. (a) An application for a
license must be in writing, sworn to, and filed with the
commissioner in the form the commissioner prescribes.
(b) The application must:
(1) state the full legal name, federal taxpayer
identification number or social security number, and business
address of the applicant, and, if the applicant is:
(A) an individual, the home address of the
applicant, and the full legal name and federal taxpayer
identification number or social security number of the applicant's
spouse; or
(B) a person other than an individual, the full
legal name, federal taxpayer identification number or social
security number, and the business address of:
(i) each individual who is a principal of
the applicant; and
(ii) each individual who is a principal of
any person that is a principal of the applicant;
(2) describe in detail the applicant's business plan
relating to the business of selling checks, including:
(A) method of operations;
(B) location of operations and outlets;
(C) projections regarding the anticipated growth
in volume of checks sold in dollars and in number of consumers
during the initial two-year period of operation; and
(D) other information sufficient to permit the
commissioner to evaluate the bonding requirements of Section
152.206;
(3) include an undertaking to increase or supplement
the bond furnished with the application to equal the aggregate bond
required by the commissioner before the issuance of the license and
the start of operations; and
(4) disclose any other information that may be
required by rule or reasonably requested by the commissioner .
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 3, eff. Sept. 1, 2001.
§ 152.205. ACCOMPANYING FEE, STATEMENTS, AND BOND. An
application for a license must be accompanied by:
(1) a nonrefundable application fee in an amount
established by rule that is sufficient to administer this chapter;
(2) audited financial statements of the applicant that
are reasonably satisfactory to the commissioner; and
(3) a surety bond or deposit in the amount of
$100,000, subject to the additional bonding or deposit requirements
of Section 152.206 or 152.207.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 3, eff. Sept. 1, 2001.
§ 152.206. SURETY BOND. (a) Except as provided by
Section 152.207, a license holder shall post a surety bond issued by
a bonding company or insurance company authorized to do business in
this state that is acceptable to the commissioner.
(b) The commissioner shall, on application and otherwise
from time to time, determine the amount of the surety bond but may
not determine the amount to be less than $100,000 or greater than $1
million. In making a determination under this subsection, the
commissioner shall consider:
(1) the nature and type of business the license holder
conducts;
(2) the license holder's financial condition in
relation to the dollar volume of the license holder's obligations
from time to time with respect to outstanding checks sold;
(3) the nature and degree of liquidity in assets
legally and beneficially owned by the license holder;
(4) the competence, character, general fitness, and
experience of management;
(5) the extent and adequacy of internal controls
maintained by the license holder;
(6) the presence or absence of annual unqualified
audits by an independent certified public accountant; and
(7) the existence and adequacy of other insurance
obtained or held by the license holder to protect its customers.
(c) The bond represents money held in trust for the benefit
of check purchasers. The bond must be payable to the commissioner
on behalf of any claimants against the license holder or the license
holder's agent to secure the faithful performance of the
obligations of the license holder or agent with respect to the
receipt, handling, transmission, and payment of money in connection
with the sale of checks.
(d) The aggregate liability of the bond's surety under this
chapter may not exceed the principal amount of the bond.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 3, eff. Sept. 1, 2001.
§ 152.207. ALTERNATIVE TO BOND. (a) Instead of
furnishing all or part of the amount of the surety bond required by
Section 152.206, an applicant or license holder may deposit with
the commissioner, or 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,
including cash, certificates of deposit, and interest-bearing
securities, that equals the total amount of the required bond or the
remaining part of the bond. For purposes of this subsection, the
value of the securities is the lesser of the principal amount or the
market value of the securities.
(b) The deposit shall be held in trust for the benefit of
check purchasers. The deposit secures the same obligations as the
surety bond. The license holder is entitled:
(1) to receive all income generated by the assets in
the deposit; and
(2) with the commissioner's approval, to substitute
other permissible assets or securities for those deposited.
(c) On written order of the commissioner made for good cause
shown, the license holder shall substitute other assets or
securities for those deposited.
(d) In this section, "securities" means marketable
investment securities consisting of:
(1) bonds and other legally created general
obligations of a state or an agency or political subdivision of a
state, or the United States or an instrumentality of the United
States;
(2) obligations that a state or an agency or political
subdivision of a state, or the United States or an instrumentality
of the United States has unconditionally agreed to purchase,
insure, or guarantee; or
(3) other securities specified by rule.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 3, eff. Sept. 1, 2001.
§ 152.208. INVESTIGATION OF APPLICATION. (a) On the
filing of an application that meets the requirements of Sections
152.204 and 152.205, the commissioner shall investigate to
determine whether the qualifications prescribed by Section 152.203
have been met.
(b) To the extent considered advisable by the commissioner,
the commissioner may investigate and consider the qualifications of
principals of an applicant in determining whether the
qualifications prescribed by Section 152. 203(b) have been met.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 3, eff. Sept. 1, 2001.
§ 152.209. ISSUANCE OF LICENSE. (a) The commissioner
shall issue a license to the applicant if the commissioner finds
that the qualifications prescribed by Section 152.203 are met,
based on the application and investigation, and receives an
acceptable bond or bonds and deposits aggregating to the amount
required by the commissioner.
(b) The applicant on request is entitled to a hearing on the
denial of the application, to be held not later than the 60th day
after the date the commissioner receives the request.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 3, eff. Sept. 1, 2001.
SUBCHAPTER D. REQUIREMENTS TO MAINTAIN LICENSE
§ 152.301. MINIMUM SECURITY AND NET WORTH OF LICENSE
HOLDER. (a) A license holder shall maintain at all times while
the license is in effect:
(1) a surety bond or deposit in the amount prescribed
by Section 152.206 or 152.207;
(2) a net worth of not less than the amount prescribed
by Section 152.203; and
(3) a surety bond or letter of credit, or have on hand
permissible investments, in an amount equal to:
(A) the aggregate face amount of all outstanding
checks sold in the United States for which the license holder is
liable for payment, less the amount of the surety bond or deposit
maintained under Section 152.206 or 152.207, if the license holder
has a net worth of less than $5 million; or
(B) at least 50 percent of the amount required by
Paragraph (A) if the license holder has a net worth of at least $5
million.
(b) A surety bond or letter of credit required under
Subsection (a)(3) must be:
(1) in addition to any other bond or security required
by this chapter;
(2) issued by a bonding company or insurance company
authorized to do business in this state and acceptable to the
commissioner, in the case of a surety bond;
(3) issued by a federally insured financial
institution that has its main office or a branch in this state and
is acceptable to the commissioner, in the case of a letter of
credit; and
(4) payable to the commissioner on behalf of any
claimants against the license holder to secure the faithful
performance of the obligations of the license holder with respect
to the receipt, handling, and payment of money in connection with
the sale of checks.
(c) The net worth of the license holder for purposes of
Subsection (a) is shown by an audited financial statement
reasonably satisfactory to the commissioner.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 62, § 7.38, eff. Sept. 1, 1999; Acts
1999, 76th Leg., ch. 344, § 2.021, eff. Sept. 1, 1999; Acts
2001, 77th Leg., ch. 1012, § 4, eff. Sept. 1, 2001.
§ 152.302. INSUFFICIENT BOND OR DEPOSIT. (a) If the
commissioner at any time reasonably determines that the bond or
deposit required by this chapter is insecure, deficient in amount,
or exhausted in whole or part, the commissioner by written order may
require the license holder to file a new or supplemental bond or
make new or additional deposits to secure compliance with this
chapter.
(b) The license holder shall comply with the order not later
than the 30th day after the date on which the order is served.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 152.304. ANNUAL LICENSE FEE. (a) Not later than June
30 of each year, a license holder shall pay to the commissioner a
license renewal fee in an amount established by rule.
(b) The fee required by Section 152.205(1) satisfies the
license fee requirement for the first license year or part of that
year.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 5, eff. Sept. 1, 2001.
§ 152.305. FINANCIAL STATEMENTS AND
REPORTS. (a) Unless waived by the commissioner, not later than
the 45th day after the last day of each quarter of the license
holder's fiscal year, a license holder shall file with the
commissioner a certification of net worth and a report regarding
maintaining permissible investments under Section 152.301 for the
preceding quarter submitted on forms furnished by the commissioner.
(b) Not later than June 30 of each year, or a later date the
commissioner approves in writing for good cause shown, a license
holder shall file an annual audited unconsolidated financial
statement dated as of the last day of the license holder's fiscal
year that ended in the immediately preceding calendar year.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 349, § 1, eff. Sept. 1, 1999; Acts
2001, 77th Leg., ch. 1012, § 6, eff. Sept. 1, 2001.
§ 152.306. REVOCATION OF LICENSE;
INVESTIGATION. (a) The commissioner shall revoke a license if
the commissioner determines that the net worth of the license
holder is less than the amount required under Section 152.301.
(b) The commissioner may revoke a license:
(1) on a ground on which the commissioner may refuse to
grant a license; or
(2) for a violation of this chapter.
(c) The commissioner may investigate the business and
records of a license holder if the commissioner has reasonable
cause to believe that grounds for revocation exist.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 152.307. HEARING ON LICENSE REVOCATION. (a) The
commissioner shall give a license holder an opportunity for a
hearing before a license may be revoked.
(b) The commissioner shall give the license holder notice of
the hearing.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 7, eff. Sept. 1, 2001.
SUBCHAPTER E. SALE OF CHECKS
§ 152.401. BUSINESS CONDUCTED BY AGENT. (a) A license
holder may conduct the business of selling checks under this
chapter from any location within or outside of this state, either
directly or through an agent appointed by the license holder.
(b) A rule adopted under Section 152.102 may not directly
apply to a license holder's agent.
(c) Subject to compliance with this chapter, a license
holder or the license holder's agent may sell checks through
physical facilities, electronic facilities, including the
Internet, or telephonic facilities and may charge a different price
for checks based on the type of facility used in the transaction. A
price differential based on the type of facility used does not
constitute a surcharge subject to Section 339.001 if:
(1) the price charged for checks paid for by credit
card is not greater than the price charged for checks paid for by
another form of payment accepted within the same type of facility;
and
(2) the license holder or agent does not refuse to sell
checks to a customer who intends to pay by credit card through one
type of facility, at which credit cards are ordinarily accepted, by
redirecting the customer to use a credit card at another type of
facility.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 8, eff. Sept. 1, 2001.
§ 152.402. DISCLOSURE OF RESPONSIBILITY. Each check
sold by a license holder, directly or through an agent, must:
(1) include the name and mailing address or telephone
number of the license holder clearly printed or displayed on or in
connection with sale of the check; or
(2) be accompanied by a written notice displayed or
delivered to the purchaser at the time of sale containing that
information.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 9, eff. Sept. 1, 2001.
§ 152.403. TRUST IMPOSED ON SALES PROCEEDS. (a) A
license holder or the license holder's agent shall hold in trust the
proceeds of a sale of the license holder's checks from the date of
receipt.
(b) A license holder's agent may not commingle the proceeds
with the agent's own money or other property, except to use the
money in the ordinary course of the agent's business for the purpose
of making change, if the proceeds are accounted for at the end of
each business day.
(c) If a license holder or the license holder's agent
commingles any proceeds received from the sale of checks with money
or other property owned or controlled by the license holder or
agent, all commingled proceeds and other property are impressed
with a trust in an amount equal to the amount of the proceeds from
the sale less the amount of fees paid for the sale. A trust
resulting from a license holder's actions is in favor of the holders
of the checks. A trust resulting from the agent's actions is in
favor of the license holder.
(d) If the commissioner revokes a license holder's license
under Section 152.306, all sales proceeds held in trust by the
license holder and the license holder's agents are assigned to the
commissioner for the benefit of the holders of the checks.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 152.404. REMITTANCE OF SALES PROCEEDS. (a) A
license holder's agent shall remit to the license holder all money
due from the sale of a check not later than the 10th business day
after the date of the sale unless:
(1) otherwise ordered by the commissioner; or
(2) the license holder requires a shorter period for
the remittance.
(b) Notwithstanding Subsection (a), a license holder's
agent may remit to the license holder all money due from the sale of
a check at a later date if the agent maintains on deposit with an
office of a federally insured financial institution located in the
United States an amount that:
(1) is in an account solely in the name of the license
holder; and
(2) for each day by which the period before which the
remittance is made exceeds 10 business days, is not less than the
outstanding obligations of the license holder represented by checks
issued by the license holder that the agent usually sells daily.
(c) In this section, "business day" does not include a
Saturday, Sunday, or legal public holiday, as designated by 5
U.S.C. Section 6103.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 10, eff. Sept. 1, 2001.
§ 152.405. LIABILITY FOR PAYMENT OF CHECK. (a) Except
as provided by Subsection (b), a license holder that sells a check,
directly or through an agent, is liable for the payment of the check
in the same manner as a maker or drawer of a negotiable instrument
subject to Chapter 3, Business & Commerce Code, regardless of
whether the license holder signed or assumed primary liability for
obligations evidenced by the check.
(b) With respect to a check that is designated as a money
order and that contains on the front or the back of the check a
written disclosure that the purchaser has the right to stop
payment, the license holder is considered to be a drawee and the
purchaser of the check is considered to be a drawer of a negotiable
instrument subject to Chapter 3, Business & Commerce Code, for
purposes of a stop-payment order and liability to the holder of the
check.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997. Amended
by Acts 2001, 77th Leg., ch. 1012, § 11, eff. Sept. 1, 2001.
SUBCHAPTER F. CRIMINAL PENALTIES AND CIVIL REMEDIES
§ 152.501. CRIMINAL PENALTY. (a) A person commits an
offense if the person intentionally:
(1) makes an untrue statement of a material fact in an
application or report required to be filed with the commissioner
under this chapter; or
(2) violates Section 152.201.
(b) An offense under this section is a third degree felony.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 152.502. ADMINISTRATIVE PENALTY. (a) The
commissioner may impose an administrative penalty on a person in an
amount specified by the commissioner if, after notice and hearing,
the commissioner finds the person has violated:
(1) this chapter;
(2) a rule adopted under this chapter; or
(3) an order of the commissioner issued under this
chapter.
(b) The amount of the penalty may not exceed:
(1) $1,000 for each violation; or
(2) $1,000 for each day the violation continues.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 152.503. CLAIM AGAINST LICENSE HOLDER IN BANKRUPTCY OR
RECEIVERSHIP. A claimant against a license holder that is in
bankruptcy or receivership or against the license holder's agent
may:
(1) sue directly on the bond required by Section
152.205 for an amount equal to the amount of an unpaid judgment
against the license holder; or
(2) assert a claim against the bond.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 152.504. SUIT BY ATTORNEY GENERAL. The attorney
general may sue on behalf of claimants on the bond required by
Section 152.205 in a district court in Travis County, either in one
action or successive actions.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 152.505. CEASE AND DESIST ORDER. (a) The
commissioner may issue an order to cease and desist from a violation
or practice if the commissioner determines that a license holder or
a person acting on the license holder's behalf:
(1) violated this chapter, a rule adopted under this
chapter, or any other law applicable to the sale of checks;
(2) committed a breach of trust or of a fiduciary duty;
(3) committed a fraudulent act;
(4) refused to submit to an examination by the
commissioner;
(5) conducted the license holder's business in an
unsafe or unauthorized manner; or
(6) violated a condition of the license or an
agreement between the license holder and the commissioner.
(b) A copy of the order shall be served on the license holder
and each person named in the order.
(c) The order takes effect on the date specified in the
order but not before the 10th day after the date of the receipt by
the license holder or other person named in the order unless the
commissioner finds that immediate and irreparable harm is
threatened to the license holder, purchasers or potential
purchasers of checks, or the public.
(d) The license holder shall certify to the commissioner in
writing that each person named in the order and, if the license
holder is a corporation, each member of the corporation's board of
directors has read and understood the order.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 152.506. APPEAL OF CEASE AND DESIST ORDER. (a) A
license holder or other person named in an order issued under
Section 152.505 may appeal the order by filing notice with the
commission not later than the 10th day after the date on which
notice of the order is received.
(b) On receipt of a timely notice of appeal, the commission
shall set a time and place for hearing the appeal and give
reasonable notice of the hearing to the person filing the appeal.
(c) If the commission finds that the person filing the
appeal has committed one or more of the violations or practices
charged by the commissioner and that the order is necessary or in
the best interests of purchasers of checks, the commission shall
affirm the order. If the commission finds otherwise, the
commission shall set aside the order.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 152.507. ENFORCEMENT OF CEASE AND DESIST ORDER. If a
license holder or other person named in a cease and desist order
issued under Section 152.505 does not comply with the
commissioner's final order, the attorney general, on the
commissioner's request, may sue the person in a district court in
Travis County to enjoin violation of the order.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
§ 152.508. REGULATORY AND ENFORCEMENT
POWERS. (a) Sections 152.505-152.507 do not diminish the
regulatory or enforcement powers of the commissioner or the
commission under this chapter or other applicable law.
(b) The commissioner is not required to proceed under those
sections before taking regulatory action under Section 152.306 or
152.502 or other applicable law.
Acts 1997, 75th Leg., ch. 1008, § 1, eff. Sept. 1, 1997.
