Relating to certain enforcement powers of the banking commissioner regarding the regulation of money services businesses, the official text

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