7 TAC §29.11
The Texas Department of Banking adopts new §29.11, concerning
the effect certain criminal convictions may have on the holder of a license
to engage in the business of selling checks or on an applicant for a license.
The section is adopted with nonsubstantive changes to the proposed text as
published in the May 7, 1999, issue of the
Texas
Register
(24 TexReg 3419).
Texas Civil Statutes, Article 6252-13c and Article 6252-13d, require a
licensing authority to adopt rules relating to its exercise of authority to
suspend or revoke an existing license, or deny an application for a license,
because of a person's conviction of a crime which directly relates to the
duties and responsibilities of the licensed profession.
Licenses to sell checks are regulated by the banking commissioner and the
department of banking pursuant to Finance Code, Chapter 152. Before a license
may be issued, an applicant must be found to possess satisfactory character
and general fitness. A license also may be revoked if a license holder no
longer possesses these attributes. As adopted, §29.11(b) addresses conviction
of an official of a felony or another crime of moral turpitude that directly
disqualfy an applicant or license holder as provided in Finance Code, §152.203(a)(3).
A conviction of a crime which directly relates to the duties and responsibilities
of a check seller could result in a determination that an applicant or license
holder lacks the requisite character and general fitness. As adopted, §29.11(c)-(i)
identifies crimes the agency considers directly related to the duties and
responsibilities of a check seller, specifies possible mitigating circumstances,
and describes the precedural rights and protections available to the applicant
or license holder affected by an adverse action of the commissioner as a result
of a conviction.
The adopted rule will benefit potential applicants for a check seller's
license by permitting assessment of the prospects of obtaining a license if
an official of the applicant has a criminal conviction prior to expending
the resources necessary to apply. It also will benefit existing license holders
by providing notice and the opportunity to avoid adverse action with respect
to a license because of such a conviction.
The agency received only one comment on the proposed section. The commenter
suggested that §29.11(i), relating to judicial review, incorporate relevant
and controlling Government Code provisions in lieu of specifying details such
as the location of the court in which a petition must be filed and the time
limitations on filing, to avoid the necessity of amending the rule should
the underlying statutes change. The agency believes that this suggestion is
well-founded, and has changed the subsection accordingly. The agency is also
making stylistic edits to improve readability based on internal comments.
No edit changes the meaning, intent, or effect of the section as proposed
with regard to any affected person.
The agency is also correcting a few citations to law. The remaining provisions
of Texas Civil Statutes, Article 489d, have been codified into Finance Code,
Chapter 152, by Senate Bill 1368, §7.37, 76th Legislature, effective
September 1, 1999. All references to Article 489d in the proposed section
are edited to reflect correct statutory location in the Finance Code.
The section is adopted pursuant to Texas Civil Statutes, Article
6252-13d, which requires a licensing authority to issue guidelines relating
to the suspension, revocation, or denial of a license because of a conviction
of a crime which directly relates to the licensed occupation, and Finance
Code, §152.102(a), which authorizes the commission to adopt rules to
enforce and administer Finance Code, Chapter 152, including rules related
to an application for a license.
§29.11. Effect of Criminal Conviction on Licenses.
(a)
Definitions. The following words and terms, when used
in this section, shall have the following meanings, unless the context clearly
indicates otherwise:
(1)
Commissioner--The banking commissioner of Texas.
(2)
Official--An individual applying for or holding a
license, or an owner, director, or officer of a license applicant or holder
that is an entity.
(3)
License--The authorization issued by the commissioner
to sell checks, or to maintain, utilize or otherwise control an account for
the purpose of engaging in the business of selling checks, as required by
Finance Code, §152.201.
(b)
Effect of conviction for a felony or a crime involving
moral turpitude on proposed or existing license. As required by Finance Code,
§152.203(a)(3), the commissioner shall deny an application for a license
if the applicant is an individual who has been convicted of a felony, or another
crime involving moral turpitude that is reasonably related to the individual's
fitness to hold a license. For purposes of this subsection, the crimes listed
in subsections (d)(1)-(3) of this section are considered to be crimes involving
moral turpitude.
(c)
Effect of other criminal convictions on proposed or existing
license. The commissioner may deny an application for a license, or revoke
an existing license if an official has been convicted of a crime which directly
relates to the duties and responsibilities of a check seller. Adverse action
by the commissioner in response to a crime specified in subsection (d) of
this section is subject to mitigating circumstances and rights of the applicant
or license holder as specified in subsections (e)-(i) of this section.
(d)
Crimes directly related to fitness for a license. The
sale of checks involves or may involve representations to prospective check
purchasers, maintenance of fund accounts to pay the checks upon presentment,
compliance with reporting requirements to governmental agencies relating to
certain currency transactions, the financial condition and performance of
the license holder, and the adequacy of the bond or alternate security maintained.
Consequently, a crime involving the misrepresentation of costs or benefits
of a product or service, the improper handling of money or property entrusted
to an official, or a crime involving failure to file a governmental report
or filing a false report is a crime directly related to the duties and responsibilities
of a license holder, including a crime involving:
(1)
fraud, misrepresentation, deception, or forgery;
(2)
breach of trust or other fiduciary duty;
(3)
dishonesty or theft;
(4)
violation of a statute governing check issuers of
this or another state;
(5)
failure to file a required report with a governmental
body, or filing a false report; or
(6)
attempt, preparation, or conspiracy to commit one
of the preceding crimes.
(e)
Mitigating considerations. In determining whether a conviction
for a crime specified in Subsection (d) of this section renders an official
presently unfit to be a license holder, the commissioner shall consider:
(1)
the extent and nature of the official's past criminal
activity;
(2)
the age of the official at the time of the commission
of the crime;
(3)
the time elapsed since the official's last criminal
activity;
(4)
the conduct and work activity of the official prior
to and following the criminal activity;
(5)
the official's rehabilitation or rehabilitative effort
while incarcerated or following release; and
(6)
the official's present fitness for a license, evidence
of which may include letters of recommendation from prosecution, law enforcement,
and correctional officers who prosecuted, arrested, or had custodial responsibility
for the official, the sheriff and chief of police in the community where the
official resides, and other persons in contact with the official.
(f)
Required documentation. The applicant must, to the extent
possible, secure and provide to the commissioner reliable documents and/or
testimony evidencing the information required to make a determination under
subsection (e), including the recommendations of the prosecution, law enforcement,
and correctional authorities. The applicant must also furnish proof in such
form as may be required by the commissioner that the official has maintained
a record of steady employment, has supported such official's dependents, has
otherwise maintained a record of good conduct, and has paid all outstanding
court costs, supervision fees, fines, and restitution as may have been ordered
in all criminal cases in which the official has been convicted.
(g)
Notification of adverse action. If a license application
is to be denied, or if a license is to be revoked because of the criminal
conviction of an official, the commissioner will so notify the applicant or
license holder in writing. The notification must include a statement of the
reasons for the action and a description of the procedure for administrative
and judicial review of the action.
(h)
Administrative hearing on adverse action. Before an application
is denied or a license revoked, the applicant or license holder is entitled
to an administrative hearing. The commissioner will schedule the hearing and
notify the applicant or license holder. A hearing is subject to the provisions
of the Administrative Procedure Act, Government Code, Chapter 2001, and the
provisions of Chapter 9, Subchapter B of this title (relating to Contested
Case Hearings).
(i)
Judicial review. An applicant whose license application
has been denied or a license holder whose license has been revoked because
of a criminal conviction of an official may appeal a final order as set forth
in Government Code, Chapter 2001, Subchapter G.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on June
25, 1999.
TRD-9903798
Everette D. Jobe
General Counsel, Texas Department of Banking
Texas Department of Banking
Effective date: July 15, 1999
Proposal publication date: May 7, 1999
For further information, please call: (512) 475-1300