Part 1.
FINANCE COMMISSION OF TEXAS
Chapter 1.
CONSUMER CREDIT REGULATION
Subchapter F. ALTERNATE CHARGES FOR CONSUMER LOANS
7 TAC §1.601
The Finance Commission of Texas (commission) proposes an
amendment to §1.601, concerning authorized charges. The purpose of the
amendment is to correct citation references that have changed as a result
of legislative action.
Leslie L. Pettijohn, Consumer Credit Commissioner has determined that for
the first five-year period the rule is in effect, there will be no fiscal
implications for state or local government as a result of administering the
rule.
Commissioner Pettijohn also has determined that for each year of the first
five years the rule is in effect, the public benefit anticipated as a result
of the proposed amendment will be ensuring that existing rules conform to
legislative changes and accurate citations to prevent confusion among individuals
who use the rules. There is no anticipated cost to persons who are required
to comply with the amendment as proposed. There will be no adverse economic
effect on small or micro businesses. There will be no effect on individuals
required to comply with the section as proposed.
Comments on the proposed amendments may be submitted in writing to Leslie
L. Pettijohn, Consumer Credit Commissioner, Office of Consumer Credit Commissioner,
2601 North Lamar Boulevard, Austin, Texas 78705-4207 or by email to leslie.pettijohn@occc.state.tx.us.
To be considered, a comment must be received on or before the 30th day after
the date the proposed sections are published in the
Texas Register
.
The amendments are proposed under Texas Finance Code §11.304,
which authorizes the commission to adopt rules to enforce Title 4 of the Texas
Finance Code. Additionally, Texas Finance Code §342.551 authorizes the
commission to adopt rules for the enforcement of the consumer loan chapter.
The statutory provision (as currently in effect) affected by the proposed
amendments is Texas Finance Code §342.302.
§1.601.Authorized Charges.
(a)
An authorized lender may contract for, charge, or collect
on a loan made pursuant to Subchapter F:
(1) - (4)
(No change.)
(5)
a processing fee for the return of a dishonored check pursuant
to
Texas Business and Commerce Code, Section 3.506
[
(6)
(No change.)
(b)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on June 18, 2004.
TRD-200404030
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 1, 2004
For further information, please call: (512) 936-7640
7 TAC §1.706
The Finance Commission of Texas (commission) proposes an
amendment to §1.706, concerning amounts authorized to be collected on
or before closing. The purpose of the amendment is to correct citation references
that have changed as a result of legislative action.
Leslie L. Pettijohn, Consumer Credit Commissioner has determined that for
the first five-year period the rule is in effect, there will be no fiscal
implications for state or local government as a result of administering the
rule.
Commissioner Pettijohn also has determined that for each year of the first
five years the rule is in effect, the public benefit anticipated as a result
of the proposed amendment will be ensuring that existing rules conform to
legislative changes and accurate citations to prevent confusion among individuals
who use the rules. There is no anticipated cost to persons who are required
to comply with the amendment as proposed. There will be no adverse economic
effect on small or micro businesses. There will be no effect on individuals
required to comply with the section as proposed.
Comments on the proposed amendments may be submitted in writing to Leslie
L. Pettijohn, Consumer Credit Commissioner, Office of Consumer Credit Commissioner,
2601 North Lamar Boulevard, Austin, Texas 78705-4207 or by email to leslie.pettijohn@occc.state.tx.us.
To be considered, a comment must be received on or before the 30th day after
the date the proposed sections are published in the
Texas Register
.
The amendments are proposed under Texas Finance Code §11.304,
which authorizes the commission to adopt rules to enforce Title 4 of the Texas
Finance Code. Additionally, Texas Finance Code §342.551 authorizes the
commission to adopt rules for the enforcement of the consumer loan chapter.
The statutory provision (as currently in effect) affected by the proposed
amendment is Texas Finance Code §342.302.
§1.706.Amounts Authorized to be Collected on or Before Closing.
(a) - (b)
(No change.)
(c)
Appraisal fees. An appraisal fee may be charged when an
appraisal has been performed by an appraiser, certified or licensed by the
Texas Appraiser Licensing and Certification Board pursuant to
Texas Occupations
Code, Chapter 1103
[
(d)
(No change.)
(e)
Survey fees. A survey fee may be charged when a survey
has been performed by a surveyor, registered or licensed by the Texas Board
of Professional Land Surveying pursuant to
Texas Occupations Code, Chapter
1071
[
(f)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on June 18, 2004.
TRD-200404031
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 1, 2004
For further information, please call: (512) 936-7640
7 TAC §1.805, §1.808
The Finance Commission of Texas (commission) proposes amendments
to §1.805 and §1.808, concerning authorized credit insurance and
termination and refund. The purpose of the amendments is to correct citation
references that have changed as a result of legislative action.
Leslie L. Pettijohn, Consumer Credit Commissioner has determined that for
the first five-year period the rules are in effect, there will be no fiscal
implications for state or local government as a result of administering the
rules.
Commissioner Pettijohn also has determined that for each year of the first
five years the rules are in effect, the public benefit anticipated as a result
of the proposed amendments will be ensuring that existing rules conform to
legislative changes and accurate citations to prevent confusion among individuals
who use the rules. There is no anticipated cost to persons who are required
to comply with the amendments as proposed. There will be no adverse economic
effect on small or micro businesses. There will be no effect on individuals
required to comply with the sections as proposed.
Comments on the proposed amendments may be submitted in writing to Leslie
L. Pettijohn, Consumer Credit Commissioner, Office of Consumer Credit Commissioner,
2601 North Lamar Boulevard, Austin, Texas 78705-4207 or by email to leslie.pettijohn@occc.state.tx.us.
To be considered, a comment must be received on or before the 30th day after
the date the proposed sections are published in the
Texas Register
.
The amendments are proposed under Texas Finance Code §11.304,
which authorizes the commission to adopt rules to enforce Title 4 of the Texas
Finance Code. Additionally, Texas Finance Code §342.551 authorizes the
commission to adopt rules for the enforcement of the consumer loan chapter.
The statutory provision (as currently in effect) affected by the proposed
amendments is Texas Finance Code §342.302.
§1.805.Authorized Credit Insurance.
(a)
(No change.)
(b)
Credit life insurance and credit accident and health insurance
shall be written in compliance with Texas Insurance Code Article 3.42,
Chapter 1131,
[
(c)
(No change.)
§1.808.Termination and Refund.
(a) - (c)
(No change.)
(d)
Upon termination of a credit life or credit accident and
health insurance policy prior to the scheduled maturity of a loan, the lender
shall provide the borrower a refund or credit calculated in compliance with
Texas Insurance Code
, Chapter 1153
[
(e)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on June 18, 2004.
TRD-200404032
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 1, 2004
For further information, please call: (512) 936-7640
7 TAC §1.1501, §1.1502
The Finance Commission of Texas (the commission) proposes
new 7 TAC §1.1501 and §1.1502, relating to prepaid maintenance agreements
of a motor vehicle. The purpose of the proposed new 7 TAC §1.1501 and §1.1502
is to define prepaid maintenance agreements and contracts and outline the
usage and disclosure of the agreements as sold in connection with motor vehicles.
Section 1.1501 defines a prepaid maintenance agreement and service contract.
Section 1.1502 outlines the methods of disclosure on a retail installment
sales contract for prepaid maintenance agreements sold in connection with
motor vehicles. Prepaid maintenance agreements that are required or otherwise
included with the sale of all motor vehicles must be disclosed as a component
of the cash price. Those agreements sold on a voluntary basis may be disclosed
under two methods specified in the rule.
Leslie L. Pettijohn, Consumer Credit Commissioner has determined that for
the first five-year period the rules are in effect there will be no fiscal
implications for state or local government as a result of administering the
rules.
Commissioner Pettijohn also has determined that for each year of the first
five years the rules are in effect, the public benefit anticipated as a result
of the proposed rules will be the establishment of clear guidelines concerning
the proper disclosure of these types of agreements. Consistent and proper
disclosures aid consumers in making well-informed financial and credit decisions.
The licensees will have the option of not providing prepaid maintenance
agreements, in which case, there will be no fiscal implications for the licensee.
If a licensee opts to provide prepaid maintenance agreements the fees charged
in conjunction with the agreement should cover the costs associated with the
agreement. There will be no adverse economic effect on small or micro businesses.
Comments on the proposed rules may be submitted in writing to Sealy Hutchings,
General Counsel, Office of Consumer Credit Commissioner, 2601 North Lamar
Boulevard, Austin, Texas 78705-4207 or by email to sealy.hutchings@occc.state.tx.us.
To be considered, a comment must be received on or before the 30th day after
the date the proposed sections are published in the
Texas Register
.
The new rules are proposed under Texas Finance Code §11.304,
which authorizes the commission to adopt rules to enforce Title 4 of the Texas
Finance Code.
The statutory provision (as currently in effect) affected by the proposed
rules is Texas Finance Code §348.
§1.1501.Definitions.
(a)
Prepaid Maintenance Agreement--a maintenance agreement
as defined in Section 1304.004, Texas Occupations Code. The cost of the agreement
must be reasonable and the services covered by the prepaid maintenance agreement
should be reasonably expected to be delivered during the term of the agreement.
(b)
Service Contract--has the meaning assigned in Section 1304.003,
Texas Occupations Code. Pursuant to Section 1304.004, Texas Occupations Code,
a prepaid maintenance agreement is a type of service contract.
§1.1502.Prepaid Maintenance Agreements.
(a)
If the prepaid maintenance agreement is sold in connection
with all motor vehicle sales, regardless of whether the sale is a cash sale
or a credit sale, the charge for the prepaid maintenance agreement should
be disclosed or otherwise included as a component of the cash price.
(b)
If the prepaid maintenance agreement is offered as a voluntary
purchase in connection with the credit sale of a motor vehicle, the prepaid
maintenance agreement may be disclosed:
(1)
as a component of the cash price; or
(2)
as an itemized charge on the retail installment sales contract.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on June 18, 2004.
TRD-200404033
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: August 1, 2004
For further information, please call: (512) 936-7640
Chapter 25.
PREPAID FUNERAL CONTRACTS
Subchapter B. REGULATION OF LICENSES
7 TAC §25.23
The Finance Commission of Texas (commission) proposes to
amend §25.23, concerning application and renewal fees. The proposed amendment
to §25.23 will implement Finance Code, §154.051, which authorizes
the commission to adopt reasonable rules concerning fees to defray the cost
of administering Finance Code, Chapter 154.
The proposed amendment to §25.23 decreases the new prepaid funeral
contract permit application fee from $2,500 to $500.
The fee decrease is established by the commission and not mandated by the
Legislature. The commission proposes the fee decrease because technological
and procedural improvements have enabled the Texas Department of Banking (department)
to increase its administrative efficiency and, as a result, the department's
operational costs in processing new permit applications have decreased significantly.
The commission has determined that the department can provide the same level
of regulation at a lower cost to its license holders, permit holders and registrants.
Stephanie Newberg, Deputy Commissioner, Texas Department of Banking, has
determined that for the first five year period the proposed section is in
effect, there will be no fiscal implications for state or local governments
as a result of enforcing or administering the proposed amendment. The proposed
fee decrease might suggest a fiscal implication, but the department is a self-leveling
agency. The department's operating funds come exclusively from fees and assessments
paid by persons who must be licensed by or registered with the department.
If the funds collected by the department are not sufficient to pay its operational
expenses, the commission raises the discretionary fees and assessments. If
the department collects funds in excess of what is necessary to pay its operational
expenses, the commission decreases the discretionary fees and assessments
so that only the required amount is collected. Excess funds are not deposited
into the State's general revenue fund. Because the cost savings the department
has realized as a result of technological and administrative improvements
in processing new permit applications must be passed on to the department's
license holders, permit holders, and registrants, the proposed fee decrease
has no fiscal implication for state government.
The decreased fees from new applicants will not prevent this regulatory
program to fully fund the costs of administering Finance Code, Chapter 154.
Ms. Newberg also determined that, for each of the first five years the
section as proposed will be in effect, the anticipated public benefit will
be relieving the financial burden on new prepaid funeral contract permit applicants.
For each of the first five years the section as proposed will be in effect,
the economic costs to persons required to comply with the rule will be significantly
decreased new fees for new permit applicants. No economic cost will be incurred
by a person required to comply with the proposed amendment, and there will
be no adverse effect on small businesses or microbusinesses.
Comments concerning the proposed amendment must be submitted within 30
days of publication to Shannon Phillips Jr., Assistant General Counsel, Texas
Department of Banking, 2601 North Lamar Boulevard, Austin, Texas 78705-4294,
or to: shannon.phillips@banking.state.tx.us.
The amendment is proposed under the authority of Finance Code, §154.051,
which authorizes the commission to adopt reasonable rules concerning fees
to defray the cost of administering Finance Code, Chapter 154.
Finance Code, §154.051 is affected by this proposed amendment.
§25.23.Application and Renewal Fees.
(a)
(No change.)
(b)
Application fees. The application fees set forth in this
subsection have been set in accordance with the Finance Code, Chapter 154,
for the purpose of defraying the cost of administering the Finance Code, Chapter
154. Except as otherwise provided in this subsection, all fees are due at
the time the application is filed and are nonrefundable. An application submitted
without the appropriate filing fee will be deemed incomplete and will not
be considered.
(1)
New permit application fee. If you apply for a new prepaid
funeral benefits permit, you must pay a
$500
[
(2) - (4)
(No change.)
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on June 18, 2004.
TRD-200404020
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: August 20, 2004
For further information, please call: (512) 475-1300
7 TAC §§29.1, 29.2, 29.4, 29.11, 29.21
(Editor's note: The text of the following sections proposed for
repeal will not be published. The sections may be examined in the offices
of the Texas Department of Banking or in the Texas Register office, Room 245,
James Earl Rudder Building, 1019 Brazos Street, Austin.)
The Finance Commission of Texas (commission) proposes
the repeal of Chapter 29, §§29.1, 29.2, 29.4, 29.11, and 29.21,
concerning the Sale of Checks Act.
In February, 2004, the commission completed its review of Chapter 29 as
required by Government Code, §2001.039. As a result of the rule review,
the commission repealed former §29.3, concerning an exemption for commercial
transactions, because the section was no longer necessary, and readopted the
remaining sections of Chapter 29. At the time of the readoption, the commission
noted that certain clarifying and updating revisions to the chapter had been
identified, including changes to conform the sections' terminology and statutory
references to current law and eliminate redundancies, and that several new
sections needed to be added. The commission indicated that a comprehensive
drafting project was underway to revise and update Chapter 29 and that revisions
would be proposed later in 2004.
The Chapter 29 drafting project is now complete and the chapter has been
rewritten to incorporate necessary and appropriate revisions. With few exceptions,
the revisions to existing sections are nonsubstantive, and the new sections
simply reflect requirements the Texas Department of Banking (department) currently
applies in connection with its administration and enforcement of Finance Code,
Chapter 152. However, several of the existing sections have been extensively
reorganized and rewritten in accordance with plain language writing principles.
Because the Texas Register requires rules that are substantially revised or
rewritten to be repealed and proposed as new rules, the commission proposes
to repeal existing Chapter 29 in its entirety. The commission is simultaneously
proposing a new Chapter 29 in this issue of the
Texas Register
.
Ms. Stephanie Newberg, Deputy Commissioner of the Texas Department of Banking,
has determined that for the first five year period the repeal is in effect,
there will be no fiscal implications for state or local governments as a result
of enforcing or administering the repeal.
Ms. Newberg has also determined that, for each of the first five years
the repeal as proposed will be in effect, the anticipated public benefit will
be the replacement of existing Chapter 29 with new, updated regulations that
conform to current law and are clearer and easier to understand. No economic
cost will be incurred by a person required to comply with the repeal, and
there will be no adverse effect on small businesses.
To be considered, written comments concerning the proposed repeal should
be submitted not later than 30 days after the date of publication of this
notice. Comments should be addressed to Sarah Shirley, Assistant General Counsel,
Texas Department of Banking, 2601 North Lamar Boulevard, Austin, Texas 78705-4294,
or by email to sarah.shirley@banking.state.tx.us.
The repeal is proposed under Finance Code, §152.102, which
authorizes the commission to adopt rules necessary to enforce and administer
Finance Code, Chapter 152.
Finance Code, Chapter 152 is affected by the proposed repeal.
§29.1.Permissible Investments.
§29.2.Fees and Assessments.
§29.4.Sale of Checks License Applications; Notices to Applicants; Application Processing Times; Abandoned Filings; Appeals.
§29.11.Effect of Criminal Conviction on Licenses.
§29.21.How Do I Provide Information to Consumers on How to File a Complaint?
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on June 18, 2004.
TRD-200404021
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: August 20, 2004
For further information, please call: (512) 475-1300
7 TAC §§29.1 - 29.12
The Finance Commission of Texas (commission) proposes to
adopt a new chapter relating to Finance Code, Chapter 152, the Sale of Checks
Act. Proposed new Chapter 29 consists of §29.1, concerning permissible
investments; §29.2, concerning fees, assessments, and reimbursements; §29.3,
concerning application for a new sale of checks license; §29.4, concerning
violation of application processing times; §29.5, concerning conduct
of business through agent; §29.6, concerning net worth and bonding requirements
for a license holder that conducts currency exchange, transportation or transmission
transactions; §29.7, concerning exemption from licensing; §29.8,
concerning license renewal; §29.9, concerning extension of time to file
annual financial statement; §29.10, concerning correction of violations
and imposition of administrative penalty; §29.11, concerning reporting
and recordkeeping; and §29.12, concerning notice to customers regarding
complaints.
For the reasons explained in this preamble, the commission is simultaneously
proposing to repeal existing Chapter 29 in this issue of the
Texas Register
.
The proposed new sections reflect and incorporate revisions that the commission
has determined are necessary and appropriate, in part as a result of its review
of existing Chapter 29 earlier this year. In February, 2004, the commission
completed its Chapter 29 rule review as required by Government Code, 2001.039.
As a result of the rule review, the commissioner repealed former §29.3,
concerning an exemption for commercial transactions, because the section was
no longer necessary, and readopted the remaining sections of Chapter 29. At
the time of the readoption, the commission noted that certain clarifying and
updating revisions to the chapter had been identified, including changes to
conform the sections' terminology and statutory references to current law
and eliminate redundancies, and, further, that several new sections needed
to be added. The commission noted that a comprehensive drafting project was
underway to revise and update Chapter 29 and that revisions would be proposed
later in 2004.
The Chapter 29 drafting project is complete, and the commission is proposing
to adopt a new Chapter 29 that reflects necessary and appropriate revisions
to the existing chapter. With few exceptions, the proposed revisions to the
existing sections are nonsubstantive, and the proposed new sections simply
reflect requirements the Texas Department of Banking (department) currently
applies in connection with its administration and enforcement of Finance Code,
Chapter 152, (Act or Chapter 152). However, several of the existing sections
have been extensively reorganized or divided into two sections and rewritten
in accordance with plain language writing principles. Because the Texas Register
requires rules that are substantially revised or rewritten to be repealed
and proposed as new rules, the commission proposes the revisions as sections
in a new Chapter 29. Accordingly, the commission is simultaneously proposing
to repeal existing Chapter 29 in this issue of the
Texas Register
.
The proposed new sections implement Chapter 152. Finance Code, §152.102,
authorizes the commission to adopt rules necessary to enforce and administer
the Act, including rules to implement and clarify the Act, establish fees
to defray administration costs, create exemptions in appropriate circumstances
and subject to appropriate conditions, identify additional permissible investments,
and protect the interests of check purchasers.
This preamble first summarizes and explains the primary differences between
the proposed new sections and the existing sections the proposed sections
are intended to replace. The preamble then summarizes the proposed new sections
for which there are no equivalent provisions in existing Chapter 29.
Proposed new §29.1 identifies the types of investments, in addition
to the securities and assets defined in Finance Code, §152.001(10), that
are considered to be a "permissible investment" for purposes of satisfying
the Act's minimum security requirements, and establishes related conditions.
The proposed new section is substantively similar to existing §29.1.
Proposed new §29.1 uses more direct language and eliminates unnecessary
definitions and verbiage, and the section's terminology and statutory references
conform to current law. Additionally, proposed new §29.1 deletes several
provisions of the existing section. The proposed new section does not include
certificates of deposit or certain other debt instruments in the list of additional
permissible investments because certificates of deposit are now specifically
included in the Finance Code, §152.001(10), definition. Additionally,
proposed new §29.1 does not include existing subsection (d), which permits
a fee simple investment in real estate to satisfy a portion of the permissible
investment requirement, because the authorization has never been used and
is therefore considered unnecessary.
Proposed new §29.2 establishes the fees, assessments and reimbursements
that an applicant for a license under Chapter 152 or a license holder must
pay and sets the dates the respective payments are due. These charges are
authorized in and set in accordance with the Act to reasonably approximate
the department's costs in administering the Act generally or with respect
to a particular filing. Proposed new §29.2 does not increase the amount
of any fee, assessment or reimbursement established in or required by existing §29.2.
Proposed new §29.2 is substantively similar to existing §29.2,
but uses more direct language, eliminates unnecessary verbiage, and is reorganized
to clarify meaning and facilitate understanding. For example, proposed new §29.2
substitutes the term "annual assessment" for "financial audit fee" to more
clearly describe the charge. The primary difference between proposed new §29.2
and existing §29.2 is that the proposed new section requires a license
holder to pay its annual assessment and annual license renewal fee by ACH
debit or another method if directed to do so by the department.
Proposed new §29.3 establishes the requirements an applicant for a
new Chapter 152 license must satisfy and departmental procedures for accepting,
evaluating and granting or denying an application that are efficient, fair
and predictable. The proposed new section is substantively similar to existing §29.4,
which the proposed new section will replace, but uses more direct language,
eliminates unnecessary verbiage, clarifies procedures, and is reorganized
to clarify meaning and facilitate understanding. The application processing
times provided for in proposed new §29.3 are the same as those established
in existing §29.4(b) and (f).
In addition, proposed new §29.3 formalizes by rule the department's
current procedures regarding the return of an application that, at the time
of its initial submission, fails to satisfy certain basic requirements. Paragraph
(2) of subsection (a) of this section provides that the department may return
to the applicant an application that does not include or is not accompanied
by, for example, the applicant's notarized, sworn signature, the application
fee, or an audited financial statement that demonstrates that the applicant
satisfies the statutory minimum net worth requirement.
Finally, proposed new §29.3 does not include the provisions in existing §29.4
relating to the department's violation of application processing times. These
provisions, which were initially adopted in 2001 pursuant to Government Code, §2005.003,
are now located for clarification purposes in proposed new §29.4, concerning
violation of application processing times. Proposed new §29.4 is substantively
similar to existing §29.4(g). However, the proposed new section uses
more direct and descriptive language. For example, proposed new §29.4
uses the term "complaint," rather than "appeal," to describe the process by
which an applicant complains of an alleged departmental violation of an applicable
processing time. The term "complaint" better describes the nature of the procedure
and distinguishes it from the appeal of license denial. Proposed new §29.4
also eliminates unnecessary verbiage and clarifies procedures.
Proposed new §29.12 specifies the manner in which a Chapter 152 license
holder provides consumers with information about how to file complaints with
the department. The proposed new section, which implements Finance Code, §11.307,
is substantively similar to existing §29.21, but uses more direct language,
eliminates unnecessary verbiage, and includes clarifying definitions. For
example, the text of proposed new section uses the term "customer" instead
of "consumer," because the term more accurately describes the person with
whom or on whose behalf the license holder conducts business. Additionally,
the proposed new section allows a license holder to use either the specific
notice set out in the section or a notice that substantially conforms to the
specified language and form. Proposed new §29.12 also describes alternative
means of giving notice that are tailored to the different methods by which
a license holder conducts business and interacts with customers. Finally,
as does existing §29.21, proposed new §29.12 provides that a license
holder that conducts business through an agent is subject to enforcement sanctions
if the agent does not post the notice required by the section.
Proposed new §§29.5 - 29.11 are new sections for which there
are no equivalent provisions in existing Chapter 29. For the most part, however,
these proposed new sections reflect and formalize into rule the department's
current procedures and requirements.
Proposed new §29.5 establishes certain requirements that apply to
a Chapter 152 license holder that conducts business through an agent. The
proposed new section, which clarifies the department's existing practices
toward and review of such a license holder, requires the license holder to
adopt certain minimum written policies and practices relating to the agency
relationship. Proposed new §29.6 also requires the license holder to
enter into a written agreement with each agent, which agreement must be retained
and made available for inspection by the department. The agreement must appoint
the agent, be signed by the parties and set out their respective rights and
responsibilities, including the applicable requirements of Finance Code, §152.403
and §152.404, and the requirement that a complaint notice be posted in
accordance with proposed new §29.12.
Proposed new §29.6 relates to the net worth and bonding requirements
that apply to a Chapter 152 license holder that conducts currency exchange,
transportation or transmission transactions as defined in Finance Code, Chapter
153. The proposed new section reflects the department's practice and its interpretation
of Chapter 152 and Finance Code, Chapter 153 and 7 TAC §4.7 of this title
(relating to Bond Requirements and Deposits in Lieu of Bond). The proposed
new section requires a Chapter 152 license holder who engages in the currency
exchange, transportation or transmission business to satisfy either the net
worth and bonding requirements of Chapter 152 or Finance Code, Chapter 153,
whichever is greater.
Proposed new §29.7 establishes specific exemptions from the Act's
licensing requirements for the authorized federal or state branch or agency
of a foreign bank and the agent of such an entity, and the agent of a federally
insured financial institution. The foreign bank branch or agency exemption
is similar to that recognized in Finance Code, §153.117(2), regarding
persons who conduct currency exchange, transportation and transmission transactions.
The agent exemption is consistent with informal and formal department practice
and legal opinions that have extended the exemption for a federally insured
financial institution established in Finance Code, §152.202(1), to an
agent of such an institution. Proposed new §29.7 requires a federally
insured financial institution, foreign bank branch, or foreign bank agency
that conducts business through an agent exempt from licensing to enter into
an agency agreement with the agent that complies with proposed new §29.5(b).
Proposed new §29.8 reflects the department's existing procedures and
requirements and explains the actions a Chapter 152 license holder must take
to renew its license. The proposed new section requires a license holder to
be current on its payment of fees, assessments and reimbursement due the department
as of the date the department receives the renewal application.
Proposed new §29.9 establishes the procedure a Chapter 152 license
holder must follow to secure an extension for submitting its annual audited
financial statement. Finance Code, §152.305(b), requires a license holder
to file its annual audited financial statement with the department no later
than June 30th of each year, but authorizes the commissioner to extend the
statutory due date for good cause. Proposed new §29.9 requires a license
holder seeking an extension to submit a written request to the commissioner,
which the department must receive no later than June 30th, explaining in detail
the reasons the extension is necessary and specifying the period for which
the extension is sought.
Proposed new §29.10 establishes the department's procedures to secure
appropriate corrective and preventive action for a violation of Chapter 152,
or a rule or order adopted or issued under Chapter 152. Proposed new §29.10
also establishes procedures for dealing with continuing and repeat violations.
The proposed new section is similar to 7 TAC §4.9 of this title (regarding
Misrepresentation of Correction and Enforcement Actions for Continuing and
Repeat Violations), which applies to persons licensed under Finance Code,
Chapter 153, to conduct the currency exchange, transportation and transmission
business.
Proposed new §29.10 requires a Chapter 152 license holder or exempt
person to correct a violation or take appropriate preventive action, and,
if required by the department, to notify the department of the specific action
taken, within 30 days of receiving the department's written notice of violation.
The proposed new section further provides that, except in limited circumstances,
the misrepresentation of the corrective or preventive action taken constitutes
a violation of the section. Proposed new §29.10 also authorizes the commissioner
to impose an administrative penalty under Finance Code, §152.502, for
failure to comply with the section's requirements, and sets out the notice
and administrative hearing procedures applicable to the imposition of such
a penalty.
Proposed new §29.11 establishes reporting and recordkeeping requirements
that apply to a Chapter 152 license holder that engages or has engaged in
the business of currency exchange, transportation or transmission within the
meaning of Finance Code, Chapter 153. The specific reporting and recordkeeping
requirements apply only to such a license holder's exchange, transportation
and transmission activities, and the proposed new section simply formalizes
by rule the requirements the license holder must currently satisfy. Proposed
new §29.11 imposes no new reporting or recordkeeping obligations. The
requirements are similar to those imposed by 7 TAC §4.3 of this title
(regarding Reporting and Recordkeeping) upon persons licensed or exempt from
licensure under Chapter 153.
Proposed new §29.11 specifically requires a Chapter 152 license holder
to comply with federal laws and regulations relating to such activities. Additionally,
the proposed new section specifies the records a Chapter 152 license holder
must keep relating to its currency exchange, transportation or transmission
business and the location at which these records must be maintained.
The fees and assessments established in the proposed new sections are established
by the commission and are not mandated by the Legislature.
Ms. Stephanie Newberg, Deputy Commissioner of the Texas Department of Banking,
has determined that for the first five year period the proposed new sections
are in effect, there will be no fiscal implications for state or local governments
as a result of enforcing or administering the proposed new sections.
Ms. Newberg has also determined that, for each of the first five years
the new sections as proposed will be in effect, the anticipated public benefit
will be the replacement of existing Chapter 29 with new, updated regulations
that conform to current law and are clearer and easier to understand. No economic
cost will be incurred by a person required to comply with the proposed new
sections, and there will be no adverse effect on small businesses or microbusinesses.
To be considered, comments on the proposed new sections must be submitted
in writing not later than 30 days after the date of publication of this notice.
Comments should be addressed to Sarah Shirley, Assistant General Counsel,
Texas Department of Banking, 2601 North Lamar Boulevard, Suite 300, Austin,
Texas 78705-4294, or by email to sarah.shirley@banking.state.tx.us.
The new sections are proposed under Finance Code, §152.102,
which authorizes the commission to adopt rules necessary to enforce and administer
the Act, including rules to implement and clarify the Act, establish fees
to defray administration costs, create exemptions in appropriate circumstances
and subject to appropriate conditions, identify additional permissible investments,
and protect the interests of check purchasers. The new sections are also proposed
under Finance Code, §152.002(10)(C), which authorizes additional permissible
investments as permitted by rule, §152.202(7), which authorizes persons
to be exempted by rule from the licensing requirements of Chapter 152, and §152.205(1)
and §152.304(a), which provide for the establishment by rule of the amount
of license application and annual license renewal fees.
Finance Code, Chapter 152 is affected by the proposed new sections.
§29.1.Permissible Investments.
(a)
Permissible investments. In addition to the securities
and assets defined in Finance Code, §152.001(10), to be a "permissible
investment," a "permissible investment" for purposes of Finance Code, §152.301(a)(3),
includes:
(1)
40% of all cash due a license holder from its agents resulting
from the sale of checks under Finance Code, Chapter 152 that is not past due
or doubtful of collection;
(2)
commercial paper within the top two rating categories of
a nationally recognized United States rating service;
(3)
interest bearing bills, notes, or bonds that:
(A)
are publicly traded on a national securities exchange or
through a national automated quotation system; or
(B)
bear a rating of the highest grade as rated by a nationally
recognized United States rating service; and
(4)
shares in a money market mutual fund if the mutual fund,
under the terms of its governing documents, may only invest in securities
of the type described in paragraphs (2) and (3) of this subsection or described
in Finance Code, §152.002(10)(B).
(b)
Limitations applicable to certain permissible investments.
No more than 50% of permissible investments may be comprised of investments
described in subsection (a)(2), (3), and (4) of this section; provided, however,
that this limitation does not apply to an investment in a mutual fund if the
mutual fund, under the terms of its governing documents, may invest only in
securities of the type described in Finance Code, §152.002(10)(B).
(c)
Cash due from agent. For purposes of subsection (a)(1)
of this section, cash due a license holder from an agent is considered past
due or doubtful of collection if not remitted to the license holder on or
before the 10th day after the date of the sale of the check by the agent.
(d)
Credit for surety bond. That portion of a surety bond maintained
for the benefit of check purchasers in another state that is not in excess
of the amount of outstanding checks sold in that state may be used to satisfy
a portion of the requirements of Finance Code, §152.301(a)(3), provided:
(1)
the license holder maintains a surety bond or has on hand
other permissible investments (or a combination of a surety bond and permissible
investments) in an amount sufficient to satisfy the requirements of Finance
Code, §152.301(a)(3), with respect to the outstanding checks sold by
the license holder in Texas; and
(2)
the surety bond is approved by the commissioner and is
issued by a bonding or insurance company authorized to do business in Texas
and rated within the top two rating categories of a nationally recognized
United States rating service.
(e)
Commissioner discretion to disallow. Notwithstanding the
provisions of subsections (a), (b), and (d) of this section, if the commissioner
at any time determines that an investment permitted by this section and held
in the license holder's portfolio is unsatisfactory for investment purposes
or poses a significant supervisory concern, the commissioner may disallow
the investment for purposes of determining the license holder's compliance
with Finance Code, §152.301.
§29.2.Fees, Assessments and Reimbursements.
(a)
Definitions. The following words and terms, when used in
this section, shall have the following meanings, unless the text clearly indicates
otherwise.
(1)
Annual assessment--The fee assessed annually to pay the
costs incurred by the department to examine a license holder and administer
Finance Code, Chapter 152.
(2)
Examination--The process, by on-site examination or off-site
review, by which the department reviews and evaluates the books and records
of a license holder that relate to its sale of checks activities.
(3)
Fiscal year--The 12-month period from September 1st of
one year to August 31st of the following year.
(b)
Authority for and purpose of fees, assessments and reimbursements.
The fees, assessments and reimbursements established in or required by this
section are either specifically set out in Finance Code, Chapter 152, or set
in accordance with the Finance Code, Chapter 152, to reasonably approximate
the department's costs in administering the chapter generally or with respect
to a specific filing.
(c)
Application and renewal fees and payment due dates. Application
and renewal fees and the dates and method by which they must be paid are established
as follows:
(1)
Application fee for new license. An applicant must pay
an application fee of $2,500 for a new license under Finance Code, Chapter
152, at the time the application is submitted to the department.
(2)
Annual license renewal fee. A license holder must pay a
license renewal fee of $1,500. The renewal fee must be paid by ACH debit,
or by another method if directed to do so by the department, that is effective
on or before June 30th of each year after the first year of licensure.
(3)
Exemption application fee. A person requesting an exemption
under Finance Code, §152.202(a)(6), must pay an exemption application
fee of $100 at the time the request is submitted to the department.
(d)
Annual assessments, fees and reimbursements. Annual assessments,
fees for additional examinations and reimbursements for travel expenses are
established and required to be paid as follows:
(1)
Annual assessment. The department will assess a license
holder an annual assessment.
(A)
The assessment will not exceed $8,000 in a fiscal year,
and will be calculated at a rate of not more than $.02 per $1,000 of the amount
of checks sold by the license holder within the State of Texas. The department
will measure the amount of checks sold within the State of Texas according
to the total dollar amount of transactions reflected in the license holder's
most recent annual renewal filing. If the assessment calculated by the department
is less than $2,500, the department will collect a minimum assessment of $2,500.
(B)
The license holder must pay the annual assessment by ACH
debit, or by another method if directed to do so by the department, that is
effective 15 days after the date of the department's notice that the payment
is due.
(2)
Installment assessments. The department may collect the
annual assessment in quarterly or fewer installments in such periodically
adjusted amounts as reasonably appear necessary to pay for the costs of a
license holder's examination and to administer Finance Code, Chapter 152.
(3)
Fee for additional examinations. If the department must
examine a license holder more than once during a fiscal year as a result of
the license holder's failure to comply with Finance Code, Chapter 152, or
this chapter, or as a result of the license holder's failure to comply with
the department's requests made in the discharge of its regulatory duties under
Finance Code, Chapter 152, or this chapter, the department will assess the
license holder a fee of $600 per day for each examiner required to conduct
the additional examination. The license holder must pay the additional fee
on or before the 30th day after the date of the department's billing.
(4)
Reimbursement for department travel expenses. A license
holder must reimburse the department for all travel costs related to the department's
examination of the license holder on or before the 30th day after the date
of the department's billing.
(5)
Assessment adjustments. The commissioner may decrease the
annual assessment if he determines that a lesser amount than would otherwise
be collected is required to administer Finance Code, Chapter 152.
(e)
Refunds not paid. The fees, assessments and reimbursements
required to be paid under this section are nonrefundable.
(f)
When fee, assessment or reimbursement is considered paid.
A fee, assessment or reimbursement is considered paid as of the date the department
receives the payment.
(g)
Failure to pay when due. The department may take enforcement
action against a license holder that fails to pay a fee, assessment or reimbursement
in accordance with this section.
(h)
Severability. If a fee, assessment or reimbursement imposed
or required by this section or the manner of its calculation is determined
to be unlawful or to exceed the department's authority to adopt and impose,
the remainder of the section is unaffected.
§29.3.Application for New Sale of Checks License.
(a)
Application. An applicant for a new license under Finance
Code, Chapter 152, must submit an application on the form prescribed by the
department.
(1)
The application must be fully completed, signed and verified
and include as attachments the documentation specified in the application
and the department's instructions.
(2)
The department may refuse to process and return to the
applicant an application that does not include or is not accompanied by:
(A)
the applicant's signature, sworn to before a notary;
(B)
the application fee of $2,500 in the form of a check payable
to the Texas Department of Banking;
(C)
a surety bond or deposit in lieu of bond in at least the
following amount:
(i)
$100,000, if the applicant proposes to conduct the business
of selling checks only; or
(ii)
$300,000, if the applicant proposes to conduct the currency
exchange, transportation or transmission business as defined in Finance Code, §153.001(5);
(D)
an undertaking to increase the amount of the bond or deposit
if the commissioner determines the increase is necessary; and
(E)
an audited financial statement that demonstrates the applicant
satisfies the net worth requirement established by Finance Code, §152.203(a)(1).
(3)
If an application fee has been submitted in connection
with an application that is returned under paragraph (2) of this subsection,
the department will return or refund the application fee to the applicant
or, if the applicant promptly submits an application that includes or is accompanied
by the items identified in paragraph (2), apply the fee to the subsequent
application.
(b)
Investigation of application. The commissioner will review
the application and may investigate the applicant, the principals of the applicant,
and related facts to determine whether the applicant satisfies the licensure
requirements of Finance Code, Chapter 152.
(1)
The commissioner may at any time during the application
review and investigation process require such additional information of the
applicant, a principal of the applicant, or any other person as the commissioner
reasonably deems necessary to evaluate the application, including an opinion
of counsel or an opinion, review or compilation prepared by a certified public
accountant.
(2)
It is the applicant's responsibility to provide or cause
to be provided all information the commissioner requires to make an informed
decision regarding the application.
(c)
Notice to applicant. On or before the 15th day after the
date the department receives an application that is not returned as provided
for in subsection (a)(2) of this section, the department will notify the applicant
in writing that:
(1)
the application is incomplete and the additional information
specified in the notice is required before the department will accept the
application for filing; or
(2)
the application is complete and is accepted for filing;
(d)
Application requiring additional information. Subject to
paragraphs (1), (2) and (3) of this subsection, the department must receive
all information the department requires to consider the application complete
and to accept it for filing before the 61st day after the date the department
receives the initial application.
(1)
The commissioner will grant a 30-day extension for submission
of the required information if the department receives a written request from
the applicant before the expiration of the initial 60-day period.
(2)
Upon a finding of good cause, the commissioner may grant
an additional extension if the department receives a written request from
the applicant before the expiration of the 30-day extension authorized by
paragraph (1) of this subsection. The applicant's written request must explain
in detail the reasons the additional extension is necessary. The commissioner
will notify the applicant of the decision regarding the extension request
by letter mailed to the applicant on or before the 10th day after the date
the department receives the request.
(3)
After reviewing the information provided in response to
its initial request for additional information, the department may determine
that still more information is required to consider the application complete
and to accept it for filing. The department will notify the applicant in writing
if further information is required and specify the date by which the department
must receive the information.
(e)
Abandoned application. The commissioner may determine that
an application is abandoned, without prejudice to the applicant's right to
resubmit the application, if the department does not receive the information
required by applicable law or additional information required by the department
within the time period specified by subsection (d) of this section or as otherwise
requested by the commissioner in writing to the applicant. The commissioner
will notify the applicant in writing of the determination that an application
is considered abandoned. The commissioner's determination is effective the
date the department mails the notice to the applicant and may not be appealed.
The fee paid in connection with an abandoned application will not be refunded.
(f)
Action on application accepted for filing. On or before
the 45th day after the date the department accepts an application for filing,
the commissioner will approve or deny the application and advise the applicant
in writing of the decision.
(g)
Appeal of denied application. If the commissioner denies
the application, the applicant may appeal the denial as provided by Finance
Code, §152.209, in accordance with the applicable provisions of Chapter
9 of this title relating to Rules of Procedure for Contested Case Hearings,
Appeals, and Rulemaking.
§29.4.Violation of Application Processing Times.
(a)
Complaint regarding violation of application processing
times. An applicant for a new sale of checks license under Finance Code, Chapter
152, may complain directly to the commissioner if the department does not
process the applicant's application within a time period established in subsections
(c) or (f) of §29.3 of this title (relating to Application for New Sale
of Checks License).
(b)
Complaint requirements. The applicant must file a written
complaint with the department that sets out the facts regarding the delay
and states the specific relief sought. The department must receive the complaint
on or before the 30th day after the date the commissioner approves or denies
the applicant's application for a sale of checks license.
(c)
Division response. The department division responsible
for complying with the applicable time period must submit a written response
to the commissioner regarding the complaint that includes any facts on which
the division relies to show that good cause existed for exceeding the applicable
time period.
(d)
Commissioner review and decision. The commissioner will
review the applicant's written complaint and the division's response. If the
commissioner deems necessary, a hearing may be held to take evidence on the
matter. The commissioner will determine whether the department exceeded a
time period established in subsections (c) or (f) of §29.3 and, if so,
whether the division established good cause for exceeding the established
period. The commissioner will notify the applicant of the decision by letter
mailed to the applicant on or before the 60th day after the date the commissioner
receives the applicant's written complaint. The commissioner's decision is
final and may not be appealed.
(e)
Reimbursement of fees. If the commissioner decides that
the department exceeded an applicable time period without good cause, the
department will reimburse the applicant all of its application fees.
(f)
Decision on application unaffected. A decision in favor
of the applicant under this section does not affect any decision to grant
or deny an application for a sale of checks license. The decision to grant
or deny an application will be based on applicable substantive law without
regard to whether the department timely processed the application.
§29.5.Conduct of Business Through Agent.
(a)
Written policies and practices. A license holder that conducts
business through an agent must adopt written policies and practices relating
to its agent relationships. At a minimum, the policies and practices must
address:
(1)
agent selection criteria;
(2)
loss prevention;
(3)
regulatory compliance training; and
(4)
agent monitoring.
(b)
Written agreement. Before a license holder may conduct
business through an agent, the license holder and agent must enter into a
written agreement appointing the agent and setting out the respective rights,
responsibilities, duties and liabilities of the parties. The agreement must
be signed by the license holder and agent or their duly authorized representatives.
At a minimum, the agreement must include terms that reflect or incorporate
the applicable requirements of Finance Code, §152.403 and §152.404,
and specifically require the agent to comply with the notice posting requirements
of §29.12 of this tile (relating to Notice to Customers Regarding Complaints).
(c)
Retention of agent agreements. A license holder must retain
the original or a true and correct copy of each agent agreement and make each
agreement available for examination by the department.
§29.6.Net Worth and Bonding Requirements for a License Holder that Conducts Currency Exchange, Transportation or Transmission Transactions.
(a)
Net Worth. A license holder that engages in currency exchange,
transportation or transmission transactions as defined in Finance Code, §153.001,
must comply with the net worth requirements of Finance Code, §152.203(a)(1),
or Finance Code, §153.102(d)(5), whichever is greater.
(b)
Bond. A license holder that engages in currency exchange,
transportation or transmission transactions as defined in Finance Code, §153.001,
must post a bond, letter of credit, or deposit in lieu of bond in accordance
with Finance Code, §152.206, or Finance Code, §153.109, §153.110
and §4.7 of this title (relating to Bond Requirements and Deposits in
Lieu of Bond), whichever is greater.
§29.7.Exemption from Licensing.
(a)
Persons exempted. The following persons are not required
to be licensed under Finance Code, §152.201:
(1)
a foreign bank branch or agency in the United States established
under the federal International Banking Act of 1978 (12 U.S.C. Section 3101et
seq.) as amended or a foreign bank Texas state branch or agency authorized
under Finance Code, Chapter 204, Subchapter B.
(2)
the agent of a foreign bank branch or agency exempt under
subsection (a)(1) of this section.
(3)
the agent of a federally insured financial institution
exempt under Finance Code, §152.202.
(b)
Agreement required. A federally insured financial institution,
foreign bank branch, or foreign bank agency that conducts the business of
selling checks through an agent exempt from licensing under paragraphs (2)
and (3), respectively, of subsection (a) of this section must enter into an
agreement with the agent that meets the requirements of §29.5(b) of this
title, (relating to Conduct of Business Through Agent).
(c)
Exemptions self-executing. The exemptions to licensing
established under subsection (a) of this section are self-executing and require
no action by the commissioner or the department.
§29.8.License Renewal.
(a)
Application required. In addition to satisfying any other
requirement imposed by Finance Code, Chapter 152, to renew or maintain a license
under that chapter, a license holder must submit a license renewal application
on the form prescribed by the department.
(1)
The application must be fully completed and signed, and
include as attachments the documentation specified in the application and
the department's instructions.
(2)
The department must receive the application on or before
the 30th day of June of each year following initial licensing.
(b)
Payment of outstanding fees, assessments and reimbursements.
A license holder must be current on all payments for fees, assessments and
reimbursements due under §29.2 of this title (relating to Fees, Assessments
and Reimbursements) as of the date the department receives the renewal application.
§29.9.Extension of Time to File Annual Financial Statement.
(a)
Extension authorized. Upon a finding of good cause, the
commissioner may authorize a Chapter 152 license holder to submit the annual
audited unconsolidated financial statement required under Finance Code, §152.305(b),
at a date later than June 30th, provided that:
(1)
the department receives a written request for an extension
on or before the June 30th deadline; and
(2)
the request explains in detail the reasons the extension
is necessary and specifies the period of time for which the extension is sought.
(b)
Decision of commissioner. The commissioner will notify
the license holder of the decision regarding the extension request by letter
mailed to the license holder on or before the 10th day after the date the
department receives the request. The commissioner's decision is final and
may not be appealed.
§29.10.Correction of Violations and Imposition of Administrative Penalty.
(a)
Definitions. The following words or terms, when used in
this section, have the following meanings unless the text clearly indicates
otherwise:
(1)
Exempt person--A person exempt from licensing under Finance
Code, §152.202(a)(5).
(2)
Preventive action--Action reasonably required to prevent
a violation of the cited provision of Finance Code, Chapter 152, or rule or
order adopted or issued under Finance Code, Chapter 152, from recurring.
(b)
Correction required. On or before the 30th day after the
date a license holder or exempt person receives written notice from the department
of a violation of Finance Code, Chapter 152, or a rule or order adopted or
issued under Finance Code, Chapter 152, the license holder or exempt person
must:
(1)
correct the violation and, if applicable, take appropriate
preventive action;
(2)
if directed by the department, provide a written response
stating that the violation has been corrected and, if applicable, that preventive
action has been taken, the date the violation was corrected and/or preventive
action taken, and the specific corrective and/or preventive action taken.
(c)
Misrepresentation of correction. Except as provided in
subsection (d) of this section, a license holder or exempt person violates
this section if the license holder or exempt person has not corrected a violation
or taken preventive action as represented in the response to the department
required under subsection (b)(2).
(d)
Good faith action and reasonable belief. Subsection (c)
of this section does not apply if the department determines that a license
holder or exempt person made a diligent, good faith effort to correct and/or
prevent the recurrence of a violation and reasonably believed that corrective
or preventive action was taken as reported to the department.
(e)
Administrative penalty. The commissioner may impose an
administrative penalty under Finance Code, §152.502, upon a license holder
or exempt person who receives the violation notice provided for in subsection
(b) of this section and fails to comply with subsection (b)(1) and, if applicable,
(b)(2). The commissioner may impose an administrative penalty for each day
that the violation occurs or remains uncorrected after the date the license
holder or exempt person receives written notice of the violation.
(f)
Notice and hearing on administrative penalty. The license
holder or exempt person will be notified in writing by certified mail, return
receipt requested, of the commissioner's intent to impose an administrative
penalty and that a hearing to determine the amount of the penalty will be
held in accordance with the provisions of Government Code, Chapter 2001, the
Texas Administrative Procedures Act and Chapter 9, Subchapter B of this title
(relating to Contested Case Hearings).
(g)
Correction period inapplicable to certain repeat violations.
The 30-day correction period established under subsection (b) of this section
does not apply to a license holder or exempt person that violates the same
provision of Finance Code, Chapter 152, or of a rule or order adopted or issued
under Finance Code, Chapter 152, more than one time within a 24 consecutive
month period. In these circumstances, the written notice of intent to impose
administrative penalties and setting the administrative hearing required under
subsection (f) of this section may be mailed to the license holder or exempt
person at any time after the department has reason to believe that a repeat
violation has occurred. The commissioner may impose an administrative penalty
for each day that the violation continues uncorrected after the date the repeat
violation first occurs.
(h)
Determination of notice receipt date. For purposes of subsections
(b) and (e) of this section, receipt by a license holder or exempt person
of written notice from the commissioner or department is deemed to occur on
or before the 3rd day after the date the notice is postmarked. The burden
is on the license holder or exempt person to provide proof that the notice
was not received within such three-day period.
(i)
Remedy not exclusive. Nothing in this section diminishes
the regulatory or enforcement powers of the commissioner or in any way precludes
the commissioner from taking any enforcement action authorized under Finance
Code, Chapter 152, this chapter or any other applicable law at any time the
commissioner deems necessary.
§29.11.Reporting and Recordkeeping.
(a)
General definitions. Words used in this section that are
defined in Finance Code, §153.001, have the same meaning as defined in
the Finance Code.
(b)
Scope. This section applies to a license holder under Finance
Code, Chapter 152, that engages or has engaged in the currency exchange, transportation,
or transmission business. The specific reporting and recordkeeping requirements
established in this section apply only to the license holder's currency exchange,
transportation and/or transmission activities.
(c)
Location of records. A license holder must maintain separate
accounting books and records for its Texas currency exchange, transportation
and/or transmission business. The records must be maintained at a location
readily accessible to the department. If the records are maintained outside
of Texas, the commissioner may require the license holder to make the records
available at the department's office on or before the 20th day after the date
of the department's written request for the records.
(d)
Compliance with federal law. A license holder must comply
with all applicable federal laws and regulations relating to its currency
exchange, transportation, and/or transmission business and maintain records
of all filings and documentation required by law, including 31 United States
Code, §5313 and 31 Code of Federal Regulations (CFR), Part 103.
(e)
Records required. A license holder must keep the following
records related to its currency exchange, transportation and/or transmission
business:
(1)
Currency exchange. No license holder may engage in a currency
exchange transaction in an amount in excess of $1,000, unless the license
holder issues a receipt bearing a unique identification or transaction number
for each such transaction. The receipt must include the date of the transaction,
the amount and type of currency received and given in exchange, the rate of
exchange, and the applicable commission for the transaction. Additionally,
the license holder must be able to associate or link each such transaction
to a record that includes the following information:
(A)
the name, address, and date of birth of the individual
conducting the transaction;
(B)
the social security number of the individual, or if the
individual is an alien and does not have a social security number, then the
passport number, alien identification card number, or other official document
of the individual evidencing foreign nationality or residence;
(C)
the name and address of the person or business on whose
behalf the transaction is conducted if the individual is conducting the transaction
on behalf of another person or business, together with the appropriate identification
for such other person or business (e.g., passport number, taxpayer identification
number, alien registration number);
(D)
the location of the office where the transaction was conducted;
(E)
the employee or representative of the license holder executing
the transaction; and
(F)
the specific identifying information (number, type, and
issuer) of a document that contains the name and a photograph of the individual
and is customarily acceptable within the banking community as a means of identification
when cashing checks for nondepositors.
(2)
Currency transmission and transportation. No license holder
may enter into a currency transmission or transportation transaction of $3,000
or more in amount unless the license holder issues a receipt, electronic record,
or other written confirmation bearing a unique identification or transaction
number for each such transaction. The receipt, electronic record, or other
written confirmation must bear the date and time of day of the transaction,
the amount of the transmission in United States dollars, the rate of exchange
(if applicable), and the applicable fee or commission for the transaction.
Additionally, the license holder must be able to associate or link each such
transaction to a record that includes the following information:
(A)
the name, address, date of birth, and telephone number
of the individual conducting the transaction, whether sender or recipient,
or if the individual has no telephone, a notation in the record of that fact;
(B)
the social security number of the individual, or if the
individual is an alien and does not have a social security number, then the
passport number, alien identification card number, or other official document
of the customer evidencing foreign nationality or residence;
(C)
the name and address of the person or business on whose
behalf the transaction is conducted, if the individual is conducting the transaction
on behalf of another person or business, together with the appropriate identification
for such other person or business (e.g., passport number, taxpayer identification
number, alien registration number);
(D)
the location of the office where the transaction was conducted;
(E)
if the customer is the sender, the designated recipient's
name and either:
(i)
the recipient's address and telephone number, or if the
inquiry of the license holder reveals that the recipient has no telephone,
a notation in the record of that fact; or
(ii)
the identity of the recipient's bank and the recipient's
bank account number, if the funds are being deposited in the recipient's bank
account;
(F)
if the customer is the recipient, the sender's name, address,
and telephone number, to the extent such information is available to the license
holder after reasonable inquiry, with a notation in the record of the type
of information that is not available;
(G)
the method of payment (e.g., cash, check, credit card,
etc.);
(H)
the employee or representative of the currency business
executing the transaction; and
(I)
the specific identifying information of a document that
contains the name and photograph of the individual and is customarily acceptable
within the banking community as a means of identification when cashing checks
for nondepositors.
(3)
Transaction log. A license holder must maintain a log or
logs of its currency exchange, transportation, and/or transmission activities,
containing the following information for each transaction:
(A)
the date of the transaction;
(B)
the location of the office where the transaction was conducted;
(C)
the amount and type of currency received and given in exchange,
or the amount of the transmission or transportation;
(D)
the rate of exchange, if applicable;
(E)
the amount of service charges or fees assessed in connection
with the transaction;
(F)
the number of the receipt issued in connection with the
transaction, if any;
(G)
if transportation, whether currency or monetary instrument;
and
(H)
if transmission, the names of the sender and the recipient.
(f)
Format and retention of records. A license holder must
maintain the logs, records, and receipt information required under this section
for a period of at least five years in a readily accessible and retrievable
form. An actual duplicate copy of receipts issued by a license holder need
not be retained if the information required on the receipt is maintained in
hard copy form, on microfiche, or in an electronic database from which information
may be reasonably retrieved in hard copy form.
(g)
Waiver of requirements. The commissioner may waive any
requirement of this section upon a showing of good cause if the commissioner
is of the opinion that:
(1)
the license holder maintains records sufficient for the
department to examine its currency exchange, transportation and/or transmission
business; or
(2)
the imposition of the requirement would cause an undue
burden on the license holder and conformity with the requirement would not
significantly advance the state's interests under Finance Code, Chapters 152
or 153.
§29.12.Notice to Customers Regarding Complaints.
(a)
Definitions. The following words and terms, when used in
this section, shall have the following meanings, unless the text clearly indicates
otherwise.
(1)
"Conspicuously posted"--Displayed so that a customer with
20/20 vision can read it from the place where he or she would typically conduct
business or, alternatively, on a bulletin board, in plain view, on which all
notices to the general public are posted (such as equal housing posters, licenses,
Community Reinvestment Act notices, etc.).
(2)
"Customer"--An individual who obtains or has obtained a
product or service that is to be used primarily for personal, family, or household
purposes. The term includes a consumer required to be given a privacy notice
under state or federal law.
(3)
"Privacy notice"--Any notice regarding a customer's right
to privacy required to be given under a specific state or federal law.
(4)
"Required notice"--A notice in the form set forth or provided
for in subsection (b)(1) of this section.
(b)
Required notice. A license holder must tell each of its
customers how to file a complaint concerning the license holder's conduct
of its business under Finance Code, Chapter 152, in accordance with this subsection.
(1)
A license holder must use the following notice, or a notice
that substantially conforms to the language and form of the following notice,
to tell customers how to file complaints: Complaints concerning (insert name
or filed assumed name of license holder) sale of checks activities should
be directed to: Texas Department of Banking, 2601 North Lamar Boulevard, Austin,
Texas 78705, 1-877/276-5554 (toll free), www.banking.state.tx.us.
(2)
A license holder must provide the required notice in the
language in which a transaction is conducted.
(3)
If a state or federal law requires a license holder to
send a privacy notice to its customers, the license holder must include the
required notice with each privacy notice.
(4)
If a license holder maintains a website by which a customer
can remit funds for transmission or obtain information about the license holder
or the customer's transaction or existing account, the license holder must
include the required notice on the website. The notice must be prominently
displayed on the initial page the customer uses to initiate the remittance
or access the information, or on a page available no more than one link from
the initial page. The link must clearly describe the information available
by clicking the link, e.g., "Texas customers click here for information about
filing complaints about our service."
(5)
In addition to including the required notice in a privacy
notice in accordance with subsection (b)(3) of this section and on its website
in accordance with subsection (b)(4) of this section, as applicable, a license
holder must tell customers how to file complaints by one or more of the following
methods:
(A)
The license holder may include the required notice, in
at least 8 point type, on each check, instrument, or other access device,
or receipt, used in the license holder's service, provided that:
(i)
the check, instrument or device constitutes the only means
of accessing the funds the license holder receives for transmission; or
(ii)
a receipt is always issued for any funds received for
transmission.
(B)
If the license holder or its agent personally receives
all the funds paid by a customer, the required notice may be conspicuously
posted in each area where the license holder or its agent conducts business
under Finance Code, Chapter 152, with customers on a face-to-face basis.
(C)
The license holder may provide each customer with a required
notice separately, provided that:
(i)
not later than the time a transmission is initiated, the
license holder delivers the required notice in a form that the customer can
retain, in at least 10 point type. If the access device, such as a stored
value card, is mailed to the customer, the notice may be included in the mailing;
and
(ii)
if the same access device may be used continuously, such
as a reloadable card, the license holder also delivers the required notice
to the customer at least once every twelve months. The notice may be included
with or on a statement, included with a privacy statement, or provided by
other means so long as the customer actually receives the notice within each
twelve-month period.
(6)
If a license holder's business is entirely internet based,
so that account relationships and transactions are initiated solely by means
of the internet, the additional disclosures described in subsection (b)(5)
of this section are not required.
(7)
A license holder that conducts business through an agent
is subject to enforcement sanctions under Finance Code, Chapter 152, Subchapter
F, if the agent does not post the required notice in accordance with subsection
(b)(5)(B) of this section.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on June 18, 2004.
TRD-200404022
Everette D. Jobe
Certifying Official
Texas Department of Banking
Proposed date of adoption: August 20, 2004
For further information, please call: (512) 475-1300
Chapter 153.
HOME EQUITY LENDING
Article
9022, Tex. Rev. Civ. Stat.
]; and
Subchapter G. INTEREST AND OTHER CHARGES ON SECONDARY MORTGAGE LOANS
Tex. Rev. Civ. Stat., Art. 6573a.2.
],
and who is not a salaried employee of the lender.
Tex. Rev. Civ. Stat., Art. 5282c.
], and who is not
a salaried employee of the lender.
Subchapter I. INSURANCE
3.50
],
Article
3.51-6, and
Chapter 1153
[
3.53
] and any regulations issued by the Texas
Department of Insurance under the authority of that provision.
Article 3.53
] and
regulations issued by the Texas Department of Insurance under the authority
of that provision.
Subchapter T. MOTOR VEHICLES SALES FINANCE OPERATIONS
Part 2.
TEXAS DEPARTMENT OF BANKING
$2,500
]
fee. In addition to the application fee, you must pay any extraordinary costs
incurred by the department pursuant to any out of state investigation of you
as required by the Finance Code, §154.102(3). You must pay any extraordinary
costs within 20 days after written request by the department.
Chapter 29.
SALE OF CHECKS ACT
Part 8.
JOINT FINANCIAL REGULATORY AGENCIES