Tex. Finance Code § 152.003 — TX Code / Code fi / Chapter 152 / Section 152.003
§ 152.003. DEFINITIONS.
Status: in_force

In this chapter:

(1) "Acting in concert" means knowingly acting together with a common goal of jointly acquiring control of a money services licensee whether or not under an express agreement.

(2) "Authorized delegate" means a person designated by a money transmission licensee to engage in money transmission services on behalf of the licensee.

(3) "Average daily money transmission liability" means the amount of a money services licensee's outstanding money transmission obligations in this state at the end of each day in a given period of time, added together, and divided by the total number of days in the given period of time. For purposes of calculating average daily money transmission liability under this chapter as required by a money services licensee, the given period of time shall be:

(A) the calendar quarters;

(B) a period described by this chapter; or

(C) any other period of time designated by the commissioner during an examination.

(4) "Bank Secrecy Act" means the Bank Secrecy Act (31 U.S.C. Section 5311), and its implementing regulations.

(5) "Closed-loop stored value" means stored value that is redeemable by the issuer only for goods or services provided by the issuer, the issuer's affiliate, or a franchisee of the issuer or the issuer's affiliate, except to the extent required by applicable law to be redeemable in cash for its cash value.

(6) "Commission" means the Finance Commission of Texas.

(7) "Commissioner" means the banking commissioner of Texas or a person designated by the banking commissioner and acting under the banking commissioner's direction and authority.

(8) "Control" means the power to:

(A) directly or indirectly vote at least 25 percent or more of the outstanding voting shares or voting interests of a money services licensee or person in control of a money services licensee;

(B) elect or appoint a majority of key individuals or executive officers, managers, directors, trustees, or other persons exercising managerial authority of a person in control of a money services licensee; or

(C) directly or indirectly exercise a controlling influence over the management or policies of a money services licensee or person in control of a money services licensee.

(9) "Currency" means the coin and paper money issued by the United States or another country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance.

(10) "Currency exchange" means receiving:

(A) the currency of one government and exchanging it for the currency of another government; or

(B) a negotiable instrument, as defined by Section 3.104, Business & Commerce Code, and exchanging it for the currency of another government.

(11) "Currency exchange licensee" means a holder of a currency exchange license under this chapter.

(12) "Department" means the Texas Department of Banking.

(13) "Eligible rating" means a sufficiently high credit rating given by an eligible rating service. If a security has differing credit ratings given by multiple eligible rating services, the highest rating shall apply when determining whether the security has an eligible rating. For purposes of this definition, a sufficiently high credit rating is a credit rating of any of the three highest rating categories provided by an eligible rating service, including:

(A) a long-term credit rating of A- or higher by S&P Global;

(B) a short-term credit rating of A-2, SP-2, or higher by S&P Global; or

(C) the relative equivalent rating from an eligible rating service that does not have a rating described by Paragraphs (A) and (B).

(14) "Eligible rating service" means:

(A) a Nationally Recognized Statistical Rating Organization as defined by the United States Securities and Exchange Commission; and

(B) any other organization designated by the commissioner by rule or order.

(15) "Federally insured depository financial institution" means a bank, credit union, savings and loan association, trust company, savings association, savings bank, industrial bank, or industrial loan company organized under the laws of the United States or any state of the United States that has federally insured deposits.

(16) "In this state" means:

(A) for a transaction requested in person, a physical location within this state; or

(B) for a transaction requested electronically or by phone, a determination that the person requesting the transaction is in this state based on:

(i) information provided by the person regarding:

(a) if the person is an individual, the location of the individual's residential address; or

(b) if the person is a business entity, the entity's principal place of business or other physical address location; and

(ii) any records associated with the person that the provider of money transmission has that indicate the person's location, including an address associated with a person's account.

(17) "Key individual" means an individual who is ultimately responsible for establishing or directing policies and procedures of a money services licensee, including an executive officer, manager, director, or trustee.

(18) "Material litigation" means litigation that, according to United States generally accepted accounting principles, is significant to a person's financial health and would be required to be disclosed in the person's annual audited financial statements, report to shareholders, or similar records.

(19) "Money" or "monetary value" means currency or a claim that can be converted into currency through a financial institution, electronic payments network, or other formal or informal payment system. The term includes stablecoin that:

(A) is pegged to a sovereign currency;

(B) is fully backed by assets held in reserve; and

(C) grants a holder of the stablecoin the right to redeem the stablecoin for sovereign currency from the issuer.

(20) "Money services" means money transmission services or currency exchange services.

(21) "Money services licensee" means a holder of a money transmission license or currency exchange license under this chapter.

(22) "Money transmission":

(A) means:

(i) selling or issuing payment instruments to a person located in this state;

(ii) selling or issuing stored value to a person located in this state; or

(iii) receiving money for money transmission services from a person located in this state;

(B) includes payroll processing services; and

(C) does not include the provision solely of online or telecommunications services or network access.

(23) "Money transmission licensee" means a holder of a money transmission license under this chapter.

(24) "MSB-accredited state" means a state agency that is accredited by the Conference of State Bank Supervisors and Money Transmitter Regulators Association for money transmission licensing and supervision.

(25) "Multistate licensing process" means an agreement entered into by and among state regulators relating to coordinated processing of applications for money transmission licenses, applications for the acquisition of control of a money transmission licensee, control determinations, or notice and information requirements for a change of key individuals.

(26) "NMLS" means the Nationwide Multistate Licensing System and Registry developed by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators and owned and operated by the State Regulatory Registry, LLC, for the licensing and registration of persons in financial services industries, or a successor or affiliated entity.

(27) "Outstanding money transmission obligation," as established and extinguished in accordance with applicable state law, means:

(A) a payment instrument or stored value:

(i) that has been:

(a) issued or sold by a money transmission licensee to a person located in any state, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or a United States military installation that is located in a foreign country; or

(b) reported as sold by an authorized delegate to a person who is located in any state, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or a United States military installation that is located in a foreign country; and

(ii) that has not been:

(a) paid or refunded by or for the licensee; or

(b) escheated in accordance with applicable abandoned property laws; or

(B) money received for money transmission services by a money transmission licensee or an authorized delegate from a person located in any state, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or a United States military installation that is located in a foreign country that has not been:

(i) received by the payee or refunded to the person; or

(ii) escheated in accordance with applicable abandoned property laws.

(28) "Passive investor" means a person who:

(A) does not have the power to elect a majority of key individuals or executive officers, managers, directors, trustees, or other persons exercising managerial authority of a person in control of a money services licensee;

(B) is not employed by and does not have any managerial duties of a money services licensee or person in control of a money services licensee;

(C) does not have the power to directly or indirectly exercise a controlling influence over the management or policies of a money services licensee or person in control of a money services licensee; and

(D) either:

(i) attests to Paragraphs (A), (B), and (C) in a form and medium prescribed by the commissioner; or

(ii) commits to the passivity characteristics of Paragraphs (A), (B), and (C) in a written document.

(29) "Patriot Act" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 (Pub. L. No. 107-56).

(30) "Payment instrument" means a written or electronic check, draft, money order, traveler's check, or other written or electronic instrument for the transmission or payment of money or monetary value, whether or not the instrument is negotiable. The term does not include stored value or an instrument that is:

(A) redeemable by the issuer only for goods or services provided by the issuer, the issuer's affiliate, or a franchisee of the issuer or the issuer's affiliate, except to the extent required by applicable law to be redeemable in cash for its cash value; or

(B) not sold to the public but issued and distributed as part of a loyalty, rewards, or promotional program.

(31) "Payroll processing services" means receiving money for money transmission services under a contract with a person to deliver wages or salaries, make payment of payroll taxes to state and federal agencies, make payments relating to an employee benefit plan, or make distributions of other authorized deductions from wages or salaries. The term does not include:

(A) an employer performing payroll processing services on its own behalf or on behalf of its affiliate; or

(B) a professional employer organization subject to regulation under other applicable state law.

(32) "Person" means an individual, general partnership, limited partnership, limited liability company, corporation, trust, association, joint stock corporation, or other corporate entity identified by the commissioner.

(33) "Receiving money for money transmission" means receiving money or monetary value in the United States for money transmission services by electronic or other means that occurs within or outside the United States.

(34) "Stored value" means monetary value representing a claim against the issuer evidenced by an electronic or digital record that is intended and accepted for use as a means of redemption for money or monetary value or payment for goods or services. The term includes prepaid access as defined by 31 C.F.R. Section 1010.100(ww). The term does not include a payment instrument, closed-loop stored value, or stored value not sold to the public but issued and distributed as part of a loyalty, rewards, or promotional program.

(35) "Tangible net worth" means the aggregate assets of a money services licensee excluding all intangible assets, less liabilities, as determined in accordance with United States generally accepted accounting principles.

(36) "Unsafe or unsound act or practice" means a practice of or conduct by a money services licensee or an authorized delegate that:

(A) creates the likelihood of material loss, insolvency, or dissipation of the licensee's assets; or

(B) otherwise materially prejudices the interests of the licensee or the licensee's customers.