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Texas Finance Code - FIN § 151.404. Trust Imposed

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(a) A money transmission license holder may conduct business regulated under this chapter through an authorized delegate appointed by the license holder in accordance with this section.  A license holder is responsible for the acts of the authorized delegate, of which the license holder has or reasonably should have knowledge, that are conducted pursuant to the authority granted by the license holder and that relate to the license holder's money transmission business.

(b) Before a license holder is authorized to conduct business through an authorized delegate or allows a person to act as the license holder's authorized delegate, the license holder must:

(1) adopt, and update as necessary, written policies and procedures designed to ensure that the license holder's authorized delegate complies with applicable state and federal law;

(2) enter into a written contract that complies with Subsection (c);  and

(3) conduct a reasonable risk-based background investigation sufficient for the license holder to determine whether the authorized delegate has complied with applicable state and federal law.

(c) The written contract required by Subsection (b)(2) must be signed by the license holder and the authorized delegate and, at a minimum, must:

(1) appoint the person signing the contract as the license holder's authorized delegate with the authority to conduct money transmission on behalf of the license holder;

(2) set forth the nature and scope of the relationship between the license holder and the authorized delegate and the respective rights and responsibilities of the parties;

(3) require the authorized delegate to certify that the delegate is familiar with and agrees to fully comply with all applicable state and federal laws, rules, and regulations pertaining to money transmission, including this chapter and rules adopted under this chapter, relevant provisions of the Bank Secrecy Act and the USA PATRIOT ACT, and Chapter 271;

(4) require the authorized delegate to remit and handle money and monetary value in accordance with Sections 151.403(b) and (c);

(5) impose a trust on money and monetary value received in accordance with Section 151.404;

(6) require the authorized delegate to prepare and maintain records as required by this chapter or a rule adopted under this chapter or as reasonably requested by the commissioner;

(7) acknowledge that the authorized delegate consents to examination or investigation by the commissioner;

(8) state that the license holder is subject to regulation by the commissioner and that, as part of that regulation, the commissioner may suspend or revoke an authorized delegate designation or require the license holder to terminate an authorized delegate designation;

(9) acknowledge receipt of the written policies and procedures required under Subsection (b)(1);  and

(10) acknowledge that the authorized delegate has been provided regulatory website addresses through which the authorized delegate can access this chapter and rules adopted under this chapter and the Bank Secrecy Act, the USA PATRIOT ACT, and Chapter 271.

(d) A license holder must report to the commissioner the theft or loss of payment instruments or stored value from the license holder or an authorized delegate in this state if the total value of the instruments or stored value exceeds $10,000. The license holder must make the report as soon as the license holder has knowledge of the theft or loss.

(e) A license holder must notify the license holder's authorized delegates and require the delegates to take any action required by the commissioner if:

(1) the license holder's license expired or is surrendered or revoked;  or

(2) the license holder is subject to an emergency or final order that affects the conduct of the license holder's business through an authorized delegate.

(f) A license holder must maintain a current list of authorized delegates located in this state or doing business with persons located in this state that includes the name and business address of each delegate and must provide the list to the commissioner on request.  A license holder that engages in business through 11 or more authorized delegates located in this state must include on the license holder's website a list of the names and addresses of the authorized delegates of the license holder located in this state and the delegates' business addresses.  The license holder must update the list quarterly.

(g) The commission by rule may exempt from one or more of the requirements of this chapter an authorized delegate that is a federally insured financial institution excluded under Section 151.003(3) or a foreign bank branch or agency excluded under Section 151.003(4).

Cite this article: - Texas Finance Code - FIN § 151.404. Trust Imposed - last updated April 14, 2021 |

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