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Texas Finance Code - Section 151.402. Conduct Of Business Through Authorized Delegate

Legal Research Home > Texas Laws > Finance Code > Texas Finance Code - Section 151.402. Conduct Of Business Through Authorized Delegate

§ 151.402. CONDUCT OF BUSINESS THROUGH AUTHORIZED 
DELEGATE.  (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 the license holder:
		(1)  fails to renew the license holder's license;  or                         
		(2)  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 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).

Added by Acts 2005, 79th Leg., ch. 1099, § 1, eff. Sept. 1, 2005.          

Last modified: August 11, 2007