TITLE 7. BANKING AND SECURITIES

PART 2. TEXAS DEPARTMENT OF BANKING

CHAPTER 33. MONEY SERVICES BUSINESSES

7 TAC §33.27

The Finance Commission of Texas (the commission), on behalf of the Texas Department of Banking (the department), proposes to amend 7 TAC §33.27, concerning fees, assessments and reimbursements. The amended rule is proposed to clarify what fees a new license holder must pay to maintain its license.

Texas Finance Code, §151.207(b)(1), requires a money service business license holder to pay an annual license fee in an amount established by commission rule in order to maintain its license. The department currently has two rules that address what a new license holder that has not yet filed its first annual report must pay to maintain its license. Current §33.27(e)(3) provides that a new license holder that has not yet filed its first annual report must pay the minimum annual assessment as specified by §33.27(e)(1) or (2). In addition, current §33.27(h)(3) provides that a new license holder that has not yet filed its first annual report must pay an examination fee of $75 per hour for each examiner and all associated travel expenses, and that portion of this fee attributable to hourly charges shall be reduced by an amount equal to 50 percent of the annual assessment the license holder paid pursuant to §33.27(e)(3). Having these two rules in different subsections could be confusing to new license holders, particularly because §33.27(h)(3) has to do with the fee to maintain a license, but is under the subsection related to "other fees." Furthermore, the department believes it is more reasonable not to require a new license holder pay the minimum annual assessment shortly after it has paid a $10,000 application fee.

The proposed amendments to §33.27 would eliminate §33.27(h)(3) under the other fees subsection, and modify §33.27(e)(3) in the subsection on fees to maintain a license to clarify that a new license holder that has not yet filed its first annual report would only have to pay an examination fee of $75 per hour for each examiner and all associated travel expenses as its annual assessment.

Stephanie Newberg, Deputy Commissioner of the Texas Department of Banking, has determined that for the first five-year period the proposed rule is in effect, there will be no fiscal implications for state government or for local government as a result of enforcing or administering the rule.

Ms. Newberg has also determined that, for each year of the first five years the rule amendments as proposed are in effect, the public benefit anticipated is the correction of misleading language in order to clearly communicate how an assessment for a new license holder is calculated.

For each year of the first five years that the rule amendments will be in effect, there will not be economic costs to persons required to comply with the rule amendments as proposed.

For each year of the first five years that the rule amendments will be in effect, the rule amendments will not:

create or eliminate a government program;

require the creation of new employee positions or the elimination of existing employee positions;

require an increase or decrease in future legislative appropriations to the agency;

create a new regulation;

increase or decrease the number of individuals subject to the rule's applicability; or

positively or adversely affect this state's economy.

For each year of the first five years that the rule amendments will be in effect, the rule amendments will:

decrease fees paid to the department; and

limit an existing regulation.

There will be no adverse economic effect on small businesses, micro-businesses, or rural communities. There will be no difference in the cost of compliance for these entities.

To be considered, comments on the proposed amendments must be submitted no later than 5:00 p.m. on February 20, 2018. Comments should be addressed to General Counsel, Texas Department of Banking, Legal Division, 2601 North Lamar Boulevard, Suite 300, Austin, Texas 78705-4294. Comments may also be submitted by email to legal@dob.texas.gov.

The amendments are proposed under Finance Code §151.102, which authorizes the commission to adopt rules to administer and enforce Chapter 151, and under Finance Code §151.207(b)(1), which authorizes the commission to establish an annual license fee by rule.

Finance Code §151.207 is affected by the proposed amended section.

§33.27.What Fees Must I Pay to Get and Maintain a License?

(a) - (d) (No change.)

(e) What fees must I pay to maintain my money transmission or currency exchange license? You must pay your annual assessment. Subject to paragraph (3) of this subsection, the amount of your annual assessment is determined based on the total annual dollar amount of your Texas money transmission and or currency exchange transactions, as applicable, as reflected on your most recent annual report filed with the department under Finance Code, §151.207(b)(2).

(1) If you hold a currency exchange license, you must pay the annual assessment specified in the following table:

Figure: 7 TAC §33.27(e)(1) (No change.)

(2) If you hold a money transmission license, you must pay the annual assessment specified in the following table:

Figure: 7 TAC §33.27(e)(2) (No change.)

(3) If you are a new license holder and have not yet filed your first annual report under Finance Code, §151.207(b)(2), you must pay an examination fee of $75 per hour for each examiner and all associated travel expenses for an examination [the minimum annual assessment specified by paragraph (1) or (2) of this subsection, as applicable, prorated for the number of quarters remaining in the department's fiscal year after the date your license is issued].

(f) - (h) (No change.)

(i) What other fees must I pay?

(1) If the department does not receive your completed annual report on or before the due date prescribed by the commissioner under Finance Code, §151.207, you must pay a late fee of $100 per day for each business day after the due date that the department does not receive your completed annual report.

(2) If more than one examination is required in the same fiscal year because of your failure to comply with Finance Code, Chapter 151, this chapter, or a department directive, you must pay for the additional examination at a rate of $75 per hour for each examiner required to conduct the additional examination and all associated travel expenses. A fiscal year is the 12-month period from September 1st of one year to August 31st of the following year.

[(3) If you are a new license holder and have not yet filed your first annual report required under Finance Code, §151.207(b)(2), you must pay an examination fee of $75 per hour for each examiner and all associated travel expenses for an examination. The portion of this fee attributable to hourly charges shall be reduced by an amount equal to 50% of the annual assessment you paid pursuant to subsection (e)(3) of this section, but not below zero.]

(3) [(4)] If the department travels out-of-state to conduct your examination, you must pay for all associated travel expenses.

(4) [(5)] If the commissioner determines it is necessary to conduct an on-site examination of your authorized delegate to ensure your compliance with Finance Code, Chapter 151, you must pay an examination fee of $75 per hour for each examiner and any associated travel expenses.

(j) - (k) (No change.)

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 4, 2018.

TRD-201800034

Catherine Reyer

General Counsel

Texas Department of Banking

Earliest possible date of adoption: February 18, 2018

For further information, please call: (512) 475-1301