HBA-TYH H.B. 2223 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2223
By: Solomons
Financial Institutions
3/24/1999
Introduced



BACKGROUND AND PURPOSE 

The legislature adopted the Sale of Checks Act (Act) in 1963.  The
regulatory scheme was to pay $50 and obtain a license.  After a large money
order company filed for bankruptcy and Texas citizens lost money, the
legislature adopted amendments establishing minimum net worth and bonding
requirements and giving the Texas Department of Banking (department)
examination and enforcement authority.  Legislative amendments during the
1990s expanded the definition of check to include electronic transmittals,
increased bond amounts, imposed reporting requirements, and provided
rulemaking and additional enforcement authority to the department.  

Some large license holders are not able to obtain audited financial
statements within 45 days after the end of the fiscal year.  Currently, the
law does not provide flexibility to permit an extension of time for filing
comprehensive financial reports.   H.B. 2223 gives the banking commissioner
of Texas the authority to extend the time period for good cause shown.
H.B. 2223  also permits the department to consider whether to allow some
license holders to provide fiscal reports to examiners during an
examination, rather than filing them with the department as is currently
required. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 152.305, Finance Code, as follows:

Sec. 152.305.  FINANCIAL STATEMENTS AND REPORTS.  (a) Requires a license
holder, unless waived by the banking commissioner of Texas (commissioner),
to file within 45 days of the last day of each  quarter of the license
holder's fiscal year with the commissioner a certification of net worth and
a report regarding maintaining permissible investments under Section
152.301(Minimum Security and Net Worth of License Holder) and 152.3015
(Phase-in of Minimum Security Requirement for Certain License Holders) for
the preceding quarter submitted on forms furnished by the commissioner.
Deletes text specifying an unconsolidated financial statement as part of
the report.  Makes conforming changes. 

(b)  Requires a license holder, before April 15 of each year, or a later
date the commissioner approves in writing for good cause shown, to file an
annual audited unconsolidated financial statement dated as of the last day
of the license holder's fiscal year that ended in the immediately preceding
calendar year.  Deletes text specifying the time period to be within120
days after the last day of the license holder's fiscal year. 

SECTION 2.   Repealer: Section 152.303, Finance Code (Report of Business
Locations).    This section relates to the reporting of business locations
for a license holder that does not have on file a bond or maintain deposits
in the undiminished principal amount of at least $500,000. 

SECTION 3.  Effective date: September 1, 1999.

SECTION 4.  Emergency clause.