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TITLE 7BANKING AND SECURITIES
PART 2TEXAS DEPARTMENT OF BANKING
CHAPTER 33MONEY SERVICES BUSINESSES
RULE §33.23What Additional Provisions Apply to Permissible Investments?

(a) Does this section apply to me? This section applies if you hold a money transmission license under Finance Code, Chapter 151.

(b) How do I calculate and report my average outstanding money transmissions for purposes of Finance Code, §151.309(a)?

  (1) For purposes of this subsection and subsection (e), "outstanding" has the meaning assigned by Finance Code, §151.301(b)(5).

  (2) Under Finance Code, §151.309(a), the aggregate amount of permissible investments that a money transmission license holder must maintain is calculated on the basis of the license holder's average outstanding money transmission obligations in the United States (U.S.). You must calculate and report your average outstanding U.S. money transmission obligations for purposes of §151.309(a) in the following manner:

    (A) You must calculate your average outstanding U.S. money transmission obligations for the calendar quarters ending March 31st, June 30th, September 30th, and December 31st and at any other date that may be requested during an examination.

    (B) At the end of each calendar quarter, you must aggregate the daily amount of your outstanding U.S. money transmissions computed for each day in the quarter. You must then divide the aggregate of the daily amount of outstanding U.S. money transmissions for the quarter by the number of days in the quarter. The resulting figure is the amount of average outstanding U.S. money transmission obligations for the quarter and must be disclosed in the report of permissible investments prepared under Finance Code, §151.603(b)(2).

(c) What does "past due or doubtful of collection" mean for purposes of Finance Code, §151.309(b)(1) and this rule? "Past due or doubtful of collection" means cash due that is not remitted on or before the 10th business day after the date the remitting entity is required to remit the money to the license holder under the applicable written agreement.

(d) Does the department recognize any specific category of assets or securities as "permissible investments" in addition to the categories listed in Finance Code, §151.309(b)? In addition to the assets and securities listed in Finance Code, §151.309(b), to be a "permissible investment," a permissible investment for purposes of Finance Code, Chapter 151, includes:

  (1) commercial paper within the top three rating categories of a nationally recognized rating service;

  (2) interest bearing bills, notes or bonds that bear a rating within the top three rating categories of a nationally recognized rating service; and

  (3) any receivable owed by a bank to a license holder resulting from an automated clearinghouse, debit, or credit-funded transmission subject to subsections (g) through (l) of this section.

(e) What general records must I maintain for purposes of calculating my permissible investment requirement?

  (1) At a minimum, you must maintain a daily record of your outstanding money transmission transactions in the United States (U.S.). The record must be maintained:

    (A) in a log or by another means of retention that allows the information to be readily retrieved; and

    (B) in a manner that enables you to identify and make available to the department the records related to your U.S. money transmission activity and to separately account for your U.S. money transmission activity.

  (2) You must make the records required under this subsection available to the department within the time period reasonably requested.

(f) For the purpose of satisfying a license holder's permissible investments requirement under Tex. Fin. Code Ann. §151.309, the Department interprets "cash in demand or interest-bearing accounts with a federally insured depository institution" to include funds held by a license holder's depository institution after being withdrawn from the license holder's account for transmission to satisfy the license holder's outstanding money transmission obligation.

(g) For purposes of this section:

  (1) "Automated Clearing House (ACH) Receivables" are amounts debited from a customer's depository account or ACH credits initiated by the customer through the ACH, which are for the purchase or payment of money transmission products and services.

  (2) "Credit Card Receivables" are amounts owed by a license holder's merchant acquirer and arising from the license holder's submission of credit card transactions for settlement by the merchant acquirer for the purchase or payment of money transmission products and services.

  (3) "Debit Card Receivables" are amounts owed by a license holder's merchant acquirer and arising from the license holder's submission of debit or pre-paid card transactions for settlement by the merchant acquirer for the purchase or payment of money transmission products and services.

  (4) "Merchant acquirer" means an acquiring bank or its designated processor who forwards the transaction information to the respective credit card associations for authorization, clearing, and settlement. The acquiring bank must remain fully liable for payment to the license holder if the designated processor fails to settle with the license holder.

(h) ACH Receivables must be:

  (1) due from U.S. national or state-chartered depository institutions; and

  (2) current and not past due or doubtful of collection.

(i) Credit Card Receivables must be current and not past due or doubtful of collection.

(j) Debit Card Receivables must be current and not past due or doubtful of collection.

(k) The aggregate value of ACH Receivables, Credit Card Receivables, and Debit Card Receivables owned by a license holder that qualifies as a permissible investment shall not include the portion of the aggregate value of such receivables due from one person, which exceeds 10% of the aggregate value of a license holder's permissible investments.

(l) ACH Receivables, Credit Card Receivables, and Debit Card Receivables may be reported by the license holder as:

  (1) cash, cash items, or cash in transit; or

  (2) ACH, Credit Card, or Debit Card Receivables or due from banks on the license holder's balance sheet, or in any other manner approved by the commissioner.


Source Note: The provisions of this §33.23 adopted to be effective November 9, 2006, 31 TexReg 8987; amended to be effective July 8, 2010, 35 TexReg 5805; amended to be effective July 5, 2018, 43 TexReg 4452; amended to be effective January 3, 2019, 43 TexReg 8584

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