HB3805

HB3805 gives the Texas banking commissioner specific authority to remove or bar certain people from money-services businesses and other entities the commissioner regulates. It took effect immediately on June 20, 2025. Money services include money transmission and currency exchange; a “key individual” is someone with ultimate responsibility for setting policy or directing operations. Final law and Chapter 152.

Misconduct-based removal requires more than an allegation or ordinary mistake. New Section 152.411 covers a current or former key individual or employee, a controlling person, or another person participating in a licensee’s affairs. The commissioner must find all three kinds of facts:

• Specified misconduct: intentionally committing the criminal acts covered by Section 152.408; intentionally committing, participating in or causing a licensee’s conduct covered by Section 152.403; violating a final state or federal cease-and-desist order; or making false entries in a licensee’s records.
• A resulting or probable financial loss or other damage, prejudice to customers, creditors or shareholders—including holders of outstanding money-transmission obligations—or personal gain or benefit to the person.
• Personal dishonesty or willful or continuing disregard for the licensee’s safety or soundness.

If necessary and in the public interest, the commissioner may propose removal or prohibit participation in a money-services licensee or any other entity chartered, registered, permitted or licensed by the commissioner. An order may be permanent, time-limited, suspended subject to conditions, or otherwise conditional. The ordinary notice and hearing procedures in Section 152.409 apply; an uncontested order becomes final and nonappealable when effective. This is not a blanket automatic lifetime ban for every regulatory violation. Enforcement and procedures.

A separate route applies to qualifying final felony convictions. Under Section 152.412, a felony must involve the money-services business, dishonesty or breach of trust. “Conviction” includes qualifying sentences, probation/community supervision including deferred adjudication, and deferred final disposition, but only when the matter is no longer subject to further appellate review. The commissioner’s order takes effect on service, subject to being stayed, terminated, set aside or appealed.

The person may request a hearing in writing within 30 days after service. The hearing must be held within 30 days after the request is received unless the person requests a later date. The person bears the burden of showing continued service or participation does not, and is not likely to, threaten the licensee’s interests, its customers or public confidence. An affirmed or modified order is immediately final and appealable under the specified procedures. Conviction-based orders.

A possible second chance after ten years is discretionary. Someone subject to a removal or prohibition order under this enforcement subchapter may apply for release after ten years from issuance, regardless of the order’s duration or issuance date. The application must be sworn, use the prescribed form and include required fees. The commissioner may approve or deny it; that release decision is final and cannot be appealed. Ten years does not automatically erase an order or reinstate someone. Release provision.