2025 · Regular session · Senate bill
SB512
SB512 bars a money transmission licensee from putting a monetary fine or penalty for violating its terms of service into that agreement.
Official caption: Relating to prohibiting the imposition of a monetary fine or penalty for a violation of a money services business's terms of service agreement; providing a civil penalty.
Official report lists Senate author(s): Kolkhorst. This does not identify sponsors or amendment drafters.
Bill explanation published · Version and amendment review scope is stated below · Individual amendment records may not be separately annotated.
Bill highlights
Selected points from the published explanation. Follow each point to its source-linked context; conditions and limits may matter.
- SB512 bars a money transmission licensee from putting a monetary fine or penalty for violating its terms of service into that agreement.
- A licensee can still close an account for a terms-of-service violation, but must refund the account balance in a way that makes the money readily available to the customer.
- Signed June 20, 2025, the law took effect September 1, 2025.
What does it do?
SB512 bars a money transmission licensee from putting a monetary fine or penalty for violating its terms of service into that agreement. It addresses penalties for breaking the agreement, not every ordinary service charge. The restriction is written for money transmission licensees, not every financial business. Final restriction.
A licensee can still close an account for a terms-of-service violation, but must refund the account balance in a way that makes the money readily available to the customer. A violating licensee owes the state a civil penalty equal to three times the fine or penalty it imposed. The attorney general may sue to recover that penalty, plus attorney’s fees and costs. The threefold penalty is payable to the state; this act does not award that amount to the customer. Account closure, refunds and enforcement.
Signed June 20, 2025, the law took effect September 1, 2025. Its transition clause applies only to terms-of-service agreements entered into after the effective date; agreements entered into before it remain governed by the former law. Sections 3–4; History.
What changed along the way?
The bill adds Finance Code Section 152.305 and broadens the heading of the subchapter covering licensee duties. The introduced, Senate committee, engrossed and House committee versions contained the same fine prohibition and state enforcement remedy, but allowed account closure without the final bill’s express refund condition. Introduced proposal; Five text versions.
Schofield’s sole indexed House amendment required the licensee to refund the balance in readily available funds when closing an account for a violation. The House adopted it May 26, and the Senate concurred May 30. That consumer safeguard survived in the enacted law. Complete adopted amendment; Amendment index.
For the full amendment record, open the official amendment index.
Official bill versions
Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.
Who could benefit—and who could bear the costs?
Customers covered by new agreements gain protection against contractual punishment deducted as a fine, while licensees retain the ability to end a customer relationship if they return the balance as required. Licensees may need to revise terms and account-closure procedures, and face state enforcement if they violate the new section. The act does not require a licensee to keep an account open or set a quantified refund deadline. Benefits, compliance duties and limits.
The April 9 introduced, May 7 engrossed and May 27 House-passed fiscal notes reach the same conclusion: no significant state or local fiscal impact is anticipated. The final posting assumes enforcement costs can be absorbed within existing resources and civil-penalty revenue will not be significant. It does not quantify customer savings or businesses’ compliance costs. Final fiscal posting.
Official sources
- Bill history and latest recorded action
- Bill versions, analyses and fiscal notes
- Action history and votes
- Amendment index
Catalog report retrieved 2026-10-25. Check the official record for corrections or later changes.
