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.
Summary
SB 512 amends the Texas Finance Code to regulate money transmission licensees’ terms of service agreements. The bill prohibits a money services business or money transmission licensee from including a contractual provision that imposes a monetary fine or penalty on a customer for violating the terms of service. It does not bar the business from closing a customer account for a violation, so long as the customer’s remaining balance is refunded in a way that makes the funds readily available.
The bill also creates an enforcement mechanism. A licensee that violates the new prohibition is liable to the state for a civil penalty equal to three times the amount of the prohibited fine or penalty, and the attorney general may sue to recover that amount as well as attorney’s fees and costs. The law applies only to terms of service agreements entered into after the effective date, which is September 1, 2025; earlier agreements remain governed by prior law.
Impact
SB 512 changes Chapter 152 of the Texas Finance Code by adding a new restriction on money transmission licensees and revising the subchapter heading to reflect broader general duties and restrictions. It affects money services businesses, money transmitters, and their customer agreements by limiting the remedies they may contract for when customers violate terms of service, while preserving account-closure rights and requiring refund of account balances. It also gives the attorney general express authority to enforce the prohibition and seek civil penalties, attorney’s fees, and costs.
Sentiment
The bill appears to have been broadly supported and noncontroversial. It passed the Senate 30-0 with one member present not voting and passed the House 140-0 with two present not voting, followed by Senate concurrence in the House amendment. The unanimous or near-unanimous votes suggest general agreement across both chambers that the bill addresses an appropriate consumer-protection issue in the money transmission industry.
Contention
No committee transcript or floor debate was provided, and the voting history shows little overt opposition. The main policy line drawn by the bill is between banning monetary fines or penalties in terms of service and preserving a licensee’s ability to close accounts for violations, provided customer funds are returned promptly. Any potential concern would likely center on how the prohibition affects business enforcement tools and contractual freedom, but the recorded votes do not show significant resistance.
Identical
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.
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.
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