Recently, the Texas Department of Banking (DOB) issued two separate consent orders against companies for alleged unlicensed money transmission under Texas Finance Code Chapter 152, assessing a $75,000 penalty against a payroll processor and a $90,000 penalty against a surrogacy escrow services provider.

On May 8, the DOB issued a consent order against a payroll processing company that had allegedly operated as an unlicensed money transmitter in Texas since 2012. The DOB found the company accepted funds under payroll contracts obligating it to pay employee wages and remit payroll taxes on behalf of its clients, in violation of both former Chapter 151 and current Chapter 152 of the Finance Code. The DOB assessed a $75,000 administrative penalty and noted that Chapter 152 explicitly includes “payroll processing services” in its definition of money transmission. The company had first sought a license in December 2025, but that application was returned as incomplete; a second application submitted in February remained pending. Under the order, the company must cease all money transmission activity in Texas if its application is ultimately withdrawn or denied. The company neither admitted nor denied the DOB’s findings.

On May 11, the DOB issued a consent order against a Florida-based company that managed escrow accounts for surrogacy arrangements, alleging its practice of collecting funds from intended parents and later disbursing them to surrogates and service providers constituted unlicensed money transmission under both former Chapter 151 and current Chapter 152 of the Finance Code. The DOB assessed a $90,000 administrative penalty. Chapter 152, which took effect September 1, 2023, defines money transmission to include “receiving money for money transmission services from a person located in this state.” The DOB concluded that the company’s escrow model — accepting funds with an obligation to release them at a subsequent time or to a different party — satisfied that statutory definition. The order gives the company 90 days to file a completed application for a money transmission license or secure an exemption, failing which it must stop operating in Texas. The DOB also ordered the company to furnish $50,000 in surrogacy-related pro bono services to Texas residents over the following year. The company neither admitted nor denied the DOB’s findings.