HB 3109 seeks to expand and restructure the Financial Crimes Intelligence Center (FCIC) within the Texas Department of Licensing and Regulation (TDLR) by transferring its statutory authority from the Occupations Code to the Government Code and broadening its mission. The bill updates key definitions to encompass a wider range of payment fraud schemes, such as check fraud, unauthorized electronic fund transfers, and other digital financial crimes. It aims to enhance interagency coordination and provide improved support to law enforcement, financial institutions, and businesses in identifying and responding to financial crime.
While the bill has commendable goals—namely, addressing the growing sophistication and frequency of financial fraud—it raises concerns that warrant a “No; Amend” recommendation. The bill grants TDLR and the Texas Commission of Licensing and Regulation broad authority to adopt rules and oversee enforcement without sufficient statutory limitations, external oversight, or privacy safeguards. The centralized data collection functions of the FCIC also present risks of government overreach, particularly in the absence of transparency measures and accountability mechanisms. These issues could impact individual liberty and create unintended regulatory burdens on private businesses.
Furthermore, the bill does not include sunset or performance review provisions that would allow lawmakers to assess the effectiveness and scope of the expanded FCIC in future years. Without these guardrails, the legislation could evolve into a broader surveillance and enforcement apparatus than originally intended, straying from the principles of limited government and due process.
For these reasons, Texas Policy Research recommends that lawmakers vote NO on HB 3109 unless amended as described below. Lawmakers should insist on meaningful amendments that establish clear oversight, data privacy protections, stakeholder input mechanisms, and a sunset review to ensure the bill’s goals are met without undermining foundational liberty principles.
- Individual Liberty: While the bill is designed to protect Texans from financial crime, it expands the authority of the Financial Crimes Intelligence Center (FCIC) in ways that raise significant civil liberties concerns. The FCIC is granted broad data collection, interagency coordination, and rulemaking authority without adequate transparency, consent mechanisms, or restrictions on how personal financial information is shared or stored. These gaps create risks of surveillance or misuse of sensitive data, potentially infringing on individuals' privacy and freedom from unwarranted government scrutiny.
- Personal Responsibility: The legislation reinforces accountability by targeting those who perpetrate fraud and empowering state authorities to pursue them more effectively. It supports a legal and regulatory framework that holds bad actors responsible for financial crimes, aligning with the principle that individuals must answer for their actions, particularly when those actions harm others or defraud the system.
- Free Enterprise: On one hand, the bill supports legitimate business by attempting to reduce financial crime, which can threaten commerce and consumer confidence. On the other hand, the FCIC’s expanded authority and the lack of explicit limits on its enforcement reach could impose burdensome compliance requirements on financial institutions, payment processors, or small businesses. Without a clear carve-out or feedback mechanism, the legislation could unintentionally hinder innovation or growth in the private sector.
- Private Property Rights: The bill enhances property protections by targeting financial crimes that could result in financial losses for individuals and businesses. Improving fraud prevention helps secure financial assets and reduce the risks of unauthorized transactions. The bill lacks clear due process protections against potential government overreach in fraud investigations. If financial accounts are monitored, frozen, or seized due to suspected fraud without sufficient checks and balances, property rights could be at risk. Stronger judicial oversight provisions should be added to protect against unjust asset seizures.
- Limited Government: This is where the bill most clearly diverges from liberty principles. H.B. 3109 expands the role of state government by centralizing enforcement authority, increasing interagency data access, and authorizing new rulemaking without sufficient constraints or checks. The absence of sunset provisions, independent oversight, or legislative reporting creates a structure that risks unchecked growth in bureaucratic power. It sets a precedent for administrative overreach and potentially blurs the boundaries between regulatory assistance and investigatory surveillance.
