✅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.

✅ SB 512: Stops Hidden Fines in the Fine Print

What it says it does:
SB 512 bans money service companies from charging users monetary fines written into terms of service. It gives the state power to penalize companies that try to take money this way and allows them to close accounts only if they return remaining balances.

What it actually changes:
The bill adds a new section to the Texas Finance Code. Companies like PayPal or other money transmitters can no longer include fine-based penalties in contracts. If they do, the state can fine them three times the amount they attempted to collect. The Attorney General has authority to enforce it and recover legal costs.

Who is pushing for it:
Authored by Sen. Lois Kolkhorst. Witness lists show support from Tom Glass of Texas Constitutional Enforcement and John Litzler representing the Baptist General Convention of Texas Christian Life Commission. No opponents are listed in the files.

Who benefits:
Consumers gain direct protection against hidden financial penalties. The Attorney General’s office gains enforcement authority and can pursue violators.

Who gets left out or exposed:
Texans still under older service agreements will not be covered until those contracts are renewed. Enforcement also depends on how actively the Attorney General pursues violations, so smaller cases could be overlooked.

Why this matters long term:
It protects people from being fined through private contracts that act like law without court oversight. It keeps control of financial penalties in the public system instead of letting companies police their own customers’ wallets.

What to watch next:
How often the Attorney General uses this authority and whether future Legislatures expand it to cover existing contracts. Tracking how companies adjust their terms of service after September 1, 2025 will show how effective the deterrent really is.

Bottom line:
SB 512 strengthens consumer protection and makes sure that only the law, not private terms of service, can take your money. It’s a quiet but important win for fairness and financial accountability in Texas.

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