Texas fintech guide
Building a fintech company in Texas
Austin is home to a large and growing technology community. A fintech is a technology company with one extra dependency: the regulators. This guide covers what Texas founders need to know before the product touches anyone's money.
Money transmission
When holding or moving customer funds needs a Texas Department of Banking license, and what applying involves.
Licensing guide →Lending licenses
OCCC, SML and the federal rules: which regulator oversees which kind of loan.
Lending guide →Compliance checklist
AML, sanctions, privacy, breach notification, card data and bank-partner diligence.
Open the checklist →Bank partners
What a sponsor bank reviews before it signs, and what to check about the bank.
Prepare for diligence →All guides
Money transmission licensing
- Texas money transmitter license — what counts as money transmission under Chapter 152, net worth and bond requirements, the application and ongoing duties.
- Texas money transmission exemptions — agent of the payee, bank service providers, authorized delegates and how to document an exemption.
- Texas crypto and stablecoin rules — the stablecoin definition, the Department of Banking's guidance and Chapter 160 for platforms holding customer assets.
- FinCEN MSB registration — who is a money services business, FinCEN Form 107, deadlines, renewals and the obligations that follow.
Lending
- Texas lending licenses — which regulator licenses which loan, the 10 percent threshold for regulated loans, and the federal consumer credit rules.
Compliance programs
- Fintech compliance checklist — AML, sanctions, privacy, payments, consumer protection and bank-partner readiness in one list.
- Building a BSA/AML program — required elements, the order to build them in, and SAR, CTR and recordkeeping thresholds.
- KYC and KYB requirements — CIP, beneficial ownership, ongoing due diligence and onboarding design.
- PCI DSS for startups — scope reduction, self-assessment questionnaires and what changed in v4.0.1.
- Texas Data Privacy and Security Act — the GLBA exemption, consumer rights and Texas breach notification deadlines.
Banks and payments
- Sponsor bank due diligence — what a partner bank must review, how to prepare, and what to check about the bank.
- Payment rails explained — ACH, cards, wires, RTP and FedNow: settlement, reversibility and where customer money sits.
- ACH vs RTP vs FedNow — speed, hours, limits and finality compared, with use cases.
Tax
- Texas sales tax on SaaS and fintech services — the data processing tax, the payment processing exclusion and the franchise tax.
The questions to answer before you build
- Do you ever hold or control customer money? If funds pass through your company, even briefly, you may be a money transmitter under Texas law and federal rules, unless an exemption fits. The answer shapes your architecture, not just your paperwork.
- Do you make, arrange or service loans? Consumer lending in Texas is licensed by product type, and the license you need depends on the loan's rate, size and security.
- Who is your bank? Many fintechs operate through a partner bank. The bank's own regulators then expect it to supervise you, and your compliance program becomes part of theirs.
- What personal data do you hold? Financial data carries federal privacy rules, and Texas has its own privacy and breach notification laws.
- Which payment rails do you depend on? Each rail has its own rules, settlement times and reversal rights, and each shapes your fraud exposure.
The Texas regulators you are most likely to meet
| Regulator | What it oversees |
|---|---|
| Texas Department of Banking | State banks, and money services businesses (money transmission and currency exchange) |
| Office of Consumer Credit Commissioner (OCCC) | Consumer and regulated lenders, credit access businesses, pawnshops and more |
| Texas Department of Savings and Mortgage Lending | Residential mortgage companies and loan originators |
| Texas State Securities Board | Securities offerings, dealers and investment advisers |
| Texas Attorney General | Consumer protection, the Texas Data Privacy and Security Act, and data-breach notifications |
| Texas Comptroller of Public Accounts | Sales and use tax, including data processing services, and franchise tax |
Federal agencies sit alongside them, above all FinCEN for anti-money-laundering rules, the CFPB for consumer financial products, and the federal banking regulators who supervise your partner bank. Card programs also answer to the card networks' rules and the PCI Security Standards Council's standard.
A sensible order of work
- Draw the flow of funds for the first product, and decide which licenses, registrations and exemptions it depends on.
- Choose the structure: your own licenses, a bank partnership, or both.
- Build the core programs: BSA/AML and sanctions, identity verification, information security and privacy.
- Pick rails and partners that match the customer promise and your risk controls.
- Sort out tax registrations before the first invoice.
- Keep the checklist current as the product grows.
Not legal advice. Whether a license applies turns on the exact facts of your product. Use these guides to ask better questions, then confirm the answers with the regulator or with counsel before launch.