Florida 2022 2022 Regular Session

Florida House Bill H0389 Introduced / Bill

Filed 10/21/2021

                       
 
HB 389  	2022 
 
 
 
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A bill to be entitled 1 
An act relating to money services businesses; amending 2 
s. 560.103, F.S.; revising and providing definitions; 3 
amending s. 560.105, F.S.; authorizing the Financial 4 
Services Commission to adopt rules establishing time 5 
periods during which money services business are 6 
barred from licensure; providing requirements for such 7 
rules; providing that applicants are not eligible for 8 
licensure until the expiration of the disqua lifying 9 
period; providing applicability; amending s. 560.114, 10 
F.S.; authorizing the Office of Financial Regulation 11 
to bar certain persons that violate specified laws, 12 
rules, orders, or written agreements from applying for 13 
a license or acting as control per sons for money 14 
services businesses; authorizing licenses to be 15 
suspended under certain circumstances; providing 16 
requirements for orders of license suspension; 17 
specifying when criminal prosecutions are pending or 18 
terminated; amending ss. 560.118, 560.123, a nd 19 
560.126, F.S.; conforming provisions to changes made 20 
by the act; repealing s. 560.127, F.S., relating to 21 
control of a money services business; amending ss. 22 
560.141 and 560.143, F.S.; conforming provisions to 23 
changes made by the act; providing an effecti ve date. 24 
 25     
 
HB 389  	2022 
 
 
 
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Be It Enacted by the Legislature of the State of Florida: 26 
 27 
 Section 1.  Subsections (10) through (25), (34), and (35) 28 
of section 560.103, Florida Statutes, are renumbered as 29 
subsections (11) through (26), (33), and (34), respectively, 30 
subsection (1) and present subsections (26) and (33) are 31 
amended, and a new subsection (10) is added to that section, to 32 
read: 33 
 560.103  Definitions. —As used in this chapter, the term: 34 
 (1)  "Affiliated party" means a control director, officer, 35 
responsible person, employee, or foreign affiliate of a money 36 
services business, or a person who has a controlling interest in 37 
a money services business as provided in s. 560.127 . 38 
 (10)  "Control person" means an individual, partnership, 39 
corporation, trust, or other organ ization that possesses the 40 
power, directly or indirectly, to direct the management or 41 
policies of a company, whether through ownership of securities, 42 
by contract, or otherwise. The term includes a company's 43 
executive officers, including the president, chie f executive 44 
officer, chief financial officer, chief operations officer, 45 
chief legal officer, compliance officer, director, and other 46 
individuals having similar status or functions. The term also 47 
includes: 48 
 (a)  All shareholders that, directly or indirectly , own 25 49 
percent or more, or that have the power to vote 25 percent or 50     
 
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more, of a class of voting securities. 51 
 (b)  For a partnership: 52 
 1.  All general partners. 53 
 2.  All limited or special partners that have contributed 54 
25 percent or more, or that have th e right to receive, upon 55 
dissolution, 25 percent or more, of the partnership's capital. 56 
 (c)  For a trust, all trustees. 57 
 (d)  For a limited liability company: 58 
 1.  All managers. 59 
 2.  All members that have contributed 25 percent or more, 60 
or that have the right to receive, upon dissolution, 25 percent 61 
or more, of the limited liability company's capital account. 62 
 (26)  "Officer" means an individual, other than a director, 63 
who participates in, or has authority to participate in, the 64 
major policymaking functions of a money services business, 65 
regardless of whether the individual has an official title or 66 
receives a salary or other compensation. 67 
 (33)  "Responsible person" means an individual who is 68 
employed by or affiliated with a money services business a nd who 69 
has principal active management authority over the business 70 
decisions, actions, and activities of the money services 71 
business in this state. 72 
 Section 2.  Paragraph (c) is added to subsection (2) of 73 
section 560.105, Florida Statutes, to read: 74 
 560.105  Supervisory powers; rulemaking. — 75     
 
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 (2)  The commission may adopt rules pursuant to ss. 76 
120.536(1) and 120.54 to administer this chapter. 77 
 (c)  The commission may adopt rules establishing time 78 
periods during which a money services business is barred fro m 79 
licensure due to prior criminal convictions of, or guilty or 80 
nolo contendere pleas by, an applicant's control persons, 81 
regardless of adjudication. The rules must provide: 82 
 1.  A disqualifying period of: 83 
 a.  Fifteen years for a felony involving fraud, di shonesty, 84 
breach of trust, money laundering, or any other act of moral 85 
turpitude. 86 
 b.  Seven years for any felony other than those specified 87 
in sub-subparagraph a. 88 
 c.  Five years for a misdemeanor involving fraud, 89 
dishonesty, or any other act of moral tur pitude. 90 
 2.  An additional waiting period due to dates of 91 
imprisonment or community supervision, the commitment of 92 
multiple crimes, and other factors reasonably related to the 93 
applicant's criminal history. 94 
 3.  Mitigating factors for crimes identified in s ub-95 
subparagraphs 1.a., 1.b., and 1.c. Mitigating factors include 96 
any of the following: 97 
 a.  A probation officer or prosecuting attorney in the most 98 
recent crime states in a signed writing that the probation 99 
officer or prosecuting attorney believes that the applicant 100     
 
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would pose no significant threat to public welfare if licensed 101 
as a money services business. 102 
 b.  Restitution or settlement has been made for all crimes 103 
in which restitution or settlement was ordered by the court, and 104 
proof of such restitution o r settlement is shown in official 105 
court documents or as verified in a signed writing by the 106 
prosecuting attorney or probation officer. 107 
 c.  The applicant was under age 21 when the crime was 108 
committed, and there is only one crime in the applicant's 109 
criminal history record. 110 
 d.  The applicant furnishes proof that the applicant was at 111 
the time of the crime addicted to drugs or suffering active 112 
alcoholism. Proof must be accompanied by a written letter from a 113 
properly licensed physician, psychologist, or therapi st stating 114 
that the he or she has examined or treated the applicant and 115 
that, in his or her professional opinion, the addiction or 116 
alcoholism is currently in remission and has been in remission 117 
for the previous 12 months. 118 
 119 
An applicant is not eligible for licensure until the expiration 120 
of the disqualifying period set by rule. Section 112.011 does 121 
not apply to eligibility for licensure under this part. 122 
 Section 3.  Subsections (9) and (10) are added to section 123 
560.114, Florida Statutes, to read: 124 
 560.114  Disciplinary actions; penalties. — 125     
 
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 (9)  The office may bar, permanently or for a specific 126 
time, a person found to have violated any provision of this 127 
chapter, any related rule or order adopted by the commission or 128 
office, or any written agreement entered i nto with the office, 129 
from submitting an application for a license with the office or 130 
from acting as a control person of a money services business. 131 
 (10)  A money services business license under s. 560.141 132 
may be suspended if a control person of the money s ervices 133 
business is arrested for any conduct that would authorize 134 
revocation under subsection (1). 135 
 (a)  An order of suspension under this subsection: 136 
 1.  Takes effect only after a hearing, unless a hearing is 137 
not requested by the licensee or unless the s uspension is made 138 
in accordance with s. 120.60(6). 139 
 2.  Must contain a finding that evidence of a prima facie 140 
case supports the charge made in the criminal prosecution. 141 
 3.  Must operate for no longer than 10 calendar days beyond 142 
receipt of notice to the o ffice of the termination of the 143 
pending criminal prosecution. 144 
 (b)  For purposes of this subsection, a criminal 145 
prosecution is pending at any time after criminal charges are 146 
filed and is terminated at any time after conviction, acquittal, 147 
or dismissal. 148 
 Section 4.  Subsection (2) of section 560.118, Florida 149 
Statutes, is amended to read: 150     
 
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 560.118  Reports.— 151 
 (2)  Each licensee must submit quarterly reports to the 152 
office in a format and include information as specified by rule. 153 
The rule may require the report to contain a declaration by a 154 
control person an officer, or any other responsible person 155 
authorized to make such declaration , that the report is true and 156 
correct to the best of her or his knowledge and belief. 157 
 Section 5.  Paragraph (d) of subsection (3) of section 158 
560.123, Florida Statutes, is amended to read: 159 
 560.123  Florida Control of Money Launderin g in Money 160 
Services Business Act. — 161 
 (3)  A money services business shall keep a record of each 162 
financial transaction occurring in this state which it knows to 163 
involve currency or other payment instrument, as prescribed by 164 
the commission, having a value gre ater than $10,000; to involve 165 
the proceeds of specified unlawful activity; or to be designed 166 
to evade the reporting requirements of this section or chapter 167 
896. The money services business must maintain appropriate 168 
procedures to ensure compliance with this section and chapter 169 
896. 170 
 (d)  A money services business, or control person officer, 171 
employee, or agent thereof, that files a report in good faith 172 
pursuant to this section is not liable to any person for loss or 173 
damage caused in whole or in part by the making, filing, or 174 
governmental use of the report, or any information contained 175     
 
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therein. 176 
 Section 6.  Subsection (3) of section 560.126, Florida 177 
Statutes, is amended to read: 178 
 560.126  Required notice by licensee. — 179 
 (3)  Each licensee must report any change in the control 180 
persons partners, officers, members, joint venturers, directors, 181 
controlling shareholders, or responsible persons of the licensee 182 
or changes in the form of business organization by written 183 
amendment in such form and at such time as specified by rule. 184 
 (a)  If any person, directly or indirectly or acting by or 185 
through one or more persons, proposes to purchase or acquire a 186 
controlling interest in a licensee, such person or group must 187 
submit an application for licensure as a money services business 188 
or deferred presentment provider before such purchase or 189 
acquisition at such t ime and in such form as prescribed by rule. 190 
As used in this subsection, the term "controlling interest" 191 
means the same as described in s. 560.127. 192 
 (b) The addition of a control partner, officer, member, 193 
joint venturer, director, controlling shareholder, or 194 
responsible person of the applicant who does not have a 195 
controlling interest and who has not previously complied with 196 
the applicable provisions of ss. 560.1401 and 560.141 is subject 197 
to such provisions. If the office determines that the licensee 198 
does not continue to meet the licensure requirements, the office 199 
may bring an administrative action in accordance with s. 560.114 200     
 
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to enforce the provisions of this chapter. 201 
 (c)  The commission shall adopt rules providing for the 202 
waiver of the license application required by this subsection if 203 
the person or group of persons proposing to purchase or acquire 204 
a controlling interest in a licensee has previously complied 205 
with the applicable provisions of ss. 560.1401 and 560.141 under 206 
the same legal entity or is curren tly licensed under this 207 
chapter. 208 
 Section 7.  Section 560.127, Florida Statutes, is repealed. 209 
 Section 8.  Paragraph (a) of subsection (1) of section 210 
560.141, Florida Statutes, is amended to read: 211 
 560.141  License application. — 212 
 (1)  To apply for a li cense as a money services business 213 
under this chapter, the applicant must submit: 214 
 (a)  An application to the office on forms prescribed by 215 
rule which includes the following information: 216 
 1.  The legal name and address of the applicant, including 217 
any fictitious or trade names used by the applicant in the 218 
conduct of its business. 219 
 2.  The date of the applicant's formation and the state in 220 
which the applicant was formed, if applicable. 221 
 3.  The name, social security number, alien identification 222 
or taxpayer identification number, business and residence 223 
addresses, and employment history for the past 5 years for each 224 
control officer, director, responsible person, the compliance 225     
 
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officer, each controlling shareholder, and any other person who 226 
has a controlling inte rest in the money services business as 227 
provided in s. 560.127 . 228 
 4.  A description of the organizational structure of the 229 
applicant, including the identity of any parent or subsidiary of 230 
the applicant, and the disclosure of whether any parent or 231 
subsidiary is publicly traded. 232 
 5.  The applicant's history of operations in other states 233 
if applicable and a description of the money services business 234 
or deferred presentment provider activities proposed to be 235 
conducted by the applicant in this state. 236 
 6.  If the applicant or its parent is a publicly traded 237 
company, copies of all filings made by the applicant with the 238 
United States Securities and Exchange Commission, or with a 239 
similar regulator in a country other than the United States, 240 
within the preceding year. 241 
 7.  The location at which the applicant proposes to 242 
establish its principal place of business and any other 243 
location, including branch offices and authorized vendors 244 
operating in this state. For each branch office and each 245 
location of an authorized vendor, the applicant shall include 246 
the nonrefundable fee required by s. 560.143. 247 
 8.  The name and address of the clearing financial 248 
institution or financial institutions through which the 249 
applicant's payment instruments are drawn or through which the 250     
 
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payment instruments are payable. 251 
 9.  The history of the applicant's material litigation, 252 
criminal convictions, pleas of nolo contendere, and cases of 253 
adjudication withheld. 254 
 10.  The history of material litigation, arrests, criminal 255 
convictions, pleas of nolo conten dere, and cases of adjudication 256 
withheld for each control executive officer, director, 257 
controlling shareholder, and responsible person. 258 
 11.  The name of the registered agent in this state for 259 
service of process unless the applicant is a sole proprietor. 260 
 12.  Any other information specified in this chapter or by 261 
rule. 262 
 Section 9.  Paragraph (g) of subsection (1) of section 263 
560.143, Florida Statutes, is amended to read: 264 
 560.143  Fees.— 265 
 (1)  LICENSE APPLICATION FEES. —The applicable non-266 
refundable fees must accompany an application for licensure: 267 
 (g)  License application fees for branch offices and 268 
authorized vendors are limited to $20,000 when such fees are 269 
assessed as a result of a change in control controlling interest 270 
as defined in s. 560.127 . 271 
 Section 10.  This act shall take effect October 1, 2022. 272