HB 389 2022 CODING: Words stricken are deletions; words underlined are additions. hb0389-00 Page 1 of 11 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S 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 CODING: Words stricken are deletions; words underlined are additions. hb0389-00 Page 2 of 11 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S 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 HB 389 2022 CODING: Words stricken are deletions; words underlined are additions. hb0389-00 Page 3 of 11 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S 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 HB 389 2022 CODING: Words stricken are deletions; words underlined are additions. hb0389-00 Page 4 of 11 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S (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 HB 389 2022 CODING: Words stricken are deletions; words underlined are additions. hb0389-00 Page 5 of 11 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S 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 HB 389 2022 CODING: Words stricken are deletions; words underlined are additions. hb0389-00 Page 6 of 11 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S (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 HB 389 2022 CODING: Words stricken are deletions; words underlined are additions. hb0389-00 Page 7 of 11 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S 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 HB 389 2022 CODING: Words stricken are deletions; words underlined are additions. hb0389-00 Page 8 of 11 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S 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 HB 389 2022 CODING: Words stricken are deletions; words underlined are additions. hb0389-00 Page 9 of 11 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S 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 HB 389 2022 CODING: Words stricken are deletions; words underlined are additions. hb0389-00 Page 10 of 11 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S 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 HB 389 2022 CODING: Words stricken are deletions; words underlined are additions. hb0389-00 Page 11 of 11 F L O R I D A H O U S E O F R E P R E S E N T A T I V E S 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