Massachusetts 2023-2024 Regular Session

Massachusetts House Bill H1106 Compare Versions

Only one version of the bill is available at this time.

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1	1	1 of 1
2	2	HOUSE DOCKET, NO. 2543 FILED ON: 1/19/2023
3	3	HOUSE . . . . . . . . . . . . . . . No. 1106
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	James M. Murphy
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act relative to the regulation of money transmission by the Division of Banks.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :DATE ADDED:James M. Murphy4th Norfolk1/19/2023 1 of 47
16	16	HOUSE DOCKET, NO. 2543 FILED ON: 1/19/2023
17	17	HOUSE . . . . . . . . . . . . . . . No. 1106
18	18	By Representative Murphy of Weymouth, a petition (accompanied by bill, House, No. 1106) of
19	19	James M. Murphy for legislation to further regulate certain money transmissions. Financial
20	20	Services.
21	21	The Commonwealth of Massachusetts
22	22	_______________
23	23	In the One Hundred and Ninety-Third General Court
24	24	(2023-2024)
25	25	_______________
26	26	An Act relative to the regulation of money transmission by the Division of Banks.
27	27	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
28	28	of the same, as follows:
29	29	1 SECTION 1. Chapter 167F of the General Laws is hereby amended by striking out
30	30	2section 4 and inserting in place thereof the following section:-
31	31	3 Section 4. A bank may engage directly in the business of selling, issuing or registering
32	32	4checks.
33	33	5 SECTION 2. Chapter 169 of the General Laws is hereby repealed.
34	34	6 SECTION 3. The General Laws are hereby amended by inserting after chapter 169A
35	35	7the following chapter:-
36	36	8 CHAPTER 169B.
37	37	9 THE MONEY TRANSMISSION ACT. 2 of 47
38	38	10 Section 1. - This chapter shall be known and may be cited as the Money Transmission
39	39	11Act.
40	40	12 Section 2 For purposes of this chapter, the following definitions shall apply:
41	41	13 "Acting in concert" means persons knowingly acting together with a common goal of
42	42	14jointly acquiring control of a licensee whether or not pursuant to an express agreement.
43	43	15 "Authorized delegate" means a person a licensee designates to engage in money
44	44	16transmission on behalf of the licensee.
45	45	17 "Average daily money transmission liability" means the amount of the licensee's
46	46	18outstanding money transmission obligations in the Commonwealth at the end of each day in a
47	47	19given period of time, added together, and divided by the total number of days in the given period
48	48	20of time. For purposes of calculating average daily money transmission liability under this chapter
49	49	21for any licensee required to do so, the given period of time shall be the quarters ending March
50	50	2231st, June 30th, September 30th, and December 31st.
51	51	23 "Bank Secrecy Act" means the Bank Secrecy Act, 31 U.S.C. Section 5311, et seq. and its
52	52	24implementing regulations, as amended and recodified from time to time.
53	53	25 "Closed loop stored value" means stored value that is redeemable by the issuer only for
54	54	26goods or services provided by the issuer or its affiliate or franchisees of the issuer or its affiliate,
55	55	27except to the extent required by applicable law to be redeemable in cash for its cash value;
56	56	28 “Commissioner” means the Commissioner of Banks.
57	57	29 "Control" means 3 of 47
58	58	30 (1)(A) the power to vote, directly or indirectly, at least 25 percent of the outstanding
59	59	31voting shares or voting interests of a licensee or person in control of a licensee;
60	60	32 (B)the power to elect or appoint a majority of key individuals or executive officers,
61	61	33managers, directors, trustees, or other persons exercising managerial authority of a person in
62	62	34control of a licensee; or
63	63	35 (C)the power to exercise, directly or indirectly, a controlling influence over the
64	64	36management or policies of a licensee or person in control of a licensee.
65	65	37 (2)Rebuttable Presumption of Control.
66	66	38 (A)A person is presumed to exercise a controlling influence when the person holds
67	67	39the power to vote, directly or indirectly, at least 10 percent of the outstanding voting shares or
68	68	40voting interests of a licensee or person in control of a licensee.
69	69	41 (B)A person presumed to exercise a controlling influence as defined by this section
70	70	42can rebut the presumption of control if the person is a passive investor.
71	71	43 (3)For purposes of determining the percentage of a person controlled by any other
72	72	44person, the person's interest shall be aggregated with the interest of any other immediate family
73	73	45member, including the person's spouse, parents, children, siblings, mothers- and fathers-in law,
74	74	46sons- and daughters-in-law, brothers- and sisters-in-law, and any other person who shares such
75	75	47person's home.
76	76	48 (4) Consistent with the authority described in subsection (b) of section 5, the
77	77	49commissioner may adopt regulations, policies and procedures as necessary, which may modify
78	78	50the definition of “control” as set out in this section. 4 of 47
79	79	51 “Division” shall mean the Division of Banks.
80	80	52 “Eligible rating” shall mean a credit rating of any of the three highest rating categories
81	81	53provided by an eligible rating service, whereby each category may include rating category
82	82	54modifiers such as “plus” or “minus” for S&P, or the equivalent for any other eligible rating
83	83	55service. Long-term credit ratings are deemed eligible if the rating is equal to A- or higher by
84	84	56S&P, or the equivalent from any other eligible rating service. Short-term credit ratings are
85	85	57deemed eligible if the rating is equal to or higher than A-2 or SP-2 by S&P, or the equivalent
86	86	58from any other eligible rating service. In the event that ratings differ among eligible rating
87	87	59services, the highest rating shall apply when determining whether a security bears an eligible
88	88	60rating.
89	89	61 “Eligible rating service” shall mean any Nationally Recognized Statistical Rating
90	90	62Organization (NRSRO) as defined by the U.S. Securities and Exchange Commission, and any
91	91	63other organization designated by the commissioner by rule or order.
92	92	64 “Federally insured depository financial institution” means a bank, credit union, savings
93	93	65and loan association, trust company, savings association, savings bank, industrial bank, or
94	94	66industrial loan company organized under the laws of the United States or any state of the United
95	95	67States, when such bank, credit union, savings and loan association, trust company, savings
96	96	68association, savings bank, industrial bank, or industrial loan company has federally insured
97	97	69deposits.
98	98	70 “In this state” means at a physical location within this state for a transaction requested in
99	99	71person. For a transaction requested electronically or by phone, the provider of money
100	100	72transmission may determine if the person requesting the transaction is “in this state” by relying 5 of 47
101	101	73on other information provided by the person regarding the location of the individual’s residential
102	102	74address or a business entity’s principal place of business or other physical address location, and
103	103	75any records associated with the person that the provider of money transmission may have that
104	104	76indicate such location, including but not limited to an address associated with an account.
105	105	77 “Individual” means a natural person.
106	106	78 “Key individual” means any individual ultimately responsible for establishing or
107	107	79directing policies and procedures of the licensee, such as an executive officer, manager, director,
108	108	80or trustee.
109	109	81 “Licensee” means a person licensed under this chapter.
110	110	82 “Material litigation” means litigation, that according to United States generally accepted
111	111	83accounting principles, is significant to a person’s financial health and would be required to be
112	112	84disclosed in the person’s annual audited financial statements, report to shareholders, or similar
113	113	85records.
114	114	86 “Money” means a medium of exchange that is authorized or adopted by the United States
115	115	87or a foreign government. The term includes a monetary unit of account established by an
116	116	88intergovernmental organization or by agreement between two or more governments.
117	117	89 “Monetary value” means a medium of exchange, whether or not redeemable in money.
118	118	90 “Money transmission” means any of the following:
119	119	91 (1) Selling or issuing payment instruments to a person located in this state.
120	120	92 (2)Selling or issuing stored value to a person located in this state. 6 of 47
121	121	93 (3)Receiving money for transmission from a person located in this state.
122	122	94 The term shall apply only to those transactions engaged in by a person for personal,
123	123	95family or household purposes. The term does not include the provision solely of online or
124	124	96telecommunications services or network access.
125	125	97 "MSB accredited state" means a state agency that is accredited by the Conference of State
126	126	98Bank Supervisors and Money Transmitter Regulators Association for money transmission
127	127	99licensing and supervision.
128	128	100 "Multistate licensing process" means any agreement entered into by and among state
129	129	101regulators relating to coordinated processing of applications for money transmission licenses,
130	130	102applications for the acquisition of control of a licensee, control determinations, or notice and
131	131	103information requirements for a change of key individuals.
132	132	104 "NMLS" means the Nationwide Multistate Licensing System and Registry developed by
133	133	105the Conference of State Bank Supervisors and the American Association of Residential
134	134	106Mortgage Regulators and owned and operated by the State Regulatory Registry, LLC, or any
135	135	107successor or affiliated entity, for the licensing and registration of persons in financial services
136	136	108industries.
137	137	109 "Outstanding money transmission obligations" shall be established and extinguished in
138	138	110accordance with applicable state law and shall mean:
139	139	111 (1)Any payment instrument or stored value issued or sold by the licensee to a person
140	140	112located in the United States or reported as sold by an authorized delegate of the licensee to a 7 of 47
141	141	113person that is located in the United States that has not yet been paid or refunded by or for the
142	142	114licensee, or escheated in accordance with applicable abandoned property laws; or
143	143	115 (2)Any money received for transmission by the licensee or an authorized delegate in
144	144	116the United States from a person located in the United States that has not been received by the
145	145	117payee or refunded to the sender, or escheated in accordance with applicable abandoned property
146	146	118laws.
147	147	119 (3)For purposes of this section, "in the United States" shall include, to the extent
148	148	120applicable, a person in any state, territory, or possession of the United States; the District of
149	149	121Columbia; the Commonwealth of Puerto Rico; or a U.S. military installation that is located in a
150	150	122foreign country.
151	151	123 "Passive investor" means a person that:
152	152	124 (1)Does not have the power to elect a majority of key individuals or executive
153	153	125officers, managers, directors, trustees, or other persons exercising managerial authority of a
154	154	126person in control of a licensee;
155	155	127 (2)Is not employed by and does not have any managerial duties of the licensee or
156	156	128person in control of a licensee;
157	157	129 (3)Does not have the power to exercise, directly or indirectly, a controlling influence
158	158	130over the management or policies of a licensee or person in control of a licensee; and
159	159	131 (4)Either:
160	160	132 (A)Attests to (1), (2), and (3), in a form and in a medium prescribed by the
161	161	133commissioner; or 8 of 47
162	162	134 (B)Commits to the passivity characteristics of (1), (2), and (3), in a written document.
163	163	135 "Payment instrument" means a written or electronic check, draft, money order, traveler's
164	164	136check, or other written or electronic instrument for the transmission or payment of money or
165	165	137monetary value, whether or not negotiable. The term does not include stored value or any
166	166	138instrument that (1) is redeemable by the issuer only for goods or services provided by the issuer
167	167	139or its affiliate or franchisees of the issuer or its affiliate, except to the extent required by
168	168	140applicable law to be redeemable in cash for its cash value; or (2) not sold to the public but issued
169	169	141and distributed as part of a loyalty, rewards, or promotional program.
170	170	142 "Person" means any individual, general partnership, limited partnership, limited liability
171	171	143company, corporation, trust, association, joint stock corporation, or other corporate entity
172	172	144identified by the commissioner.
173	173	145 "Receiving money for transmission" or "money received for transmission" means
174	174	146receiving money or monetary value in the United States for transmission within or outside the
175	175	147United States by electronic or other means.
176	176	148 "Stored value" means monetary value representing a claim against the issuer evidenced
177	177	149by an electronic or digital record, and that is intended and accepted for use as a means of
178	178	150redemption for money or monetary value, or payment for goods or services. The term includes,
179	179	151but is not limited to, "prepaid access" as defined by 31 C.F.R. 1010.100, as amended or
180	180	152recodified from time to time. Notwithstanding the foregoing, the term "stored value" does not
181	181	153include a payment instrument or closed loop stored value, or stored value not sold to the public
182	182	154but issued and distributed as part of a loyalty, rewards, or promotional program. 9 of 47
183	183	155 "Tangible net worth" shall mean the aggregate assets of a licensee excluding all
184	184	156intangible assets, less liabilities, as determined in accordance with United States generally
185	185	157accepted accounting principles.
186	186	158 Section 3. (a) This chapter does not apply to:
187	187	159 (1)An operator of a payment system to the extent that it provides processing,
188	188	160clearing, or settlement services, between or among persons exempted by this subsection or
189	189	161licensees, in connection with wire transfers, credit card transactions, debit card transactions,
190	190	162stored-value transactions, automated clearing house transfers, or similar funds transfers.
191	191	163 (2)A person appointed as an agent of a payee to collect and process a payment from
192	192	164a payor to the payee for goods or services, other than money transmission itself, provided to the
193	193	165payor by the payee, provided that:
194	194	166 (i)there exists a written agreement between the payee and the agent directing the
195	195	167agent to collect and process payments from payors on the payee's behalf;
196	196	168 (ii)the payee holds the agent out to the public as accepting payments for goods or
197	197	169services on the payee's behalf; and
198	198	170 (iii)payment for the goods and services is treated as received by the payee upon
199	199	171receipt by the agent so that the payor's obligation is extinguished and there is no risk of loss to
200	200	172the payor if the agent fails to remit the funds to the payee.
201	201	173 (3)A person that acts as an intermediary by processing payments between an entity
202	202	174that has directly incurred an outstanding money transmission obligation to a sender, and the
203	203	175sender's designated recipient, provided that the entity: 10 of 47
204	204	176 (i)is properly licensed or exempt from licensing requirements under this chapter;
205	205	177 (ii)provides a receipt, electronic record, or other written confirmation to the sender
206	206	178identifying the entity as the provider of money transmission in the transaction; and
207	207	179 (iii)bears sole responsibility to satisfy the outstanding money transmission obligation
208	208	180to the sender, including the obligation to make the sender whole in connection with any failure to
209	209	181transmit the funds to the sender's designated recipient.
210	210	182 (4)The United States or a department, agency, or instrumentality thereof, or its agent.
211	211	183 (5)Money transmission by the United States Postal Service or by an agent of the
212	212	184United States Postal Service.
213	213	185 (6)A state, county, city, or any other governmental agency or governmental
214	214	186subdivision or instrumentality of a state, or its agent.
215	215	187 (7)A federally insured depository financial institution, bank holding company, office
216	216	188of an international banking corporation, foreign bank that establishes a federal branch pursuant to
217	217	189the International Bank Act, 12 U.S.C. Section 3102, as amended or recodified from time to time,
218	218	190corporation organized pursuant to the Bank Service Corporation Act, 12 U.S.C. Sections 1861-
219	219	1911867, as amended or recodified from time to time, or corporation organized under the Edge Act,
220	220	19212 U.S.C. Sections 611-633, as amended or recodified from time to time.
221	221	193 (8)Electronic funds transfer of governmental benefits for a federal, state, county, or
222	222	194governmental agency by a contractor on behalf of the United States or a department, agency, or
223	223	195instrumentality thereof, or on behalf of a state or governmental subdivision, agency, or
224	224	196instrumentality thereof. 11 of 47
225	225	197 (9)A board of trade designated as a contract market under the federal Commodity
226	226	198Exchange Act, 7 U.S.C. Sections 1-25, as amended or recodified from time to time, or a person
227	227	199that, in the ordinary course of business, provides clearance and settlement services for a board of
228	228	200trade to the extent of its operation as or for such a board.
229	229	201 (10)A registered futures commission merchant under the federal commodities laws to
230	230	202the extent of its operation as such a merchant.
231	231	203 (11)A person registered as a securities broker-dealer under federal or state securities
232	232	204laws to the extent of its operation as such a broker-dealer.
233	233	205 (12)An individual employed by a licensee, authorized delegate, or any person
234	234	206exempted from the licensing requirements of the chapter when acting within the scope of
235	235	207employment and under the supervision of the licensee, authorized delegate, or exempted person
236	236	208as an employee and not as an independent contractor.
237	237	209 (13)A person expressly appointed as a third party service provider to or agent of an
238	238	210entity exempt under paragraph (7) of this subsection, solely to the extent that:
239	239	211 (i)such service provider or agent is engaging in money transmission on behalf of and
240	240	212pursuant to a written agreement with the exempt entity that sets forth the specific functions that
241	241	213the service provider or agent is to perform; and
242	242	214 (ii)the exempt entity assumes all risk of loss and all legal responsibility for satisfying
243	243	215the outstanding money transmission obligations owed to purchasers and holders of the
244	244	216outstanding money transmission obligations upon receipt of the purchaser's or holder's money or
245	245	217monetary value by the service provider or agent. 12 of 47
246	246	218 (14)A person exempt by regulation or order if the commissioner finds such exemption
247	247	219to be in the public interest and that the regulation of such person is not necessary for the purposes
248	248	220of this chapter.
249	249	221 (b)The commissioner may require that any person claiming to be exempt from
250	250	222licensing pursuant to subsection (a) provide information and documentation to the commissioner
251	251	223demonstrating that it qualifies for any claimed exemption.
252	252	224 Section 4.(a)(1) In order to carry out the purposes of this chapter, the commissioner
253	253	225may, subject to the provisions of paragraph (1) of subsection (b) and paragraph (2) of subsection
254	254	226(b):
255	255	227 (i)Enter into agreements or relationships with other government officials or federal
256	256	228and state regulatory agencies and regulatory associations in order to improve efficiencies and
257	257	229reduce regulatory burden by standardizing methods or procedures, and sharing resources, records
258	258	230or related information obtained under this chapter;
259	259	231 (ii)Use, hire, contract, or employ analytical systems, methods, or software to
260	260	232examine or investigate any person subject to this chapter;
261	261	233 (iii)Accept, from other state or federal government agencies or officials, licensing,
262	262	234examination, or investigation reports made by such other state or federal government agencies or
263	263	235officials; and
264	264	236 (iv)Accept audit reports made by an independent certified public accountant or other
265	265	237qualified third-party auditor for an applicant or licensee and incorporate the audit report in any
266	266	238report of examination or investigation. 13 of 47
267	267	239 (2)The commissioner shall have the broad administrative authority to administer,
268	268	240interpret and enforce this chapter, and promulgate rules or regulations implementing this chapter
269	269	241and to recover the cost of administering and enforcing this chapter by imposing and collecting
270	270	242proportionate and equitable fees and costs associated with applications, examinations,
271	271	243investigations, and other actions required to achieve the purpose of this chapter.
272	272	244 (b)(1)Except as otherwise provided in paragraph (2) of this subsection, all information
273	273	245or reports obtained by the commissioner from an applicant, licensee, or authorized delegate, and
274	274	246all information contained in or related to an examination, investigation, operating report, or
275	275	247condition report prepared by, on behalf of, or for the use of the commissioner, or financial
276	276	248statements, balance sheets, or authorized delegate information, are confidential and privileged,
277	277	249shall not be subject to subpoena, and are not subject to disclosure under chapter 66 of the
278	278	250General Laws. For the purpose of this paragraph, records of investigation and reports of
279	279	251examinations shall include records of investigation and reports of examinations conducted by a
280	280	252financial regulatory agency of the federal government and any other state, and of any foreign
281	281	253government which are considered confidential by the agency or foreign government and which
282	282	254are in possession of the commissioner. In any proceeding before a court, the court may issue a
283	283	255protective order to seal the record protecting the confidentiality in appropriate circumstances to
284	284	256protect the confidentiality of any such record, other than any such record on file with the court or
285	285	257filed in connection with the court proceeding, and the court may exclude the public from any
286	286	258portion of the proceeding at which any such record may be disclosed. Copies of the reports of
287	287	259examination shall be furnished to a licensee for its use only and shall not be exhibited to any
288	288	260other person, organization or agency without prior written approval by the commissioner. The
289	289	261commissioner may, in his or her discretion, furnish to regulatory agencies of the federal 14 of 47
290	290	262government, of other states, or of foreign countries, and any law enforcement agency, the
291	291	263information, reports, inspections and statements relating to the licensees under the
292	292	264commissioner’s supervision.
293	293	265 (2)The commissioner may disclose information not otherwise subject to disclosure
294	294	266under paragraph (1) of this subsection to representatives of state or federal agencies who promise
295	295	267in a record that they will maintain the confidentiality of the information or where the
296	296	268commissioner finds that the release is reasonably necessary for the protection and interest of the
297	297	269public in accordance with chapter 66 of the General Laws.
298	298	270 (3)This subsection does not prohibit the commissioner from disclosing to the public
299	299	271a list of all licensees or the aggregated financial or transactional data concerning those licensees.
300	300	272 (4)Information contained in the records of the division that is not confidential and
301	301	273may be made available to the public either on the division’s website, upon receipt by the division
302	302	274of a written request, or in NMLS shall include:
303	303	275 (i) The name, business address, telephone number, and unique identifier of a licensee;
304	304	276 (ii) The business address of a licensee's registered agent for service;
305	305	277 (iii) The name, business address, and telephone number of all authorized delegates;
306	306	278 (iv) The terms of or a copy of any bond filed by a licensee, provided that confidential
307	307	279information, including, but not limited to, prices and fees for such bond is redacted;
308	308	280 (v) Copies of any non-confidential final orders of the division relating to any violation of
309	309	281this chapter or regulations implementing this chapter; and 15 of 47
310	310	282 (5) Imposition of an administrative fine or penalty under this chapter.
311	311	283 (c)(1)The commissioner may conduct an examination or investigation of a licensee or
312	312	284authorized delegate or otherwise take independent action authorized by this chapter or by a rule
313	313	285adopted or order issued under this chapter as reasonably necessary or appropriate to administer
314	314	286and enforce this chapter, regulations implementing this chapter, and other applicable law,
315	315	287including the Bank Secrecy Act and the USA PATRIOT ACT. The commissioner may:
316	316	288 (i)conduct an examination either on-site or off-site as the commissioner may
317	317	289reasonably require;
318	318	290 (ii)conduct an examination in conjunction with an examination conducted by
319	319	291representatives of other state agencies or agencies of another state or of the federal government;
320	320	292 (iii)accept the examination report of another state agency or an agency of another
321	321	293state or of the federal government, or a report prepared by an independent accounting firm,
322	322	294which on being accepted is considered for all purposes as an official report of the commissioner;
323	323	295and
324	324	296 (iv)summon and examine under oath a key individual or employee of a licensee or
325	325	297authorized delegate and require the person to produce records regarding any matter related to the
326	326	298condition and business of the licensee or authorized delegate.
327	327	299 (2)A licensee or authorized delegate shall provide, and the commissioner shall have
328	328	300full and complete access to, all records the commissioner may reasonably require to conduct a
329	329	301complete examination. The records must be provided at the location and in the format specified
330	330	302by the commissioner, provided, the commissioner may utilize multistate record production 16 of 47
331	331	303standards and examination procedures when such standards will reasonably achieve the
332	332	304requirements of this paragraph.
333	333	305 (3)Unless otherwise directed by the commissioner, a licensee shall pay all costs
334	334	306reasonably incurred in connection with an examination of the licensee or the licensee's
335	335	307authorized delegates.
336	336	308 (d)(1)To efficiently and effectively administer and enforce this chapter and to minimize
337	337	309regulatory burden, the commissioner is authorized to participate in multistate supervisory
338	338	310processes established between states and coordinated through the Conference of State Bank
339	339	311Supervisors, Money Transmitter Regulators Association, and affiliates and successors thereof for
340	340	312all licensees that hold licenses in this state and other states. As a participant in multistate
341	341	313supervision, the commissioner may:
342	342	314 (i)cooperate, coordinate, and share information with other state and federal
343	343	315regulators in accordance with subsection (b)
344	344	316 (ii)enter into written cooperation, coordination, or information-sharing contracts or
345	345	317agreements with organizations the membership of which is made up of state or federal
346	346	318governmental agencies; and
347	347	319 (iii)cooperate, coordinate, and share information with organizations the membership
348	348	320of which is made up of state or federal governmental agencies, provided that the organizations
349	349	321agree in writing to maintain the confidentiality and security of the shared information in
350	350	322accordance with subsection (b). 17 of 47
351	351	323 (2)The commissioner may not waive, and nothing in this subsection constitutes a
352	352	324waiver of, the commissioner's authority to conduct an examination or investigation or otherwise
353	353	325take independent action authorized by this chapter or a rule adopted or order issued under this
354	354	326chapter to enforce compliance with applicable state or federal law.
355	355	327 (3)A joint examination or investigation, or acceptance of an examination or
356	356	328investigation report, does not waive an examination assessment provided for in this chapter.
357	357	329 (e)(1)In the event state money transmission jurisdiction is conditioned on a federal law,
358	358	330any inconsistencies between a provision of this chapter and the federal law governing money
359	359	331transmission shall be governed by the applicable federal law to the extent of the inconsistency.
360	360	332 (2)In the event of any inconsistencies between this chapter and a federal law that
361	361	333governs pursuant to paragraph (1), the commissioner may provide interpretive guidance that:
362	362	334 (i)identifies the inconsistency; and
363	363	335 (ii)identifies the appropriate means of compliance with federal law.
364	364	336 Section 5.(a)(1) A person may not engage in the business of money transmission or
365	365	337advertise, solicit, or hold itself out as providing money transmission unless the person is licensed
366	366	338under this chapter;
367	367	339 (2)This subsection does not apply to:
368	368	340 (i)A person that is an authorized delegate of a person licensed under this chapter
369	369	341acting within the scope of authority conferred by a written contract with the licensee; or 18 of 47
370	370	342 (ii)A person that is exempt pursuant to subsection (a) of section 3and does not
371	371	343engage in money transmission outside the scope of such exemption.
372	372	344 (3)A license issued under subsection (e) is not transferable or assignable.
373	373	345 (b)(1)To establish consistent licensing between Massachusetts and other states, the
374	374	346commissioner is authorized to:
375	375	347 (i) implement all licensing provisions of this chapter in a manner that is consistent with
376	376	348other states that have adopted this chapter or multistate licensing processes; and
377	377	349 (ii) participate in nationwide protocols for licensing cooperation and coordination among
378	378	350state regulators provided that such protocols are consistent with this chapter.
379	379	351 (2) In order to fulfill the purposes of this chapter, the Commissioner is authorized to
380	380	352establish relationships or contracts with NMLS or other entities designated by NMLS to enable
381	381	353the Commissioner to:
382	382	354 (i) collect and maintain records;
383	383	355 (ii) coordinate multistate licensing processes and supervision processes;
384	384	356 (iii) process fees; and
385	385	357 (iv) facilitate communication between the division and licensees or other persons subject
386	386	358to this chapter.
387	387	359 (3) The commissioner may participate in a multistate licensing process and the NMLS for
388	388	360the sharing of regulatory information and for the application, by electronic or other means, and
389	389	361licensing of persons engaged in money transmission. The commissioner may establish 19 of 47
390	390	362requirements for participation by an applicant in the NMLS that vary from the provisions of this
391	391	363chapter. The applicant shall pay directly to the NMLS any additional fee relating to participation
392	392	364in such multistate licensing system.
393	393	365 (4) The commissioner is authorized to utilize NMLS forms, processes, and functionalities
394	394	366in accordance with this chapter. In the event NMLS does not provide functionality, forms, or
395	395	367processes for a provision of this chapter, the commissioner is authorized to implement the
396	396	368requirements in a manner that facilitates uniformity with respect to licensing, supervision,
397	397	369reporting, and regulation of licensees which are licensed in multiple jurisdictions.
398	398	370 (5) For the purpose of participating in the NMLS, the commissioner is authorized to
399	399	371waive or modify, in whole or in part, by rule, regulation or order, any or all of the requirements
400	400	372and to establish new requirements as reasonably necessary to participate in the NMLS.
401	401	373 (c)(1)The application for a license shall be in a form prescribed by the commissioner and
402	402	374shall contain the name and address or addresses where the business of the applicant is located
403	403	375and if the applicant is a partnership, association, corporation or other form of business
404	404	376organization, the names and addresses of each member, director and principal officer thereof.
405	405	377Such application shall also include a description of the activities of the applicant, in such detail
406	406	378and for such periods as the commissioner may require, and such further information as the
407	407	379commissioner may require.
408	408	380 (2) Each application for a license shall be accompanied by an investigation fee and a
409	409	381license fee. The investigation and license fees shall be determined annually by the secretary of
410	410	382administration and finance under section 3B of chapter 7. 20 of 47
411	411	383 (d)(1)Any individual in control of a licensee or applicant, any individual that seeks to
412	412	384acquire control of a licensee, and each key individual shall furnish to the commissioner through
413	413	385NMLS the following items:
414	414	386 (i)The individual's fingerprints for submission to the Federal Bureau of Investigation
415	415	387and the commissioner for purposes of a national criminal history background check unless the
416	416	388person currently resides outside of the United States and has resided outside of the United States
417	417	389for the last ten years.
418	418	390 (ii)Personal history and experience in a form and in a medium prescribed by the
419	419	391commissioner, to obtain the following:
420	420	392 (A)An independent credit report from a consumer reporting agency unless the
421	421	393individual does not have a Social Security number, in which case, this requirement shall be
422	422	394waived;
423	423	395 (B)Information related to any criminal convictions or pending charges; and
424	424	396 (C)Information related to any regulatory or administrative action and any civil
425	425	397litigation involving claims of fraud, misrepresentation, conversion, mismanagement of funds,
426	426	398breach of fiduciary duty, or breach of contract.
427	427	399 (2)If the individual has resided outside of the United States at any time in the last ten
428	428	400years, the individual shall also provide an investigative background report prepared by an
429	429	401independent search firm that meets the following requirements:
430	430	402 (i)At a minimum, the search firm shall: 21 of 47
431	431	403 (A)Demonstrate that it has sufficient knowledge, resources, and employs accepted
432	432	404and reasonable methodologies to conduct the research of the background report; and
433	433	405 (B)Not be affiliated with or have an interest with the individual it is researching.
434	434	406 (ii)At a minimum, the investigative background report shall be written in the English
435	435	407language and shall contain the following:
436	436	408 (A)If available in the individual's current jurisdiction of residency, a comprehensive
437	437	409credit report, or any equivalent information obtained or generated by the independent search firm
438	438	410to accomplish such report, including a search of the court data in the countries, provinces, states,
439	439	411cities, towns, and contiguous areas where the individual resided and worked;
440	440	412 (B)Criminal records information for the past ten years, including, but not limited to,
441	441	413felonies, misdemeanors, or similar convictions for violations of law in the countries, provinces,
442	442	414states, cities, towns, and contiguous areas where the individual resided and worked;
443	443	415 (C); Employment history;
444	444	416 (D)Media history, including an electronic search of national and local publications,
445	445	417wire services, and business applications; and
446	446	418 (E)Financial services-related regulatory history, including but not limited to, money
447	447	419transmission, securities, banking, insurance, and mortgage-related industries.
448	448	420 (3)The commissioner may, as part of an investigation or examination of a licensee,
449	449	421require a background investigation by means of state criminal history record checks by the
450	450	422department of criminal justice information services pursuant to section 172 of chapter 6 on a
451	451	423manager of a location from which an authorized delegate engages in money transmission. 22 of 47
452	452	424 (e)(1) When an application for an original license under this chapter appears to include
453	453	425all the items and addresses all of the matters that are required, the application is complete and the
454	454	426commissioner shall promptly notify the applicant in a record of the date on which the application
455	455	427is determined to be complete:
456	456	428 (2)A determination by the commissioner that an application is complete and is
457	457	429accepted for processing means only that the application, on its face, appears to include all of the
458	458	430items, including the Criminal Background Check response from the FBI, and address all of the
459	459	431matters that are required, and is not an assessment of the substance of the application or of the
460	460	432sufficiency of the information provided.
461	461	433 (3) When an application is filed and considered complete under this subsection, the
462	462	434commissioner shall investigate the applicant's financial condition and responsibility, financial
463	463	435and business experience, character, and general fitness. The commissioner may conduct an on-
464	464	436site investigation of the applicant, the reasonable cost of which the applicant must pay. The
465	465	437commissioner shall issue a license to an applicant under this subsection if the commissioner finds
466	466	438that all of the following conditions have been fulfilled:
467	467	439 (i)The applicant has complied with subsection (c) and subsection (d); and
468	468	440 (ii)the financial condition and responsibility, financial and business experience,
469	469	441competence, character, and general fitness of the applicant; and the competence, experience,
470	470	442character, and general fitness of the key individuals and persons in control of the applicant
471	471	443indicate that it is in the interest of the public to permit the applicant to engage in money
472	472	444transmission. 23 of 47
473	473	445 (4)The commissioner is authorized to accept the results of an investigation
474	474	446conducted by another state regulatory agency for the purpose of paragraph (3) if a licensee avails
475	475	447itself or is otherwise subject to the multistate licensing process.
476	476	448 (5)The commissioner shall issue a formal written notice of the denial of a license
477	477	449application within 30 days of the decision to deny the application. The Commissioner shall set
478	478	450forth in the notice of denial the specific reasons for the denial of the application. An applicant
479	479	451whose application is denied by the commissioner under this paragraph may appeal pursuant to
480	480	452the procedures set forth in chapter 30A of the General Laws.
481	481	453 (6)The initial license term shall begin on the day the application is approved. The
482	482	454license shall expire on December 31st of the year in which the license term began, unless the
483	483	455initial license date is between November 1st and December 31st, in which instance the initial
484	484	456license term shall run through December 31st of the following year.
485	485	457 (f) A license may be renewed upon the filing of a renewal application in such form and
486	486	458containing all such information as the commissioner may prescribe.
487	487	459 (1)An annual renewal fee to be determined annually by the secretary of
488	488	460administration and finance under the provisions of section 3B of chapter 7 shall be paid upon
489	489	461submission of the renewal application.
490	490	462 (2)The renewal term shall be for a period of 1 year and shall begin on January 1st of
491	491	463each year after the initial license term and shall expire on December 31st of the year the renewal
492	492	464term begins. 24 of 47
493	493	465 (g)(1)If a licensee does not continue to meet the qualifications or satisfy the
494	494	466requirements that apply to an applicant for a new money transmission license, the Commissioner
495	495	467may suspend or revoke the licensee's license in accordance with the procedures established by
496	496	468this chapter or chapter 30A of the General Laws..
497	497	469 (2)An applicant for a money transmission license must demonstrate that it meets or
498	498	470will meet, and a money transmission licensee must at all times meet, the requirements in
499	499	471subsections (a) through (c), inclusive, of section 10of this chapter.
500	500	472 (h)A licensee shall annually, not later than a date to be determined by the
501	501	473commissioner, file a report with the commissioner containing such information as the
502	502	474commissioner may require concerning the business and operations during the preceding calendar
503	503	475year. A licensee neglecting to file such report or failing to amend the same within 15 days of
504	504	476notice from the commissioner directing the same shall, unless such neglect or failure is due to
505	505	477justifiable cause and not due to willful neglect, pay to the commonwealth $50 for each day
506	506	478during which such neglect or failure continues.
507	507	479 Section 6.(a)(1) Any person, or group of persons acting in concert, seeking to
508	508	480acquire control of a licensee shall file notice with the commissioner prior to acquiring control.
509	509	481An addition or replacement of a key individual pursuant to subsection (b) is not deemed to be an
510	510	482acquisition of control of a licensee and is not subject to these acquisition of control provisions.
511	511	483 (2)A person, or group of persons acting in concert, seeking to acquire control of a
512	512	484licensee shall, in cooperation with the licensee submit a notice in a form and in a medium
513	513	485prescribed by the commissioner. 25 of 47
514	514	486 (3)Upon request, the commissioner may permit a licensee or the person, or group of
515	515	487persons acting in concert, to submit some or all information required by the commissioner
516	516	488pursuant to paragraph (2) without using NMLS.
517	517	489 (4)The notice required by paragraph (2) shall include information required by
518	518	490subsection (d) of section 5 for any new key individuals that have not previously completed the
519	519	491requirements of subsection (d) of section 5 for a licensee.
520	520	492 (5)When a notice is filed, the commissioner shall investigate as deemed necessary
521	521	493the person, or group of persons acting in concert, seeking to acquire control. The commissioner
522	522	494shall not object to an acquisition of control pursuant to this subsection if the commissioner finds
523	523	495that all of the following conditions have been fulfilled:
524	524	496 (i)The requirements of paragraphs (2) and (4) of this subsection have been met, as
525	525	497applicable; and
526	526	498 (ii)the financial condition and responsibility, character, and general fitness of the
527	527	499person, or group of persons acting in concert, seeking to acquire control; and the competence,
528	528	500experience, character, and general fitness of the key individuals and persons that would be in
529	529	501control of the licensee after the acquisition of control indicate that it is in the interest of the
530	530	502public consistent with the purposes of this chapter to permit the person, or group of persons
531	531	503acting in concert, to control the licensee.
532	532	504
533	533	505 (6)The requirements of paragraph (1) and paragraph (2) of this subsection do not
534	534	506apply to any of the following: 26 of 47
535	535	507 (i)A person that acts as a proxy for the sole purpose of voting at a designated
536	536	508meeting of the shareholders or holders of voting shares or voting interests of a licensee or a
537	537	509person in control of a licensee;
538	538	510 (ii)A person that acquires control of a licensee by devise or descent;
539	539	511 (iii)A person that acquires control of a licensee as a personal representative,
540	540	512custodian, guardian, conservator, or trustee, or as an officer appointed by a court of competent
541	541	513jurisdiction or by operation of law;
542	542	514 (iv)A person that is exempt under paragraph (7) of subsection (a) of section 3;
543	543	515 (v)A public offering of securities of a licensee or a person in control of a licensee; or
544	544	516 (vi)An internal reorganization of a person in control of the licensee where the
545	545	517ultimate person in control of the licensee remains the same.
546	546	518 (7)Persons in clauses (ii) through (iv), inclusive, of paragraph (6) in cooperation with
547	547	519the licensee shall notify the commissioner within 15 days after the acquisition of control.
548	548	520 (8)The commissioner is authorized to accept the determination pursuant to
549	549	521subsection (a) of section 6 of this chapter of another state regulatory agency if a licensee avails
550	550	522itself or is otherwise subject to the multistate licensing process.
551	551	523 (b)(1)A licensee adding or replacing any key individual shall:
552	552	524 (i)Provide notice in a manner prescribed by the commissioner within 15 days after
553	553	525the effective date of the key individual's appointment; and
554	554	526 (ii)Provide information as required by subsection (d) of section 5. 27 of 47
555	555	527 (2)When a notification pursuant to this section is filed, the commissioner shall
556	556	528investigate as deemed necessary the key individual. The commissioner shall not object to the
557	557	529change of key individual pursuant to this section if the commissioner finds that the financial
558	558	530responsibility, character, and general fitness of the key individual would indicate that it is in the
559	559	531interest of the public consistent with the purposes of this chapter.
560	560	532 (3)The commissioner is authorized to accept the determination pursuant to
561	561	533subsection (b) of section 6 of this chapter of another state regulatory agency if the licensee
562	562	534avails itself or is otherwise subject to the multistate licensing process.
563	563	535 Section 7.(a)(1) Each licensee shall submit a report of condition within 45 days of
564	564	536the end of the calendar quarter, or within any extended time as the commissioner may prescribe.
565	565	537 (2)The report of condition shall include:
566	566	538 (i)Financial information at the licensee level;
567	567	539 (ii)Nationwide and state-specific money transmission transaction information in
568	568	540every jurisdiction in the United States where the licensee is licensed to engage in money
569	569	541transmission;
570	570	542 (iii)Permissible investments report;
571	571	543 (iv)Transaction destination country reporting for money received for transmission, if
572	572	544applicable; and
573	573	545 (v)Any other information the commissioner reasonably requires with respect to the
574	574	546licensee. The commissioner is authorized and encouraged to utilize NMLS for the submission of
575	575	547the report required by paragraph (1) of this subsection this and is authorized to change or update 28 of 47
576	576	548as necessary the requirements of this subsection to carry out the purposes of this chapter and
577	577	549maintain consistency with NMLS reporting.
578	578	550 (3)The information required by clause (iv) of paragraph (2) of this subsection shall
579	579	551only be included in a report of condition submitted within 45 days of the end of the fourth
580	580	552calendar quarter.
581	581	553 (b)(1)Each licensee shall, within 90 days after the end of each fiscal year, or within any
582	582	554extended time as the commissioner may prescribe, file with the commissioner:
583	583	555 (i)An audited financial statement of the licensee for the fiscal year prepared in
584	584	556accordance with United States generally accepted accounting principles; and
585	585	557 (ii)Any other information as the commissioner may reasonably require.
586	586	558 (2)The audited financial statements shall be prepared by an independent certified
587	587	559public accountant;
588	588	560 (3)The audited financial statements shall include or be accompanied by a certificate
589	589	561of opinion of the independent certified public accountant that is satisfactory in form and content
590	590	562to the commissioner. If the certificate or opinion is qualified, the commissioner may order the
591	591	563licensee to take any action as the Commissioner may find necessary to enable the independent or
592	592	564certified public accountant or independent public accountant to remove the qualification.
593	593	565 (c)(1)Each licensee shall submit a report of authorized delegates within 45 days of the
594	594	566end of the calendar quarter. The commissioner is authorized and encouraged to utilize NMLS for
595	595	567the submission of the report required by this paragraph provided that such functionality is
596	596	568consistent with the requirements of this subsection. 29 of 47
597	597	569 (2)The authorized delegate report shall include, at a minimum, each authorized
598	598	570delegate's:
599	599	571 (i)Company legal name;
600	600	572 (ii)Taxpayer employer identification number;
601	601	573 (iii)Principal provider identifier;
602	602	574 (iv)Physical address;
603	603	575 (v)Mailing address;
604	604	576 (vi)Any business conducted in other states;
605	605	577 (vii)Any fictitious or trade name;
606	606	578 (viii)Contact person name, phone number, and email
607	607	579 (ix)Start date as licensee’s authorized delegate;
608	608	580 (x)End date acting as licensee’s authorized delegate, if applicable;
609	609	581 and
610	610	582 (xi)Any other information the commissioner reasonably requires with respect to the
611	611	583authorized delegate.
612	612	584 (d)(1)A licensee shall file a report with the commissioner within one business day after
613	613	585the licensee has reason to know of the occurrence of any of the following events: 30 of 47
614	614	586 (i)the filing of a petition by or against the licensee under the United States
615	615	587Bankruptcy Code, 11 U.S.C. Section 101-110, as amended or recodified from time to time, for
616	616	588bankruptcy or reorganization;
617	617	589 (ii)the filing of a petition by or against the licensee for receivership, the
618	618	590commencement of any other judicial or administrative proceeding for its dissolution or
619	619	591reorganization, or the making of a general assignment for the benefit of its creditors; or
620	620	592 (iii)the commencement of a proceeding to revoke or suspend its license in a state or
621	621	593country in which the licensee engages in business or is licensed.
622	622	594 (2)A licensee shall file a report with the commissioner within three business day
623	623	595after the licensee has reason to know of the occurrence of any of the following events:
624	624	596 (i)a charge or conviction of the licensee or of a key individual or person in control of
625	625	597the licensee for a felony; or
626	626	598 (ii)a charge or conviction of an authorized delegate for a felony.
627	627	599 (e)A licensee and an authorized delegate shall file all reports required by federal
628	628	600currency reporting, record keeping, and suspicious activity reporting requirements as set forth in
629	629	601the Bank Secrecy Act and other federal and state laws pertaining to money laundering. The
630	630	602timely filing of a complete and accurate report required under this subsection with the
631	631	603appropriate federal agency is deemed compliant with the requirements of this subsection.
632	632	604 (f)(1)Licensee shall maintain the following records, for determining its compliance
633	633	605with this chapter for at least 3 years:
634	634	606 (i)a record of each outstanding money transmission obligation sold; 31 of 47
635	635	607 (ii)a general ledger posted at least monthly containing all asset, liability, capital,
636	636	608income, and expense accounts;
637	637	609 (iii)bank statements and bank reconciliation records;
638	638	610 (iv)records of outstanding money transmission obligations;
639	639	611 (v)records of each outstanding money transmission obligation paid within the three-
640	640	612year period;
641	641	613 (vi)a list of the last known names and addresses of all of the licensee's authorized
642	642	614delegates; and
643	643	615 (vii)any other records the commissioner reasonably requires by rule.
644	644	616 (2)The items specified in paragraph (1) of this subsection may be maintained in any
645	645	617form of record.
646	646	618 (3)Records specified in paragraph (1) of this subsection may be maintained outside
647	647	619this state if they are made accessible to the commissioner on 7 business-days' notice that is sent
648	648	620in a record.
649	649	621 (4)All records maintained by the licensee as required in clauses (i) through (iii),
650	650	622inclusive, of this subsection are open to inspection by the commissioner pursuant to paragraph
651	651	623(1) of subsection (c) of section 4.
652	652	624 Section 8.(a)(1) In this subsection, "remit" means to make direct payments of
653	653	625money to a licensee or its representative authorized to receive money or to deposit money in a
654	654	626bank in an account specified by the licensee. 32 of 47
655	655	627 (2)Before a licensee is authorized to conduct business through an authorized delegate
656	656	628or allows a person to act as the licensee's authorized delegate, the licensee must:
657	657	629 (i)adopt, and update as necessary, written policies and procedures reasonably
658	658	630designed to ensure that the licensee's authorized delegates comply with applicable state and
659	659	631federal law;
660	660	632 (ii)enter into a written contract that complies with paragraph (4); and
661	661	633 (iii)conduct a reasonable risk-based background investigation sufficient for the
662	662	634licensee to determine whether the authorized delegate has complied and will likely comply with
663	663	635applicable state and federal law.
664	664	636 (3)An authorized delegate must operate in full compliance with this chapter.
665	665	637 (4)The written contract required by paragraph (2) must be signed by the licensee and
666	666	638the authorized delegate and, at a minimum, must:
667	667	639 (i)appoint the person signing the contract as the licensee's authorized delegate with
668	668	640the authority to conduct money transmission on behalf of the licensee;
669	669	641 (ii)set forth the nature and scope of the relationship between the licensee and the
670	670	642authorized delegate and the respective rights and responsibilities of the parties;
671	671	643 (iii)require the authorized delegate to agree to fully comply with all applicable state
672	672	644and federal laws, rules, and regulations pertaining to money transmission, including this chapter
673	673	645and regulations implementing this chapter, relevant provisions of the Bank Secrecy Act and the
674	674	646USA PATRIOT ACT; 33 of 47
675	675	647 (iv)require the authorized delegate to remit and handle money and monetary value in
676	676	648accordance with the terms of the contract between the licensee and the authorized delegate;
677	677	649 (v)impose a trust on money and monetary value net of fees received for money
678	678	650transmission for the benefit of the licensee;
679	679	651 (vi)require the authorized delegate to prepare and maintain records as required by this
680	680	652chapter or regulations implementing this chapter, or as reasonably requested by the
681	681	653Commissioner;
682	682	654 (vii)acknowledge that the authorized delegate consents to examination or investigation
683	683	655by the commissioner;
684	684	656 (viii)state that the licensee is subject to regulation by the Commissioner and that, as
685	685	657part of that regulation, the commissioner may suspend or revoke an authorized delegate
686	686	658designation or require the licensee to terminate an authorized delegate designation; and
687	687	659 (ix)acknowledge receipt of the written policies and procedures required under clause
688	688	660(i) of paragraph (2).
689	689	661 (5)If the licensee's license is suspended, revoked, surrendered, or expired, the
690	690	662licensee must, within 5 business days, provide documentation to the commissioner that the
691	691	663licensee has notified all applicable authorized delegates of the licensee whose names are in a
692	692	664record filed with the commissioner of the suspension, revocation, surrender, or expiration of a
693	693	665license. Upon suspension, revocation, surrender, or expiration of a license, applicable authorized
694	694	666delegates shall immediately cease to provide money transmission as an authorized delegate of
695	695	667the licensee. 34 of 47
696	696	668 (6) An authorized delegate of a licensee holds in trust for the benefit of the licensee
697	697	669all money net of fees received from money transmission. If any authorized delegate commingles
698	698	670any funds received from money transmission with any other funds or property owned or
699	699	671controlled by the authorized delegate, all commingled funds and other property shall be
700	700	672considered held in trust in favor of the licensee in an amount equal to the amount of money net
701	701	673of fees received from money transmission.
702	702	674 (7)An authorized delegate may not use a subdelegate to conduct money transmission
703	703	675on behalf of a licensee.
704	704	676 (b)A person shall not engage in the business of money transmission on behalf of a
705	705	677person not licensed under this chapter or not exempt pursuant to section 3 of this chapter. A
706	706	678person that engages in such activity provides money transmission to the same extent as if the
707	707	679person were a licensee, and shall be jointly and severally liable with the unlicensed or nonexempt
708	708	680person.
709	709	681 Section 9.(a)(1) Every licensee shall forward all money received for transmission
710	710	682in accordance with the terms of the agreement between the licensee and the sender unless the
711	711	683licensee has a reasonable belief or a reasonable basis to believe that the sender may be a victim
712	712	684of fraud or that a crime or violation of law, rule, or regulation has occurred, is occurring, or may
713	713	685occur.
714	714	686 (2)If a licensee fails to forward money received for transmission in accordance with
715	715	687this section, the licensee must respond to inquiries by the sender with the reason for the failure
716	716	688unless providing a response would violate a state or federal law, rule, or regulation.
717	717	689 (b)(1)This subsection does not apply to: 35 of 47
718	718	690 (i)money received for transmission subject to the federal Remittance Rule (12
719	719	691C.F.R. Part 1005, Subpart B), as amended or recodified from time to time; or
720	720	692 (ii)money received for transmission pursuant to a written agreement between the
721	721	693licensee and payee to process payments for goods or services provided by the payee.
722	722	694 (2)Every licensee shall refund to the sender within 10 days of receipt of the sender's
723	723	695written request for a refund of any and all money received for transmission unless any of the
724	724	696following occurs:
725	725	697 (i)The money has been forwarded within 10 days of the date on which the money
726	726	698was received for transmission;
727	727	699 (ii)Instructions have been given committing an equivalent amount of money to the
728	728	700person designated by the sender within 10 days of the date on which the money was received for
729	729	701transmission;
730	730	702 (iii)The agreement between the licensee and the sender instructs the licensee to
731	731	703forward the money at a time that is beyond 10 days of the date on which the money was received
732	732	704for transmission. If funds have not yet been forwarded in accordance with the terms of the
733	733	705agreement between the licensee and the sender, the licensee shall issue a refund in accordance
734	734	706with the other provisions of this subsection; or
735	735	707 (iv)The refund is requested for a transaction that the licensee has not completed based
736	736	708on a reasonable belief or a reasonable basis to believe that a crime or violation of law, rule, or
737	737	709regulation has occurred, is occurring, or may occur.
738	738	710 (v)The refund request does not enable the licensee to: 36 of 47
739	739	711 (A)Identify the sender's name and address or telephone number; or
740	740	712 (B)Identify the particular transaction to be refunded in the event the sender has
741	741	713multiple transactions outstanding.
742	742	714 (c)(1)This subsection does not apply to:
743	743	715 (i)Money received for transmission subject to the federal Remittance
744	744	716 Rule (12 C.F.R. Part 1005, Subpart B), as amended or recodified from time to time;
745	745	717 (ii)money received for transmission that is not primarily for personal, family or
746	746	718household purposes; or
747	747	719 (iii)money received for transmission pursuant to a written agreement between the
748	748	720licensee and payee to process payments for goods or services provided by the payee.
749	749	721 (2)For purposes of this subsection "receipt" means a paper receipt, electronic record
750	750	722or other written confirmation. For a transaction conducted in person, the receipt may be provided
751	751	723electronically if the sender requests or agrees to receive an electronic receipt. For a transaction
752	752	724conducted electronically or by phone, a receipt may be provided electronically. All electronic
753	753	725receipts shall be provided in a retainable form.
754	754	726 (3)Every licensee or its authorized delegate shall provide the sender a receipt for
755	755	727money received for transmission.
756	756	728 (i)The receipt shall contain the following information, as applicable:
757	757	729 (A)The name of the sender; 37 of 47
758	758	730 (B)The name of the designated recipient;
759	759	731 (C)The date of the transaction;
760	760	732 (D)The unique transaction or identification number;
761	761	733 (E)The name of the licensee, NMLS Unique ID, the licensee's business address, and
762	762	734the licensee’s customer service telephone number;
763	763	735 (F)The amount of the transaction in United States dollars;
764	764	736 (G)Any fee charged by the licensee to the sender for the transaction; and
765	765	737 (H)Any taxes collected by the licensee from the sender for the transaction.
766	766	738 (ii)The receipt required by this subsection shall be in English and in the language
767	767	739principally used by the licensee or authorized delegate to advertise, solicit, or negotiate, either
768	768	740orally or in writing, for a transaction conducted in person, electronically or by phone, if other
769	769	741than English.
770	770	742 Section 10.(a)(1) A licensee under this chapter shall maintain at all times a tangible
771	771	743net worth of the greater of $100,000 or 3 percent of total assets for the first $100 million, 2
772	772	744percent of additional assets for $100 million to $1 billion, and 0.5 percent of additional assets for
773	773	745over $1 billion.
774	774	746 (2)Tangible net worth must be demonstrated at initial application by the applicant’s
775	775	747most recent audited or reviewed financial statements. 38 of 47
776	776	748 (3)Notwithstanding the foregoing provisions of this subsection, the Commissioner
777	777	749shall have the authority, for good cause shown, to exempt, in-part or in whole, from the
778	778	750requirements of this subsection any applicant or licensee.
779	779	751 (b)(1)An applicant for a money transmission license must provide, and a licensee at all
780	780	752times must maintain, security consisting of a surety bond in a form satisfactory to the
781	781	753commissioner.
782	782	754 (2)The amount of the required security shall be the greater of $100,000 or an amount
783	783	755equal to one hundred percent of the licensee's average daily money transmission liability in this
784	784	756state calculated for the most recently completed three-month period, up to a maximum of
785	785	757$500,000.
786	786	758 (3)A licensee that maintains a bond in the maximum amount provided for in clause
787	787	759(1) or (2) of this subsection shall not be required to calculate its average daily money
788	788	760transmission liability in this state for purposes of this subsection.
789	789	761 (4)A licensee may exceed the maximum required bond amount pursuant to clause (v)
790	790	762of paragraph (1) of subsection d.
791	791	763 (c)(1)A licensee shall maintain at all times permissible investments that have a market
792	792	764value computed in accordance with United States generally accepted accounting principles of not
793	793	765less than the aggregate amount of all of its outstanding money transmission obligations.
794	794	766 (2)Except for permissible investments enumerated in paragraph (1) of subsection (d),
795	795	767the Commissioner, with respect to any licensee, may by rule or order limit the extent to which a
796	796	768specific investment maintained by a licensee within a class of permissible investments may be 39 of 47
797	797	769considered a permissible investment, if the specific investment represents undue risk to
798	798	770customers, not reflected in the market value of investments.
799	799	771 (3)Permissible investments, even if commingled with other assets of the licensee, are
800	800	772held in trust for the benefit of the purchasers and holders of the licensee's outstanding money
801	801	773transmission obligations in the event of insolvency, the filing of a petition by or against the
802	802	774licensee under the United States Bankruptcy Code, 11 U.S.C. Section 101-110, as amended or
803	803	775recodified from time to time, for bankruptcy or reorganization, the filing of a petition by or
804	804	776against the licensee for receivership, the commencement of any other judicial or administrative
805	805	777proceeding for its dissolution or reorganization, or in the event of an action by a creditor against
806	806	778the licensee who is not a beneficiary of this statutory trust. No permissible investments
807	807	779impressed with a trust pursuant to this paragraph shall be subject to attachment, levy of
808	808	780execution, or sequestration by order of any court, except for a beneficiary of this statutory trust.
809	809	781 (4)Upon the establishment of a statutory trust in accordance with paragraph (3) or
810	810	782when any funds are drawn on a letter of credit pursuant to clause (iv) of paragraph (1) of
811	811	783subsection (d), the commissioner shall notify the applicable regulator of each state in which the
812	812	784licensee is licensed to engage in money transmission, if any, of the establishment of the trust or
813	813	785the funds drawn on the letter of credit, as applicable. Notice shall be deemed satisfied if
814	814	786performed pursuant to a multistate agreement or through NMLS. Funds drawn on a letter of
815	815	787credit, and any other permissible investments held in trust for the benefit of the purchasers and
816	816	788holders of the licensee's outstanding money transmission obligations, are deemed held in trust for
817	817	789the benefit of such purchasers and holders on a pro rata and equitable basis in accordance with
818	818	790statutes pursuant to which permissible investments are required to be held in this state, and other 40 of 47
819	819	791states, as applicable. Any statutory trust established hereunder shall be terminated upon
820	820	792extinguishment of all of the licensee's outstanding money transmission obligations.
821	821	793 (5)The commissioner by rule or by order may allow other types of investments that
822	822	794the commissioner determines are of sufficient liquidity and quality to be a permissible
823	823	795investment. The commissioner is authorized to participate in efforts with other state regulators to
824	824	796determine that other types of investments are of sufficient liquidity and quality to be a
825	825	797permissible investment.
826	826	798 (d)(1)The following investments are permissible under subsection (c):
827	827	799 (i)cash (including demand deposits, savings deposits, and funds in such accounts
828	828	800held for the benefit of the licensee's customers in a federally insured depository financial
829	829	801institution) and cash equivalents including ACH items in transit to the licensee and ACH items
830	830	802or international wires in transit to a payee, cash in transit via armored car, cash in smart safes,
831	831	803cash in licensee-owned locations, debit card or credit card-funded transmission receivables owed
832	832	804by any bank, or money market mutual funds rated "AAA" by S&P, or the equivalent from any
833	833	805eligible rating service;
834	834	806 (ii)certificates of deposit or senior debt obligations of an insured depository
835	835	807institution, as defined in Section 3 of the Federal Deposit Insurance Act, 12 U.S.C. Section 1813,
836	836	808as amended or recodified from time to time, or as defined under the federal Credit Union Act, 12
837	837	809U.S.C. Section 1781, as amended or recodified from time to time;
838	838	810 (iii)an obligation of the United States or a commission, agency, or instrumentality
839	839	811thereof; an obligation that is guaranteed fully as to principal and interest by the United States; or
840	840	812an obligation of a state or a governmental subdivision, agency, or instrumentality thereof; 41 of 47
841	841	813 (iv)the full drawable amount of an irrevocable standby letter of credit for which the
842	842	814stated beneficiary is the commissioner under such terms as the commissioner may define by
843	843	815regulation, policies, procedures, or other guidance;
844	844	816 (v)One hundred percent of the surety bond [or deposit] provided for under subsection
845	845	817(b) that exceeds the average daily money transmission liability in this state.
846	846	818 (2)Unless permitted by the commissioner by rule or by order to exceed the limit as
847	847	819set forth herein, the following investments are permissible under subsection (c) to the extent
848	848	820specified:
849	849	821 (i)receivables that are payable to a licensee from its authorized delegates in the
850	850	822ordinary course of business that are less than seven days old, up to 50% of the aggregate value of
851	851	823the licensee's total permissible investments;
852	852	824 (ii)of the receivables permissible under clause (i) of paragraph (2), receivables that
853	853	825are payable to a licensee from a single authorized delegate in the ordinary course of business
854	854	826may not exceed 10% of the aggregate value of the licensee's total permissible investments.
855	855	827 (iii)the following investments are permissible up to 20% per category and combined
856	856	828up to 50% of the aggregate value of the licensee's total permissible investments:
857	857	829 (A)A short-term (up to six months) investment bearing an eligible rating;
858	858	830 (B)Commercial paper bearing an eligible rating;
859	859	831 (C)A bill, note, bond, or debenture bearing an eligible rating; 42 of 47
860	860	832 (D)U.S. tri-party repurchase agreements collateralized at 100% or more with U.S.
861	861	833government or agency securities, municipal bonds, or other securities bearing an eligible rating;
862	862	834 (E)Money market mutual funds rated less than "AAA" and equal to or higher than
863	863	835"A-" by S&P, or the equivalent from any other eligible rating service; and
864	864	836 (F)A mutual fund or other investment fund composed solely and exclusively of one
865	865	837or more permissible investments listed in clauses (i) through (iii), inclusive, of paragraph (1).
866	866	838 (iv)cash (including demand deposits, savings deposits, and funds in such accounts
867	867	839held for the benefit of the licensee's customers) at foreign depository institutions are permissible
868	868	840up to 10% of the aggregate value of the licensee's total permissible investments if the licensee
869	869	841has received a satisfactory rating in its most recent examination and the foreign depository
870	870	842institution:
871	871	843 (A)has an eligible rating; is registered under the Foreign Account Tax Compliance
872	872	844Act;
873	873	845 (B)is not located in any country subject to sanctions from the Office of Foreign Asset
874	874	846Control; and
875	875	847 (C)is not located in a high-risk or non-cooperative jurisdiction as designated by the
876	876	848Financial Action Task Force.
877	877	849 Section 11.(a)(1) The commissioner may suspend or revoke a license or order a
878	878	850licensee to revoke the designation of an authorized delegate if:
879	879	851 (i) the licensee violates this chapter or a rule adopted or an order issued under this
880	880	852chapter; 43 of 47
881	881	853 (ii) the licensee does not cooperate with an examination or investigation by the
882	882	854commissioner;
883	883	855 (iii) the licensee engages in fraud, intentional misrepresentation, or gross negligence;
884	884	856 (iv) an authorized delegate is convicted of a violation of a state or federal anti-money
885	885	857laundering statute, or violates a rule adopted or an order issued under this chapter, as a result of
886	886	858the licensee's willful misconduct or willful blindness;
887	887	859 (v) the competence, experience, character, or general fitness of the licensee, authorized
888	888	860delegate, person in control of a licensee, key individual, or responsible person of the authorized
889	889	861delegate indicates that it is not in the public interest to permit the person to provide money
890	890	862transmission;
891	891	863 (vi) the licensee engages in an unsafe or unsound practice;
892	892	864 (vii) the licensee is insolvent, suspends payment of its obligations, or makes a general
893	893	865assignment for the benefit of its creditors; or
894	894	866 (viii) the licensee does not remove an authorized delegate after the commissioner issues
895	895	867and serves upon the licensee a final order including a finding that the authorized delegate has
896	896	868violated this chapter.
897	897	869 (2) In determining whether a licensee is engaging in an unsafe or unsound practice, the
898	898	870commissioner may consider the size and condition of the licensee's money transmission, the
899	899	871magnitude of the loss, the gravity of the violation of this chapter, and the previous conduct of the
900	900	872person involved. 44 of 47
901	901	873 (b)(1)The Commissioner may issue an order suspending or revoking the designation of
902	902	874an authorized delegate, if the Commissioner finds that:
903	903	875 (i)the authorized delegate violated this chapter or a rule adopted or an order issued
904	904	876under this chapter;
905	905	877 (ii)the authorized delegate did not cooperate with an examination or investigation by
906	906	878the commissioner;
907	907	879 (iii) the authorized delegate engaged in fraud, intentional misrepresentation, or gross
908	908	880negligence;
909	909	881 (iv) the authorized delegate is convicted of a violation of a state or federal anti-money
910	910	882laundering statute;
911	911	883 (v) the competence, experience, character, or general fitness of the authorized delegate or
912	912	884a person in control of the authorized delegate indicates that it is not in the public interest to
913	913	885permit the authorized delegate to provide money transmission; or
914	914	886 (vi) the authorized delegate is engaging in an unsafe or unsound practice.
915	915	887 (2) In determining whether an authorized delegate is engaging in an unsafe or unsound
916	916	888practice, the commissioner may consider the size and condition of the authorized delegate's
917	917	889provision of money transmission, the magnitude of the loss, the gravity of the violation of this
918	918	890chapter or a rule adopted or order issued under this chapter, and the previous conduct of the
919	919	891authorized delegate.
920	920	892 (3) An authorized delegate may apply for relief from a suspension or revocation of
921	921	893designation as an authorized delegate according to procedures prescribed by the commissioner. 45 of 47
922	922	894 (c)(1) If the commissioner determines, after giving notice of and opportunity for a
923	923	895hearing, that a person or entity has engaged in or is about to engage in an act or practice
924	924	896constituting a violation of a provision of this chapter or a rule, regulation or order hereunder,
925	925	897they may order such person or entity to cease and desist from such unlawful act or practice and
926	926	898take such affirmative action as in their judgment will effect the purposes of this chapter.
927	927	899 (2) If the commissioner makes written findings of fact that the public interest will be
928	928	900irreparably harmed by delay in issuing an order under subsection (a) they may issue a temporary
929	929	901cease and desist order. Upon the entry of a temporary cease and desist order, the commissioner
930	930	902shall promptly notify, in writing, the person or entity affected thereby that such order has been so
931	931	903entered, the reasons therefor, and that within twenty days after the receipt of a written request
932	932	904from such person or entity, the matter will be scheduled for hearing to determine whether or not
933	933	905such temporary order shall become permanent and final. If no such hearing is requested and none
934	934	906is ordered by the commissioner, the order shall remain in effect until it is modified or vacated by
935	935	907the commissioner. If a hearing is requested or ordered, the commissioner, after giving notice of
936	936	908and opportunity for a hearing to the person or entity subject to said order, shall, by written
937	937	909finding of facts and conclusions of law, vacate, modify or make permanent the order.
938	938	910 (3) No order under this section, except an order issued pursuant to subsection (b), may be
939	939	911entered without prior notice of and opportunity for a hearing. The commissioner may vacate or
940	940	912modify an order under this section upon finding that the conditions which required such an order
941	941	913have changed and that it is in the public interest to so vacate or modify.
942	942	914 (4) Any order issued pursuant to this section shall be subject to review as provided in
943	943	915chapter thirty A. 46 of 47
944	944	916 (d)The Commissioner may assess a civil penalty against a person or entity that
945	945	917violates this chapter or a rule adopted or an order issued under this chapter in an amount not to
946	946	918exceed two thousand dollars per day for each day the violation is outstanding or per transaction,
947	947	919plus this State's costs and expenses for the investigation and prosecution of the matter, including
948	948	920reasonable attorney's fees.
949	949	921 (e)The commissioner may enforce the provisions of this chapter or restrain
950	950	922violations thereof by filing a civil action in the superior court department of the trial court.
951	951	923 Section 12.(a) In applying and construing this act, consideration must be given to the
952	952	924need to promote uniformity of the law with respect to its subject matter among states that enact
953	953	925it.
954	954	926 (b)If any provision of this act or its application to any person or circumstance is held
955	955	927invalid, the invalidity does not affect other provisions or applications of this act which can be
956	956	928given effect without the invalid provision or application, and to this end the provisions of this act
957	957	929are severable.
958	958	930 SECTION 4. (a) A license issued pursuant to chapter 169 of the General Laws or
959	959	931section 4 of chapter 167F of the General Laws, including all authorized delegate location
960	960	932designations, that is in effect immediately before the effective date of chapter 169B shall remain
961	961	933in force as a license under said chapter 169 or said section 4 of said chapter 167F. Such licensees
962	962	934shall file a renewal application in accordance with section 6 of chapter 169B of the General
963	963	935Laws, as inserted by SECTION 3.
964	964	936 (b) Any person that was not required to obtain a license pursuant to chapter 169 of the
965	965	937General Laws or pursuant to section 4 of chapter 167F of the General Laws, but that is now 47 of 47
966	966	938required to obtain a license under chapter 169B of the General Laws shall file an application for
967	967	939a license within 6 months of the effective date of Section 5 of chapter 169B, as inserted by
968	968	940SECTION 3, to continue conducting money transmission in the commonwealth directly or
969	969	941through authorized delegates. If such application is timely filed and pending with the
970	970	942commissioner, that person may continue to conduct money transmission in the commonwealth,
971	971	943until such time as the application has been approved, withdrawn or denied.
972	972	944 (c) All authorized delegate designations under section 4 of chapter 167F of the General
973	973	945Laws that are in effect as of the effective date of chapter 169B shall be deemed in compliance
974	974	946with chapter 169B.-
975	975	947 (d) A licensee shall only be required to amend its authorized delegate contracts for
976	976	948contracts entered into or amended after the effective date. Nothing herein shall be construed as
977	977	949limiting an authorized delegate’s obligations to operate in full compliance with chapter 169B.
978	978	950 SECTION 5. Section 4 of chapter 169B of the General Laws, as inserted by
979	979	951SECTION 3, shall take effect upon passage. SECTION 1, SECTION 2, and the remainder of
980	980	952SECTION 3 shall take effect 9 months after the effective date of this act.