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 Chapter 169 of the General Laws is hereby repealed.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