Massachusetts 2023-2024 Regular Session

Massachusetts House Bill H4840 Compare Versions

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1	1	HOUSE . . . . . . . No. 4840
2	2	The Commonwealth of Massachusetts
3	3	______________________________________
4	4	HOUSE OF REPRESENTATIVES, July 9, 2024.
5	5	The committee on Ways and Means, to whom was referred the Bill
6	6	relative to the regulation of money transmission by the Division of Banks
7	7	(House, No. 1106), reports recommending that the same ought to pass
8	8	with an amendment substituting therefor the accompanying bill (House,
9	9	No. 4840).
10	10	For the committee,
11	11	AARON MICHLEWITZ. 1 of 44
12	12	FILED ON: 7/9/2024
13	13	HOUSE . . . . . . . . . . . . . . . No. 4840
14	14	The Commonwealth of Massachusetts
15	15	_______________
16	16	In the One Hundred and Ninety-Third General Court
17	17	(2023-2024)
18	18	_______________
19	19	An Act relative to the regulation of money transmission by the Division of Banks.
20	20	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
21	21	of the same, as follows:
22	22	1 SECTION 1. Chapter 167F of the General Laws is hereby amended by striking out
23	23	2section 4 and inserting in place thereof the following section:-
24	24	3 Section 4. A bank may engage directly in the business of selling, issuing or registering
25	25	4checks.
26	26	5 SECTION 2. Chapter 169 of the General Laws is hereby repealed.
27	27	6 SECTION 3. The General Laws are hereby amended by inserting after chapter 169A the
28	28	7following chapter:-
29	29	8 CHAPTER 169B
30	30	9 THE MONEY TRANSMISSION ACT
31	31	10 Section 1. As used in this chapter, the following words shall, unless the context clearly
32	32	11requires otherwise, have the following meanings: 2 of 44
33	33	12 “Acting in concert”, persons knowingly acting together with a common goal of jointly
34	34	13acquiring control of a licensee whether or not pursuant to an express agreement.
35	35	14 “Authorized delegate”, a person a licensee designates to engage in money transmission
36	36	15on behalf of the licensee.
37	37	16 “Average daily money transmission liability”, the amount of the licensee’s outstanding
38	38	17money transmission obligations in the commonwealth at the end of each day in a given period of
39	39	18time, added together and divided by the total number of days in the given period of time. For
40	40	19purposes of calculating average daily money transmission liability under this chapter for any
41	41	20licensee required to do so, the given period of time shall be the quarters ending March 31, June
42	42	2130, September 30 and December 31.
43	43	22 “Bank Secrecy Act”, the Bank Secrecy Act, 31 U.S.C. section 5311, et seq. and its
44	44	23implementing regulations, as amended and recodified from time to time.
45	45	24 “Closed loop stored value”, stored value that is redeemable by the issuer only for goods
46	46	25or services provided by the issuer or its affiliate or franchisees of the issuer or its affiliate, except
47	47	26to the extent required by applicable law to be redeemable in cash for its cash value.
48	48	27 “Commissioner”, the commissioner of banks.
49	49	28 “Control”, the power to: (i) vote, directly or indirectly, at least 25 per cent of the
50	50	29outstanding voting shares or voting interests of a licensee or person in control of a licensee; (ii)
51	51	30elect or appoint a majority of key individuals or executive officers, managers, directors, trustees,
52	52	31or other persons exercising managerial authority of a person in control of a licensee; or (iii)
53	53	32exercise, directly or indirectly, a controlling influence over the management or policies of a 3 of 44
54	54	33licensee or person in control of a licensee; provided, that for rebuttable presumptions of control a
55	55	34person shall be presumed to exercise a controlling influence when the person holds the power to
56	56	35vote, directly or indirectly, at least 10 per cent of the outstanding voting shares or voting interests
57	57	36of a licensee or person in control of a licensee; and provided further, that a person presumed to
58	58	37exercise a controlling influence may rebut the presumption of control if the person is a passive
59	59	38investor. For purposes of determining the percentage of a person controlled by any other person,
60	60	39the person’s interest shall be aggregated with the interest of any other immediate family member,
61	61	40including the person’s spouse, parents, children, siblings, mothers- and fathers-in law, sons- and
62	62	41daughters-in-law, brothers- and sisters-in-law and any other person who shares such person’s
63	63	42home. Consistent with the authority described in subsection (b) of section 4, the commissioner
64	64	43may adopt regulations, policies and procedures as necessary, which may modify the definition of
65	65	44“control”.
66	66	45 “Division”, the division of banks.
67	67	46 “Eligible rating”, a credit rating of any of the 3 highest rating categories provided by an
68	68	47eligible rating service, whereby each category may include rating category modifiers such as
69	69	48“plus” or “minus” for S&P, or the equivalent for any other eligible rating service. Long-term
70	70	49credit ratings shall be deemed eligible if the rating is equal to A- or higher by S&P, or the
71	71	50equivalent from any other eligible rating service. Short-term credit ratings shall be deemed
72	72	51eligible if the rating is equal to or higher than A-2 or SP-2 by S&P, or the equivalent from any
73	73	52other eligible rating service. In the event that ratings differ among eligible rating services, the
74	74	53highest rating shall apply when determining whether a security bears an eligible rating. 4 of 44
75	75	54 “Eligible rating service”, any nationally recognized statistical rating organization, as
76	76	55defined by the United States Securities and Exchange Commission, and any other organization
77	77	56designated by the commissioner by rule or order.
78	78	57 “Federally insured depository financial institution”, a bank, credit union, savings and loan
79	79	58association, trust company, savings association, savings bank, industrial bank, or industrial loan
80	80	59company organized under the laws of the United States or any state of the United States, when
81	81	60such bank, credit union, savings and loan association, trust company, savings association,
82	82	61savings bank, industrial bank or industrial loan company has federally insured deposits.
83	83	62 “Individual”, a natural person.
84	84	63 “In the commonwealth”, at a physical location within the commonwealth of
85	85	64Massachusetts for a transaction requested in person. For a transaction requested electronically or
86	86	65by phone, the provider of money transmission may determine if the person requesting the
87	87	66transaction is in the commonwealth by relying on other information provided by the person
88	88	67regarding the location of the individual’s residential address or a business entity’s principal place
89	89	68of business or other physical address location and any records associated with the person that the
90	90	69provider of money transmission may have that indicate such location, including, but not limited
91	91	70to, an address associated with an account.
92	92	71 “Key individual”, any individual ultimately responsible for establishing or directing
93	93	72policies and procedures of the licensee, such as an executive officer, manager, director, or
94	94	73trustee.
95	95	74 “Licensee”, a person licensed under this chapter. 5 of 44
96	96	75 “Material litigation”, litigation, that according to United States generally accepted
97	97	76accounting principles, is significant to a person’s financial health and would be required to be
98	98	77disclosed in the person’s annual audited financial statements, report to shareholders or similar
99	99	78records.
100	100	79 “Monetary value”, a medium of exchange, whether or not redeemable in money.
101	101	80 “Money”, a medium of exchange that is authorized or adopted by the United States or a
102	102	81foreign government. Money shall include a monetary unit of account established by an
103	103	82intergovernmental organization or by agreement between 2 or more governments.
104	104	83 “Money transmission”, (i) selling or issuing payment instruments to a person located in
105	105	84the commonwealth; (ii) selling or issuing stored value to a person located in the commonwealth;
106	106	85or (iii) receiving money for transmission from a person located in the commonwealth. Money
107	107	86transmission shall apply only to those transactions engaged in by a person for personal, family or
108	108	87household purposes and shall not include the provision solely of online or telecommunications
109	109	88services or network access.
110	110	89 “MSB accredited state”, a state agency that is accredited by the Conference of State Bank
111	111	90Supervisors and Money Transmitter Regulators Association for money transmission licensing
112	112	91and supervision.
113	113	92 “Multistate licensing process”, any agreement entered into by and among state regulators
114	114	93relating to coordinated processing of applications for money transmission licenses, applications
115	115	94for the acquisition of control of a licensee, control determinations, or notice and information
116	116	95requirements for a change of key individuals. 6 of 44
117	117	96 “NMLS”, the Nationwide Multistate Licensing System and Registry developed by the
118	118	97Conference of State Bank Supervisors and the American Association of Residential Mortgage
119	119	98Regulators and owned and operated by the State Regulatory Registry, LLC, or any successor or
120	120	99affiliated entity, for the licensing and registration of persons in financial services industries.
121	121	100 “Outstanding money transmission obligations”, obligations that shall be established and
122	122	101extinguished in accordance with applicable state law and shall include: (i) any payment
123	123	102instrument or stored value issued or sold by the licensee to a person located in the United States
124	124	103or reported as sold by an authorized delegate of the licensee to a person that is located in the
125	125	104United States that has not yet been paid or refunded by or for the licensee, or escheated in
126	126	105accordance with applicable abandoned property laws; or (ii) any money received for
127	127	106transmission by the licensee or an authorized delegate in the United States from a person located
128	128	107in the United States that has not been received by the payee or refunded to the sender or
129	129	108escheated in accordance with applicable abandoned property laws.
130	130	109 “Passive investor”, a person that: (i) does not have the power to elect a majority of key
131	131	110individuals or executive officers, managers, directors, trustees, or other persons exercising
132	132	111managerial authority of a person in control of a licensee; (ii) is not employed by and does not
133	133	112have any managerial duties of the licensee or person in control of a licensee; (iii) does not have
134	134	113the power to exercise, directly or indirectly, a controlling influence over the management or
135	135	114policies of a licensee or person in control of a licensee; and (iv) either: (A) attests to (i), (ii) and
136	136	115(iii), in a form and in a medium prescribed by the commissioner; or (B) commits to the passivity
137	137	116characteristics of (i), (ii) and (iii) in a written document. 7 of 44
138	138	117 “Payment instrument”, a written or electronic check, draft, money order, traveler’s check,
139	139	118or other written or electronic instrument for the transmission or payment of money or monetary
140	140	119value, whether or not negotiable. Payment instrument shall not include stored value or any
141	141	120instrument that is: (i) redeemable by the issuer only for goods or services provided by the issuer
142	142	121or its affiliate or franchisees of the issuer or its affiliate, except to the extent required by
143	143	122applicable law to be redeemable in cash for its cash value; or (ii) not sold to the public but issued
144	144	123and distributed as part of a loyalty, rewards, or promotional program.
145	145	124 “Person”, any individual, general partnership, limited partnership, limited liability
146	146	125company, corporation, trust, association, joint stock corporation or other corporate entity
147	147	126identified by the commissioner.
148	148	127 “Prepaid access”, as defined by 31 C.F.R. 1010.100, as amended or recodified from time
149	149	128to time.
150	150	129 “Receiving money for transmission” or “money received for transmission”, receiving
151	151	130money or monetary value in the United States for transmission within or outside the United
152	152	131States by electronic or other means.
153	153	132 “Remit”, to make direct payments of money to a licensee or its representative authorized
154	154	133to receive money or to deposit money in a bank in an account specified by the licensee.
155	155	134 “Stored value”, monetary value representing a claim against the issuer evidenced by an
156	156	135electronic or digital record and that is intended and accepted for use as a means of redemption
157	157	136for money or monetary value, or payment for goods or services; provided, that stored value shall
158	158	137include, but shall not be limited to, prepaid access; and provided further, that stored value shall 8 of 44
159	159	138not include a payment instrument or closed loop stored value, or stored value not sold to the
160	160	139public but issued and distributed as part of a loyalty, rewards or promotional program.
161	161	140 “Tangible net worth”, the aggregate assets of a licensee excluding all intangible assets,
162	162	141less liabilities, as determined in accordance with United States generally accepted accounting
163	163	142principles.
164	164	143 “United States”, (i) any state, territory or possession of the United States; (ii) the District
165	165	144of Columbia; (iii) the commonwealth of Puerto Rico; or (iv) a United States military installation
166	166	145located in a foreign country.
167	167	146 Section 2. (a) This chapter shall not apply to:
168	168	147 (i) an operator of a payment system to the extent that it provides processing, clearing or
169	169	148settlement services, between or among persons exempted by this subsection or licensees, in
170	170	149connection with wire transfers, credit card transactions, debit card transactions, stored-value
171	171	150transactions, automated clearing house transfers or similar funds transfers;
172	172	151 (ii) a person appointed as an agent of a payee to collect and process a payment from a
173	173	152payor to the payee for goods or services, other than money transmission itself, provided to the
174	174	153payor by the payee; provided, that: (A) there exists a written agreement between the payee and
175	175	154the agent directing the agent to collect and process payments from payors on the payee’s behalf;
176	176	155(B) the payee holds the agent out to the public as accepting payments for goods or services on
177	177	156the payee’s behalf; and (C) payment for the goods and services is treated as received by the
178	178	157payee upon receipt by the agent so that the payor’s obligation is extinguished and there is no risk
179	179	158of loss to the payor if the agent fails to remit the funds to the payee; 9 of 44
180	180	159 (iii) a person that acts as an intermediary by processing payments between an entity that
181	181	160has directly incurred an outstanding money transmission obligation to a sender, and the sender’s
182	182	161designated recipient; provided, that the entity: (A) is properly licensed or exempt from licensing
183	183	162requirements under this chapter; (B) provides a receipt, electronic record or other written
184	184	163confirmation to the sender identifying the entity as the provider of money transmission in the
185	185	164transaction; and (C) bears sole responsibility to satisfy the outstanding money transmission
186	186	165obligation to the sender, including the obligation to make the sender whole in connection with
187	187	166any failure to transmit the funds to the sender’s designated recipient;
188	188	167 (iv) the United States or a department, agency, or instrumentality thereof, or its agent.
189	189	168 (v) money transmission by the United States Postal Service or by an agent of the United
190	190	169States Postal Service;
191	191	170 (vi) a state, county, city or any other governmental agency or governmental subdivision
192	192	171or instrumentality of a state, or its agent;
193	193	172 (vii) a federally insured depository financial institution, bank holding company, office of
194	194	173an international banking corporation, foreign bank that establishes a federal branch pursuant to
195	195	174the International Bank Act, 12 U.S.C. section 3102, as amended or recodified from time to time,
196	196	175corporation organized pursuant to the Bank Service Corporation Act, 12 U.S.C. sections 1861 to
197	197	1761867, inclusive, as amended or recodified from time to time or corporation organized under the
198	198	177Edge Act, 12 U.S.C. sections 611 to 633, inclusive, as amended or recodified from time to time;
199	199	178 (viii) electronic funds transfer of governmental benefits for a federal, state, county or
200	200	179governmental agency by a contractor on behalf of the United States or a department, agency or 10 of 44
201	201	180instrumentality thereof, or on behalf of a state or governmental subdivision, agency or
202	202	181instrumentality thereof;
203	203	182 (ix) a board of trade designated as a contract market under the federal Commodity
204	204	183Exchange Act, 7 U.S.C. sections 1 to 25, inclusive, as amended or recodified from time to time,
205	205	184or a person that, in the ordinary course of business, provides clearance and settlement services
206	206	185for a board of trade to the extent of its operation as or for such a board;
207	207	186 (x) a registered futures commission merchant under the federal commodities laws to the
208	208	187extent of its operation as such a merchant;
209	209	188 (xi) a person registered as a securities broker-dealer under federal or state securities laws
210	210	189to the extent of its operation as such a broker-dealer;
211	211	190 (xii) an individual employed by a licensee, authorized delegate or any person exempted
212	212	191from the licensing requirements of the chapter when acting within the scope of employment and
213	213	192under the supervision of the licensee, authorized delegate or exempted person as an employee
214	214	193and not as an independent contractor;
215	215	194 (xiii) a person expressly appointed as a third-party service provider to or agent of an
216	216	195entity exempt under clause (vii), solely to the extent that: (A) such service provider or agent is
217	217	196engaging in money transmission on behalf of and pursuant to a written agreement with the
218	218	197exempt entity that sets forth the specific functions that the service provider or agent is to
219	219	198perform; and (B) the exempt entity assumes all risk of loss and all legal responsibility for
220	220	199satisfying the outstanding money transmission obligations owed to purchasers and holders of the
221	221	200outstanding money transmission obligations upon receipt of the purchaser’s or holder’s money or
222	222	201monetary value by the service provider or agent; and 11 of 44
223	223	202 (xiv) a person exempt by regulation or order if the commissioner finds such exemption to
224	224	203be in the public interest and that the regulation of such person is not necessary for the purposes
225	225	204of this chapter.
226	226	205 (b) The commissioner may require that any person claiming to be exempt from licensing
227	227	206pursuant to subsection (a) shall provide information and documentation to the commissioner
228	228	207demonstrating that it qualifies for any claimed exemption.
229	229	208 Section 3. (a)(1) To carry out the purposes of this chapter, the commissioner may, subject
230	230	209to paragraphs (1) and (2) of subsection (b):
231	231	210 (i) enter into agreements or relationships with other government officials or federal and
232	232	211state regulatory agencies and regulatory associations to improve efficiencies and reduce
233	233	212regulatory burden by standardizing methods or procedures and sharing resources, records or
234	234	213related information obtained under this chapter;
235	235	214 (ii) use, hire, contract or employ analytical systems, methods or software to examine or
236	236	215investigate any person subject to this chapter;
237	237	216 (iii) accept, from other state or federal government agencies or officials, licensing,
238	238	217examination or investigation reports made by such other state or federal government agencies or
239	239	218officials; and
240	240	219 (iv) accept audit reports made by an independent certified public accountant or other
241	241	220qualified third-party auditor for an applicant or licensee and incorporate the audit report in any
242	242	221report of examination or investigation. 12 of 44
243	243	222 (2) The commissioner may administer, interpret and enforce this chapter, promulgate
244	244	223rules or regulations implementing this chapter and recover the cost of administering and
245	245	224enforcing this chapter by imposing and collecting proportionate and equitable fees and costs
246	246	225associated with applications, examinations, investigations and other actions required to achieve
247	247	226the purpose of this chapter.
248	248	227 (b)(1) Except as otherwise provided in paragraph (2), all information or reports obtained
249	249	228by the commissioner from an applicant, licensee or authorized delegate and all information
250	250	229contained in or related to an examination, investigation, operating report or condition report
251	251	230prepared by, on behalf of or for the use of the commissioner, financial statements, balance sheets
252	252	231and authorized delegate information, shall be confidential and privileged, shall not be subject to
253	253	232subpoena, and shall not be subject to disclosure under chapter 66. For the purpose of this
254	254	233paragraph, records of investigation and reports of examinations shall include records of
255	255	234investigation and reports of examinations conducted by a financial regulatory agency of the
256	256	235federal government and any other state, and of any foreign government, which are considered
257	257	236confidential by the agency or foreign government and are in the possession of the commissioner.
258	258	237In any proceeding before a court, the court may issue a protective order to seal the record
259	259	238protecting the confidentiality in appropriate circumstances to protect the confidentiality of any
260	260	239such record, other than any such record on file with the court or filed in connection with the
261	261	240court proceeding, and the court may exclude the public from any portion of the proceeding at
262	262	241which any such record may be disclosed. Copies of the reports of examination shall be furnished
263	263	242to a licensee for its use only and shall not be exhibited to any other person, organization or
264	264	243agency without prior written approval by the commissioner. The commissioner may, in their
265	265	244discretion, furnish to regulatory agencies of the federal government, other states or foreign 13 of 44
266	266	245countries, and any law enforcement agency, the information, reports, inspections and statements
267	267	246relating to the licensees under the commissioner’s supervision.
268	268	247 (2) The commissioner may disclose information not otherwise subject to disclosure under
269	269	248paragraph (1): (i) to representatives of state or federal agencies who agree in writing that they
270	270	249will maintain the confidentiality of the information; or (ii) if the commissioner finds that the
271	271	250release is reasonably necessary for the protection and interest of the public in accordance with
272	272	251chapter 66.
273	273	252 (3) This subsection shall not prohibit the commissioner from disclosing to the public a list
274	274	253of all licensees or the aggregated financial or transactional data concerning those licensees.
275	275	254 (4) Information contained in the records of the division that is not confidential and may
276	276	255be made available to the public either on the division’s website, upon receipt by the division of a
277	277	256written request or in NMLS shall include:
278	278	257 (i) the name, business address, telephone number and unique identifier of a licensee;
279	279	258 (ii) the business address of a licensee’s registered agent for service;
280	280	259 (iii) the name, business address and telephone number of all authorized delegates;
281	281	260 (iv) the terms of or a copy of any bond filed by a licensee; provided, that confidential
282	282	261information, including, but not limited to, prices and fees for such bond shall be redacted;
283	283	262 (v) copies of any non-confidential final orders of the division relating to any violation of
284	284	263this chapter or regulations implementing this chapter; and
285	285	264 (vi) imposition of an administrative fine or penalty under this chapter. 14 of 44
286	286	265 (c)(1) The commissioner may conduct an examination or investigation of a licensee or
287	287	266authorized delegate or otherwise take independent action authorized by this chapter or by a rule
288	288	267adopted or order issued under this chapter as reasonably necessary or appropriate to administer
289	289	268and enforce this chapter, regulations implementing this chapter, and as authorized by other
290	290	269applicable law, including the Bank Secrecy Act and the USA Patriot Act, Pub. Law 107-56.
291	291	270 (2) The commissioner may:
292	292	271 (i) conduct an examination either on-site or off-site as the commissioner may reasonably
293	293	272require;
294	294	273 (ii) conduct an examination in conjunction with an examination conducted by
295	295	274representatives of other state agencies or agencies of another state or of the federal government;
296	296	275 (iii) accept the examination report of an agency of another state or of the federal
297	297	276government or a report prepared by an independent accounting firm, which on being accepted
298	298	277shall be considered for all purposes as an official report of the commissioner; and
299	299	278 (iv) summon and examine under oath a key individual or employee of a licensee or
300	300	279authorized delegate and require the person to produce records regarding any matter related to the
301	301	280condition and business of the licensee or authorized delegate.
302	302	281 (3) A licensee or authorized delegate shall provide, and the commissioner shall have full
303	303	282and complete access to, all records the commissioner may reasonably require to conduct a
304	304	283complete examination. The records shall be provided at the location and in the format specified
305	305	284by the commissioner; provided, that the commissioner may utilize multistate record production 15 of 44
306	306	285standards and examination procedures when such standards will reasonably achieve the
307	307	286requirements of this paragraph.
308	308	287 (4) Unless otherwise directed by the commissioner, a licensee shall pay all costs
309	309	288reasonably incurred in connection with an examination of the licensee or the licensee’s
310	310	289authorized delegates.
311	311	290 (d)(1) The commissioner may participate in multistate supervisory processes established
312	312	291between states and coordinated through the Conference of State Bank Supervisors, the Money
313	313	292Transmitter Regulators Association and affiliates and successors thereof for all licensees that
314	314	293hold licenses in the commonwealth and other states. As a participant in multistate supervision,
315	315	294the commissioner may:
316	316	295 (i) cooperate, coordinate and share information with other state and federal regulators in
317	317	296accordance with subsection (b);
318	318	297 (ii) enter into written cooperation, coordination or information-sharing contracts or
319	319	298agreements with organizations the membership of which is made up of state or federal
320	320	299governmental agencies; and
321	321	300 (iii) cooperate, coordinate and share information with organizations the membership of
322	322	301which is made up of state or federal governmental agencies; provided, that the organizations
323	323	302shall agree in writing to maintain the confidentiality and security of the shared information in
324	324	303accordance with subsection (b).
325	325	304 (2) The commissioner shall not waive, and nothing in this subsection shall constitute a
326	326	305waiver of, the commissioner’s authority to conduct an examination or investigation or otherwise 16 of 44
327	327	306take independent action authorized by this chapter or a rule adopted or order issued under this
328	328	307chapter to enforce compliance with applicable state or federal law.
329	329	308 (3) A joint examination or investigation, or acceptance of an examination or investigation
330	330	309report, shall not waive an examination assessment provided for in this chapter.
331	331	310 (e)(1) In the event state money transmission jurisdiction is conditioned on a federal law,
332	332	311any inconsistencies between a provision of this chapter and the federal law governing money
333	333	312transmission shall be governed by the applicable federal law to the extent of the inconsistency.
334	334	313 (2) In the event of any inconsistencies between this chapter and a federal law that governs
335	335	314pursuant to paragraph (1), the commissioner may provide interpretive guidance that:
336	336	315 (i) identifies the inconsistency; and
337	337	316 (ii) identifies the appropriate means of compliance with federal law.
338	338	317 Section 4. (a)(1) A person shall not engage in the business of money transmission or
339	339	318advertise, solicit or hold itself out as providing money transmission unless the person is licensed
340	340	319under this chapter.
341	341	320 (2) This subsection shall not apply to:
342	342	321 (i) a person that is an authorized delegate of a person licensed under this chapter acting
343	343	322within the scope of authority conferred by a written contract with the licensee; or
344	344	323 (ii) a person that is exempt pursuant to subsection (a) of section 2 and does not engage in
345	345	324money transmission outside the scope of such exemption.
346	346	325 (3) A license issued under subsection (e) is not transferable or assignable. 17 of 44
347	347	326 (b)(1) To establish consistent licensing between the commonwealth and other states, the
348	348	327commissioner may: (i) implement all licensing provisions of this chapter in a manner that is
349	349	328consistent with other states that have adopted laws that are consistent with this chapter or
350	350	329multistate licensing processes; and (ii) participate in nationwide protocols for licensing
351	351	330cooperation and coordination among state regulators to the extent that such protocols are
352	352	331consistent with this chapter.
353	353	332 (2) In order to administer this chapter, the commissioner may establish relationships or
354	354	333contracts with NMLS or other entities designated by NMLS to enable the commissioner to: (i)
355	355	334collect and maintain records; (ii) coordinate multistate licensing processes and supervision
356	356	335processes; (iii) process fees; and (iv) facilitate communication between the division and licensees
357	357	336or other persons subject to this chapter.
358	358	337 (3) The commissioner may participate in a multistate licensing process and the NMLS for
359	359	338the sharing of regulatory information and for the application, by electronic or other means, and
360	360	339licensing of persons engaged in money transmission. The commissioner may establish
361	361	340requirements for participation by an applicant in the NMLS that vary from the provisions of this
362	362	341chapter. The applicant shall pay directly to the NMLS any additional fee relating to participation
363	363	342in such multistate licensing system.
364	364	343 (4) The commissioner may utilize NMLS forms, processes and functionalities in
365	365	344accordance with this chapter. If NMLS does not provide functionality, forms or processes for a
366	366	345provision of this chapter, the commissioner may implement the requirements in a manner that
367	367	346facilitates uniformity with respect to licensing, supervision, reporting and regulation of licensees
368	368	347that are licensed in multiple jurisdictions. 18 of 44
369	369	348 (5) For the purpose of participating in the NMLS, the commissioner may waive or
370	370	349modify, in whole or in part, by rule, regulation or order, any or all of the requirements and to
371	371	350establish new requirements as reasonably necessary to participate in the NMLS.
372	372	351 (c)(1) The application for a license shall be in a form prescribed by the commissioner and
373	373	352shall contain the name and address or addresses where the business of the applicant is located
374	374	353and if the applicant is a partnership, association, corporation or other form of business
375	375	354organization, the names and addresses of each member, director and principal officer thereof.
376	376	355The application shall also include a description of the activities of the applicant, in such detail
377	377	356and for such periods as the commissioner may require and such further information as the
378	378	357commissioner may require.
379	379	358 (2) Each application for a license shall be accompanied by an investigation fee and a
380	380	359license fee. The investigation and license fees shall be determined annually by the secretary of
381	381	360administration and finance under section 3B of chapter 7.
382	382	361 (d)(1) Any individual in control of a licensee or applicant, any individual that seeks to
383	383	362acquire control of a licensee, and each key individual shall furnish to the commissioner through
384	384	363NMLS the following items:
385	385	364 (i) the individual’s fingerprints for submission to the Federal Bureau of Investigation and
386	386	365the commissioner for purposes of a national criminal history background check unless the person
387	387	366currently resides outside of the United States and has resided outside of the United States for the
388	388	367last 10 years;
389	389	368 (ii) personal history and experience in a form and in a medium prescribed by the
390	390	369commissioner, to obtain: (A) an independent credit report from a consumer reporting agency 19 of 44
391	391	370unless the individual does not have a Social Security number, in which case, this requirement
392	392	371shall be waived; (B) information related to any criminal convictions or pending charges; and (C)
393	393	372information related to any regulatory or administrative action and any civil litigation involving
394	394	373claims of fraud, misrepresentation, conversion, mismanagement of funds, breach of fiduciary
395	395	374duty, or breach of contract.
396	396	375 (2)(A) If the individual has resided outside of the United States at any time in the last 10
397	397	376years, the individual shall also provide an investigative background report prepared by an
398	398	377independent search firm that shall, at a minimum: (i) demonstrate that it has sufficient
399	399	378knowledge, resources and employs accepted and reasonable methodologies to conduct the
400	400	379research of the background report; and (ii) not be affiliated with or have an interest in the
401	401	380individual it is researching.
402	402	381 (B) At a minimum, the investigative background report shall be written in English and
403	403	382shall contain the following:
404	404	383 (i) if available in the individual’s current jurisdiction of residency, a comprehensive
405	405	384credit report, or any equivalent information obtained or generated by the independent search firm
406	406	385to accomplish such report, including a search of the court data in the countries, provinces, states,
407	407	386cities, towns and contiguous areas where the individual resided and worked;
408	408	387 (ii) criminal records information for the past 10 years, including, but not limited to,
409	409	388felonies, misdemeanors, or similar convictions for violations of law in the countries, provinces,
410	410	389states, cities, towns and contiguous areas where the individual resided and worked;
411	411	390 (iii) employment history; 20 of 44
412	412	391 (iv) media history, including an electronic search of national and local publications, wire
413	413	392services and business applications; and
414	414	393 (v) financial services-related regulatory history, including but not limited to, money
415	415	394transmission, securities, banking, insurance and mortgage-related industries.
416	416	395 (3) The commissioner may, as part of an investigation or examination of a licensee,
417	417	396require a background investigation by means of state criminal history record checks by the
418	418	397department of criminal justice information services pursuant to section 172 of chapter 6 on a
419	419	398manager of a location from which an authorized delegate engages in money transmission.
420	420	399 (e)(1) When an application for an original license under this chapter appears to include all
421	421	400the items and addresses all of the matters that are required, the application shall be considered
422	422	401complete and the commissioner shall promptly notify the applicant in writing of the date on
423	423	402which the application is determined to be complete.
424	424	403 (2) A determination by the commissioner that an application is complete and is accepted
425	425	404for processing shall mean only that the application, on its face, appears to include all of the
426	426	405items, including the criminal background check response from the FBI, and address all of the
427	427	406matters that are required, and shall not be considered an assessment of the substance of the
428	428	407application or of the sufficiency of the information provided.
429	429	408 (3) When an application is filed and considered complete under this subsection, the
430	430	409commissioner shall investigate the applicant’s financial condition and responsibility, financial
431	431	410and business experience, character, and general fitness. The commissioner may conduct an on-
432	432	411site investigation of the applicant, the reasonable cost of which the applicant shall pay. The
433	433	412commissioner shall issue a license to an applicant under this subsection if the commissioner finds 21 of 44
434	434	413that: (i) the applicant has complied with subsection (c) and subsection (d); and (ii) the financial
435	435	414condition and responsibility, financial and business experience, competence, character, and
436	436	415general fitness of the applicant, and the competence, experience, character and general fitness of
437	437	416the key individuals and persons in control of the applicant indicate that it is in the interest of the
438	438	417public to permit the applicant to engage in money transmission.
439	439	418 (4) The commissioner may accept the results of an investigation conducted by another
440	440	419state regulatory agency for the purpose of paragraph (3) if a licensee avails itself of or is
441	441	420otherwise subject to the multistate licensing process.
442	442	421 (5) The commissioner shall issue a formal written notice of the denial of a license
443	443	422application within 30 days of the decision to deny the application. The commissioner shall set
444	444	423forth in the notice of denial the specific reasons for the denial of the application. An applicant
445	445	424whose application is denied by the commissioner under this paragraph may appeal pursuant to
446	446	425the procedures set forth in chapter 30A.
447	447	426 (6) The initial license term shall begin on the day the application is approved. The license
448	448	427shall expire on December 31 of the year in which the license term began, unless the initial
449	449	428license date is between November 1 and December 31, in which instance the initial license term
450	450	429shall run through December 31 of the following year.
451	451	430 (f)(1) A license may be renewed upon the filing of a renewal application in such form and
452	452	431containing all such information as the commissioner may prescribe.
453	453	432 (2) An annual renewal fee to be determined annually by the secretary of administration
454	454	433and finance under the provisions of section 3B of chapter 7 shall be paid upon submission of the
455	455	434renewal application. 22 of 44
456	456	435 (3) The renewal term shall be for a period of 1 year and shall begin on January 1 of each
457	457	436year after the initial license term and shall expire on December 31 of the year the renewal term
458	458	437begins.
459	459	438 (g)(1) If a licensee does not continue to meet the qualifications or satisfy the requirements
460	460	439that apply to an applicant for a new money transmission license, the commissioner may suspend
461	461	440or revoke the licensee’s license in accordance with the procedures established by this chapter or
462	462	441chapter 30A.
463	463	442 (2) An applicant for a money transmission license shall demonstrate that it meets or will
464	464	443meet, and a money transmission licensee shall at all times meet, the requirements in subsections
465	465	444(a) to (c), inclusive, of section 9.
466	466	445 (h) A licensee shall annually, not later than a date to be determined by the commissioner,
467	467	446file a report with the commissioner containing such information as the commissioner may
468	468	447require concerning the business and operations during the preceding calendar year. A licensee
469	469	448neglecting to file such report or failing to amend the same within 15 days of notice from the
470	470	449commissioner directing the same shall, unless such neglect or failure is due to justifiable cause
471	471	450and not due to willful neglect, pay to the commonwealth $50 for each day during which such
472	472	451neglect or failure continues.
473	473	452 Section 5. (a)(1) Any person, or group of persons acting in concert, seeking to acquire
474	474	453control of a licensee shall, in cooperation with the licensee, file a notice, in a form and in a
475	475	454medium prescribed by the commissioner, with the commissioner prior to acquiring control. An
476	476	455addition or replacement of a key individual pursuant to subsection (b) shall not be deemed to be
477	477	456an acquisition of control of a licensee and shall not be subject to this section. 23 of 44
478	478	457 (2) Upon request, the commissioner may permit a licensee or the person, or group of
479	479	458persons acting in concert, to submit some or all information required by the commissioner
480	480	459pursuant to paragraph (1) without using NMLS.
481	481	460 (3) The notice required by paragraph (1) shall include information required by subsection
482	482	461(d) of section 4 for any new key individuals that have not previously completed the requirements
483	483	462of said subsection (d) of said section 4 for a licensee.
484	484	463 (4) When a notice is filed, the commissioner shall investigate, as the commissioner
485	485	464determines is necessary, the person, or group of persons acting in concert, seeking to acquire
486	486	465control. The commissioner shall not object to an acquisition of control pursuant to this
487	487	466subsection if the commissioner finds that: (i) the requirements of paragraphs (1) and (3) have
488	488	467been met, as applicable; and (ii) the financial condition and responsibility, character and general
489	489	468fitness of the person, or group of persons acting in concert, seeking to acquire control, and the
490	490	469competence, experience, character and general fitness of the key individuals and persons that
491	491	470would be in control of the licensee after the acquisition of control, indicate that it is in the
492	492	471interest of the public consistent with the purposes of this chapter to permit the person, or group
493	493	472of persons acting in concert, to control the licensee.
494	494	473 (5) The requirements of paragraph (1) shall not apply to:
495	495	474 (i) a person that acts as a proxy for the sole purpose of voting at a designated meeting of
496	496	475the shareholders or holders of voting shares or voting interests of a licensee or a person in control
497	497	476of a licensee;
498	498	477 (ii) a person that acquires control of a licensee by devise or descent; 24 of 44
499	499	478 (iii) a person that acquires control of a licensee as a personal representative, custodian,
500	500	479guardian, conservator or trustee, or as an officer appointed by a court of competent jurisdiction
501	501	480or by operation of law;
502	502	481 (iv) a person that is exempt under paragraph (7) of subsection (a) of section 2;
503	503	482 (v) a public offering of securities of a licensee or a person in control of a licensee; or
504	504	483 (vi) an internal reorganization of a person in control of the licensee where the ultimate
505	505	484person in control of the licensee remains the same.
506	506	485 (6) Persons in clauses (ii) through (iv), inclusive, of paragraph (5) in cooperation with the
507	507	486licensee shall notify the commissioner within 15 days after the acquisition of control.
508	508	487 (7) The commissioner may accept the determination pursuant to this subsection of
509	509	488another state regulatory agency if a licensee avails itself or is otherwise subject to the multistate
510	510	489licensing process.
511	511	490 (b)(1) A licensee adding or replacing any key individual shall: (i) provide notice in a
512	512	491manner prescribed by the commissioner within 15 days after the effective date of the key
513	513	492individual’s appointment; and (ii) provide information as required by subsection (d) of section 4.
514	514	493 (2) When a notification pursuant to this section is filed, the commissioner shall
515	515	494investigate as deemed necessary the key individual. The commissioner shall not object to the
516	516	495change of key individual pursuant to this section if the commissioner finds that the financial
517	517	496responsibility, character and general fitness of the key individual would indicate that it is in the
518	518	497interest of the public consistent with the purposes of this chapter. 25 of 44
519	519	498 (3) The commissioner may accept the determination pursuant to this subsection of
520	520	499another state regulatory agency if the licensee avails itself or is otherwise subject to the
521	521	500multistate licensing process.
522	522	501 Section 6. (a)(1) Each licensee shall submit a report of condition within 45 days of the
523	523	502end of the calendar quarter, or within any extended time as the commissioner may prescribe.
524	524	503 (2) The report of condition shall include:
525	525	504 (i) financial information at the licensee level;
526	526	505 (ii) nationwide and state-specific money transmission transaction information in every
527	527	506jurisdiction in the United States where the licensee is licensed to engage in money transmission;
528	528	507 (iii) permissible investments report;
529	529	508 (iv) transaction destination country reporting for money received for transmission, if
530	530	509applicable; and
531	531	510 (v) any other information the commissioner reasonably requires with respect to the
532	532	511licensee.
533	533	512 (3) The commissioner may utilize NMLS for the submission of the report required by
534	534	513paragraph (1) and may change or update as necessary the requirements of this subsection to carry
535	535	514out the purposes of this chapter and maintain consistency with NMLS reporting.
536	536	515 (4) The information required by clause (iv) of paragraph (2) shall only be included in a
537	537	516report of condition submitted within 45 days of the end of the fourth calendar quarter. 26 of 44
538	538	517 (b)(1) Each licensee shall, within 90 days after the end of each fiscal year, or within any
539	539	518extended time as the commissioner may prescribe, file with the commissioner:
540	540	519 (i) an audited financial statement of the licensee for the fiscal year prepared in accordance
541	541	520with United States generally accepted accounting principles; and
542	542	521 (ii) any other information as the commissioner may reasonably require.
543	543	522 (2) The audited financial statements shall be prepared by an independent certified public
544	544	523accountant and shall include or be accompanied by a certificate of opinion of the independent
545	545	524certified public accountant that is satisfactory in form and content to the commissioner. If the
546	546	525certificate or opinion is qualified, the commissioner may order the licensee to take any action as
547	547	526the commissioner may find necessary to enable the independent or certified public accountant or
548	548	527independent public accountant to remove the qualification.
549	549	528 (c)(1) Each licensee shall submit a report of authorized delegates within 45 days of the
550	550	529end of the calendar quarter. The commissioner may utilize NMLS for the submission of the
551	551	530report required by this paragraph; provided, that such functionality is consistent with the
552	552	531requirements of this subsection.
553	553	532 (2) The authorized delegate report shall include, at a minimum, each authorized
554	554	533delegate’s: (i) company legal name; (ii) taxpayer employer identification number; (iii) principal
555	555	534provider identifier; (iv) physical and mailing addresses; (v) business conducted in other states, if
556	556	535any; (vi) fictitious or trade name, if any; (vii) contact person name, phone number and email;
557	557	536(viii) start date as licensee’s authorized delegate; (ix) end date acting as licensee’s authorized
558	558	537delegate, if applicable; and (x) other information, as the commissioner reasonably requires. 27 of 44
559	559	538 (d)(1) A licensee shall file a report with the commissioner within 1 business day after the
560	560	539licensee has reason to know of the occurrence of any of the following events:
561	561	540 (i) the filing of a petition by or against the licensee under the United States Bankruptcy
562	562	541Code, 11 U.S.C. section 101-110, as amended or recodified from time to time, for bankruptcy or
563	563	542reorganization;
564	564	543 (ii) the filing of a petition by or against the licensee for receivership, the commencement
565	565	544of any other judicial or administrative proceeding for its dissolution or reorganization, or the
566	566	545making of a general assignment for the benefit of its creditors; or
567	567	546 (iii) the commencement of a proceeding to revoke or suspend its license in a state or
568	568	547country in which the licensee engages in business or is licensed.
569	569	548 (2) A licensee shall file a report with the commissioner within 3 business day after the
570	570	549licensee has reason to know of the occurrence of a charge or conviction of the licensee, a key
571	571	550individual, a person in control of the licensee or an authorized delegate for a felony.
572	572	551 (e) A licensee and an authorized delegate shall file all reports required by federal
573	573	552currency reporting, record keeping and suspicious activity reporting requirements as set forth in
574	574	553the Bank Secrecy Act and other federal and state laws pertaining to money laundering. The
575	575	554timely filing of a complete and accurate report required under this subsection with the
576	576	555appropriate federal agency shall be deemed compliant with the requirements of this subsection.
577	577	556 (f)(1) A licensee shall maintain the following records for not less than 3 years, for
578	578	557determining its compliance with this chapter:
579	579	558 (i) a record of each outstanding money transmission obligation sold; 28 of 44
580	580	559 (ii) a general ledger posted at least monthly containing all asset, liability, capital, income
581	581	560and expense accounts;
582	582	561 (iii) bank statements and bank reconciliation records;
583	583	562 (iv) records of outstanding money transmission obligations;
584	584	563 (v) records of each outstanding money transmission obligation paid within the 3-year
585	585	564period;
586	586	565 (vi) a list of the last known names and addresses of all of the licensee’s authorized
587	587	566delegates; and
588	588	567 (vii) any other records the commissioner reasonably requires by rule or regulation.
589	589	568 (2) The items specified in paragraph (1) may be maintained in any form of record.
590	590	569 (3) Records specified in paragraph (1) may be maintained outside the commonwealth if
591	591	570they are made accessible to the commissioner on 7 business-days’ notice that is sent in writing.
592	592	571 (4) All records maintained by the licensee as required in clauses (i) through (iii),
593	593	572inclusive, of paragraph (1) shall be subject to inspection by the commissioner pursuant to
594	594	573paragraph (1) of subsection (c) of section 3.
595	595	574 Section 7. (a)(1) Before a licensee is authorized to conduct business through an
596	596	575authorized delegate or allows a person to act as the licensee’s authorized delegate, the licensee
597	597	576shall:
598	598	577 (i) adopt, and update as necessary, written policies and procedures reasonably designed to
599	599	578ensure that the licensee’s authorized delegates comply with applicable state and federal law; 29 of 44
600	600	579 (ii) enter into a written contract that complies with paragraph (3); and
601	601	580 (iii) conduct a reasonable risk-based background investigation sufficient for the licensee
602	602	581to determine whether the authorized delegate has complied and will likely comply with
603	603	582applicable state and federal law.
604	604	583 (2) An authorized delegate shall operate in full compliance with this chapter.
605	605	584 (3) The written contract required by paragraph (1) shall be signed by the licensee and the
606	606	585authorized delegate and, at a minimum, shall:
607	607	586 (i) appoint the person signing the contract as the licensee’s authorized delegate with the
608	608	587authority to conduct money transmission on behalf of the licensee;
609	609	588 (ii) set forth the nature and scope of the relationship between the licensee and the
610	610	589authorized delegate and the respective rights and responsibilities of the parties;
611	611	590 (iii) require the authorized delegate to agree to fully comply with all applicable state and
612	612	591federal laws, rules and regulations pertaining to money transmission, including, but not limited
613	613	592to, this chapter and regulations implementing this chapter, and relevant provisions of the Bank
614	614	593Secrecy Act and the Patriot Act, Pub. Law 107-56;
615	615	594 (iv) require the authorized delegate to remit and handle money and monetary value in
616	616	595accordance with the terms of the contract between the licensee and the authorized delegate;
617	617	596 (v) impose a trust on money and monetary value net of fees received for money
618	618	597transmission for the benefit of the licensee; 30 of 44
619	619	598 (vi) require the authorized delegate to prepare and maintain records as required by this
620	620	599chapter or regulations implementing this chapter, or as reasonably requested by the
621	621	600commissioner;
622	622	601 (vii) acknowledge that the authorized delegate consents to examination or investigation
623	623	602by the commissioner;
624	624	603 (viii) state that the licensee shall be subject to regulation by the commissioner and that, as
625	625	604part of that regulation, the commissioner may suspend or revoke an authorized delegate
626	626	605designation or require the licensee to terminate an authorized delegate designation; and
627	627	606 (ix) acknowledge receipt of the written policies and procedures required under clause (i)
628	628	607of paragraph (1).
629	629	608 (4) If the licensee’s license is suspended, revoked, surrendered or expired, the licensee
630	630	609shall, within 5 business days, provide documentation to the commissioner that the licensee has
631	631	610notified all applicable authorized delegates of the licensee whose names are in a record filed with
632	632	611the commissioner of the suspension, revocation, surrender or expiration of a license. Upon
633	633	612suspension, revocation, surrender or expiration of a license, applicable authorized delegates shall
634	634	613immediately cease to provide money transmission as an authorized delegate of the licensee.
635	635	614 (5) An authorized delegate of a licensee shall hold in trust for the benefit of the licensee
636	636	615all money net of fees received from money transmission. If any authorized delegate commingles
637	637	616any funds received from money transmission with any other funds or property owned or
638	638	617controlled by the authorized delegate, all commingled funds and other property shall be
639	639	618considered held in trust in favor of the licensee in an amount equal to the amount of money net
640	640	619of fees received from money transmission. 31 of 44
641	641	620 (6) An authorized delegate shall not use a subdelegate to conduct money transmission on
642	642	621behalf of a licensee.
643	643	622 (b) A person shall not engage in the business of money transmission on behalf of a person
644	644	623not licensed under this chapter or not exempt pursuant to section 2. A person that engages in
645	645	624such activity shall be considered to provide money transmission to the same extent as if the
646	646	625person were a licensee and shall be jointly and severally liable with the unlicensed or nonexempt
647	647	626person.
648	648	627 Section 8. (a)(1) Every licensee shall forward all money received for transmission in
649	649	628accordance with the terms of the agreement between the licensee and the sender unless the
650	650	629licensee has a reasonable belief or a reasonable basis to believe that the sender may be a victim
651	651	630of fraud or that a crime or violation of law, rule or regulation has occurred, is occurring or may
652	652	631occur.
653	653	632 (2) If a licensee fails to forward money received for transmission in accordance with this
654	654	633section, the licensee shall respond to inquiries by the sender with the reason for the failure unless
655	655	634providing a response would violate a state or federal law, rule or regulation.
656	656	635 (b)(1) This subsection shall not apply to:
657	657	636 (i) money received for transmission subject to the federal Remittance Rule, 12 C.F.R.
658	658	637Part 1005, Subpart B, as amended or recodified from time to time; or
659	659	638 (ii) money received for transmission pursuant to a written agreement between the licensee
660	660	639and payee to process payments for goods or services provided by the payee. 32 of 44
661	661	640 (2) Every licensee shall refund to the sender within 10 days of receipt of the sender’s
662	662	641written request for a refund of any and all money received for transmission unless:
663	663	642 (i) the money has been forwarded within 10 days of the date on which the money was
664	664	643received for transmission;
665	665	644 (ii) instructions have been given committing an equivalent amount of money to the
666	666	645person designated by the sender within 10 days of the date on which the money was received for
667	667	646transmission;
668	668	647 (iii) the agreement between the licensee and the sender instructs the licensee to forward
669	669	648the money at a time that is beyond 10 days of the date on which the money was received for
670	670	649transmission; provided, that if funds have not yet been forwarded in accordance with the terms of
671	671	650the agreement between the licensee and the sender, the licensee shall issue a refund in
672	672	651accordance with the other provisions of this subsection;
673	673	652 (iv) the refund is requested for a transaction that the licensee has not completed based on
674	674	653a reasonable belief or a reasonable basis to believe that a crime or violation of law, rule or
675	675	654regulation has occurred, is occurring or may occur; or
676	676	655 (v) the refund request does not enable the licensee to: (A) identify the sender’s name and
677	677	656address or telephone number; or (B) identify the particular transaction to be refunded in the event
678	678	657the sender has multiple transactions outstanding.
679	679	658 (c)(1) This section shall not apply to:
680	680	659 (i) money received for transmission subject to the federal Remittance Rule 12 C.F.R. Part
681	681	6601005, Subpart B, as amended or recodified from time to time; 33 of 44
682	682	661 (ii) money received for transmission that is not primarily for personal, family or
683	683	662household purposes; or
684	684	663 (iii) money received for transmission pursuant to a written agreement between the
685	685	664licensee and payee to process payments for goods or services provided by the payee.
686	686	665 (2) For purposes of this section, “receipt” shall mean a paper receipt, electronic record or
687	687	666other written confirmation. For a transaction conducted in person, the receipt may be provided
688	688	667electronically if the sender requests or agrees to receive an electronic receipt. For a transaction
689	689	668conducted electronically or by phone, a receipt may be provided electronically. All electronic
690	690	669receipts shall be provided in a retainable form.
691	691	670 (3)(1) Every licensee or its authorized delegate shall provide the sender a receipt for
692	692	671money received for transmission. The receipt shall contain the following information, as
693	693	672applicable:
694	694	673 (i) the name of the sender;
695	695	674 (ii) the name of the designated recipient;
696	696	675 (iii) the date of the transaction;
697	697	676 (iv) the unique transaction or identification number;
698	698	677 (v) the name of the licensee, NMLS Unique ID, the licensee’s business address and the
699	699	678licensee’s customer service telephone number;
700	700	679 (vi) the amount of the transaction in United States dollars;
701	701	680 (vii) any fee charged by the licensee to the sender for the transaction; and 34 of 44
702	702	681 (viii) any taxes collected by the licensee from the sender for the transaction.
703	703	682 (2) The receipt required by this section shall be in English and in the language principally
704	704	683used by the licensee or authorized delegate to advertise, solicit or negotiate, either orally or in
705	705	684writing, for a transaction conducted in person, electronically or by phone, if other than English.
706	706	685 Section 9. (a)(1) A licensee under this chapter shall maintain at all times: (i) a tangible
707	707	686net worth of the greater of $100,000 or 3 per cent of total assets for the first $100,000,000; (ii) 2
708	708	687per cent of additional assets for $100,000,000 to $1,000,000,000; and (iii) 0.5 per cent of
709	709	688additional assets for over $1,000,000,000.
710	710	689 (2) Tangible net worth shall be demonstrated at initial application by the applicant’s most
711	711	690recent audited or reviewed financial statements.
712	712	691 (3) The commissioner may, for good cause shown, exempt, in-part or in whole, any
713	713	692applicant or licensee from the requirements of this section.
714	714	693 (b)(1) An applicant for a money transmission license shall provide, and a licensee at all
715	715	694times shall maintain, security consisting of a surety bond in a form satisfactory to the
716	716	695commissioner.
717	717	696 (2) The amount of the required security shall be the greater of $100,000 or an amount
718	718	697equal to 100 per cent of the licensee’s average daily money transmission liability in the
719	719	698commonwealth calculated for the most recently completed 3-month period not greater than
720	720	699$500,000. 35 of 44
721	721	700 (3) A licensee that maintains a bond in the maximum amount provided for in paragraphs
722	722	701(1) and (2) shall not be required to calculate its average daily money transmission liability in the
723	723	702commonwealth for purposes of this subsection.
724	724	703 (4) A licensee may exceed the maximum required bond amount pursuant to clause (v) of
725	725	704paragraph (1) of subsection d.
726	726	705 (c)(1) A licensee shall maintain at all times permissible investments, pursuant to
727	727	706subsection (d), that have a market value computed in accordance with the United States generally
728	728	707accepted accounting principles of not less than the aggregate amount of all of its outstanding
729	729	708money transmission obligations.
730	730	709 (2) Except for permissible investments enumerated in paragraph (1) of subsection (d), the
731	731	710commissioner, with respect to any licensee, may limit, by rule or order, the extent to which a
732	732	711specific investment maintained by a licensee within a class of permissible investments may be
733	733	712considered a permissible investment, if the specific investment represents undue risk to
734	734	713customers, not reflected in the market value of investments.
735	735	714 (3) Permissible investments, even if commingled with other assets of the licensee, shall
736	736	715be held in trust for the benefit of the purchasers and holders of the licensee’s outstanding money
737	737	716transmission obligations in the event of insolvency, the filing of a petition by or against the
738	738	717licensee pursuant to the United States Bankruptcy Code, 11 U.S.C. section 101-110, as amended
739	739	718or recodified from time to time, for bankruptcy or reorganization, the filing of a petition by or
740	740	719against the licensee for receivership, the commencement of any other judicial or administrative
741	741	720proceeding for its dissolution or reorganization or in the event of an action by a creditor against
742	742	721the licensee who is not a beneficiary of this statutory trust. No permissible investments 36 of 44
743	743	722impressed with a trust pursuant to this paragraph shall be subject to attachment, levy of execution
744	744	723or sequestration by order of any court, except for a beneficiary of this statutory trust.
745	745	724 (4) Upon the establishment of a statutory trust in accordance with paragraph (3) or when
746	746	725any funds are drawn on a letter of credit pursuant to clause (iv) of paragraph (1) of subsection
747	747	726(d), the commissioner shall notify the applicable regulator of each state in which the licensee is
748	748	727licensed to engage in money transmission, if any, of the establishment of the trust or the funds
749	749	728drawn on the letter of credit, as applicable. Notice shall be deemed satisfied if performed
750	750	729pursuant to a multistate agreement or through NMLS. Funds drawn on a letter of credit, and any
751	751	730other permissible investments held in trust for the benefit of the purchasers and holders of the
752	752	731licensee’s outstanding money transmission obligations, shall be deemed held in trust for the
753	753	732benefit of such purchasers and holders on a pro rata and equitable basis in accordance with
754	754	733statutes pursuant to which permissible investments are required to be held in the commonwealth,
755	755	734and other states, as applicable. Any statutory trust established hereunder shall be terminated upon
756	756	735extinguishment of all of the licensee’s outstanding money transmission obligations.
757	757	736 (5) The commissioner may, by rule or order, allow other types of investments that the
758	758	737commissioner determines are of sufficient liquidity and quality to be a permissible investment.
759	759	738The commissioner may participate in efforts with other state regulators to determine that other
760	760	739types of investments are of sufficient liquidity and quality to be a permissible investment.
761	761	740 (d)(1)The following investments shall be permissible under subsection (c):
762	762	741 (i) cash, including demand deposits, savings deposits and funds in such accounts held for
763	763	742the benefit of the licensee’s customers in a federally insured depository financial institution and
764	764	743cash equivalents, including ACH items in transit to the licensee and ACH items or international 37 of 44
765	765	744wires in transit to a payee, cash in transit via armored car, cash in smart safes, cash in licensee-
766	766	745owned locations, debit card or credit card-funded transmission receivables owed by any bank or
767	767	746money market mutual funds rated AAA by S&P or the equivalent from any eligible rating
768	768	747service;
769	769	748 (ii) certificates of deposit or senior debt obligations of an insured depository institution,
770	770	749as defined in section 3 of the Federal Deposit Insurance Act, 12 U.S.C. section 1813, as amended
771	771	750or recodified from time to time, or as defined in the Federal Credit Union Act, 12 U.S.C. section
772	772	7511781, as amended or recodified from time to time;
773	773	752 (iii) an obligation of the United States or a commission, agency or instrumentality
774	774	753thereof; an obligation that is guaranteed fully as to principal and interest by the United States or
775	775	754an obligation of a state or a governmental subdivision, agency or instrumentality thereof;
776	776	755 (iv) the full drawable amount of an irrevocable standby letter of credit for which the
777	777	756stated beneficiary is the commissioner under such terms as the commissioner may define by
778	778	757regulation, policies, procedures or other guidance;
779	779	758 (v) 100 per cent of the surety bond provided for under subsection (b) that exceeds the
780	780	759average daily money transmission liability in the commonwealth.
781	781	760 (2) Unless permitted by the commissioner by rule or by order to exceed the limit as set
782	782	761forth herein, the following investments shall be permissible under subsection (c) to the extent
783	783	762specified: 38 of 44
784	784	763 (i) receivables that are payable to a licensee from its authorized delegates in the ordinary
785	785	764course of business that are less than 7 days old, up to 50 per cent of the aggregate value of the
786	786	765licensee’s total permissible investments;
787	787	766 (ii) of the receivables permissible under clause (i) of paragraph (2), receivables that are
788	788	767payable to a licensee from a single authorized delegate in the ordinary course of business may
789	789	768not exceed 10 per cent of the aggregate value of the licensee’s total permissible investments;
790	790	769 (iii) the following shall be permissible up to 20 per cent per category and combined up to
791	791	77050 per cent of the aggregate value of the licensee’s total permissible investments:
792	792	771 (A) a short-term, not more than 6 months, investment bearing an eligible rating;
793	793	772 (B) commercial paper bearing an eligible rating;
794	794	773 (C) a bill, note, bond or debenture bearing an eligible rating;
795	795	774 (D) United States tri-party repurchase agreements collateralized at 100 per cent or more
796	796	775with United States government or agency securities, municipal bonds or other securities bearing
797	797	776an eligible rating;
798	798	777 (E) money market mutual funds rated less than AAA and equal to or higher than A- by
799	799	778S&P or the equivalent from any other eligible rating service; and
800	800	779 (F) a mutual fund or other investment fund composed solely and exclusively of 1 or more
801	801	780permissible investments listed in clauses (i) through (iii), inclusive, of paragraph (1);
802	802	781 (iv) cash, including demand deposits, savings deposits and funds in such accounts held
803	803	782for the benefit of the licensee’s customers, at foreign depository institutions, shall be permissible 39 of 44
804	804	783up to 10 per cent of the aggregate value of the licensee’s total permissible investments if the
805	805	784licensee has received a satisfactory rating in its most recent examination and the foreign
806	806	785depository institution:
807	807	786 (A) has an eligible rating;
808	808	787 (B) is registered under the federal Foreign Account Tax Compliance Act;
809	809	788 (C) is not located in any country subject to sanctions from the Office of Foreign Asset
810	810	789Control of the United States Treasury; and
811	811	790 (D) is not located in a high-risk or non-cooperative jurisdiction as designated by the
812	812	791Financial Action Task Force.
813	813	792 Section 10. (a)(1) The commissioner may suspend or revoke a license or order a licensee
814	814	793to revoke the designation of an authorized delegate if:
815	815	794 (i) the licensee violates this chapter or a rule adopted or an order issued under this
816	816	795chapter;
817	817	796 (ii) the licensee does not cooperate with an examination or investigation by the
818	818	797commissioner;
819	819	798 (iii) the licensee engages in fraud, intentional misrepresentation or gross negligence;
820	820	799 (iv) an authorized delegate is convicted of a violation of a state or federal anti-money
821	821	800laundering statute, or violates a rule adopted or an order issued under this chapter, as a result of
822	822	801the licensee’s willful misconduct or willful blindness; 40 of 44
823	823	802 (v) the competence, experience, character or general fitness of the licensee, authorized
824	824	803delegate, person in control of a licensee, key individual or responsible person of the authorized
825	825	804delegate indicates that it is not in the public interest to permit the person to provide money
826	826	805transmission;
827	827	806 (vi) the licensee engages in an unsafe or unsound practice;
828	828	807 (vii) the licensee is insolvent, suspends payment of its obligations or makes a general
829	829	808assignment for the benefit of its creditors; or
830	830	809 (viii) the licensee does not remove an authorized delegate after the commissioner issues
831	831	810and serves upon the licensee a final order including a finding that the authorized delegate has
832	832	811violated this chapter.
833	833	812 (2) In determining whether a licensee is engaging in an unsafe or unsound practice, the
834	834	813commissioner may consider the size and condition of the licensee’s money transmission, the
835	835	814magnitude of the loss, the gravity of the violation of this chapter and the previous conduct of the
836	836	815person involved.
837	837	816 (b)(1) The commissioner may issue an order suspending or revoking the designation of
838	838	817an authorized delegate, if the commissioner finds that:
839	839	818 (i) the authorized delegate violated this chapter or a rule adopted or an order issued under
840	840	819this chapter;
841	841	820 (ii) the authorized delegate did not cooperate with an examination or investigation by the
842	842	821commissioner; 41 of 44
843	843	822 (iii) the authorized delegate engaged in fraud, intentional misrepresentation or gross
844	844	823negligence;
845	845	824 (iv) the authorized delegate has been convicted of a violation of a state or federal anti-
846	846	825money laundering statute;
847	847	826 (v) the competence, experience, character, or general fitness of the authorized delegate or
848	848	827a person in control of the authorized delegate indicates that it is not in the public interest to
849	849	828permit the authorized delegate to provide money transmission; or
850	850	829 (vi) the authorized delegate is engaging in an unsafe or unsound practice.
851	851	830 (2) In determining whether an authorized delegate is engaging in an unsafe or unsound
852	852	831practice, the commissioner may consider the size and condition of the authorized delegate’s
853	853	832provision of money transmission, the magnitude of the loss, the gravity of the violation of this
854	854	833chapter or a rule adopted or order issued under this chapter and the previous conduct of the
855	855	834authorized delegate.
856	856	835 (3) An authorized delegate may apply for relief from a suspension or revocation of
857	857	836designation as an authorized delegate according to procedures prescribed by the commissioner.
858	858	837 (c)(1) If the commissioner determines, after giving notice of and opportunity for a
859	859	838hearing, that a person or entity has engaged in or is about to engage in an act or practice
860	860	839constituting a violation of this chapter or a rule, regulation or order hereunder, the commissioner
861	861	840may order such person or entity to cease and desist from such unlawful act or practice and take
862	862	841such affirmative action as in their judgment shall effect the purposes of this chapter. 42 of 44
863	863	842 (2) If the commissioner makes written findings of fact that the public interest will be
864	864	843irreparably harmed by delay in issuing an order pursuant to subsection (a), the commissioner
865	865	844may issue a temporary cease and desist order. Upon the entry of a temporary cease and desist
866	866	845order, the commissioner shall promptly notify, in writing, the person or entity affected thereby
867	867	846that such order has been so entered, the reasons therefor, and that within 20 days after the receipt
868	868	847of a written request from such person or entity, the matter shall be scheduled for a hearing to
869	869	848determine whether or not such temporary order shall become permanent and final. If no such
870	870	849hearing is requested and none is ordered by the commissioner, the order shall remain in effect
871	871	850until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the
872	872	851commissioner, after giving notice of and opportunity for a hearing to the person or entity subject
873	873	852to said order, shall, by written finding of facts and conclusions of law, vacate, modify or make
874	874	853permanent the order.
875	875	854 (3) No order under this section, except an order issued pursuant to subsection (b), may be
876	876	855entered without prior notice of and opportunity for a hearing. The commissioner may vacate or
877	877	856modify an order under this section upon finding that the conditions that required such an order
878	878	857have changed and that it is in the public interest to so vacate or modify.
879	879	858 (4) Any order issued pursuant to this section shall be subject to review as provided in
880	880	859chapter 30A.
881	881	860 (d) The commissioner may assess a civil penalty against a person or entity that violates
882	882	861this chapter or a rule adopted or an order issued under this chapter in an amount not to exceed
883	883	862$2,000 per day for each day the violation is outstanding or per transaction, plus the 43 of 44
884	884	863commonwealth’s costs and expenses for the investigation and prosecution of the matter,
885	885	864including reasonable attorney’s fees.
886	886	865 (e) The commissioner may enforce the provisions of this chapter or restrain violations
887	887	866thereof by filing a civil action in the superior court department of the trial court.
888	888	867 Section 11. In applying and construing this act, consideration shall be given to the need to
889	889	868promote uniformity of the law with respect to its subject matter among states that enact it.
890	890	869 SECTION 4. (a) A license issued pursuant to chapter 169 of the General Laws or section
891	891	8704 of chapter 167F of the General Laws, including all authorized delegate location designations,
892	892	871that is in effect immediately before the effective date of chapter 169B of the General Laws shall
893	893	872remain in effect as a license pursuant to said chapter 169 or said section 4 of said chapter 167F.
894	894	873Such licensees shall file a renewal application in accordance with section 5 of said chapter 169B,
895	895	874as inserted by section 3.
896	896	875 (b) Any person that was not required to obtain a license pursuant to chapter 169 of the
897	897	876General Laws or pursuant to section 4 of chapter 167F of the General Laws, but that is now
898	898	877required to obtain a license pursuant to chapter 169B of the General Laws shall file an
899	899	878application for a license within 6 months of the effective date of section 45 of said chapter 169B,
900	900	879as inserted by section 3, to continue conducting money transmission in the commonwealth
901	901	880directly or through authorized delegates. If such application is timely filed and pending with the
902	902	881commissioner, that person may continue to conduct money transmission in the commonwealth,
903	903	882until such time as the application has been approved, withdrawn or denied. 44 of 44
904	904	883 (c) All authorized delegate designations pursuant to section 4 of chapter 167F of the
905	905	884General Laws that are in effect as of the effective date of chapter 169B of the General Laws shall
906	906	885be deemed in compliance with said chapter 169B.
907	907	886 (d) A licensee shall only be required to amend its authorized delegate contracts for
908	908	887contracts entered into or amended after the effective date of chapter 169B of the General Laws.
909	909	888Nothing herein shall be construed as limiting an authorized delegate’s obligations to operate in
910	910	889full compliance with said chapter 169B.
911	911	890 SECTION 5. Sections 1 and 2 shall take effect 9 months after the effective date of this
912	912	891act.
913	913	892 SECTION 6. Sections 1, 2 and 4 to 11, inclusive, of chapter 169B of the General Laws,
914	914	893inserted by section 3, shall take effect 9 months after the effective date of this act.
915	915	894 SECTION 7. Section 3 of chapter 169B of the General Laws, inserted by section 3, shall
916	916	895take effect upon passage.