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Senate File 421 - IntroducedA Bill ForAn Act 1relating to money transmission services.
2BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 533A.2, subsection 2, paragraph h, Code
22023, is amended to read as follows:
3h. A person licensed under chapter 533C, including that
4person’s authorized delegates as defined in section 533C.102,
5or a person exempt from licensing under section 533C.103, when
6engaging in money transmission or currency exchange as defined
7in section 533C.102.
8 Sec. 2. Section 533C.101, Code 2023, is amended to read as
9follows:
10533C.101 Short title.
11This chapter may be cited as the “Uniform Money Services
12 Transmission Modernization Act”.
13 Sec. 3. Section 533C.102, Code 2023, is amended to read as
14follows:
15533C.102 Definitions.
16In this chapter:
171. “Applicant” means a person that files an application for
18a license under this chapter.
191. “Acting in concert” means persons knowingly acting
20together with a common goal of jointly acquiring control of a
21licensee whether or not pursuant to an express agreement.
222. “Authorized delegate” means a person a licensee
23designates to provide money services on behalf of the licensee.
243. “Bank” means an institution organized under federal or
25state law which does any of the following:
26a. Accepts demand deposits or deposits that the depositor
27may use for payment to third parties and engages in the
28business of making commercial loans.
29b. Engages in credit card operations and maintains only one
30office that accepts deposits, does not accept demand deposits
31or deposits that the depositor may use for payments to third
32parties, does not accept a savings or time deposit less than
33one hundred thousand dollars, and does not engage in the
34business of making commercial loans.
354. “Compensation” means any fee, commission, or other
-1-1benefit.
25. “Conducting the business” means engaging in activities
3of a licensee or money transmitter more than ten times in any
4calendar year for compensation.
53. “Average daily money transmission liability” means
6the amount of the licensee’s outstanding money transmission
7obligations in this state at the end of each day in a given
8period of time, added together, and divided by the total
9number of days in the given period of time. For purposes of
10calculating average daily money transmission liability under
11this chapter for any required licensee, the given period of
12time shall be the quarters ending March 31, June 30, September
1330, and December 31.
144. “Bank Secrecy Act” means the federal Bank Secrecy Act,
1531 U.S.C.§5311 et seq., and its implementing regulations, as
16amended.
175. “Closed loop stored value” means stored value that is
18redeemable by the issuer only for goods or services provided by
19the issuer or its affiliate or franchisees of the issuer or its
20affiliate, except to the extent required by applicable law to
21be redeemable in cash for its cash value.
226. “Control” means any of the following:
23a. Ownership of, or the The power to vote, directly
24or indirectly, at least twenty-five percent of a class of
25 outstanding voting securities or voting interests of a licensee
26or person in control of a licensee.
27b. Power The power to elect or appoint a majority of key
28individuals, executive officers, managers, directors, trustees,
29or other persons exercising managerial authority of a licensee
30or person in control of a licensee.
31c. The power to exercise, directly or indirectly, a
32controlling influence over the management or policies of a
33licensee or person in control of a licensee.
347. “Credit union” means a cooperative, nonprofit association
35incorporated under chapter 533 or the Federal Credit Union Act,
-2-112 U.S.C. §1751 et seq., that is insured by the national credit
2union administration and includes an office of a credit union.
38. “Currency exchange” means receipt of compensation from
4the exchange of money of one government for money of another
5government.
69. “Executive officer” means a president, chairperson of
7the executive committee, chief financial officer, responsible
8individual, or other individual who performs similar functions.
97. “Eligible rating” means a credit rating of any of the
10three highest rating categories provided by an eligible rating
11service, whereby each category may include rating category
12modifiers such as “plus” or “minus” for Standard and Poor’s 500
13stock market index, or the equivalent for any other eligible
14rating service. A long-term credit rating is deemed eligible
15if the rating is equal to “A-” or higher by Standard and Poor’s
16500 stock market index, or the equivalent from any other
17eligible rating service. A short-term credit rating is deemed
18eligible if the rating is equal to or higher than “A-2” or
19“SP-2” by Standard and Poor’s 500 stock market index, or the
20equivalent from any other eligible rating service. In the
21event that the ratings differ among eligible rating services,
22the highest rating shall apply when determining whether a
23security bears an eligible rating.
248. “Eligible rating service” means any nationally recognized
25statistical rating organization as defined by the federal
26Securities and Exchange Commission, and any other organization
27designated by the superintendent by rule or order.
289. “Federally insured depository financial institution”
29 means a bank, credit union, savings and loan association, trust
30company, savings association, savings bank, industrial bank, or
31industrial loan company organized under the laws of the United
32States or any state, when such entity has federally insured
33deposits.
3410. “In this state” means at a physical location within Iowa
35for an in-person transaction request.
-3- 111. “Individual” means a natural person.
212. “Key individual” means an individual ultimately
3responsible for establishing or directing policies and
4procedures of the licensee, including an executive officer,
5manager, director, or trustee.
610. 13. “Licensee” means a person licensed under this
7chapter.
811. “Location” means a place of business at which activity
9conducted by a licensee or money transmitter occurs.
1014. “Material litigation” means litigation that, according
11to generally accepted accounting principles in the United
12States, is significant to a person’s financial health and would
13be required to be disclosed in the person’s audited financial
14statements, report to shareholders, or similar records.
1512. 15. “Monetary value” means a medium of exchange,
16whether or not redeemable in money.
1713. 16. “Money” means a medium of exchange authorized or
18adopted by a domestic the United States or a foreign government
19as a part of its currency and that is customarily used and
20accepted as a medium of exchange in the country of issuance.
21The term includes a monetary unit of account established by an
22intergovernmental organization or by agreement between two or
23more governments.
2414. “Money services” means money transmission or currency
25exchange.
2615. 17. “Money transmission” means and includes any of the
27following:
28a. Selling or issuing payment instruments to one or more
29persons or issuing payment instruments which are sold to one or
30more persons a person located in this state.
31b. Selling or issuing stored value to a person located in
32this state.
33b. c. Conducting the business of receiving Receiving money
34or monetary value for transmission from a person located in
35this state.
-4- 1c. Conducting the business of receiving money for obligors
2for the purpose of paying obligors’ bills, invoices, or
3accounts.
4d. “Money transmission” does not include the provision
5solely of online or telecommunications services or network
6access.
716. “Outstanding”, with respect to a payment instrument,
8means issued or sold by or for the licensee and reported as
9sold but not yet paid by or for the licensee.
1018. “Money services businesses accredited state” or “MSB
11accredited state” means a state agency that is accredited by the
12conference of state bank supervisors and the money transmitter
13regulators association for money transmission licensing and
14supervision.
1519. “Multistate licensing process” means any agreement
16entered into by and among state regulators relating to
17coordinated processing of applications for money transmission
18licenses, applications for the acquisition of control of a
19licensee, control determinations, or notice and information
20requirements for a change of key individuals.
2120. “Nationwide multistate licensing system” or “NMLS”
22 means the nationwide multistate licensing system and registry
23developed by the conference of state bank supervisors and the
24American association of residential mortgage regulators and
25owned and operated by the state regulatory registry, LLC, or
26any successor or affiliated entity, for the licensing and
27registration of persons in financial services industries.
2821. “Outstanding money transmission obligations” means any
29of the following:
30a. Any payment instrument or stored value issued or sold
31by the licensee to a person located in the United States or
32reported as sold by an authorized delegate of the licensee to
33a person that is located in the United States that has not yet
34been paid or refunded by or for the licensee, or escheated in
35accordance with applicable abandoned property laws.
-5- 1b. Any money received for transmission by the licensee or an
2authorized delegate in the United States from a person located
3in the United States that has not been received by the payee
4or refunded to the sender, or escheated in accordance with
5applicable abandoned property laws.
622. “Passive investor” means a person that can attest in a
7medium prescribed by the superintendent or commits in writing
8to any of the following:
9a. The person does not have the power to elect a majority
10of key individuals or executive officers, managers, directors,
11trustees, or other persons exercising managerial authority of a
12person in control of a licensee.
13b. The person is not employed by and does not have any
14managerial duties of the licensee or person in control of a
15licensee.
16c. The person does not have the power to exercise, directly
17or indirectly, a controlling influence over the management or
18policies of a licensee or person in control of a licensee.
1917. 23. “Payment instrument” means a written or electronic
20 check, draft, money order, traveler’s check, stored-value,
21 or other written or electronic instrument or order for the
22transmission or payment of money or monetary value, sold to
23one or more persons, whether or not that instrument or order
24 is negotiable. “Payment instrument” does not include an stored
25value or any instrument that is redeemable by the issuer
26only for goods or services provided by the issuer or an its
27 affiliate in merchandise or service, a credit card voucher, or
28a letter of credit, except to the extent required by applicable
29law to be redeemable in cash for its cash value, or not sold
30to the public but issued and distributed as part of a loyalty,
31rewards, or promotional program.
3224. “Payroll processing services” means receiving money for
33transmission pursuant to a contract with a person to deliver
34wages or salaries, make payments of payroll taxes to states and
35federal agencies, make payments relating to employee benefit
-6-1plans, or make distributions of other authorized deductions
2from wages or salaries. The term “payroll processing services”
3 does not include an employer performing payroll processing
4services on its own behalf or on behalf of its affiliate, or
5a professional employment organization subject to regulation
6under other applicable state law.
718. 25. “Person” means an individual, corporation, business
8trust, estate, trust, partnership, general partnership, limited
9partnership, limited liability company, association, joint
10venture stock corporation, trust, corporation, government;
11governmental subdivision, agency or instrumentality; public
12corporation; or any other legal or commercial corporate entity
13identified by the superintendent.
1419. “Proceeds” means property acquired or derived directly
15or indirectly from, produced through, realized through, or
16caused by an act or omission and includes any property of any
17kind.
1820. “Property” means anything of value, and includes any
19interest in property, including any benefit, privilege, claim,
20or right with respect to anything of value, whether real
21or personal, tangible or intangible, without reduction for
22expenses incurred for acquisition, maintenance, production, or
23any other purpose.
2421. “Record” means information that is inscribed on a
25tangible medium or that is stored in an electronic or other
26medium and is retrievable in perceivable form.
2722. “Responsible individual” means an individual who is
28employed by a licensee and has principal managerial authority
29over the provision of money services by the licensee in this
30state.
3123. “State” means a state of the United States, the District
32of Columbia, Puerto Rico, the United States Virgin Islands, or
33any territory or insular possession subject to the jurisdiction
34of the United States.
3526. “Receipt” means a paper receipt, electronic record, or
-7-1other written confirmation.
227. “Receiving money for transmission” or “money received
3for transmission” means receiving money or monetary value in
4the United States for transmission within or outside the United
5States by electronic or other means.
628. “Remit” means to make direct payments of money to a
7licensee or its representative authorized to receive money
8or to deposit money in a bank in an account specified by the
9licensee.
1024. 29. “Stored-value” means a monetary value that is
11 representing a claim against the issuer evidenced by an
12electronic or digital record, and that is intended and accepted
13for use as a means of redemption for money or monetary value,
14or payment for goods or services. The term “stored-value”
15 includes but is not limited to “prepaid access” as defined by 31
16C.F.R.§1010.100, as amended. “Stored-value” does not include a
17payment instrument or closed loop stored value, or stored value
18not sold to the public but issued and distributed as part of a
19loyalty, rewards, or promotional program.
2025. 30. “Superintendent” means the superintendent of
21banking for the state of Iowa.
2226. “Transaction” includes a purchase, sale, trade, loan,
23pledge, investment, gift, transfer, transmission, delivery,
24deposit, withdrawal, payment, transfer between accounts,
25exchange of currency, extension of credit, purchase or sale of
26any monetary instrument or stored-value, use of a safe deposit
27box, or any other acquisition or disposition of property by
28whatever means effected.
2927. “Unsafe or unsound practice” means a practice or
30conduct by a person licensed to engage in money transmission
31or an authorized delegate of such a person which creates the
32likelihood of material loss, insolvency, or dissipation of
33the licensee’s assets, or otherwise materially prejudices the
34interests of its customers.
3531. “Tangible net worth” means the aggregate assets of a
-8-1licensee excluding all intangible assets, less liabilities, as
2determined in accordance with generally accepted accounting
3principles in the United States.
432. “In the United States” means a person in any state,
5territory, or possession of the United States, District
6of Columbia, Commonwealth of Puerto Rico, or U.S.military
7installation that is located in a foreign country.
8 Sec. 4. Section 533C.103, Code 2023, is amended to read as
9follows:
10533C.103 Exclusions Exemptions.
11 The superintendent may require that any person claiming
12to be exempt from licensing pursuant to this section
13provide information and documentation to the superintendent
14demonstrating that the person qualifies for any claimed
15exemption.This chapter does not apply to:
161. The United States or a department, agency, agent, or
17instrumentality thereof.
182. A money Money transmission by the United States postal
19service or by a contractor on behalf an agent of the United
20States postal service.
213. A state, county, city, or any other governmental agency,
22 or governmental subdivision, instrumentality, or agent of a
23state.
244. The following entities whether chartered or organized
25under the laws of a state or of the United States: a bank,
26 A federally insured depository financial institution, bank
27holding company, savings and loan association, savings bank,
28credit union, office of an international banking corporation,
29branch of a foreign bank that establishes a federal branch
30pursuant to the federal International Bank Act, 12 U.S.C.
31§3102, as amended, corporation organized pursuant to the
32federal Bank Service Company Act, 12 U.S.C. §1861 – 1867, as
33amended, or corporation organized under the federal Edge Act,
3412 U.S.C. §611 – 633, as amended.
355. Electronic funds transfer of governmental benefits
-9-1for a federal, state, county, or governmental agency by a
2contractor on behalf of the United States or a department,
3agency, or instrumentality thereof, or on behalf of a state or
4governmental subdivision, agency, or instrumentality thereof.
56. A board of trade designated as a contract market under
6the federal Commodity Exchange Act, 7 U.S.C. §1 – 25, as
7amended, or a person that, in the ordinary course of business,
8provides clearance and settlement services for a board of trade
9to the extent of its operation as or for such a board.
107. A registered futures commission merchant under the
11federal commodities laws to the extent of its operation as such
12a merchant.
138. A person that provides clearance or settlement services
14pursuant to a registration as a clearing agency or an exemption
15from such registration granted under the federal securities
16laws to the extent of its operation as such a provider acts
17as an intermediary by processing payments between an entity
18that has directly incurred an outstanding money transmission
19obligation to a sender, and the sender’s designated recipient,
20provided all of the following apply:
21a. The entity is properly licensed or exempt from licensing
22requirements under this chapter.
23b. The entity provides a receipt, electronic record, or
24other written confirmation to the sender identifying the entity
25as the provider of money transmission in the transaction.
26c. The entity bears sole responsibility to satisfy the
27outstanding money transmission obligations to the sender,
28including the obligation to make the sender whole in connection
29with any failure to transmit the funds to the sender’s
30designated recipient.
319. An operator of a payment system to the extent that it
32provides processing, clearing, or settlement services, between
33or among persons excluded by this section, or licensees, in
34connection with wire transfers, credit card transactions,
35debit card transactions, stored-value transactions, automated
-10-1clearing house transfers, or similar funds transfers.
210. A person registered as a securities broker-dealer under
3federal or state securities laws to the extent of its operation
4as such a broker-dealer.
511. A delayed deposit services business as defined in
6chapter 533D.
712. A real estate broker or salesperson as defined in
8chapter 543B.
913. Pari-mutuel wagering, racetracks, excursion gambling
10boats, and gambling structures as provided in chapters 99D and
1199F.
1214. A person engaging in the business of debt management
13that is licensed or exempt from licensing pursuant to section
14533A.2.
1515. An insurance company organized under chapter 508, 514,
16514B, 515, 518, 518A, or 520, or authorized to do the business
17of insurance in Iowa to the extent of its operation as an
18insurance company.
1916. An insurance producer as defined in section 522B.1 to
20the extent of its operation as an insurance producer.
2117. A person appointed as an agent of a payee to collect
22and process a payment from a payor to the payee for goods or
23services, other than money transmission itself, provided to the
24payor by the payee, provided all of the following apply:
25a. There exists a written agreement between the payee and
26the agent directing the agent to collect and process payments
27from payors on the payee’s behalf.
28b. The payee holds the agent out to the public as accepting
29payments for goods or services on the payee’s behalf.
30c. Payment for the goods and services is treated as received
31by the payee upon receipt by the agent so that the payor’s
32obligation is extinguished and there is no risk of loss to the
33payor if the agent fails to remit the funds to the payee.
3418. An individual employed by a licensee, authorized
35delegate, or any person exempted from the licensing
-11-1requirements of this chapter when acting within the scope
2of employment and under the supervision of the licensee,
3authorized delegate, or exempted person as an employee and not
4as an independent contractor.
519. A person expressly appointed as a third-party service
6provider to or agent of an entity exempt under subsection 4,
7provided all of the following apply:
8a. The service provider or agent is engaging in money
9transmission on behalf of and pursuant to a written agreement
10with the exempt entity that sets forth the specific functions
11that the service provider or agent is to perform.
12b. The exempt entity assumes all risk of loss and all
13legal responsibility for satisfying the outstanding money
14transmission obligations owed to purchasers and holders of the
15outstanding money transmission obligations upon receipt of the
16purchaser’s or holder’s money or monetary value by the service
17provider or agent.
1820. A person exempt by regulation or order if the
19superintendent finds such exemption to be in the public
20interest and that the regulation of such person is not
21necessary for the purposes of this chapter.
22 Sec. 5. Section 533C.201, Code 2023, is amended by striking
23the section and inserting in lieu thereof the following:
24533C.201 Implementation.
251. In order to carry out the purposes of this chapter,
26the superintendent may, subject to the provisions of section
27533C.202:
28a. Enter into agreements or relationships with other
29government officials, federal and state regulatory agencies,
30and regulatory associations in order to improve efficiencies
31and reduce regulatory burden by standardizing methods or
32procedures, and sharing resources, records, or related
33information obtained under this chapter.
34b. Use, hire, contract, or employ analytical systems,
35methods, or software to examine or investigate any person
-12-1subject to this chapter.
2c. Accept, from other state or federal government agencies
3or officials, licensing, examination, or investigation reports
4made by such other state or federal government agencies or
5officials.
6d. Accept audit reports made by an independent certified
7public accountant or other qualified third-party auditor for an
8applicant or licensee and incorporate the audit report in any
9report of examination or investigation.
102. The superintendent shall have the broad administrative
11authority to administer, interpret, and enforce this chapter,
12to promulgate rules or regulations implementing this chapter,
13and to recover the cost of administering and enforcing this
14chapter by imposing and collecting proportionate and equitable
15fees and costs associated with applications, examinations,
16investigations, and other actions required to achieve the
17purpose of this chapter.
183. For a transaction requested electronically or by phone,
19the provider of money transmission may determine if the person
20requesting the transmission is located in this state by relying
21on other information provided by the person regarding the
22location of the individual’s residential address or a business
23entity’s principal place of business or other physical address
24location, and any records associated with the person that the
25provider of money transmission may have that indicate such
26location, including but not limited to an address associated
27with an account, provided that any transaction requested by
28an individual whose residential address is in Iowa shall be
29presumed to occur in Iowa.
304. Outstanding money transmission obligations shall be
31established and extinguished in accordance with applicable
32state law.
33 Sec. 6. Section 533C.202, Code 2023, is amended by striking
34the section and inserting in lieu thereof the following:
35533C.202 Confidentiality.
-13- 11. Except as otherwise provided in subsection 2, financial
2statements, balance sheets, authorized delegate information,
3all information and reports obtained by the superintendent
4from an applicant, licensee, or authorized delegate, and
5all information contained in or related to an examination,
6investigation, operating report, or condition report prepared
7by, on behalf of, or for the use of the superintendent are
8confidential and are not subject to disclosure under chapter
922.
102. The superintendent may disclose information not
11otherwise subject to disclosure under subsection 1 where:
12a. Representatives of state or federal agencies certify in
13a record that they shall maintain the confidentiality of the
14information.
15b. The superintendent finds that the release is reasonably
16necessary for the protection and interest of the public in
17accordance with chapter 22.
183. This section does not prohibit the superintendent
19from disclosing to the public a list of all licensees or the
20aggregated financial or transactional data concerning those
21licensees.
224. The division of banking or superintendent’s records
23containing nonconfidential information may be made available
24to the public on the division’s website, upon receipt by the
25division of a written request, or via the NMLS. The release
26of information shall include, where applicable, all of the
27following:
28a. The name, business address, telephone number, and unique
29identifier of a licensee.
30b. The business address of a licensee’s registered agent for
31service.
32c. The name, business address, and telephone number of all
33authorized delegates.
34d. The terms, or a copy, of any bond filed by a licensee,
35provided that confidential information, including but not
-14-1limited to prices and fees for such bond, is redacted.
2e. Copies of any nonconfidential final orders of the
3superintendent relating to any violation of this chapter or
4regulations implementing this chapter.
5f. Imposition of an administrative fine or penalty under
6this chapter.
7 Sec. 7. Section 533C.203, Code 2023, is amended by striking
8the section and inserting in lieu thereof the following:
9533C.203 Supervision.
101. The superintendent may conduct an examination or
11investigation of a licensee or authorized delegate or otherwise
12take independent action authorized by this chapter or by a
13rule adopted or order issued under this chapter as reasonably
14necessary or appropriate to administer and enforce this
15chapter, regulations implementing this chapter, and other
16applicable law, including the federal Bank Secrecy Act, Pub.
17L.No.91-508, and the federal Uniting and Strengthening
18America by Providing Appropriate Tools Required to Intercept
19and Obstruct Terrorism Act of 2001, Pub.L.No.107-56. The
20superintendent shall provide supervision as follows:
21a. Conducting an examination either on site or off site as
22the supervision may reasonably require.
23b. Conducting an examination in conjunction with an
24examination conducted by representatives of other state
25agencies or agencies of another state or of the federal
26government.
27c. Accepting the examination report of another state agency
28or an agency of another state or of the federal government, or
29a report prepared by an independent accounting firm, which on
30being accepted is considered for all purposes as an official
31report of the superintendent.
32d. Summoning and examining under oath a key individual or
33employee of a licensee or authorized delegate and requiring the
34person to produce records regarding any matter related to the
35condition and business of the licensee or authorized delegate.
-15- 12. A licensee or authorized delegate shall provide, and
2the superintendent shall have full and complete access to, all
3records the superintendent may reasonably require to conduct
4a complete examination. The records shall be provided at the
5location and in the format specified by the superintendent,
6provided the superintendent may utilize multistate record
7production standards and examination procedures when such
8standards will reasonably achieve the requirements of this
9section.
103. Unless otherwise directed by the superintendent, a
11licensee shall pay all costs reasonably incurred in connection
12with an examination of the licensee or the licensee’s
13authorized delegates.
14 Sec. 8. Section 533C.204, Code 2023, is amended by striking
15the section and inserting in lieu thereof the following:
16533C.204 Networked supervision.
171. To efficiently and effectively administer and
18enforce this chapter and to minimize regulatory burden, the
19superintendent is authorized and encouraged to participate in
20multistate supervisory processes established between states and
21coordinated through the conference of state bank supervisors,
22the money transmitter regulators association, and affiliates
23and successors thereof for all licensees that hold licenses in
24this state and other states. As a participant in multistate
25supervision, the superintendent shall engage in all of the
26following:
27a. Cooperation, coordination, and information sharing with
28other state and federal regulators in accordance with section
29533C.202.
30b. Cooperation, coordination, and information sharing with
31organizations, the membership of which is made up of state or
32federal government agencies, provided that the organizations
33agree in writing to maintain the confidentiality and security
34of the shared information in accordance with section 533C.202.
35c. Entering into written cooperation, coordination, or
-16-1information-sharing contracts or agreements with organizations
2the membership of which is made up of state or federal
3government agencies.
42. The superintendent shall not waive, and nothing in this
5section constitutes a waiver of, the superintendent’s authority
6to conduct an examination or investigation or otherwise take
7independent action authorized by this chapter or a rule adopted
8or order issued under this chapter to enforce compliance with
9applicable state or federal law.
103. A joint examination or investigation, or acceptance of
11an examination or investigation report, shall not waive an
12examination assessment provided for in this chapter.
13 Sec. 9. Section 533C.205, Code 2023, is amended by striking
14the section and inserting in lieu thereof the following:
15533C.205 Relationship to federal law.
161. In the event state money transmission jurisdiction is
17conditioned on a federal law, any inconsistencies between a
18provision of this chapter and the federal law governing money
19transmission shall be governed by the applicable federal law to
20the extent of the inconsistency.
212. In the event of any inconsistencies between this chapter
22and a federal law that governs pursuant to subsection 1,
23the superintendent may provide interpretive guidance that
24identifies the inconsistency and the appropriate means of
25compliance with federal law.
26 Sec. 10. Section 533C.301, Code 2023, is amended to read as
27follows:
28533C.301 License required.
291. A person shall not engage in currency exchange the
30business of money transmission or advertise, solicit, or hold
31itself out as providing currency exchange for which the person
32receives revenues equal to or greater than five percent of
33total revenues unless the person: money transmission unless
34they are
35a. Is licensed under this article.
-17- 1b. Is licensed for money transmission under article 2.
2c. Is an authorized delegate of a person licensed under
3article 2.
42. This section shall not apply to the following:
5a. A person that is an authorized delegate of a person
6licensed under this chapter acting within the scope of
7authority conferred by a written contract with the licensee.
8b. A person that is exempt pursuant to section 533C.103 and
9does not engage in money transmission outside the scope of such
10exemption.
112. 3. A license under this article is not transferable or
12assignable.
13 Sec. 11. Section 533C.302, Code 2023, is amended by striking
14the section and inserting in lieu thereof the following:
15533C.302 Consistent state licensing.
161. To establish consistent licensing between this state and
17other states, the superintendent is authorized and encouraged
18to provide all of the following:
19a. Implement all licensing provisions of this chapter in a
20manner that is consistent with other states that have adopted
21this chapter or multistate licensing processes.
22b. Participate in nationwide protocols for licensing
23cooperation and coordination among state regulators provided
24that such protocols are consistent with this section.
252. The superintendent is authorized and encouraged to
26establish relationships or contracts with NMLS or other
27entities designated by NMLS to enable the superintendent to do
28all of the following:
29a. Collect and maintain records.
30b. Coordinate multistate licensing processes and supervision
31processes.
32c. Process fees.
33d. Facilitate communication between this state, the
34superintendent, and licensees or other persons subject to this
35chapter.
-18- 13. The superintendent is authorized and encouraged to
2utilize NMLS for all aspects of licensing in accordance
3with this chapter, including but not limited to: license
4applications, applications for acquisitions of control, surety
5bonds, reporting, criminal history background checks, credit
6checks, fee processing, and examinations.
74. The superintendent is authorized and encouraged
8to utilize NMLS forms, processes, and functionalities in
9accordance with this chapter. In the event NMLS does not
10provide functionality, forms, or processes for a provision of
11this chapter, the superintendent is authorized and encouraged
12to strive to implement the requirements in a manner that
13facilitates uniformity with respect to licensing, supervision,
14reporting, and regulation of licensees which are licensed in
15multiple jurisdictions.
165. For the purpose of participating in the NMLS and
17registry, the superintendent is authorized to waive or modify,
18in whole or in part, by rule, regulation, or order, any or
19all of the requirements and to establish new requirements
20as reasonably necessary to participate in the nationwide
21multistate licensing system and registry.
22 Sec. 12. Section 533C.303, Code 2023, is amended by striking
23the section and inserting in lieu thereof the following:
24533C.303 Application for license.
251. Applicants for a license under this chapter shall
26apply on a form prescribed by the superintendent. Each such
27form shall contain content as set forth by rule, regulation,
28instruction, or procedure of the superintendent and shall be
29changed or updated by the superintendent in accordance with
30applicable law in order to carry out the purposes of this
31chapter and maintain consistency with NMLS licensing standards
32and practices. The application shall state or contain, as
33applicable, the following:
34a. The legal name and residential and business addresses
35of the applicant and any fictitious or trade name used by the
-19-1applicant in conducting its business.
2b. A list of any criminal convictions of the applicant
3and any material litigation in which the applicant has been
4involved in the ten-year period immediately preceding the
5submission of the application.
6c. A description of any money transmission previously
7provided by the applicant and the money transmission that the
8applicant seeks to provide in this state.
9d. A list of the applicant’s proposed authorized delegates
10and the locations in this state where the applicant and its
11authorized delegates propose to engage in money transmission.
12e. A list of other states in which the applicant is licensed
13to engage in money transmission and of any license revocations,
14suspensions, or other disciplinary action taken against the
15applicant in another state.
16f. Information concerning any bankruptcy or receivership
17proceedings affecting the licensee or a person in control of
18a licensee.
19g. A sample form of contract for authorized delegates.
20h. A sample form of payment instrument or stored value.
21i. The name and address of any federally insured depository
22financial institution through which the applicant plans to
23conduct money transmission.
24j. Any other information the superintendent or NMLS
25reasonably requires with respect to the applicant.
262. If an applicant is a corporation, limited liability
27company, partnership, or other legal entity, the applicant
28shall also provide all of the following:
29a. The date of the applicant’s incorporation or formation
30and state or country of incorporation or formation.
31b. If applicable, a certificate of good standing from the
32state or country in which the applicant is incorporated or
33formed.
34c. A brief description of the structure or organization of
35the applicant, including any parents or subsidiaries of the
-20-1applicant, and whether any parents or subsidiaries are publicly
2traded.
3d. The legal name, any fictitious or trade name, all
4business and residential addresses, and the employment, in the
5ten-year period immediately preceding the submission of the
6application of each key individual and person in control of the
7applicant.
8e. A list of any criminal convictions and material
9litigation in which a person in control of the applicant that
10is not an individual has been involved in the ten-year period
11immediately preceding the submission of the application.
12f. A copy of audited financial statements for the most
13recent fiscal year and for the two-year period immediately
14preceding the submission of the application or, if determined
15to be acceptable to the superintendent, certified unaudited
16financial statements for the most recent fiscal year or other
17period acceptable to the superintendent.
18g. A certified copy of the applicant’s unaudited financial
19statements for the most recent fiscal quarter.
20h. If the applicant is a publicly traded corporation, a
21copy of the most recent report filed with the United States
22securities and exchange commission under section 13 of the
23federal Securities Exchange Act of 1934, 15 U.S.C.§78m, as
24amended.
25i. If the applicant is a wholly owned subsidiary of any of
26the following:
27(1) A corporation publicly traded in the United States, a
28copy of audited financial statements for the parent corporation
29for the most recent fiscal year or a copy of the parent
30corporation’s most recent report filed under section 13 of the
31federal Securities Exchange Act of 1934, 15 U.S.C. §78m, as
32amended.
33(2) A corporation publicly traded outside the United
34States, a copy of similar documentation filed with the
35regulator of the parent corporation’s domicile outside the
-21-1United States.
2j. The name and address of the applicant’s registered agent
3in this state.
4k. Any other information the superintendent reasonably
5requires with respect to the applicant.
63. A nonrefundable application fee of one thousand dollars
7and a license fee shall accompany an application for a license
8under this chapter. The license fee shall be refunded if
9the application is denied. The license fee shall be the sum
10of five hundred dollars plus an additional ten dollars for
11each location in this state at which business is conducted
12through authorized delegates or employees of the licensee, but
13shall not exceed five thousand dollars. Fees for locations
14added after the initial application shall be submitted with
15the quarterly reports pursuant to section 533C.601. If the
16licensee has no locations in this state at which business is
17conducted through authorized delegates or employees of the
18licensee, the license fee shall be set by the superintendent,
19but shall not exceed five thousand dollars. A license
20under this chapter expires on the next December 31 after its
21issuance. The initial license fee is considered an annual fee
22and the superintendent shall prorate the license fee, refunding
23any amount due to a partial license year. No refund of a
24license fee shall be made when a license is suspended, revoked,
25or surrendered.
264. A person who requests written confirmation from the
27superintendent that a license is not required shall submit a
28fee of one hundred dollars along with the written request.
29 Sec. 13. Section 533C.304, Code 2023, is amended by striking
30the section and inserting in lieu thereof the following:
31533C.304 Information requirements for certain individuals.
321. An individual in control of a licensee or applicant, an
33individual seeking to acquire control of a licensee, and each
34key individual shall furnish to the superintendent through NMLS
35the following items:
-22- 1a. The individual’s fingerprints for submission to the
2federal bureau of investigation and the superintendent for
3purposes of a national criminal history background check unless
4the person currently resides outside of the United States and
5has resided outside of the United States for the last ten
6years.
7b. Personal history and experience in a form and in a
8medium prescribed by the superintendent, to obtain all of the
9following:
10(1) An independent credit report from a consumer reporting
11agency. If the individual does not have a social security
12number, the requirement shall be waived.
13(2) Information related to any criminal convictions or
14pending charges.
15(3) Information related to any regulatory or administrative
16action and any civil litigation involving claims of fraud,
17misrepresentation, conversion, mismanagement of funds, breach
18of fiduciary duty, or breach of contract.
192. If the individual has resided outside of the United
20States at any time in the last ten years, the individual shall
21also provide an investigative background report prepared by an
22independent search firm. The search firm shall demonstrate
23it has sufficient knowledge, resources, and employs accepted
24and reasonable methodologies to conduct the research of the
25background report and be unaffiliated with, or have no interest
26in, the individual it is researching. The investigative
27background report shall be written in the English language and
28shall contain all of the following:
29a. If available in the individual’s current jurisdiction
30of residency, a comprehensive credit report, or any equivalent
31information obtained or generated by the independent search
32firm to accomplish such report, including a search of the court
33data in the countries, provinces, states, cities, towns, and
34contiguous areas where the individual resided and worked.
35b. Criminal record information for the past ten years,
-23-1including but not limited to felonies, misdemeanors, or
2similar convictions for violations of law in the countries,
3provinces, states, cities, towns, and contiguous areas where
4the individual resided and worked.
5c. Employment history.
6d. Media history, including an electronic search of
7national and local publications, wire services, and business
8applications.
9e. Financial services-related regulatory history, including
10but not limited to money transmission, securities, banking,
11insurance, and mortgage-related industries.
12 Sec. 14. NEW SECTION. 533C.305 Issuance of license.
131. When an application for an original license is filed
14under this chapter and appears to include all required
15information, the application is considered complete and the
16superintendent shall promptly notify the applicant in a record
17of the date on which the application is determined to be
18complete. The application is approved one hundred twenty-one
19days after completion, unless denied or approved earlier by
20the superintendent. The license takes effect as of the first
21business day after expiration of the one hundred twenty-day
22period. The superintendent may for good cause extend the
23application period.
242. A determination by the superintendent that an
25application is complete and is accepted for processing means
26only that the application, on its face, appears to include
27all of the items, including the criminal background check
28response from the federal bureau of investigation, and address
29all of the matters that are required. A determination by
30the superintendent that an application is complete is not
31an assessment of the substance of the application or of the
32sufficiency of the information provided.
333. When an application is filed and considered complete
34under this section, the superintendent shall investigate the
35applicant’s financial condition and responsibility, financial
-24-1and business experience, character, and general fitness. The
2superintendent may conduct an on-site investigation of the
3applicant, the reasonable cost of which the applicant shall
4pay. The superintendent shall issue a license to an applicant
5under this section if the superintendent finds that all of the
6following conditions have been fulfilled:
7a. The applicant has complied with sections 533C.303 and
8533C.304.
9b. The financial condition and responsibility, financial and
10business experience, competence, character, and general fitness
11of the applicant or key individuals and person in control of
12the applicant, indicate that it is in the interest of the
13public to permit the applicant to engage in money transmission.
144. If an applicant avails itself or is otherwise subject
15to a multistate licensing process, the superintendent is
16authorized and encouraged to accept the investigation results
17of a lead investigative state for the purpose of subsection
183, if the lead investigative state has sufficient staffing,
19expertise, and minimum standards. Additionally, if this
20state is a lead investigative state, the superintendent is
21authorized and encouraged to investigate the applicant pursuant
22to subsection 3, and the time frames established by agreement
23through the multistate licensing process, provided, that in no
24case shall such time frame be noncompliant with the application
25period in subsection 1, paragraph “a”.
265. The superintendent shall issue a formal written notice
27of the denial of a license application within thirty days of
28the decision to deny the application. The superintendent shall
29set forth in the notice of denial the specific reasons for the
30denial of the application. An applicant whose application is
31denied by the superintendent under this section may appeal
32within thirty days after receipt of the written notice of the
33denial pursuant to chapter 17A.
346. The initial license term shall begin on the day the
35application is approved. The license shall expire on December
-25-131 of the year in which the license term began, unless the
2initial license date is between November 1 and December 31, in
3which case the initial license term shall run through December
431 of the following year.
5 Sec. 15. NEW SECTION. 533C.306 Renewal of license.
61. A license under this chapter shall be renewed annually.
7An annual renewal fee of five hundred dollars plus an
8additional ten dollars for each location in this state at which
9business is conducted through authorized delegates or employees
10of the licensee, which shall not exceed five thousand dollars,
11shall be paid no more than sixty days before the license
12expiration. The renewal term shall be for a period of one year
13and shall begin on January 1 of each year after the initial
14license term and shall expire on December 31 of the year the
15renewal term begins.
162. A licensee shall submit a renewal report with the
17renewal fee, in a form prescribed by the superintendent. The
18renewal report shall state or contain a description of each
19material change in information submitted by the licensee in its
20original license application which has not been reported to the
21superintendent.
223. The superintendent for good cause may grant an extension
23of the renewal date.
244. The superintendent is authorized and encouraged
25to utilize NMLS to process renewals provided that such
26functionality is consistent with this section.
275. If a licensee does not file a renewal report or pay its
28renewal fee by December 1, or any extension of time granted by
29the superintendent, the superintendent may assess a late fee
30of one hundred dollars per day.
31 Sec. 16. NEW SECTION. 533C.307 Maintenance of license.
32If a licensee does not continue to meet the qualifications or
33satisfy the requirements that apply to an applicant for a new
34money transmission license, the superintendent may suspend or
35revoke the licensee’s license in accordance with the procedures
-26-1established by this chapter or other applicable state law for
2such suspension or revocation.
31. An applicant for a money transmission license shall
4demonstrate that the applicant meets or will meet the
5requirements of sections 533C.801, 533C.802, and 533C.803.
62. A money transmission licensee shall at all times meet the
7requirements of sections 533C.801, 533C.802, and 533C.803.
8 Sec. 17. Section 533C.401, Code 2023, is amended by striking
9the section and inserting in lieu thereof the following:
10533C.401 Acquisition of control.
111. Any person, or group of persons acting in concert,
12seeking to acquire control of a licensee shall obtain the
13written approval of the superintendent prior to acquiring
14control. An individual is not deemed to acquire control
15of a licensee and is not subject to acquisition of control
16provisions when that individual becomes a key individual in the
17ordinary course of business.
182. A person is presumed to exercise a controlling
19influence when the person holds the power to vote, directly
20or indirectly, at least ten percent of the outstanding voting
21shares or voting interests of a licensee or person in control
22of a licensee. A person presumed to exercise a controlling
23influence can rebut the presumption of control if the person
24is a passive investor.
253. For purposes of determining the percentage of a
26person controlled by any other person, the person’s interest
27shall be aggregated with the interest of any other immediate
28family member, including the person’s spouse, parents,
29children, siblings, mother-in-law, father-in-law, son-in-law,
30daughter-in-law, brother-in-law, sister-in-law, and any other
31person who shares such person’s home.
324. A person, or group of persons acting in concert, seeking
33to acquire control of a licensee shall, in cooperation with
34the licensee, submit an application in a form and in a medium
35prescribed by the superintendent and a nonrefundable fee of one
-27-1thousand dollars with the request for approval.
25. Upon request, the superintendent may permit a licensee or
3the person, or group of persons acting in concert, to submit
4some or all information required by the superintendent pursuant
5to subsection 4 without using NMLS.
66. The application required by subsection 4 shall include
7information required by section 533C.304 for a licensee,
8including for any new key individuals that have not previously
9completed the requirements.
107. When an application for acquisition of control under this
11section appears to include all the items and address all of the
12matters that are required, the application shall be considered
13complete and the superintendent shall promptly notify the
14applicant in a record of the date on which the application was
15determined to be complete. The application is approved and the
16person, or group of persons acting in concert, are permitted to
17acquire control sixty-one days after application completion,
18unless denied or approved earlier by the superintendent. The
19superintendent may for good cause extend the application
20period.
218. A determination by the superintendent that an
22application is complete and is accepted for processing means
23only that the application, on its face, appears to include all
24of the items and address all of the matters that are required,
25and is not an assessment of the substance of the application or
26of the sufficiency of the information provided.
279. When an application is filed and considered complete
28under subsection 7, the superintendent shall investigate the
29financial condition and responsibility, financial and business
30experience, character, and general fitness of the person, or
31group of persons acting in concert, seeking to acquire control.
32The superintendent shall approve an acquisition of control
33pursuant to this section if the superintendent finds that all
34of the following conditions have been fulfilled:
35a. The requirements of subsections 4 and 6 have been met,
-28-1as applicable.
2b. The financial condition and responsibility, financial and
3business experience, competence, character, and general fitness
4of the person, or group of persons acting in concert, seeking
5to acquire control, and of the key individuals and persons that
6would be in control of the licensee indicate that it is in the
7interest of the public to permit the applicant to control the
8licensee.
910. If an applicant avails itself or is otherwise subject
10to a multistate licensing process, the superintendent is
11authorized and encouraged to accept the investigation results
12of a lead investigative state for the purpose of subsection
139 if the lead investigative state has sufficient staffing,
14expertise, and minimum standards. If this state is a lead
15investigative state, the superintendent is authorized and
16encouraged to investigate the applicant pursuant to subsection
179 and the time frames established by agreement through the
18multistate licensing process.
1911. The superintendent shall issue a formal written
20notice of the denial of an application to acquire control
21within thirty days of the decision to deny the application.
22The superintendent shall set forth in the notice of denial
23the specific reasons for the denial of the application. An
24applicant whose application is denied by the superintendent
25under this section may appeal within thirty days after receipt
26of the written notice of the denial.
2712. The requirements of subsections 1 and 4 shall not apply
28to any of the following:
29a. A person that acts as a proxy for the sole purpose of
30voting at a designated meeting of the shareholders or holders
31of voting shares or voting interests of a licensee or a person
32in control of a licensee.
33b. A person that acquires control of a licensee by devise
34or descent.
35c. A person that acquires control of a licensee as a
-29-1personal representative, custodian, guardian, conservator, or
2trustee, or as an officer appointed by a court of competent
3jurisdiction or by operation of law.
4d. A person that is exempt under section 533C.103,
5subsection 4.
6e. A person that the superintendent determines is not
7subject to subsection 1 based on the public interest.
8f. A public offering of securities of a licensee or a person
9in control of a licensee.
10g. An internal reorganization of a person in control of the
11licensee where the ultimate person in control of the licensee
12remains the same.
1313. Persons specified in subsection 12, paragraphs “b”,
14“c”, “d”, “f”, and “g”, in cooperation with the licensee,
15shall notify the superintendent within fifteen days after the
16acquisition of control.
1714. The requirements of subsections 1 and 4 shall not
18apply to a person that has complied with and received approval
19to engage in money transmission under this chapter or was
20identified as a person in control in a prior application filed
21with and approved by the superintendent or by an MSB accredited
22state pursuant to a multistate licensing process, provided all
23of the following apply:
24a. The person has not had a license revoked or suspended.
25b. The person has not controlled a licensee that has had a
26license revoked or suspended while the person was in control of
27the licensee in the previous five years.
28c. If the person is a licensee, the person is well-managed
29and has received at least a satisfactory rating for compliance
30at its most recent examination by an MSB-accredited state if
31such rating was given.
32d. The licensee to be acquired is projected to meet the
33requirements of sections 533C.801, 533C.802, and 533C.803 after
34the acquisition of control is completed.
35e. If the person acquiring control is a licensee, that
-30-1licensee is projected to meet the requirements of sections
2533C.801, 533C.802, and 533C.803 after the acquisition of
3control is completed.
4f. The licensee to be acquired will not implement any
5material changes to its business plan as a result of the
6acquisition of control.
7g. If the person acquiring control is a licensee, that
8licensee will not implement any material changes to its
9business plan as a result of the acquisition of control.
10h. The person provides notice of the acquisition in
11cooperation with the licensee and attests to the provisions in
12this subsection in a form and in a medium prescribed by the
13superintendent. If the notice is not disapproved within thirty
14days after the date on which the notice was determined to be
15complete, the notice is deemed approved.
1615. Before filing an application for approval to acquire
17control of a licensee, a person may request in writing a
18determination from the superintendent as to whether the person
19would be considered a person in control of a licensee upon
20consummation of a proposed transaction. If the superintendent
21determines that the person would not be a person in control of
22a licensee, the proposed person and transaction are not subject
23to the requirements of subsections 1 and 4.
2416. If a multistate licensing process includes a
25determination pursuant to subsection 15 and an applicant avails
26itself or is otherwise subject to the multistate licensing
27process, the superintendent is authorized and encouraged to
28accept the control determination of a lead investigative state
29with sufficient staffing, expertise, and minimum standards
30for the purpose of subsection 15. If this state is a lead
31investigative state, the superintendent is authorized and
32encouraged to investigate the applicant pursuant to subsection
3315 and the time frames established by agreement through the
34multistate licensing process.
35 Sec. 18. Section 533C.402, Code 2023, is amended by striking
-31-1the section and inserting in lieu thereof the following:
2533C.402 Notice and information requirements for a change of
3key individuals.
41. A licensee adding or replacing any key individual shall
5provide notice in a manner prescribed by the superintendent
6within fifteen days after the effective date of the key
7individual’s appointment and provide information as required by
8section 533C.304 within forty-five days of the effective date.
92. A key individual is considered approved ninety-one
10days after notice is provided pursuant to this section,
11unless denied or approved earlier by the superintendent.
12The superintendent may issue a notice of disapproval of a
13key individual if the competence, experience, character, or
14integrity of the individual would not be in the best interests
15of the public or the customers of the licensee to permit
16the individual to be a key individual of such licensee. A
17notice of disapproval shall contain a statement of the basis
18for disapproval and shall be sent to the licensee and the
19disapproved individual. A licensee may appeal a notice of
20disapproval within thirty days after receipt of the written
21notice of such disapproval.
223. If a multistate licensing process includes a key
23individual notice review and disapproval process pursuant to
24this section and the licensee avails itself or is otherwise
25subject to the multistate licensing process, the superintendent
26is authorized and encouraged to accept the determination
27of another state if the investigating state has sufficient
28staffing, expertise, and minimum standards for the purpose of
29this section. If this state is a lead investigative state,
30the superintendent is authorized and encouraged to investigate
31the applicant pursuant to subsection 2 and the time frames
32established by agreement through the multistate licensing
33process.
34 Sec. 19. Section 533C.501, Code 2023, is amended by striking
35the section and inserting in lieu thereof the following:
-32- 1533C.501 Relationship between licensee and authorized
2delegate.
31. Before a licensee is authorized to conduct business
4through an authorized delegate or allows a person to act as the
5licensee’s authorized delegate, the licensee shall do all of
6the following:
7a. Adopt, and update as necessary, written policies and
8procedures reasonably designed to ensure that the licensee’s
9authorized delegates comply with applicable state and federal
10law.
11b. Enter into a written contract that complies with this
12subsection.
13c. Conduct a reasonable risk-based background investigation
14sufficient for the licensee to determine whether the authorized
15delegate has complied and will likely comply with applicable
16state and federal law.
172. An authorized delegate shall operate in full compliance
18with this chapter.
193. The written contract required by subsection 1, shall be
20signed by the licensee and the authorized delegate and shall:
21a. Appoint the person signing the contract as the licensee’s
22authorized delegate with the authority to conduct money
23transmission on behalf of the licensee.
24b. Set forth the nature and scope of the relationship
25between the licensee and the authorized delegate and the
26respective rights and responsibilities of the parties.
27c. Require the authorized delegate to agree to fully
28comply with all applicable state and federal laws, rules, and
29regulations pertaining to money transmission, including this
30chapter and regulations implementing this chapter, relevant
31provisions of the federal Bank Secrecy Act and federal Uniting
32and Strengthening America by Providing Appropriate Tools
33Required to Intercept and Obstruct Terrorism Act of 2001, Pub.
34L.No.107-56.
35d. Require the authorized delegate to remit and handle money
-33-1and monetary value in accordance with the terms of the contract
2between the licensee and the authorized delegate.
3e. Impose a trust on money and monetary value net of
4fees received for money transmission for the benefit of the
5licensee.
6f. Require the authorized delegate to prepare and maintain
7records as required by this chapter or regulations implementing
8this chapter, or as reasonably requested by the superintendent.
9g. Acknowledge that the authorized delegate consents to
10examination or investigation by the superintendent.
11h. State that the licensee is subject to regulation by the
12superintendent who may suspend or revoke an authorized delegate
13designation or require the licensee to terminate an authorized
14delegate designation as a part of regulation.
15i. Acknowledge receipt of the written policies and
16procedures required under subsection 1.
174. If the licensee’s license is suspended, revoked,
18surrendered, or expired, the licensee shall, within five
19business days, provide documentation to the superintendent that
20the licensee has notified all applicable authorized delegates
21of the licensee whose names are in a record filed with the
22superintendent of the suspension, revocation, surrender,
23or expiration of a license. Upon suspension, revocation,
24surrender, or expiration of a license, applicable authorized
25delegates shall immediately cease to provide money transmission
26as an authorized delegate of the licensee.
275. An authorized delegate of a licensee holds in trust for
28the benefit of the licensee all money net of fees received from
29money transmission. If any authorized delegate commingles any
30funds received from money transmission with any other funds or
31property owned or controlled by the authorized delegate, all
32commingled funds and other property shall be considered held in
33trust in favor of the licensee in an amount equal to the amount
34of money net of fees received from money transmission.
356. An authorized delegate may not use a subdelegate to
-34-1conduct money transmission on behalf of a licensee.
2 Sec. 20. Section 533C.502, Code 2023, is amended by striking
3the section and inserting in lieu thereof the following:
4533C.502 Unauthorized activities.
5A person shall not engage in the business of money
6transmission on behalf of a person not licensed under this
7chapter. A person who engages in such activity provides
8money transmission to the same extent as if the person were a
9licensee, and shall be jointly and severally liable with the
10unlicensed or nonexempt person.
11 Sec. 21. Section 533C.601, Code 2023, is amended by striking
12the section and inserting in lieu thereof the following:
13533C.601 Report of condition.
141. A licensee shall submit a report of condition within
15forty-five days of the end of the calendar quarter, or within
16any extended time as the superintendent may prescribe.
172. The report of condition shall include all of the
18following:
19a. Financial information at the licensee level.
20b. Nationwide and state-specific money transmission
21transaction information in every jurisdiction in the United
22States where the licensee is licensed to engage in money
23transmission.
24c. Permissible investments report.
25d. Transaction destination country reporting for money
26received for transmission, if applicable. This information
27shall only be included in a report of condition submitted
28within forty-five days of the end of the fourth calendar
29quarter.
30e. Any other information the superintendent reasonably
31requires with respect to the licensee. The superintendent is
32authorized and encouraged to utilize NMLS for the submission of
33the report required by this section and is authorized to update
34as necessary the requirements of this section to carry out the
35purposes of this chapter and maintain consistency with NMLS
-35-1reporting.
2 Sec. 22. Section 533C.602, Code 2023, is amended by striking
3the section and inserting in lieu thereof the following:
4533C.602 Audited financials.
51. A licensee shall, within ninety days after the end
6of each fiscal year, or within any extended time as the
7superintendent may prescribe, file with the superintendent an
8audited financial statement for the fiscal year prepared in
9accordance with United States generally accepted accounting
10principles and any other information as the superintendent may
11reasonably require.
122. The audited financial statements shall be prepared by an
13independent certified public accountant or independent public
14accountant who is satisfactory to the superintendent.
153. The audited financial statements shall include or be
16accompanied by a certificate of opinion of the independent
17certified public accountant or independent public accountant
18that is satisfactory in form and content to the superintendent.
19If the certificate or opinion is qualified, the superintendent
20may order the licensee to take any action as the superintendent
21may find necessary to enable the independent or certified
22public accountant or independent public accountant to remove
23the qualification.
24 Sec. 23. NEW SECTION. 533C.603 Authorized delegate
25reporting.
261. A licensee shall submit a report of authorized delegates
27within forty-five days of the end of the calendar quarter. The
28superintendent is authorized and encouraged to utilize NMLS for
29the submission of the report required by this section provided
30that such functionality is consistent with the requirements of
31this section.
322. The authorized delegate report shall include the
33following for each authorized delegate:
34a. Company legal name.
35b. Taxpayer employer identification number.
-36- 1c. Principal provider identifier.
2d. Physical address.
3e. Mailing address.
4f. Any business conducted in other states.
5g. Any fictitious or trade name.
6h. Contact person name, phone number, and email.
7i. Start date as licensee’s authorized delegate.
8j. End date acting as licensee’s authorized delegate, if
9applicable.
10k. Any other information the superintendent reasonably
11requires with respect to the authorized delegate.
12 Sec. 24. NEW SECTION. 533C.604 Report of certain events.
131. A licensee shall submit a nonrefundable fee of one
14thousand dollars with the request and file a report with the
15superintendent within one business day after the licensee knows
16or has reason to know of the occurrence of any of the following
17events:
18a. The filing of a petition by or against the licensee under
19the federal bankruptcy code, 11 U.S.C.§§101 – 110, as amended,
20for bankruptcy or reorganization.
21b. The filing of a petition by or against the licensee for
22receivership.
23c. The filing of a petition or commencement of any other
24judicial or administrative proceeding for its dissolution or
25reorganization.
26d. The filing of a petition or the making of a general
27assignment for the benefit of its creditors.
28e. The commencement of a proceeding to revoke or suspend its
29license in a state or country in which the licensee engages in
30business or is licensed.
312. A licensee shall file a report with the superintendent
32within three business days after the licensee has reason to
33know of the occurrence of a felony charge or conviction of
34the licensee, a key individual or person in control of the
35licensee, or an authorized delegate.
-37-1 Sec. 25. NEW SECTION. 533C.605 Bank secrecy act reports.
2A licensee and an authorized delegate shall file all reports
3required by federal currency reporting, record keeping, and
4suspicious activity reporting requirements pursuant to the
5federal Bank Secrecy Act and other federal and state laws
6pertaining to money laundering. The timely filing of a
7complete and accurate report required under this section with
8the appropriate federal agency is deemed compliant with the
9requirements of this section.
10 Sec. 26. NEW SECTION. 533C.606 Records.
111. A licensee shall maintain records in any form, for the
12purpose of determining compliance with this chapter, for at
13least three years, including all of the following:
14a. A record of each outstanding money transmission
15obligation sold.
16b. A general ledger posted at least monthly containing all
17asset, liability, capital, income, and expense accounts.
18c. Bank statements and bank reconciliation records.
19d. Records or outstanding money transmission obligations.
20e. Records of each outstanding money transmission obligation
21paid within the three-year period.
22f. A list of the last-known names and addresses of all of
23the licensee’s authorized delegates.
24g. Any other records the superintendent reasonably requires
25by rule.
262. Records specified in this section may be maintained
27outside the state if they are made accessible to the
28superintendent on seven business days’ notice that is sent by
29the superintendent in a record.
303. All records maintained by the licensee as required
31in this section are open to inspection by the superintendent
32pursuant to section 533C.203.
33 Sec. 27. NEW SECTION. 533C.607 Disclosure.
341. Except as otherwise provided by this chapter, the
35records of the superintendent relating to examinations,
-38-1supervision, and regulation of a person licensed pursuant to
2this chapter or authorized delegates of a person licensed
3pursuant to this chapter are not public records and are
4not subject to disclosure under chapter 22. Neither the
5superintendent nor any member of the superintendent’s staff
6shall disclose any information obtained in the discharge of the
7superintendent’s official duties to any person not connected
8with the department, except that the superintendent or the
9superintendent’s designee may disclose information to the
10following:
11a. Representatives of federal agencies insuring accounts in
12the financial institution.
13b. Representatives of state agencies, federal agencies, or
14foreign countries having regulatory or supervisory authority
15over the activities of the financial institution or similar
16financial institutions if those representatives are permitted
17to and do, upon request of the superintendent, disclose similar
18information respecting those financial institutions under
19their regulation or supervision, or to those representatives
20who state in writing under oath that they will maintain the
21confidentiality of that information.
22c. To the attorney general.
23d. To a federal or state grand jury in response to a lawful
24subpoena or pursuant to a county attorney subpoena.
25e. To the auditor of the state for the purpose of conducting
26audits authorized by law.
272. Notwithstanding subsection 1, the superintendent may
28disclose the following:
29a. The fact of filing of applications with the department
30pursuant to this chapter, give notice of a hearing, if any,
31regarding those applications, and announce the superintendent’s
32action thereon.
33b. Final decisions in connection with proceedings for the
34suspension or revocation of licenses or certificates issued
35pursuant to this chapter.
-39- 1c. Prepare and circulate reports reflecting the assets and
2liabilities of licensees on an aggregate basis, including other
3information considered pertinent to the purpose of each report
4for general statistical information.
5d. Prepare and circulate reports provided by law.
63. Every official report of the department is prima
7facie evidence of the facts therein stated in any action or
8proceeding wherein the superintendent is a party.
94. Nothing in this section shall be construed to prevent the
10disclosure of information that is:
11a. Admissible in evidence in any civil or criminal
12proceeding brought by or at the request of the superintendent
13or this state to enforce or prosecute violations of this
14chapter, chapter 706B, or the rules adopted, or orders issued
15pursuant to this chapter.
16b. Requested by or provided to a federal agency, including
17but not limited to the department of defense, department of
18energy, department of homeland security, nuclear regulatory
19commission, and centers for disease control and prevention, to
20assist state and local government with domestic preparedness
21for acts of terrorism.
225. The attorney general or the department of public safety
23may report any possible violations indicated by analysis
24of the reports required by this chapter to any appropriate
25law enforcement or regulatory agency for use in the proper
26discharge of its official duties. The attorney general or the
27department of public safety shall provide copies of the reports
28required by this chapter to any appropriate prosecutorial or
29law enforcement agency upon being provided with a written
30request for records relating to a specific individual or entity
31and stating that the agency has an articulable suspicion that
32such individual or entity has committed a felony offense or a
33violation of this chapter to which the reports are relevant.
34A person who releases information received pursuant to this
35subsection except in the proper discharge of the person’s
-40-1official duties is guilty of a serious misdemeanor.
26. Any report, record, information, analysis, or request
3obtained by the attorney general or department of public safety
4pursuant to this chapter is not a public record as defined in
5chapter 22 and is not subject to disclosure.
6 Sec. 28. Section 533C.701, Code 2023, is amended by striking
7the section and inserting in lieu thereof the following:
8533C.701 Timely transmission.
91. Every licensee shall forward all money received for
10transmission in accordance with the terms of the agreement
11between the licensee and the sender unless the licensee has a
12reasonable belief or a reasonable basis to believe that the
13sender may be a victim of fraud or that a crime or violation
14of law, rule, or regulation has occurred, is occurring, or may
15occur.
162. If a licensee fails to forward money received for
17transmission in accordance with this section, the licensee
18shall respond to inquiries by the sender with the reason for
19the failure unless providing a response would violate a state
20or federal law, rule, or regulation.
21 Sec. 29. Section 533C.702, Code 2023, is amended by striking
22the section and inserting in lieu thereof the following:
23533C.702 Refunds.
241. Every licensee shall refund to the sender within ten
25days of receipt of the sender’s written request for a refund of
26any and all money received for transmission unless any of the
27following occurs:
28a. The money has been forwarded within ten days of the date
29on which the money was received for transmission.
30b. Instructions have been given committing an equivalent
31amount of money to the person designated by the sender within
32ten days of the date on which the money was received for
33transmission.
34c. The agreement between the licensee and the sender
35instructs the licensee to forward the money at a time that is
-41-1beyond ten days of the date on which the money was received
2for transmission. If funds have not yet been forwarded in
3accordance with the terms of the agreement between the licensee
4and the sender, the licensee shall issue a refund in accordance
5with the other provisions of this section.
6d. The refund is requested for a transaction that the
7licensee has not completed based on a reasonable belief or a
8reasonable basis to believe that a crime or violation of law,
9rule, or regulation has occurred, is occurring, or may occur.
10e. The refund request does not enable the licensee to
11identify the sender’s name and address, telephone number, or
12the particular transaction to be refunded in the event the
13sender has multiple transactions outstanding.
142. This section does not apply to money received for
15transmission subject to the remittance transfer rule of the
16federal Electronic Fund Transfer Act, 12 C.F.R.§1005.30
17– 1005.36, as amended, or pursuant to a written agreement
18between the licensee and payee to process payments for goods or
19services provided by the payee.
20 Sec. 30. Section 533C.703, Code 2023, is amended by striking
21the section and inserting in lieu thereof the following:
22533C.703 Receipts.
231. For a transaction conducted in person, the receipt
24may be provided electronically if the sender requests or
25agrees to receive an electronic receipt. For a transaction
26conducted electronically or by phone, a receipt may be provided
27electronically. All electronic receipts shall be provided in
28a retainable form.
292. Every licensee or its authorized delegate shall provide
30the sender a receipt for money received for transmission.
31The receipt required by this section shall be in English
32and in the language principally used by the licensee or
33authorized delegate to advertise, solicit, or negotiate, either
34orally or in writing, for a transaction conducted in person,
35electronically, or by phone, if other than English, and shall
-42-1contain, as applicable, all of the following:
2a. The name of the sender.
3b. The name of the designated recipient.
4c. The date of the transaction.
5d. The unique transaction or identification number.
6e. The name of the licensee, NMLS unique ID, the licensee’s
7business address, and the licensee’s customer service telephone
8number.
9f. The amount of the transaction in United States dollars.
10g. Any fee charged by the licensee to the sender for the
11transaction.
12h. Any taxes collected by the licensee from the sender for
13the transaction.
143. This section does not apply to any of the following:
15a. Money received for transmission subject to the remittance
16rule of the federal Electronic Fund Transfer Act, 12 C.F.R.
17§1005.30 – 1005.36, as amended.
18b. Money received for transmission that is not primarily for
19personal, family, or household purposes.
20c. Money received for transmission pursuant to a written
21agreement between the licensee and payee to process payments
22for goods or services provided by the payee.
23d. Payroll processing services.
24 Sec. 31. Section 533C.704, Code 2023, is amended by striking
25the section and inserting in lieu thereof the following:
26533C.704 Disclosures for payroll processing services.
271. A licensee that provides payroll processing services
28shall do all of the following:
29a. Issue reports to clients detailing client payroll
30obligations in advance of the payroll funds being deducted from
31an account.
32b. Make available worker pay stubs or an equivalent
33statement to workers.
342. This section does not apply to a licensee providing
35payroll processing services where the licensee’s client
-43-1designated the intended recipients to the licensee and the
2licensee is responsible for providing the disclosures required
3by subsection 1, paragraph “a”.
4 Sec. 32. Section 533C.801, Code 2023, is amended by striking
5the section and inserting in lieu thereof the following:
6533C.801 Net worth.
71. A licensee under this chapter shall maintain at all times
8a tangible net worth of the greater of one hundred thousand
9dollars or three percent of total assets for the first one
10hundred million dollars, two percent of additional assets for
11one hundred million dollars to one billion dollars, and half of
12one percent of additional assets for over one billion dollars.
132. Tangible net worth shall be demonstrated at initial
14application by the applicant’s most recent audited or unaudited
15financial statements pursuant to section 533C.303, subsection
162, paragraph “f”.
173. Notwithstanding the foregoing provisions of this
18section, the superintendent shall have the authority, for good
19cause shown, to exempt any applicant or licensee, in part or in
20whole, from the requirements of this section.
21 Sec. 33. Section 533C.802, Code 2023, is amended by striking
22the section and inserting in lieu thereof the following:
23533C.802 Surety bond.
241. An applicant for a money transmission license shall
25provide, and a licensee at all times shall maintain, security
26consisting of a surety bond in a form satisfactory to the
27superintendent.
282. The amount of the required security shall be the
29greater of one hundred thousand dollars or an amount equal
30to one hundred percent of the licensee’s average daily money
31transmission liability in this state calculated for the most
32recently completed three-month period, up to a maximum of five
33hundred thousand dollars.
343. A licensee that maintains a bond in the maximum amount
35provided for in subsection 2 shall not be required to calculate
-44-1its average daily money transmission liability in this state
2for purposes of this section.
34. A licensee may exceed the maximum required bond amount
4pursuant to section 533C.804, subsection 1, paragraph “l”.
5 Sec. 34. Section 533C.803, Code 2023, is amended by striking
6the section and inserting in lieu thereof the following:
7533C.803 Maintenance of permissible investments.
81. A licensee shall maintain at all times permissible
9investments that have a market value computed in accordance
10with United States generally accepted accounting principles of
11not less than the aggregate amount of all of its outstanding
12money transmission obligations.
132. Except for permissible investments enumerated in section
14533C.804, subsection 1, the superintendent, with respect to
15any licensee, may by rule or order limit the extent to which
16a specific investment maintained by a licensee within a class
17of permissible investments may be considered a permissible
18investment, if the specific investment represents undue risk to
19customers, not reflected in the market value of investments.
203. Permissible investments, even if commingled with other
21assets of the licensee, are held in trust for the benefit
22of the purchasers and holders of the licensee’s outstanding
23money transmission obligations in the event of insolvency,
24the filing of a petition by or against the licensee under the
25federal bankruptcy code, 11 U.S.C. §101 – 110, as amended, for
26bankruptcy or reorganization, the filing of a petition by or
27against the licensee for receivership, the commencement of any
28other judicial or administrative proceeding for its dissolution
29or reorganization, or in the event of an action by a creditor
30against the licensee who is not a beneficiary of this statutory
31trust. No permissible investments impressed with a trust
32pursuant to this section shall be subject to attachment, levy
33of execution, or sequestration by order of any court, except
34for a beneficiary of this statutory trust.
354. Upon the establishment of a statutory trust in accordance
-45-1with subsection 3, or when any funds are drawn on a letter of
2credit pursuant to section 533C.804, subsection 1, paragraph
3“m”, the superintendent shall notify the applicable regulator
4of each state in which the licensee is licensed to engage in
5money transmission, if any, of the establishment of the trust
6or the funds drawn on the letter of credit, as applicable.
7Notice shall be deemed satisfied if performed pursuant to
8a multistate agreement or through NMLS. Funds drawn on a
9letter of credit, and any other permissible investments held
10in trust for the benefit of the purchasers and holders of the
11licensee’s outstanding money transmission obligations, are
12deemed held in trust for the benefit of such purchasers and
13holders on a pro rata and equitable basis in accordance with
14statutes pursuant to which permissible investments are required
15to be held in this state, and other states, as applicable.
16Any statutory trust established hereunder shall be terminated
17upon extinguishment of all of the licensee’s outstanding money
18transmission obligations.
195. The superintendent by rule or by order may allow other
20types of investments that the superintendent determines
21are of sufficient liquidity and quality to be a permissible
22investment. The superintendent is authorized to participate
23in efforts with other state regulators to determine that other
24types of investments are of sufficient liquidity and quality
25to be a permissible investment.
26 Sec. 35. NEW SECTION. 533C.804 Types of permissible
27investments.
281. The following investments are permissible under section
29533C.803:
30a. Cash, including demand deposits, savings deposits, and
31funds in such accounts held for the benefit of the licensee’s
32customers in a federally insured depository financial
33institution.
34b. Cash equivalents including automated clearinghouse items
35in transit to the licensee and automated clearinghouse items or
-46-1international wires in transit to a payee.
2c. Cash in transit via armored car.
3d. Cash in smart safes.
4e. Cash in licensee-owned locations.
5f. Debit card or credit card-funded transmission receivables
6owed by any bank.
7g. Money market mutual funds rated “AAA” by Standard and
8Poor’s 500 stock market index, or the equivalent from any
9eligible rating service.
10h. Certificates of deposit or senior debt obligations of an
11insured depository institution, pursuant to the federal Deposit
12Insurance Act, 12 U.S.C.§1813, as amended, or as defined under
13the federal Credit Union Act, 12 U.S.C.§1751, as amended.
14i. An obligation of the United States or a commission,
15agency, or instrumentality thereof.
16j. An obligation that is guaranteed fully as to principal
17and interest by the United States.
18k. An obligation of a state or a governmental subdivision,
19agency, or instrumentality thereof.
20l. One hundred percent of the surety bond provided for
21under section 533C.802 that exceeds the average daily money
22transmission liability in this state.
23m. The full drawable amount of an irrevocable standby
24letter of credit for which the stated beneficiary is the
25superintendent that stipulates that the beneficiary need only
26draw a sight draft under the letter of credit and present it
27to obtain funds up to the letter of credit amount within seven
28days of presentation of the items required by this section.
29(1) The letter of credit shall conform to the following:
30(a) Be issued by a federally insured depository financial
31institution, a foreign bank that is authorized under federal
32law to maintain a federal agency or federal branch office
33in a state or states, or a foreign bank that is authorized
34under state law to maintain a branch in a state that bears an
35eligible rating, or whose parent company bears an eligible
-47-1rating and such bank is regulated, supervised, and examined
2by the United States federal or state authorities having
3regulatory authority over banks, credit unions, and trust
4companies.
5(b) Be irrevocable, unconditional, and indicate that it is
6not subject to any condition or qualifications outside of the
7letter of credit.
8(c) Not contain reference to any other agreements,
9documents, or entities, or otherwise provide for any security
10interest in the licensee.
11(d) Contain an issue date and expiration date, and expressly
12provide for automatic extension, without written amendment,
13for an additional period of one year from the present or each
14future expiration date, unless the issuer of the letter of
15credit notifies the superintendent in writing by certified
16or registered mail or courier mail or other receipted means,
17at least sixty days prior to any expiration date, that the
18irrevocable letter of credit shall not be extended. In
19the event of any notice of expiration or nonextension of a
20letter of credit issued under this division, the licensee
21shall be required to demonstrate to the satisfaction of the
22superintendent, fifteen days prior to expiration, that the
23licensee maintains and will maintain permissible investments
24in accordance with section 533C.803, subsection 1, upon the
25expiration of the letter of credit. If the licensee is not
26able to do so, the superintendent may draw on the letter of
27credit in an amount up to the amount necessary to meet the
28licensee’s requirements to maintain permissible investments
29in accordance with section 533C.803, subsection 1. Any
30such draw shall be offset against the licensee’s outstanding
31money transmission obligations. The drawn funds shall be
32held in trust by the superintendent or the superintendent’s
33designated agent, to the extent authorized by law, as agent for
34the benefit of the purchasers and holders of the licensee’s
35outstanding money transmission obligations.
-48- 1(2) The letter of credit shall provide that the issuer of
2the letter of credit will honor, at sight, a presentation made
3by the beneficiary to the issuer of the following documents on
4or prior to the expiration date of the letter of credit:
5(a) The original letter of credit, including any
6amendments.
7(b) A written statement from the beneficiary stating that
8any of the following events have occurred:
9(i) The filing of a petition by or against the licensee
10under the federal bankruptcy code, 11 U.S.C.§101 – 110, as
11amended, for bankruptcy or reorganization.
12(ii) The filing of a petition by or against the licensee
13for receivership, or the commencement of any other judicial
14or administrative proceeding for its dissolution or
15reorganization.
16(iii) The seizure of assets of a licensee by the
17superintendent or any other state financial regulatory entity
18pursuant to an emergency order issued in accordance with
19applicable law, on the basis of an action, violation, or
20condition that has caused or is likely to cause the insolvency
21of the licensee.
22(iv) The beneficiary has received notice of expiration on
23nonextension of a letter of credit and the licensee failed to
24demonstrate to the satisfaction of the beneficiary that the
25licensee will maintain permissible investments in accordance
26with section 533C.803, subsection 1, upon the expiration or
27nonextension of the letter of credit.
28(3) The superintendent may designate an agent to serve
29on the superintendent’s behalf as beneficiary to a letter
30of credit so long as the agent and letter of credit meet
31requirements established by the superintendent. The
32superintendent’s agent may serve as agent for multiple
33licensing authorities for a single irrevocable letter of credit
34if the proceeds of the drawable amount for the purposes of this
35section are assigned to the superintendent.
-49- 1(4) The superintendent is authorized and encouraged to
2participate in multistate processes designed to facilitate the
3issuance and administration of letters of credit, including
4but not limited to services provided by the NMLS and state
5regulatory registry, LLC.
62. Unless permitted by the superintendent by rule or by
7order to exceed the limit as set forth herein, the following
8investments are permissible under section 533C.803 to the
9extent specified:
10a. Receivables that are payable to a licensee from its
11authorized delegates in the ordinary course of business
12that are less than seven days old, up to fifty percent of
13the aggregate value of the licensee’s total permissible
14investments.
15b. Of the receivables permissible under subsection 1,
16receivables that are payable to a licensee from a single
17authorized delegate in the ordinary course of business may not
18exceed ten percent of the aggregate value of the licensee’s
19total permissible investments.
20c. The following investments are permissible up to twenty
21percent per category and combined up to fifty percent of
22the aggregate value of the licensee’s total permissible
23investments:
24(1) An up-to-six-month short-term investment bearing an
25eligible rating.
26(2) Commercial paper bearing an eligible rating.
27(3) A bill, note, bond, or debenture bearing an eligible
28rating.
29(4) United States tri-party repurchase agreements
30collateralized at one hundred percent or more with United
31States government or agency securities, municipal bonds, or
32other securities bearing an eligible rating.
33(5) Money market mutual funds rated less than “AAA” and
34equal to or higher than “A-” by Standard and Poor’s 500 stock
35market index, or the equivalent from any other eligible rating
-50-1service.
2(6) A mutual fund or other investment fund composed solely
3and exclusively of one or more permissible investments listed
4in section 533C.804, subsection 1, paragraph “a” through “k”.
5d. Cash, including demand deposits, savings deposits, and
6funds in such accounts held for the benefit of the licensee’s
7customers, at foreign depository institutions are permissible
8up to ten percent of the aggregate value of the licensee’s
9total permissible investments if the licensee has received a
10satisfactory rating in its most recent examination and the
11foreign depository institution fulfills all of the following:
12(1) An eligible rating.
13(2) Registered under the federal Foreign Account Tax
14Compliance Act, Pub.L.No.111-147.
15(3) Not located in any country subject to sanctions from the
16federal office of foreign asset control.
17(4) Not located in a high-risk or noncooperative
18jurisdiction as designated by the international financial
19action task force.
20 Sec. 36. REPEAL. Sections 533C.206, 533C.503, 533C.504,
21533C.505, 533C.506, 533C.507, 533C.705, 533C.706, 533C.707,
22533C.708, 533C.901, 533C.902, 533C.903, and 533C.904, Code
232023, are repealed.
24 Sec. 37. CODE EDITOR DIRECTIVE. The following articles
25shall be changed by the Code editor to substantially conform
26to the following:
271. ARTICLE 2 shall be retitled IMPLEMENTATION,
28CONFIDENTIALITY, SUPERVISION, AND RELATIONSHIP TO FEDERAL LAW.
292. ARTICLE 3 shall be retitled MONEY TRANSMISSION LICENSES.
303. ARTICLE 4 shall be retitled ACQUISITION OF CONTROL AND
31CHANGE OF KEY INDIVIDUAL.
324. ARTICLE 5 shall be retitled AUTHORIZED DELEGATES.
335. ARTICLE 6 shall be retitled REPORTING AND RECORDS.
346. ARTICLE 7 shall be retitled TIMELY TRANSMISSION,
35REFUNDS, AND DISCLOSURES.
-51- 17. ARTICLE 8 shall be retitled PRUDENTIAL STANDARDS.
2EXPLANATION
3The inclusion of this explanation does not constitute agreement with
4the explanation’s substance by the members of the general assembly.
5This bill relates to bank transmission services. The
6bill includes updates to the licensing processes for money
7transmission services seeking to do business in the state, and
8encourages the superintendent of banking to collaborate with
9multistate licensing processes. The bill allows for uniform
10requirements for licensing across states to ensure multi-state
11compliance for a money transmission services business.
12The bill modifies the name of the “Uniform Money Services
13Act” to the “Uniform Money Transmission Modernization Act”.
14The bill defines the terms “acting in concert”, “average
15daily money transmission liability”, “Bank Secrecy Act”,
16“closed loop stored value”, “eligible rating”, “eligible rating
17service”, “federally insured depository financial institution”,
18“in this state”, “individual”, “key individual”, “material
19litigation”, “MSB accredited state”, “nationwide multistate
20licensing system” (NMLS), “outstanding money transmission
21obligations”, “passive investor”, “payroll processing
22services”, “receipt”, “receiving money for transmission”,
23“remit”, and “tangible net worth”.
24The bill modifies the definitions for “control”, “money”,
25“money transmission”, “payment instrument”, “person”, and
26“stored-value”. The bill deletes various definitions.
27The bill provides that the superintendent may require a
28person to provide documentation demonstrating their exemption
29from licensing requirements. Under the bill, exemptions
30are expanded to include additional activities and entities,
31including certain persons that act as intermediaries by
32processing payments, a person appointed as an agent of the
33payee to collect and process payments from a payor to the
34payee provided certain requirements, an individual employed
35and supervised by an exempted entity, a third-party service
-52-1provider or agent under certain conditions, and a person exempt
2by regulation.
3The bill authorizes a superintendent to enter into
4agreements or relationships with other regulatory entities to
5improve efficiencies, utilize software or other processes for
6investigation purposes, accept reports from other government
7entities, and accept audit reports. The superintendent has the
8authority to enforce the bill and promulgate related rules.
9The bill requires that certain financial,
10identification-related, investigation-related, and other
11relevant information remain confidential. Exceptions include
12sharing information for the public interest, where the
13superintendent may disclose otherwise confidential information.
14The release of nonconfidential information shall include
15specific limited identifying information.
16The bill allows for the superintendent to supervise
17and conduct examinations or investigations regarding the
18acquisition of a license for conducting money transmission
19services. A licensee or authorized delegate shall provide
20the superintendent with relevant documents regarding that
21examination or investigation.
22The bill provides that the superintendent shall coordinate
23and effectively participate in relevant multistate networks.
24The bill designates federal law to preempt state money
25transmission law where there are inconsistencies between the
26two.
27The bill prohibits a person from engaging in the business
28of money transmission or advertising, soliciting, or holding
29itself out as providing money transmission unless they are
30licensed under the provisions of the bill, an authorized
31delegate, or fall under an exception.
32The bill encourages consistent state licensing and
33utilization of NMLS. The superintendent is authorized and
34encouraged to implement licensing provisions in a manner
35that is consistent with other states or multistate licensing
-53-1process, and participate in national licensing cooperation
2protocols. The superintendent is authorized and encouraged
3to build relationships or contracts with NMLS to help the
4superintendent maintain records, coordinate multistate efforts,
5process fees, and facilitate communication. The superintendent
6should use NMLS forms where available, and where unavailable,
7create forms that facilitate uniformity. The superintendent
8may waive or modify requirements to participate in the NMLS.
9The bill provides for an application for a license.
10The superintendent shall create an application form. An
11application for a license shall contain specified information,
12including criminal convictions, a description of previous money
13transmission services, a list of proposed authorized delegates
14and locations for money transmission, other states in which the
15applicant is currently engaging in money transmission, as well
16as disciplinary actions, and bankruptcy disclosure. If the
17applicant is a corporation, LLC, partnership, or other legal
18entity, additional information is required to be included on
19the application, including audits, dates of incorporations,
20parent and subsidiary companies, and trading information. An
21applicant shall be charged an application fee of $1,000 which
22shall be refunded upon rejection of an application. The bill
23establishes a license fee in the amount of $500 plus $10 per
24location in Iowa in which business is conducted, or set by
25the superintendent if there is no location, but not to exceed
26$5,000. No refund of a license fee shall be made upon a license
27suspension, revocation, or surrender.
28The bill provides that any individual in control of a
29licensee, applicant, or individual seeking to acquire control
30of a licensee, and each key individual shall provide the
31superintendent with information, including fingerprints, a
32credit report, and relevant litigation. The bill allows for
33different information based on an applicant’s residence.
34The bill provides for the issuance of licenses. An applicant
35must comply with provisions of the bill to be approved for a
-54-1license. The superintendent may extend a 120-day period of
2application review for good cause. The superintendent can
3rely on other multistate license procedures for application
4purposes. The superintendent shall provide written notice of
5denial of an application and include specific reasons for the
6denial.
7The bill allows a license to be renewed annually. The cost
8of the renewal fee shall correspond to the initial licensure
9fee. No refund of a license fee shall be made upon a license
10suspension, revocation, or surrender. A renewal report
11created by the superintendent shall be filed annually with
12the licensee’s renewal fee. If the licensee does not file
13a renewal report by the set deadline, the superintendent may
14charge a $100 per day late fee.
15The bill provides for acquisition of control of a licensee.
16Individuals seeking to acquire control of a licensee shall
17obtain written approval of the superintendent prior to
18acquisition and complete an application in a form created
19by the superintendent. A person is presumed to exercise a
20controlling influence when the person holds the power to vote,
21directly or indirectly, at least 10 percent of the outstanding
22voting shares or voting interests of a licensee or person in
23control of a licensee. Individuals seeking acquisition shall
24submit a $1,000 fee with an application for acquisition. The
25superintendent shall approve or deny the application. The
26superintendent can rely on other multistate license procedures
27for application purposes. The superintendent shall provide
28written notice of denial of an application and include specific
29reasons for the denial. A person may request a determination
30from the superintendent regarding control prior to filing an
31application.
32The bill requires notice regarding a change of key
33individuals. The superintendent may issue a notice of
34disapproval within 90 days of receiving the notice of
35the change and shall contain a statement on the basis of
-55-1disapproval.
2The bill requires a licensee to conduct a background check,
3provide written policies, and comply with requirements of the
4bill before an authorized delegate can act on the licensee’s
5behalf. An authorized delegate shall act in full compliance
6with the bill’s provisions. An authorized delegate and
7licensee shall sign a written contract containing provisions
8related to the scope of the relationship and requirements
9of each party. If the licensee’s license is suspended,
10revoked, surrendered, or expired, the licensee shall provide
11documentation to the superintendent within five business days
12that the licensee has notified all applicable authorized
13delegates, and delegates shall immediately cease to provide
14money transmission as an authorized delegate of the licensee.
15The bill prohibits a person from engaging in money
16transmission on behalf of an unlicensed person.
17The bill requires a quarterly report by a licensee within
1845 days of the close of a quarter. The report shall include
19financial information, state and national transaction
20information, permissible investment information, and additional
21information. The bill requires an annual audited financial
22statement from a licensee within 90 days of the end of each
23fiscal year. A licensee shall be required to file a quarterly
24report of authorized delegates within 45 days of the close of
25a quarter.
26The bill requires a licensee to file a report and submit a
27payment of $1,000 within one business day regarding bankruptcy,
28receivership, dissolution, reorganization, revocation, or
29suspension events. A licensee is required to file a report
30within three business days in events regarding a felony charge
31or conviction of the licensee, a key individual or person in
32control of the licensee, or an authorized delegate.
33The bill requires licensees and authorized delegates to
34comply with federal record keeping and reporting requirements,
35including pursuant to the federal Bank Secrecy Act, 31 U.S.C.
-56-1§5311.
2The bill requires licensees to maintain records, inside
3or outside of the state, for compliance determination. This
4includes ledgers, bank statements, records of obligations,
5lists of names, and information the superintendent requires.
6The bill includes prohibitions on disclosure and
7disclosure allowances. A superintendent’s records relating
8to examinations, supervision, or regulation of a licensed
9individual or authorized delegate are not considered public
10records and are not subject to disclosure. The bill provides
11for exceptions to when information may be disclosed to certain
12parties.
13The bill requires that a licensee transmit money in a timely
14manner unless there is a valid reason to abstain.
15The bill requires a licensee to refund the sender within 10
16days of receipt of a written request for a refund, unless an
17exception occurs, including belief that a crime or violation
18of law, rule, or regulation has occurred, is occurring, or may
19occur.
20The bill requires every licensee or authorized delegate to
21provide a sender a receipt for money received for transmission.
22The receipt shall be communicated in English or the language
23principally used by the licensee or authorized delegate. The
24receipt shall contain applicable information, including the
25name of sender, name of the recipient, the date, and the
26amount.
27The bill provides that a licensee providing payroll
28processing services shall issue reports to clients with details
29of client payroll obligations and make pay stubs available to
30workers. Certain licensees providing these services are exempt
31where the client designated the intended recipients to the
32licensee.
33The bill requires a licensee to maintain a tangible amount
34of net worth at all times. The amount shall be the greater
35of $100,000 or 3 percent of total assets for the first $100
-57-1million, 2 percent of additional assets for $100 million to
2$1 billion, and .5 percent of additional assets for over $1
3billion. Net worth may be demonstrated by the applicant’s
4most recent audit or unaudited financial statements. The
5superintendent may exempt any applicant or licensee for good
6cause.
7The bill requires an applicant for a money transmission
8license to maintain a surety bond of 100 percent of the
9licensee’s average daily money transmission liability for a
10three-month period, or $100,000, whichever is greater, with a
11maximum amount of $500,000. A licensee may exceed the maximum
12amount.
13The bill requires that a licensee maintain permissible
14investments of not less than the total amount of all of its
15outstanding money transmission obligations. Permissible
16investments shall be held in a trust for the benefit of the
17purchaser and holder of the licensee’s outstanding money
18transmission obligation in case of certain financial events.
19Funds drawn on a letter of credit shall cause a superintendent
20to notify applicable regulators under specific circumstances.
21The superintendent may expand the types of investments deemed
22to be permissible.
23The bill provides a list of permissible investments by
24a licensee that have a market value computed in accordance
25with United States generally accepted accounting principles
26of not less than the aggregate amount of all of a licensee’s
27outstanding money transmission obligations. The list of
28permissible investments includes a specific letter of credit
29for which the stated beneficiary is the superintendent subject
30to requirements. The letter of credit shall be irrevocable,
31unconditional, issued by a federally insured depository
32financial institution or an authorized foreign bank, not
33contain reference to other writings or entities, and contain
34an issue date, expiration date, and an automatic extension
35subject to change. Upon the expiration or lack of extension,
-58-1a licensee shall be required to demonstrate sufficient
2permissible investment amounts. If the licensee cannot show
3acceptable permissible investments, the superintendent may
4draw on the letter of credit. The letter of credit shall
5provide that the issuer of the letter of credit will honor the
6letter and a written statement from the beneficiary stating
7that certain significant financial events have occurred. The
8superintendent may designate an agent to serve as beneficiary
9to a letter of credit. The bill provides limits for certain
10investments.
11The bill repeals Code sections 533C.206, 533C.503, 533C.504,
12533C.505, 533C.506, 533C.507, 533C.705, 533C.706, 533C.707,
13533C.708, 533C.901, 533C.902, 533C.903, and 533C.904.
14The Code editor is directed to change the names of articles
15two through eight of Code chapter 533C.
-59-es/rn
2BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 533A.2, subsection 2, paragraph h, Code
22023, is amended to read as follows:
3h. A person licensed under chapter 533C, including that
4person’s authorized delegates as defined in section 533C.102,
5or a person exempt from licensing under section 533C.103, when
6engaging in money transmission or currency exchange as defined
7in section 533C.102.
8 Sec. 2. Section 533C.101, Code 2023, is amended to read as
9follows:
10533C.101 Short title.
11This chapter may be cited as the “Uniform Money Services
12 Transmission Modernization Act”.
13 Sec. 3. Section 533C.102, Code 2023, is amended to read as
14follows:
15533C.102 Definitions.
16In this chapter:
171. “Applicant” means a person that files an application for
18a license under this chapter.
191. “Acting in concert” means persons knowingly acting
20together with a common goal of jointly acquiring control of a
21licensee whether or not pursuant to an express agreement.
222. “Authorized delegate” means a person a licensee
23designates to provide money services on behalf of the licensee.
243. “Bank” means an institution organized under federal or
25state law which does any of the following:
26a. Accepts demand deposits or deposits that the depositor
27may use for payment to third parties and engages in the
28business of making commercial loans.
29b. Engages in credit card operations and maintains only one
30office that accepts deposits, does not accept demand deposits
31or deposits that the depositor may use for payments to third
32parties, does not accept a savings or time deposit less than
33one hundred thousand dollars, and does not engage in the
34business of making commercial loans.
354. “Compensation” means any fee, commission, or other
-1-1benefit.
25. “Conducting the business” means engaging in activities
3of a licensee or money transmitter more than ten times in any
4calendar year for compensation.
53. “Average daily money transmission liability” means
6the amount of the licensee’s outstanding money transmission
7obligations in this state at the end of each day in a given
8period of time, added together, and divided by the total
9number of days in the given period of time. For purposes of
10calculating average daily money transmission liability under
11this chapter for any required licensee, the given period of
12time shall be the quarters ending March 31, June 30, September
1330, and December 31.
144. “Bank Secrecy Act” means the federal Bank Secrecy Act,
1531 U.S.C.§5311 et seq., and its implementing regulations, as
16amended.
175. “Closed loop stored value” means stored value that is
18redeemable by the issuer only for goods or services provided by
19the issuer or its affiliate or franchisees of the issuer or its
20affiliate, except to the extent required by applicable law to
21be redeemable in cash for its cash value.
226. “Control” means any of the following:
23a. Ownership of, or the The power to vote, directly
24or indirectly, at least twenty-five percent of a class of
25 outstanding voting securities or voting interests of a licensee
26or person in control of a licensee.
27b. Power The power to elect or appoint a majority of key
28individuals, executive officers, managers, directors, trustees,
29or other persons exercising managerial authority of a licensee
30or person in control of a licensee.
31c. The power to exercise, directly or indirectly, a
32controlling influence over the management or policies of a
33licensee or person in control of a licensee.
347. “Credit union” means a cooperative, nonprofit association
35incorporated under chapter 533 or the Federal Credit Union Act,
-2-112 U.S.C. §1751 et seq., that is insured by the national credit
2union administration and includes an office of a credit union.
38. “Currency exchange” means receipt of compensation from
4the exchange of money of one government for money of another
5government.
69. “Executive officer” means a president, chairperson of
7the executive committee, chief financial officer, responsible
8individual, or other individual who performs similar functions.
97. “Eligible rating” means a credit rating of any of the
10three highest rating categories provided by an eligible rating
11service, whereby each category may include rating category
12modifiers such as “plus” or “minus” for Standard and Poor’s 500
13stock market index, or the equivalent for any other eligible
14rating service. A long-term credit rating is deemed eligible
15if the rating is equal to “A-” or higher by Standard and Poor’s
16500 stock market index, or the equivalent from any other
17eligible rating service. A short-term credit rating is deemed
18eligible if the rating is equal to or higher than “A-2” or
19“SP-2” by Standard and Poor’s 500 stock market index, or the
20equivalent from any other eligible rating service. In the
21event that the ratings differ among eligible rating services,
22the highest rating shall apply when determining whether a
23security bears an eligible rating.
248. “Eligible rating service” means any nationally recognized
25statistical rating organization as defined by the federal
26Securities and Exchange Commission, and any other organization
27designated by the superintendent by rule or order.
289. “Federally insured depository financial institution”
29 means a bank, credit union, savings and loan association, trust
30company, savings association, savings bank, industrial bank, or
31industrial loan company organized under the laws of the United
32States or any state, when such entity has federally insured
33deposits.
3410. “In this state” means at a physical location within Iowa
35for an in-person transaction request.
-3- 111. “Individual” means a natural person.
212. “Key individual” means an individual ultimately
3responsible for establishing or directing policies and
4procedures of the licensee, including an executive officer,
5manager, director, or trustee.
610. 13. “Licensee” means a person licensed under this
7chapter.
811. “Location” means a place of business at which activity
9conducted by a licensee or money transmitter occurs.
1014. “Material litigation” means litigation that, according
11to generally accepted accounting principles in the United
12States, is significant to a person’s financial health and would
13be required to be disclosed in the person’s audited financial
14statements, report to shareholders, or similar records.
1512. 15. “Monetary value” means a medium of exchange,
16whether or not redeemable in money.
1713. 16. “Money” means a medium of exchange authorized or
18adopted by a domestic the United States or a foreign government
19as a part of its currency and that is customarily used and
20accepted as a medium of exchange in the country of issuance.
21The term includes a monetary unit of account established by an
22intergovernmental organization or by agreement between two or
23more governments.
2414. “Money services” means money transmission or currency
25exchange.
2615. 17. “Money transmission” means and includes any of the
27following:
28a. Selling or issuing payment instruments to one or more
29persons or issuing payment instruments which are sold to one or
30more persons a person located in this state.
31b. Selling or issuing stored value to a person located in
32this state.
33b. c. Conducting the business of receiving Receiving money
34or monetary value for transmission from a person located in
35this state.
-4- 1c. Conducting the business of receiving money for obligors
2for the purpose of paying obligors’ bills, invoices, or
3accounts.
4d. “Money transmission” does not include the provision
5solely of online or telecommunications services or network
6access.
716. “Outstanding”, with respect to a payment instrument,
8means issued or sold by or for the licensee and reported as
9sold but not yet paid by or for the licensee.
1018. “Money services businesses accredited state” or “MSB
11accredited state” means a state agency that is accredited by the
12conference of state bank supervisors and the money transmitter
13regulators association for money transmission licensing and
14supervision.
1519. “Multistate licensing process” means any agreement
16entered into by and among state regulators relating to
17coordinated processing of applications for money transmission
18licenses, applications for the acquisition of control of a
19licensee, control determinations, or notice and information
20requirements for a change of key individuals.
2120. “Nationwide multistate licensing system” or “NMLS”
22 means the nationwide multistate licensing system and registry
23developed by the conference of state bank supervisors and the
24American association of residential mortgage regulators and
25owned and operated by the state regulatory registry, LLC, or
26any successor or affiliated entity, for the licensing and
27registration of persons in financial services industries.
2821. “Outstanding money transmission obligations” means any
29of the following:
30a. Any payment instrument or stored value issued or sold
31by the licensee to a person located in the United States or
32reported as sold by an authorized delegate of the licensee to
33a person that is located in the United States that has not yet
34been paid or refunded by or for the licensee, or escheated in
35accordance with applicable abandoned property laws.
-5- 1b. Any money received for transmission by the licensee or an
2authorized delegate in the United States from a person located
3in the United States that has not been received by the payee
4or refunded to the sender, or escheated in accordance with
5applicable abandoned property laws.
622. “Passive investor” means a person that can attest in a
7medium prescribed by the superintendent or commits in writing
8to any of the following:
9a. The person does not have the power to elect a majority
10of key individuals or executive officers, managers, directors,
11trustees, or other persons exercising managerial authority of a
12person in control of a licensee.
13b. The person is not employed by and does not have any
14managerial duties of the licensee or person in control of a
15licensee.
16c. The person does not have the power to exercise, directly
17or indirectly, a controlling influence over the management or
18policies of a licensee or person in control of a licensee.
1917. 23. “Payment instrument” means a written or electronic
20 check, draft, money order, traveler’s check, stored-value,
21 or other written or electronic instrument or order for the
22transmission or payment of money or monetary value, sold to
23one or more persons, whether or not that instrument or order
24 is negotiable. “Payment instrument” does not include an stored
25value or any instrument that is redeemable by the issuer
26only for goods or services provided by the issuer or an its
27 affiliate in merchandise or service, a credit card voucher, or
28a letter of credit, except to the extent required by applicable
29law to be redeemable in cash for its cash value, or not sold
30to the public but issued and distributed as part of a loyalty,
31rewards, or promotional program.
3224. “Payroll processing services” means receiving money for
33transmission pursuant to a contract with a person to deliver
34wages or salaries, make payments of payroll taxes to states and
35federal agencies, make payments relating to employee benefit
-6-1plans, or make distributions of other authorized deductions
2from wages or salaries. The term “payroll processing services”
3 does not include an employer performing payroll processing
4services on its own behalf or on behalf of its affiliate, or
5a professional employment organization subject to regulation
6under other applicable state law.
718. 25. “Person” means an individual, corporation, business
8trust, estate, trust, partnership, general partnership, limited
9partnership, limited liability company, association, joint
10venture stock corporation, trust, corporation, government;
11governmental subdivision, agency or instrumentality; public
12corporation; or any other legal or commercial corporate entity
13identified by the superintendent.
1419. “Proceeds” means property acquired or derived directly
15or indirectly from, produced through, realized through, or
16caused by an act or omission and includes any property of any
17kind.
1820. “Property” means anything of value, and includes any
19interest in property, including any benefit, privilege, claim,
20or right with respect to anything of value, whether real
21or personal, tangible or intangible, without reduction for
22expenses incurred for acquisition, maintenance, production, or
23any other purpose.
2421. “Record” means information that is inscribed on a
25tangible medium or that is stored in an electronic or other
26medium and is retrievable in perceivable form.
2722. “Responsible individual” means an individual who is
28employed by a licensee and has principal managerial authority
29over the provision of money services by the licensee in this
30state.
3123. “State” means a state of the United States, the District
32of Columbia, Puerto Rico, the United States Virgin Islands, or
33any territory or insular possession subject to the jurisdiction
34of the United States.
3526. “Receipt” means a paper receipt, electronic record, or
-7-1other written confirmation.
227. “Receiving money for transmission” or “money received
3for transmission” means receiving money or monetary value in
4the United States for transmission within or outside the United
5States by electronic or other means.
628. “Remit” means to make direct payments of money to a
7licensee or its representative authorized to receive money
8or to deposit money in a bank in an account specified by the
9licensee.
1024. 29. “Stored-value” means a monetary value that is
11 representing a claim against the issuer evidenced by an
12electronic or digital record, and that is intended and accepted
13for use as a means of redemption for money or monetary value,
14or payment for goods or services. The term “stored-value”
15 includes but is not limited to “prepaid access” as defined by 31
16C.F.R.§1010.100, as amended. “Stored-value” does not include a
17payment instrument or closed loop stored value, or stored value
18not sold to the public but issued and distributed as part of a
19loyalty, rewards, or promotional program.
2025. 30. “Superintendent” means the superintendent of
21banking for the state of Iowa.
2226. “Transaction” includes a purchase, sale, trade, loan,
23pledge, investment, gift, transfer, transmission, delivery,
24deposit, withdrawal, payment, transfer between accounts,
25exchange of currency, extension of credit, purchase or sale of
26any monetary instrument or stored-value, use of a safe deposit
27box, or any other acquisition or disposition of property by
28whatever means effected.
2927. “Unsafe or unsound practice” means a practice or
30conduct by a person licensed to engage in money transmission
31or an authorized delegate of such a person which creates the
32likelihood of material loss, insolvency, or dissipation of
33the licensee’s assets, or otherwise materially prejudices the
34interests of its customers.
3531. “Tangible net worth” means the aggregate assets of a
-8-1licensee excluding all intangible assets, less liabilities, as
2determined in accordance with generally accepted accounting
3principles in the United States.
432. “In the United States” means a person in any state,
5territory, or possession of the United States, District
6of Columbia, Commonwealth of Puerto Rico, or U.S.military
7installation that is located in a foreign country.
8 Sec. 4. Section 533C.103, Code 2023, is amended to read as
9follows:
10533C.103 Exclusions Exemptions.
11 The superintendent may require that any person claiming
12to be exempt from licensing pursuant to this section
13provide information and documentation to the superintendent
14demonstrating that the person qualifies for any claimed
15exemption.This chapter does not apply to:
161. The United States or a department, agency, agent, or
17instrumentality thereof.
182. A money Money transmission by the United States postal
19service or by a contractor on behalf an agent of the United
20States postal service.
213. A state, county, city, or any other governmental agency,
22 or governmental subdivision, instrumentality, or agent of a
23state.
244. The following entities whether chartered or organized
25under the laws of a state or of the United States: a bank,
26 A federally insured depository financial institution, bank
27holding company, savings and loan association, savings bank,
28credit union, office of an international banking corporation,
29branch of a foreign bank that establishes a federal branch
30pursuant to the federal International Bank Act, 12 U.S.C.
31§3102, as amended, corporation organized pursuant to the
32federal Bank Service Company Act, 12 U.S.C. §1861 – 1867, as
33amended, or corporation organized under the federal Edge Act,
3412 U.S.C. §611 – 633, as amended.
355. Electronic funds transfer of governmental benefits
-9-1for a federal, state, county, or governmental agency by a
2contractor on behalf of the United States or a department,
3agency, or instrumentality thereof, or on behalf of a state or
4governmental subdivision, agency, or instrumentality thereof.
56. A board of trade designated as a contract market under
6the federal Commodity Exchange Act, 7 U.S.C. §1 – 25, as
7amended, or a person that, in the ordinary course of business,
8provides clearance and settlement services for a board of trade
9to the extent of its operation as or for such a board.
107. A registered futures commission merchant under the
11federal commodities laws to the extent of its operation as such
12a merchant.
138. A person that provides clearance or settlement services
14pursuant to a registration as a clearing agency or an exemption
15from such registration granted under the federal securities
16laws to the extent of its operation as such a provider acts
17as an intermediary by processing payments between an entity
18that has directly incurred an outstanding money transmission
19obligation to a sender, and the sender’s designated recipient,
20provided all of the following apply:
21a. The entity is properly licensed or exempt from licensing
22requirements under this chapter.
23b. The entity provides a receipt, electronic record, or
24other written confirmation to the sender identifying the entity
25as the provider of money transmission in the transaction.
26c. The entity bears sole responsibility to satisfy the
27outstanding money transmission obligations to the sender,
28including the obligation to make the sender whole in connection
29with any failure to transmit the funds to the sender’s
30designated recipient.
319. An operator of a payment system to the extent that it
32provides processing, clearing, or settlement services, between
33or among persons excluded by this section, or licensees, in
34connection with wire transfers, credit card transactions,
35debit card transactions, stored-value transactions, automated
-10-1clearing house transfers, or similar funds transfers.
210. A person registered as a securities broker-dealer under
3federal or state securities laws to the extent of its operation
4as such a broker-dealer.
511. A delayed deposit services business as defined in
6chapter 533D.
712. A real estate broker or salesperson as defined in
8chapter 543B.
913. Pari-mutuel wagering, racetracks, excursion gambling
10boats, and gambling structures as provided in chapters 99D and
1199F.
1214. A person engaging in the business of debt management
13that is licensed or exempt from licensing pursuant to section
14533A.2.
1515. An insurance company organized under chapter 508, 514,
16514B, 515, 518, 518A, or 520, or authorized to do the business
17of insurance in Iowa to the extent of its operation as an
18insurance company.
1916. An insurance producer as defined in section 522B.1 to
20the extent of its operation as an insurance producer.
2117. A person appointed as an agent of a payee to collect
22and process a payment from a payor to the payee for goods or
23services, other than money transmission itself, provided to the
24payor by the payee, provided all of the following apply:
25a. There exists a written agreement between the payee and
26the agent directing the agent to collect and process payments
27from payors on the payee’s behalf.
28b. The payee holds the agent out to the public as accepting
29payments for goods or services on the payee’s behalf.
30c. Payment for the goods and services is treated as received
31by the payee upon receipt by the agent so that the payor’s
32obligation is extinguished and there is no risk of loss to the
33payor if the agent fails to remit the funds to the payee.
3418. An individual employed by a licensee, authorized
35delegate, or any person exempted from the licensing
-11-1requirements of this chapter when acting within the scope
2of employment and under the supervision of the licensee,
3authorized delegate, or exempted person as an employee and not
4as an independent contractor.
519. A person expressly appointed as a third-party service
6provider to or agent of an entity exempt under subsection 4,
7provided all of the following apply:
8a. The service provider or agent is engaging in money
9transmission on behalf of and pursuant to a written agreement
10with the exempt entity that sets forth the specific functions
11that the service provider or agent is to perform.
12b. The exempt entity assumes all risk of loss and all
13legal responsibility for satisfying the outstanding money
14transmission obligations owed to purchasers and holders of the
15outstanding money transmission obligations upon receipt of the
16purchaser’s or holder’s money or monetary value by the service
17provider or agent.
1820. A person exempt by regulation or order if the
19superintendent finds such exemption to be in the public
20interest and that the regulation of such person is not
21necessary for the purposes of this chapter.
22 Sec. 5. Section 533C.201, Code 2023, is amended by striking
23the section and inserting in lieu thereof the following:
24533C.201 Implementation.
251. In order to carry out the purposes of this chapter,
26the superintendent may, subject to the provisions of section
27533C.202:
28a. Enter into agreements or relationships with other
29government officials, federal and state regulatory agencies,
30and regulatory associations in order to improve efficiencies
31and reduce regulatory burden by standardizing methods or
32procedures, and sharing resources, records, or related
33information obtained under this chapter.
34b. Use, hire, contract, or employ analytical systems,
35methods, or software to examine or investigate any person
-12-1subject to this chapter.
2c. Accept, from other state or federal government agencies
3or officials, licensing, examination, or investigation reports
4made by such other state or federal government agencies or
5officials.
6d. Accept audit reports made by an independent certified
7public accountant or other qualified third-party auditor for an
8applicant or licensee and incorporate the audit report in any
9report of examination or investigation.
102. The superintendent shall have the broad administrative
11authority to administer, interpret, and enforce this chapter,
12to promulgate rules or regulations implementing this chapter,
13and to recover the cost of administering and enforcing this
14chapter by imposing and collecting proportionate and equitable
15fees and costs associated with applications, examinations,
16investigations, and other actions required to achieve the
17purpose of this chapter.
183. For a transaction requested electronically or by phone,
19the provider of money transmission may determine if the person
20requesting the transmission is located in this state by relying
21on other information provided by the person regarding the
22location of the individual’s residential address or a business
23entity’s principal place of business or other physical address
24location, and any records associated with the person that the
25provider of money transmission may have that indicate such
26location, including but not limited to an address associated
27with an account, provided that any transaction requested by
28an individual whose residential address is in Iowa shall be
29presumed to occur in Iowa.
304. Outstanding money transmission obligations shall be
31established and extinguished in accordance with applicable
32state law.
33 Sec. 6. Section 533C.202, Code 2023, is amended by striking
34the section and inserting in lieu thereof the following:
35533C.202 Confidentiality.
-13- 11. Except as otherwise provided in subsection 2, financial
2statements, balance sheets, authorized delegate information,
3all information and reports obtained by the superintendent
4from an applicant, licensee, or authorized delegate, and
5all information contained in or related to an examination,
6investigation, operating report, or condition report prepared
7by, on behalf of, or for the use of the superintendent are
8confidential and are not subject to disclosure under chapter
922.
102. The superintendent may disclose information not
11otherwise subject to disclosure under subsection 1 where:
12a. Representatives of state or federal agencies certify in
13a record that they shall maintain the confidentiality of the
14information.
15b. The superintendent finds that the release is reasonably
16necessary for the protection and interest of the public in
17accordance with chapter 22.
183. This section does not prohibit the superintendent
19from disclosing to the public a list of all licensees or the
20aggregated financial or transactional data concerning those
21licensees.
224. The division of banking or superintendent’s records
23containing nonconfidential information may be made available
24to the public on the division’s website, upon receipt by the
25division of a written request, or via the NMLS. The release
26of information shall include, where applicable, all of the
27following:
28a. The name, business address, telephone number, and unique
29identifier of a licensee.
30b. The business address of a licensee’s registered agent for
31service.
32c. The name, business address, and telephone number of all
33authorized delegates.
34d. The terms, or a copy, of any bond filed by a licensee,
35provided that confidential information, including but not
-14-1limited to prices and fees for such bond, is redacted.
2e. Copies of any nonconfidential final orders of the
3superintendent relating to any violation of this chapter or
4regulations implementing this chapter.
5f. Imposition of an administrative fine or penalty under
6this chapter.
7 Sec. 7. Section 533C.203, Code 2023, is amended by striking
8the section and inserting in lieu thereof the following:
9533C.203 Supervision.
101. The superintendent may conduct an examination or
11investigation of a licensee or authorized delegate or otherwise
12take independent action authorized by this chapter or by a
13rule adopted or order issued under this chapter as reasonably
14necessary or appropriate to administer and enforce this
15chapter, regulations implementing this chapter, and other
16applicable law, including the federal Bank Secrecy Act, Pub.
17L.No.91-508, and the federal Uniting and Strengthening
18America by Providing Appropriate Tools Required to Intercept
19and Obstruct Terrorism Act of 2001, Pub.L.No.107-56. The
20superintendent shall provide supervision as follows:
21a. Conducting an examination either on site or off site as
22the supervision may reasonably require.
23b. Conducting an examination in conjunction with an
24examination conducted by representatives of other state
25agencies or agencies of another state or of the federal
26government.
27c. Accepting the examination report of another state agency
28or an agency of another state or of the federal government, or
29a report prepared by an independent accounting firm, which on
30being accepted is considered for all purposes as an official
31report of the superintendent.
32d. Summoning and examining under oath a key individual or
33employee of a licensee or authorized delegate and requiring the
34person to produce records regarding any matter related to the
35condition and business of the licensee or authorized delegate.
-15- 12. A licensee or authorized delegate shall provide, and
2the superintendent shall have full and complete access to, all
3records the superintendent may reasonably require to conduct
4a complete examination. The records shall be provided at the
5location and in the format specified by the superintendent,
6provided the superintendent may utilize multistate record
7production standards and examination procedures when such
8standards will reasonably achieve the requirements of this
9section.
103. Unless otherwise directed by the superintendent, a
11licensee shall pay all costs reasonably incurred in connection
12with an examination of the licensee or the licensee’s
13authorized delegates.
14 Sec. 8. Section 533C.204, Code 2023, is amended by striking
15the section and inserting in lieu thereof the following:
16533C.204 Networked supervision.
171. To efficiently and effectively administer and
18enforce this chapter and to minimize regulatory burden, the
19superintendent is authorized and encouraged to participate in
20multistate supervisory processes established between states and
21coordinated through the conference of state bank supervisors,
22the money transmitter regulators association, and affiliates
23and successors thereof for all licensees that hold licenses in
24this state and other states. As a participant in multistate
25supervision, the superintendent shall engage in all of the
26following:
27a. Cooperation, coordination, and information sharing with
28other state and federal regulators in accordance with section
29533C.202.
30b. Cooperation, coordination, and information sharing with
31organizations, the membership of which is made up of state or
32federal government agencies, provided that the organizations
33agree in writing to maintain the confidentiality and security
34of the shared information in accordance with section 533C.202.
35c. Entering into written cooperation, coordination, or
-16-1information-sharing contracts or agreements with organizations
2the membership of which is made up of state or federal
3government agencies.
42. The superintendent shall not waive, and nothing in this
5section constitutes a waiver of, the superintendent’s authority
6to conduct an examination or investigation or otherwise take
7independent action authorized by this chapter or a rule adopted
8or order issued under this chapter to enforce compliance with
9applicable state or federal law.
103. A joint examination or investigation, or acceptance of
11an examination or investigation report, shall not waive an
12examination assessment provided for in this chapter.
13 Sec. 9. Section 533C.205, Code 2023, is amended by striking
14the section and inserting in lieu thereof the following:
15533C.205 Relationship to federal law.
161. In the event state money transmission jurisdiction is
17conditioned on a federal law, any inconsistencies between a
18provision of this chapter and the federal law governing money
19transmission shall be governed by the applicable federal law to
20the extent of the inconsistency.
212. In the event of any inconsistencies between this chapter
22and a federal law that governs pursuant to subsection 1,
23the superintendent may provide interpretive guidance that
24identifies the inconsistency and the appropriate means of
25compliance with federal law.
26 Sec. 10. Section 533C.301, Code 2023, is amended to read as
27follows:
28533C.301 License required.
291. A person shall not engage in currency exchange the
30business of money transmission or advertise, solicit, or hold
31itself out as providing currency exchange for which the person
32receives revenues equal to or greater than five percent of
33total revenues unless the person: money transmission unless
34they are
35a. Is licensed under this article.
-17- 1b. Is licensed for money transmission under article 2.
2c. Is an authorized delegate of a person licensed under
3article 2.
42. This section shall not apply to the following:
5a. A person that is an authorized delegate of a person
6licensed under this chapter acting within the scope of
7authority conferred by a written contract with the licensee.
8b. A person that is exempt pursuant to section 533C.103 and
9does not engage in money transmission outside the scope of such
10exemption.
112. 3. A license under this article is not transferable or
12assignable.
13 Sec. 11. Section 533C.302, Code 2023, is amended by striking
14the section and inserting in lieu thereof the following:
15533C.302 Consistent state licensing.
161. To establish consistent licensing between this state and
17other states, the superintendent is authorized and encouraged
18to provide all of the following:
19a. Implement all licensing provisions of this chapter in a
20manner that is consistent with other states that have adopted
21this chapter or multistate licensing processes.
22b. Participate in nationwide protocols for licensing
23cooperation and coordination among state regulators provided
24that such protocols are consistent with this section.
252. The superintendent is authorized and encouraged to
26establish relationships or contracts with NMLS or other
27entities designated by NMLS to enable the superintendent to do
28all of the following:
29a. Collect and maintain records.
30b. Coordinate multistate licensing processes and supervision
31processes.
32c. Process fees.
33d. Facilitate communication between this state, the
34superintendent, and licensees or other persons subject to this
35chapter.
-18- 13. The superintendent is authorized and encouraged to
2utilize NMLS for all aspects of licensing in accordance
3with this chapter, including but not limited to: license
4applications, applications for acquisitions of control, surety
5bonds, reporting, criminal history background checks, credit
6checks, fee processing, and examinations.
74. The superintendent is authorized and encouraged
8to utilize NMLS forms, processes, and functionalities in
9accordance with this chapter. In the event NMLS does not
10provide functionality, forms, or processes for a provision of
11this chapter, the superintendent is authorized and encouraged
12to strive to implement the requirements in a manner that
13facilitates uniformity with respect to licensing, supervision,
14reporting, and regulation of licensees which are licensed in
15multiple jurisdictions.
165. For the purpose of participating in the NMLS and
17registry, the superintendent is authorized to waive or modify,
18in whole or in part, by rule, regulation, or order, any or
19all of the requirements and to establish new requirements
20as reasonably necessary to participate in the nationwide
21multistate licensing system and registry.
22 Sec. 12. Section 533C.303, Code 2023, is amended by striking
23the section and inserting in lieu thereof the following:
24533C.303 Application for license.
251. Applicants for a license under this chapter shall
26apply on a form prescribed by the superintendent. Each such
27form shall contain content as set forth by rule, regulation,
28instruction, or procedure of the superintendent and shall be
29changed or updated by the superintendent in accordance with
30applicable law in order to carry out the purposes of this
31chapter and maintain consistency with NMLS licensing standards
32and practices. The application shall state or contain, as
33applicable, the following:
34a. The legal name and residential and business addresses
35of the applicant and any fictitious or trade name used by the
-19-1applicant in conducting its business.
2b. A list of any criminal convictions of the applicant
3and any material litigation in which the applicant has been
4involved in the ten-year period immediately preceding the
5submission of the application.
6c. A description of any money transmission previously
7provided by the applicant and the money transmission that the
8applicant seeks to provide in this state.
9d. A list of the applicant’s proposed authorized delegates
10and the locations in this state where the applicant and its
11authorized delegates propose to engage in money transmission.
12e. A list of other states in which the applicant is licensed
13to engage in money transmission and of any license revocations,
14suspensions, or other disciplinary action taken against the
15applicant in another state.
16f. Information concerning any bankruptcy or receivership
17proceedings affecting the licensee or a person in control of
18a licensee.
19g. A sample form of contract for authorized delegates.
20h. A sample form of payment instrument or stored value.
21i. The name and address of any federally insured depository
22financial institution through which the applicant plans to
23conduct money transmission.
24j. Any other information the superintendent or NMLS
25reasonably requires with respect to the applicant.
262. If an applicant is a corporation, limited liability
27company, partnership, or other legal entity, the applicant
28shall also provide all of the following:
29a. The date of the applicant’s incorporation or formation
30and state or country of incorporation or formation.
31b. If applicable, a certificate of good standing from the
32state or country in which the applicant is incorporated or
33formed.
34c. A brief description of the structure or organization of
35the applicant, including any parents or subsidiaries of the
-20-1applicant, and whether any parents or subsidiaries are publicly
2traded.
3d. The legal name, any fictitious or trade name, all
4business and residential addresses, and the employment, in the
5ten-year period immediately preceding the submission of the
6application of each key individual and person in control of the
7applicant.
8e. A list of any criminal convictions and material
9litigation in which a person in control of the applicant that
10is not an individual has been involved in the ten-year period
11immediately preceding the submission of the application.
12f. A copy of audited financial statements for the most
13recent fiscal year and for the two-year period immediately
14preceding the submission of the application or, if determined
15to be acceptable to the superintendent, certified unaudited
16financial statements for the most recent fiscal year or other
17period acceptable to the superintendent.
18g. A certified copy of the applicant’s unaudited financial
19statements for the most recent fiscal quarter.
20h. If the applicant is a publicly traded corporation, a
21copy of the most recent report filed with the United States
22securities and exchange commission under section 13 of the
23federal Securities Exchange Act of 1934, 15 U.S.C.§78m, as
24amended.
25i. If the applicant is a wholly owned subsidiary of any of
26the following:
27(1) A corporation publicly traded in the United States, a
28copy of audited financial statements for the parent corporation
29for the most recent fiscal year or a copy of the parent
30corporation’s most recent report filed under section 13 of the
31federal Securities Exchange Act of 1934, 15 U.S.C. §78m, as
32amended.
33(2) A corporation publicly traded outside the United
34States, a copy of similar documentation filed with the
35regulator of the parent corporation’s domicile outside the
-21-1United States.
2j. The name and address of the applicant’s registered agent
3in this state.
4k. Any other information the superintendent reasonably
5requires with respect to the applicant.
63. A nonrefundable application fee of one thousand dollars
7and a license fee shall accompany an application for a license
8under this chapter. The license fee shall be refunded if
9the application is denied. The license fee shall be the sum
10of five hundred dollars plus an additional ten dollars for
11each location in this state at which business is conducted
12through authorized delegates or employees of the licensee, but
13shall not exceed five thousand dollars. Fees for locations
14added after the initial application shall be submitted with
15the quarterly reports pursuant to section 533C.601. If the
16licensee has no locations in this state at which business is
17conducted through authorized delegates or employees of the
18licensee, the license fee shall be set by the superintendent,
19but shall not exceed five thousand dollars. A license
20under this chapter expires on the next December 31 after its
21issuance. The initial license fee is considered an annual fee
22and the superintendent shall prorate the license fee, refunding
23any amount due to a partial license year. No refund of a
24license fee shall be made when a license is suspended, revoked,
25or surrendered.
264. A person who requests written confirmation from the
27superintendent that a license is not required shall submit a
28fee of one hundred dollars along with the written request.
29 Sec. 13. Section 533C.304, Code 2023, is amended by striking
30the section and inserting in lieu thereof the following:
31533C.304 Information requirements for certain individuals.
321. An individual in control of a licensee or applicant, an
33individual seeking to acquire control of a licensee, and each
34key individual shall furnish to the superintendent through NMLS
35the following items:
-22- 1a. The individual’s fingerprints for submission to the
2federal bureau of investigation and the superintendent for
3purposes of a national criminal history background check unless
4the person currently resides outside of the United States and
5has resided outside of the United States for the last ten
6years.
7b. Personal history and experience in a form and in a
8medium prescribed by the superintendent, to obtain all of the
9following:
10(1) An independent credit report from a consumer reporting
11agency. If the individual does not have a social security
12number, the requirement shall be waived.
13(2) Information related to any criminal convictions or
14pending charges.
15(3) Information related to any regulatory or administrative
16action and any civil litigation involving claims of fraud,
17misrepresentation, conversion, mismanagement of funds, breach
18of fiduciary duty, or breach of contract.
192. If the individual has resided outside of the United
20States at any time in the last ten years, the individual shall
21also provide an investigative background report prepared by an
22independent search firm. The search firm shall demonstrate
23it has sufficient knowledge, resources, and employs accepted
24and reasonable methodologies to conduct the research of the
25background report and be unaffiliated with, or have no interest
26in, the individual it is researching. The investigative
27background report shall be written in the English language and
28shall contain all of the following:
29a. If available in the individual’s current jurisdiction
30of residency, a comprehensive credit report, or any equivalent
31information obtained or generated by the independent search
32firm to accomplish such report, including a search of the court
33data in the countries, provinces, states, cities, towns, and
34contiguous areas where the individual resided and worked.
35b. Criminal record information for the past ten years,
-23-1including but not limited to felonies, misdemeanors, or
2similar convictions for violations of law in the countries,
3provinces, states, cities, towns, and contiguous areas where
4the individual resided and worked.
5c. Employment history.
6d. Media history, including an electronic search of
7national and local publications, wire services, and business
8applications.
9e. Financial services-related regulatory history, including
10but not limited to money transmission, securities, banking,
11insurance, and mortgage-related industries.
12 Sec. 14. NEW SECTION. 533C.305 Issuance of license.
131. When an application for an original license is filed
14under this chapter and appears to include all required
15information, the application is considered complete and the
16superintendent shall promptly notify the applicant in a record
17of the date on which the application is determined to be
18complete. The application is approved one hundred twenty-one
19days after completion, unless denied or approved earlier by
20the superintendent. The license takes effect as of the first
21business day after expiration of the one hundred twenty-day
22period. The superintendent may for good cause extend the
23application period.
242. A determination by the superintendent that an
25application is complete and is accepted for processing means
26only that the application, on its face, appears to include
27all of the items, including the criminal background check
28response from the federal bureau of investigation, and address
29all of the matters that are required. A determination by
30the superintendent that an application is complete is not
31an assessment of the substance of the application or of the
32sufficiency of the information provided.
333. When an application is filed and considered complete
34under this section, the superintendent shall investigate the
35applicant’s financial condition and responsibility, financial
-24-1and business experience, character, and general fitness. The
2superintendent may conduct an on-site investigation of the
3applicant, the reasonable cost of which the applicant shall
4pay. The superintendent shall issue a license to an applicant
5under this section if the superintendent finds that all of the
6following conditions have been fulfilled:
7a. The applicant has complied with sections 533C.303 and
8533C.304.
9b. The financial condition and responsibility, financial and
10business experience, competence, character, and general fitness
11of the applicant or key individuals and person in control of
12the applicant, indicate that it is in the interest of the
13public to permit the applicant to engage in money transmission.
144. If an applicant avails itself or is otherwise subject
15to a multistate licensing process, the superintendent is
16authorized and encouraged to accept the investigation results
17of a lead investigative state for the purpose of subsection
183, if the lead investigative state has sufficient staffing,
19expertise, and minimum standards. Additionally, if this
20state is a lead investigative state, the superintendent is
21authorized and encouraged to investigate the applicant pursuant
22to subsection 3, and the time frames established by agreement
23through the multistate licensing process, provided, that in no
24case shall such time frame be noncompliant with the application
25period in subsection 1, paragraph “a”.
265. The superintendent shall issue a formal written notice
27of the denial of a license application within thirty days of
28the decision to deny the application. The superintendent shall
29set forth in the notice of denial the specific reasons for the
30denial of the application. An applicant whose application is
31denied by the superintendent under this section may appeal
32within thirty days after receipt of the written notice of the
33denial pursuant to chapter 17A.
346. The initial license term shall begin on the day the
35application is approved. The license shall expire on December
-25-131 of the year in which the license term began, unless the
2initial license date is between November 1 and December 31, in
3which case the initial license term shall run through December
431 of the following year.
5 Sec. 15. NEW SECTION. 533C.306 Renewal of license.
61. A license under this chapter shall be renewed annually.
7An annual renewal fee of five hundred dollars plus an
8additional ten dollars for each location in this state at which
9business is conducted through authorized delegates or employees
10of the licensee, which shall not exceed five thousand dollars,
11shall be paid no more than sixty days before the license
12expiration. The renewal term shall be for a period of one year
13and shall begin on January 1 of each year after the initial
14license term and shall expire on December 31 of the year the
15renewal term begins.
162. A licensee shall submit a renewal report with the
17renewal fee, in a form prescribed by the superintendent. The
18renewal report shall state or contain a description of each
19material change in information submitted by the licensee in its
20original license application which has not been reported to the
21superintendent.
223. The superintendent for good cause may grant an extension
23of the renewal date.
244. The superintendent is authorized and encouraged
25to utilize NMLS to process renewals provided that such
26functionality is consistent with this section.
275. If a licensee does not file a renewal report or pay its
28renewal fee by December 1, or any extension of time granted by
29the superintendent, the superintendent may assess a late fee
30of one hundred dollars per day.
31 Sec. 16. NEW SECTION. 533C.307 Maintenance of license.
32If a licensee does not continue to meet the qualifications or
33satisfy the requirements that apply to an applicant for a new
34money transmission license, the superintendent may suspend or
35revoke the licensee’s license in accordance with the procedures
-26-1established by this chapter or other applicable state law for
2such suspension or revocation.
31. An applicant for a money transmission license shall
4demonstrate that the applicant meets or will meet the
5requirements of sections 533C.801, 533C.802, and 533C.803.
62. A money transmission licensee shall at all times meet the
7requirements of sections 533C.801, 533C.802, and 533C.803.
8 Sec. 17. Section 533C.401, Code 2023, is amended by striking
9the section and inserting in lieu thereof the following:
10533C.401 Acquisition of control.
111. Any person, or group of persons acting in concert,
12seeking to acquire control of a licensee shall obtain the
13written approval of the superintendent prior to acquiring
14control. An individual is not deemed to acquire control
15of a licensee and is not subject to acquisition of control
16provisions when that individual becomes a key individual in the
17ordinary course of business.
182. A person is presumed to exercise a controlling
19influence when the person holds the power to vote, directly
20or indirectly, at least ten percent of the outstanding voting
21shares or voting interests of a licensee or person in control
22of a licensee. A person presumed to exercise a controlling
23influence can rebut the presumption of control if the person
24is a passive investor.
253. For purposes of determining the percentage of a
26person controlled by any other person, the person’s interest
27shall be aggregated with the interest of any other immediate
28family member, including the person’s spouse, parents,
29children, siblings, mother-in-law, father-in-law, son-in-law,
30daughter-in-law, brother-in-law, sister-in-law, and any other
31person who shares such person’s home.
324. A person, or group of persons acting in concert, seeking
33to acquire control of a licensee shall, in cooperation with
34the licensee, submit an application in a form and in a medium
35prescribed by the superintendent and a nonrefundable fee of one
-27-1thousand dollars with the request for approval.
25. Upon request, the superintendent may permit a licensee or
3the person, or group of persons acting in concert, to submit
4some or all information required by the superintendent pursuant
5to subsection 4 without using NMLS.
66. The application required by subsection 4 shall include
7information required by section 533C.304 for a licensee,
8including for any new key individuals that have not previously
9completed the requirements.
107. When an application for acquisition of control under this
11section appears to include all the items and address all of the
12matters that are required, the application shall be considered
13complete and the superintendent shall promptly notify the
14applicant in a record of the date on which the application was
15determined to be complete. The application is approved and the
16person, or group of persons acting in concert, are permitted to
17acquire control sixty-one days after application completion,
18unless denied or approved earlier by the superintendent. The
19superintendent may for good cause extend the application
20period.
218. A determination by the superintendent that an
22application is complete and is accepted for processing means
23only that the application, on its face, appears to include all
24of the items and address all of the matters that are required,
25and is not an assessment of the substance of the application or
26of the sufficiency of the information provided.
279. When an application is filed and considered complete
28under subsection 7, the superintendent shall investigate the
29financial condition and responsibility, financial and business
30experience, character, and general fitness of the person, or
31group of persons acting in concert, seeking to acquire control.
32The superintendent shall approve an acquisition of control
33pursuant to this section if the superintendent finds that all
34of the following conditions have been fulfilled:
35a. The requirements of subsections 4 and 6 have been met,
-28-1as applicable.
2b. The financial condition and responsibility, financial and
3business experience, competence, character, and general fitness
4of the person, or group of persons acting in concert, seeking
5to acquire control, and of the key individuals and persons that
6would be in control of the licensee indicate that it is in the
7interest of the public to permit the applicant to control the
8licensee.
910. If an applicant avails itself or is otherwise subject
10to a multistate licensing process, the superintendent is
11authorized and encouraged to accept the investigation results
12of a lead investigative state for the purpose of subsection
139 if the lead investigative state has sufficient staffing,
14expertise, and minimum standards. If this state is a lead
15investigative state, the superintendent is authorized and
16encouraged to investigate the applicant pursuant to subsection
179 and the time frames established by agreement through the
18multistate licensing process.
1911. The superintendent shall issue a formal written
20notice of the denial of an application to acquire control
21within thirty days of the decision to deny the application.
22The superintendent shall set forth in the notice of denial
23the specific reasons for the denial of the application. An
24applicant whose application is denied by the superintendent
25under this section may appeal within thirty days after receipt
26of the written notice of the denial.
2712. The requirements of subsections 1 and 4 shall not apply
28to any of the following:
29a. A person that acts as a proxy for the sole purpose of
30voting at a designated meeting of the shareholders or holders
31of voting shares or voting interests of a licensee or a person
32in control of a licensee.
33b. A person that acquires control of a licensee by devise
34or descent.
35c. A person that acquires control of a licensee as a
-29-1personal representative, custodian, guardian, conservator, or
2trustee, or as an officer appointed by a court of competent
3jurisdiction or by operation of law.
4d. A person that is exempt under section 533C.103,
5subsection 4.
6e. A person that the superintendent determines is not
7subject to subsection 1 based on the public interest.
8f. A public offering of securities of a licensee or a person
9in control of a licensee.
10g. An internal reorganization of a person in control of the
11licensee where the ultimate person in control of the licensee
12remains the same.
1313. Persons specified in subsection 12, paragraphs “b”,
14“c”, “d”, “f”, and “g”, in cooperation with the licensee,
15shall notify the superintendent within fifteen days after the
16acquisition of control.
1714. The requirements of subsections 1 and 4 shall not
18apply to a person that has complied with and received approval
19to engage in money transmission under this chapter or was
20identified as a person in control in a prior application filed
21with and approved by the superintendent or by an MSB accredited
22state pursuant to a multistate licensing process, provided all
23of the following apply:
24a. The person has not had a license revoked or suspended.
25b. The person has not controlled a licensee that has had a
26license revoked or suspended while the person was in control of
27the licensee in the previous five years.
28c. If the person is a licensee, the person is well-managed
29and has received at least a satisfactory rating for compliance
30at its most recent examination by an MSB-accredited state if
31such rating was given.
32d. The licensee to be acquired is projected to meet the
33requirements of sections 533C.801, 533C.802, and 533C.803 after
34the acquisition of control is completed.
35e. If the person acquiring control is a licensee, that
-30-1licensee is projected to meet the requirements of sections
2533C.801, 533C.802, and 533C.803 after the acquisition of
3control is completed.
4f. The licensee to be acquired will not implement any
5material changes to its business plan as a result of the
6acquisition of control.
7g. If the person acquiring control is a licensee, that
8licensee will not implement any material changes to its
9business plan as a result of the acquisition of control.
10h. The person provides notice of the acquisition in
11cooperation with the licensee and attests to the provisions in
12this subsection in a form and in a medium prescribed by the
13superintendent. If the notice is not disapproved within thirty
14days after the date on which the notice was determined to be
15complete, the notice is deemed approved.
1615. Before filing an application for approval to acquire
17control of a licensee, a person may request in writing a
18determination from the superintendent as to whether the person
19would be considered a person in control of a licensee upon
20consummation of a proposed transaction. If the superintendent
21determines that the person would not be a person in control of
22a licensee, the proposed person and transaction are not subject
23to the requirements of subsections 1 and 4.
2416. If a multistate licensing process includes a
25determination pursuant to subsection 15 and an applicant avails
26itself or is otherwise subject to the multistate licensing
27process, the superintendent is authorized and encouraged to
28accept the control determination of a lead investigative state
29with sufficient staffing, expertise, and minimum standards
30for the purpose of subsection 15. If this state is a lead
31investigative state, the superintendent is authorized and
32encouraged to investigate the applicant pursuant to subsection
3315 and the time frames established by agreement through the
34multistate licensing process.
35 Sec. 18. Section 533C.402, Code 2023, is amended by striking
-31-1the section and inserting in lieu thereof the following:
2533C.402 Notice and information requirements for a change of
3key individuals.
41. A licensee adding or replacing any key individual shall
5provide notice in a manner prescribed by the superintendent
6within fifteen days after the effective date of the key
7individual’s appointment and provide information as required by
8section 533C.304 within forty-five days of the effective date.
92. A key individual is considered approved ninety-one
10days after notice is provided pursuant to this section,
11unless denied or approved earlier by the superintendent.
12The superintendent may issue a notice of disapproval of a
13key individual if the competence, experience, character, or
14integrity of the individual would not be in the best interests
15of the public or the customers of the licensee to permit
16the individual to be a key individual of such licensee. A
17notice of disapproval shall contain a statement of the basis
18for disapproval and shall be sent to the licensee and the
19disapproved individual. A licensee may appeal a notice of
20disapproval within thirty days after receipt of the written
21notice of such disapproval.
223. If a multistate licensing process includes a key
23individual notice review and disapproval process pursuant to
24this section and the licensee avails itself or is otherwise
25subject to the multistate licensing process, the superintendent
26is authorized and encouraged to accept the determination
27of another state if the investigating state has sufficient
28staffing, expertise, and minimum standards for the purpose of
29this section. If this state is a lead investigative state,
30the superintendent is authorized and encouraged to investigate
31the applicant pursuant to subsection 2 and the time frames
32established by agreement through the multistate licensing
33process.
34 Sec. 19. Section 533C.501, Code 2023, is amended by striking
35the section and inserting in lieu thereof the following:
-32- 1533C.501 Relationship between licensee and authorized
2delegate.
31. Before a licensee is authorized to conduct business
4through an authorized delegate or allows a person to act as the
5licensee’s authorized delegate, the licensee shall do all of
6the following:
7a. Adopt, and update as necessary, written policies and
8procedures reasonably designed to ensure that the licensee’s
9authorized delegates comply with applicable state and federal
10law.
11b. Enter into a written contract that complies with this
12subsection.
13c. Conduct a reasonable risk-based background investigation
14sufficient for the licensee to determine whether the authorized
15delegate has complied and will likely comply with applicable
16state and federal law.
172. An authorized delegate shall operate in full compliance
18with this chapter.
193. The written contract required by subsection 1, shall be
20signed by the licensee and the authorized delegate and shall:
21a. Appoint the person signing the contract as the licensee’s
22authorized delegate with the authority to conduct money
23transmission on behalf of the licensee.
24b. Set forth the nature and scope of the relationship
25between the licensee and the authorized delegate and the
26respective rights and responsibilities of the parties.
27c. Require the authorized delegate to agree to fully
28comply with all applicable state and federal laws, rules, and
29regulations pertaining to money transmission, including this
30chapter and regulations implementing this chapter, relevant
31provisions of the federal Bank Secrecy Act and federal Uniting
32and Strengthening America by Providing Appropriate Tools
33Required to Intercept and Obstruct Terrorism Act of 2001, Pub.
34L.No.107-56.
35d. Require the authorized delegate to remit and handle money
-33-1and monetary value in accordance with the terms of the contract
2between the licensee and the authorized delegate.
3e. Impose a trust on money and monetary value net of
4fees received for money transmission for the benefit of the
5licensee.
6f. Require the authorized delegate to prepare and maintain
7records as required by this chapter or regulations implementing
8this chapter, or as reasonably requested by the superintendent.
9g. Acknowledge that the authorized delegate consents to
10examination or investigation by the superintendent.
11h. State that the licensee is subject to regulation by the
12superintendent who may suspend or revoke an authorized delegate
13designation or require the licensee to terminate an authorized
14delegate designation as a part of regulation.
15i. Acknowledge receipt of the written policies and
16procedures required under subsection 1.
174. If the licensee’s license is suspended, revoked,
18surrendered, or expired, the licensee shall, within five
19business days, provide documentation to the superintendent that
20the licensee has notified all applicable authorized delegates
21of the licensee whose names are in a record filed with the
22superintendent of the suspension, revocation, surrender,
23or expiration of a license. Upon suspension, revocation,
24surrender, or expiration of a license, applicable authorized
25delegates shall immediately cease to provide money transmission
26as an authorized delegate of the licensee.
275. An authorized delegate of a licensee holds in trust for
28the benefit of the licensee all money net of fees received from
29money transmission. If any authorized delegate commingles any
30funds received from money transmission with any other funds or
31property owned or controlled by the authorized delegate, all
32commingled funds and other property shall be considered held in
33trust in favor of the licensee in an amount equal to the amount
34of money net of fees received from money transmission.
356. An authorized delegate may not use a subdelegate to
-34-1conduct money transmission on behalf of a licensee.
2 Sec. 20. Section 533C.502, Code 2023, is amended by striking
3the section and inserting in lieu thereof the following:
4533C.502 Unauthorized activities.
5A person shall not engage in the business of money
6transmission on behalf of a person not licensed under this
7chapter. A person who engages in such activity provides
8money transmission to the same extent as if the person were a
9licensee, and shall be jointly and severally liable with the
10unlicensed or nonexempt person.
11 Sec. 21. Section 533C.601, Code 2023, is amended by striking
12the section and inserting in lieu thereof the following:
13533C.601 Report of condition.
141. A licensee shall submit a report of condition within
15forty-five days of the end of the calendar quarter, or within
16any extended time as the superintendent may prescribe.
172. The report of condition shall include all of the
18following:
19a. Financial information at the licensee level.
20b. Nationwide and state-specific money transmission
21transaction information in every jurisdiction in the United
22States where the licensee is licensed to engage in money
23transmission.
24c. Permissible investments report.
25d. Transaction destination country reporting for money
26received for transmission, if applicable. This information
27shall only be included in a report of condition submitted
28within forty-five days of the end of the fourth calendar
29quarter.
30e. Any other information the superintendent reasonably
31requires with respect to the licensee. The superintendent is
32authorized and encouraged to utilize NMLS for the submission of
33the report required by this section and is authorized to update
34as necessary the requirements of this section to carry out the
35purposes of this chapter and maintain consistency with NMLS
-35-1reporting.
2 Sec. 22. Section 533C.602, Code 2023, is amended by striking
3the section and inserting in lieu thereof the following:
4533C.602 Audited financials.
51. A licensee shall, within ninety days after the end
6of each fiscal year, or within any extended time as the
7superintendent may prescribe, file with the superintendent an
8audited financial statement for the fiscal year prepared in
9accordance with United States generally accepted accounting
10principles and any other information as the superintendent may
11reasonably require.
122. The audited financial statements shall be prepared by an
13independent certified public accountant or independent public
14accountant who is satisfactory to the superintendent.
153. The audited financial statements shall include or be
16accompanied by a certificate of opinion of the independent
17certified public accountant or independent public accountant
18that is satisfactory in form and content to the superintendent.
19If the certificate or opinion is qualified, the superintendent
20may order the licensee to take any action as the superintendent
21may find necessary to enable the independent or certified
22public accountant or independent public accountant to remove
23the qualification.
24 Sec. 23. NEW SECTION. 533C.603 Authorized delegate
25reporting.
261. A licensee shall submit a report of authorized delegates
27within forty-five days of the end of the calendar quarter. The
28superintendent is authorized and encouraged to utilize NMLS for
29the submission of the report required by this section provided
30that such functionality is consistent with the requirements of
31this section.
322. The authorized delegate report shall include the
33following for each authorized delegate:
34a. Company legal name.
35b. Taxpayer employer identification number.
-36- 1c. Principal provider identifier.
2d. Physical address.
3e. Mailing address.
4f. Any business conducted in other states.
5g. Any fictitious or trade name.
6h. Contact person name, phone number, and email.
7i. Start date as licensee’s authorized delegate.
8j. End date acting as licensee’s authorized delegate, if
9applicable.
10k. Any other information the superintendent reasonably
11requires with respect to the authorized delegate.
12 Sec. 24. NEW SECTION. 533C.604 Report of certain events.
131. A licensee shall submit a nonrefundable fee of one
14thousand dollars with the request and file a report with the
15superintendent within one business day after the licensee knows
16or has reason to know of the occurrence of any of the following
17events:
18a. The filing of a petition by or against the licensee under
19the federal bankruptcy code, 11 U.S.C.§§101 – 110, as amended,
20for bankruptcy or reorganization.
21b. The filing of a petition by or against the licensee for
22receivership.
23c. The filing of a petition or commencement of any other
24judicial or administrative proceeding for its dissolution or
25reorganization.
26d. The filing of a petition or the making of a general
27assignment for the benefit of its creditors.
28e. The commencement of a proceeding to revoke or suspend its
29license in a state or country in which the licensee engages in
30business or is licensed.
312. A licensee shall file a report with the superintendent
32within three business days after the licensee has reason to
33know of the occurrence of a felony charge or conviction of
34the licensee, a key individual or person in control of the
35licensee, or an authorized delegate.
-37-1 Sec. 25. NEW SECTION. 533C.605 Bank secrecy act reports.
2A licensee and an authorized delegate shall file all reports
3required by federal currency reporting, record keeping, and
4suspicious activity reporting requirements pursuant to the
5federal Bank Secrecy Act and other federal and state laws
6pertaining to money laundering. The timely filing of a
7complete and accurate report required under this section with
8the appropriate federal agency is deemed compliant with the
9requirements of this section.
10 Sec. 26. NEW SECTION. 533C.606 Records.
111. A licensee shall maintain records in any form, for the
12purpose of determining compliance with this chapter, for at
13least three years, including all of the following:
14a. A record of each outstanding money transmission
15obligation sold.
16b. A general ledger posted at least monthly containing all
17asset, liability, capital, income, and expense accounts.
18c. Bank statements and bank reconciliation records.
19d. Records or outstanding money transmission obligations.
20e. Records of each outstanding money transmission obligation
21paid within the three-year period.
22f. A list of the last-known names and addresses of all of
23the licensee’s authorized delegates.
24g. Any other records the superintendent reasonably requires
25by rule.
262. Records specified in this section may be maintained
27outside the state if they are made accessible to the
28superintendent on seven business days’ notice that is sent by
29the superintendent in a record.
303. All records maintained by the licensee as required
31in this section are open to inspection by the superintendent
32pursuant to section 533C.203.
33 Sec. 27. NEW SECTION. 533C.607 Disclosure.
341. Except as otherwise provided by this chapter, the
35records of the superintendent relating to examinations,
-38-1supervision, and regulation of a person licensed pursuant to
2this chapter or authorized delegates of a person licensed
3pursuant to this chapter are not public records and are
4not subject to disclosure under chapter 22. Neither the
5superintendent nor any member of the superintendent’s staff
6shall disclose any information obtained in the discharge of the
7superintendent’s official duties to any person not connected
8with the department, except that the superintendent or the
9superintendent’s designee may disclose information to the
10following:
11a. Representatives of federal agencies insuring accounts in
12the financial institution.
13b. Representatives of state agencies, federal agencies, or
14foreign countries having regulatory or supervisory authority
15over the activities of the financial institution or similar
16financial institutions if those representatives are permitted
17to and do, upon request of the superintendent, disclose similar
18information respecting those financial institutions under
19their regulation or supervision, or to those representatives
20who state in writing under oath that they will maintain the
21confidentiality of that information.
22c. To the attorney general.
23d. To a federal or state grand jury in response to a lawful
24subpoena or pursuant to a county attorney subpoena.
25e. To the auditor of the state for the purpose of conducting
26audits authorized by law.
272. Notwithstanding subsection 1, the superintendent may
28disclose the following:
29a. The fact of filing of applications with the department
30pursuant to this chapter, give notice of a hearing, if any,
31regarding those applications, and announce the superintendent’s
32action thereon.
33b. Final decisions in connection with proceedings for the
34suspension or revocation of licenses or certificates issued
35pursuant to this chapter.
-39- 1c. Prepare and circulate reports reflecting the assets and
2liabilities of licensees on an aggregate basis, including other
3information considered pertinent to the purpose of each report
4for general statistical information.
5d. Prepare and circulate reports provided by law.
63. Every official report of the department is prima
7facie evidence of the facts therein stated in any action or
8proceeding wherein the superintendent is a party.
94. Nothing in this section shall be construed to prevent the
10disclosure of information that is:
11a. Admissible in evidence in any civil or criminal
12proceeding brought by or at the request of the superintendent
13or this state to enforce or prosecute violations of this
14chapter, chapter 706B, or the rules adopted, or orders issued
15pursuant to this chapter.
16b. Requested by or provided to a federal agency, including
17but not limited to the department of defense, department of
18energy, department of homeland security, nuclear regulatory
19commission, and centers for disease control and prevention, to
20assist state and local government with domestic preparedness
21for acts of terrorism.
225. The attorney general or the department of public safety
23may report any possible violations indicated by analysis
24of the reports required by this chapter to any appropriate
25law enforcement or regulatory agency for use in the proper
26discharge of its official duties. The attorney general or the
27department of public safety shall provide copies of the reports
28required by this chapter to any appropriate prosecutorial or
29law enforcement agency upon being provided with a written
30request for records relating to a specific individual or entity
31and stating that the agency has an articulable suspicion that
32such individual or entity has committed a felony offense or a
33violation of this chapter to which the reports are relevant.
34A person who releases information received pursuant to this
35subsection except in the proper discharge of the person’s
-40-1official duties is guilty of a serious misdemeanor.
26. Any report, record, information, analysis, or request
3obtained by the attorney general or department of public safety
4pursuant to this chapter is not a public record as defined in
5chapter 22 and is not subject to disclosure.
6 Sec. 28. Section 533C.701, Code 2023, is amended by striking
7the section and inserting in lieu thereof the following:
8533C.701 Timely transmission.
91. Every licensee shall forward all money received for
10transmission in accordance with the terms of the agreement
11between the licensee and the sender unless the licensee has a
12reasonable belief or a reasonable basis to believe that the
13sender may be a victim of fraud or that a crime or violation
14of law, rule, or regulation has occurred, is occurring, or may
15occur.
162. If a licensee fails to forward money received for
17transmission in accordance with this section, the licensee
18shall respond to inquiries by the sender with the reason for
19the failure unless providing a response would violate a state
20or federal law, rule, or regulation.
21 Sec. 29. Section 533C.702, Code 2023, is amended by striking
22the section and inserting in lieu thereof the following:
23533C.702 Refunds.
241. Every licensee shall refund to the sender within ten
25days of receipt of the sender’s written request for a refund of
26any and all money received for transmission unless any of the
27following occurs:
28a. The money has been forwarded within ten days of the date
29on which the money was received for transmission.
30b. Instructions have been given committing an equivalent
31amount of money to the person designated by the sender within
32ten days of the date on which the money was received for
33transmission.
34c. The agreement between the licensee and the sender
35instructs the licensee to forward the money at a time that is
-41-1beyond ten days of the date on which the money was received
2for transmission. If funds have not yet been forwarded in
3accordance with the terms of the agreement between the licensee
4and the sender, the licensee shall issue a refund in accordance
5with the other provisions of this section.
6d. The refund is requested for a transaction that the
7licensee has not completed based on a reasonable belief or a
8reasonable basis to believe that a crime or violation of law,
9rule, or regulation has occurred, is occurring, or may occur.
10e. The refund request does not enable the licensee to
11identify the sender’s name and address, telephone number, or
12the particular transaction to be refunded in the event the
13sender has multiple transactions outstanding.
142. This section does not apply to money received for
15transmission subject to the remittance transfer rule of the
16federal Electronic Fund Transfer Act, 12 C.F.R.§1005.30
17– 1005.36, as amended, or pursuant to a written agreement
18between the licensee and payee to process payments for goods or
19services provided by the payee.
20 Sec. 30. Section 533C.703, Code 2023, is amended by striking
21the section and inserting in lieu thereof the following:
22533C.703 Receipts.
231. For a transaction conducted in person, the receipt
24may be provided electronically if the sender requests or
25agrees to receive an electronic receipt. For a transaction
26conducted electronically or by phone, a receipt may be provided
27electronically. All electronic receipts shall be provided in
28a retainable form.
292. Every licensee or its authorized delegate shall provide
30the sender a receipt for money received for transmission.
31The receipt required by this section shall be in English
32and in the language principally used by the licensee or
33authorized delegate to advertise, solicit, or negotiate, either
34orally or in writing, for a transaction conducted in person,
35electronically, or by phone, if other than English, and shall
-42-1contain, as applicable, all of the following:
2a. The name of the sender.
3b. The name of the designated recipient.
4c. The date of the transaction.
5d. The unique transaction or identification number.
6e. The name of the licensee, NMLS unique ID, the licensee’s
7business address, and the licensee’s customer service telephone
8number.
9f. The amount of the transaction in United States dollars.
10g. Any fee charged by the licensee to the sender for the
11transaction.
12h. Any taxes collected by the licensee from the sender for
13the transaction.
143. This section does not apply to any of the following:
15a. Money received for transmission subject to the remittance
16rule of the federal Electronic Fund Transfer Act, 12 C.F.R.
17§1005.30 – 1005.36, as amended.
18b. Money received for transmission that is not primarily for
19personal, family, or household purposes.
20c. Money received for transmission pursuant to a written
21agreement between the licensee and payee to process payments
22for goods or services provided by the payee.
23d. Payroll processing services.
24 Sec. 31. Section 533C.704, Code 2023, is amended by striking
25the section and inserting in lieu thereof the following:
26533C.704 Disclosures for payroll processing services.
271. A licensee that provides payroll processing services
28shall do all of the following:
29a. Issue reports to clients detailing client payroll
30obligations in advance of the payroll funds being deducted from
31an account.
32b. Make available worker pay stubs or an equivalent
33statement to workers.
342. This section does not apply to a licensee providing
35payroll processing services where the licensee’s client
-43-1designated the intended recipients to the licensee and the
2licensee is responsible for providing the disclosures required
3by subsection 1, paragraph “a”.
4 Sec. 32. Section 533C.801, Code 2023, is amended by striking
5the section and inserting in lieu thereof the following:
6533C.801 Net worth.
71. A licensee under this chapter shall maintain at all times
8a tangible net worth of the greater of one hundred thousand
9dollars or three percent of total assets for the first one
10hundred million dollars, two percent of additional assets for
11one hundred million dollars to one billion dollars, and half of
12one percent of additional assets for over one billion dollars.
132. Tangible net worth shall be demonstrated at initial
14application by the applicant’s most recent audited or unaudited
15financial statements pursuant to section 533C.303, subsection
162, paragraph “f”.
173. Notwithstanding the foregoing provisions of this
18section, the superintendent shall have the authority, for good
19cause shown, to exempt any applicant or licensee, in part or in
20whole, from the requirements of this section.
21 Sec. 33. Section 533C.802, Code 2023, is amended by striking
22the section and inserting in lieu thereof the following:
23533C.802 Surety bond.
241. An applicant for a money transmission license shall
25provide, and a licensee at all times shall maintain, security
26consisting of a surety bond in a form satisfactory to the
27superintendent.
282. The amount of the required security shall be the
29greater of one hundred thousand dollars or an amount equal
30to one hundred percent of the licensee’s average daily money
31transmission liability in this state calculated for the most
32recently completed three-month period, up to a maximum of five
33hundred thousand dollars.
343. A licensee that maintains a bond in the maximum amount
35provided for in subsection 2 shall not be required to calculate
-44-1its average daily money transmission liability in this state
2for purposes of this section.
34. A licensee may exceed the maximum required bond amount
4pursuant to section 533C.804, subsection 1, paragraph “l”.
5 Sec. 34. Section 533C.803, Code 2023, is amended by striking
6the section and inserting in lieu thereof the following:
7533C.803 Maintenance of permissible investments.
81. A licensee shall maintain at all times permissible
9investments that have a market value computed in accordance
10with United States generally accepted accounting principles of
11not less than the aggregate amount of all of its outstanding
12money transmission obligations.
132. Except for permissible investments enumerated in section
14533C.804, subsection 1, the superintendent, with respect to
15any licensee, may by rule or order limit the extent to which
16a specific investment maintained by a licensee within a class
17of permissible investments may be considered a permissible
18investment, if the specific investment represents undue risk to
19customers, not reflected in the market value of investments.
203. Permissible investments, even if commingled with other
21assets of the licensee, are held in trust for the benefit
22of the purchasers and holders of the licensee’s outstanding
23money transmission obligations in the event of insolvency,
24the filing of a petition by or against the licensee under the
25federal bankruptcy code, 11 U.S.C. §101 – 110, as amended, for
26bankruptcy or reorganization, the filing of a petition by or
27against the licensee for receivership, the commencement of any
28other judicial or administrative proceeding for its dissolution
29or reorganization, or in the event of an action by a creditor
30against the licensee who is not a beneficiary of this statutory
31trust. No permissible investments impressed with a trust
32pursuant to this section shall be subject to attachment, levy
33of execution, or sequestration by order of any court, except
34for a beneficiary of this statutory trust.
354. Upon the establishment of a statutory trust in accordance
-45-1with subsection 3, or when any funds are drawn on a letter of
2credit pursuant to section 533C.804, subsection 1, paragraph
3“m”, the superintendent shall notify the applicable regulator
4of each state in which the licensee is licensed to engage in
5money transmission, if any, of the establishment of the trust
6or the funds drawn on the letter of credit, as applicable.
7Notice shall be deemed satisfied if performed pursuant to
8a multistate agreement or through NMLS. Funds drawn on a
9letter of credit, and any other permissible investments held
10in trust for the benefit of the purchasers and holders of the
11licensee’s outstanding money transmission obligations, are
12deemed held in trust for the benefit of such purchasers and
13holders on a pro rata and equitable basis in accordance with
14statutes pursuant to which permissible investments are required
15to be held in this state, and other states, as applicable.
16Any statutory trust established hereunder shall be terminated
17upon extinguishment of all of the licensee’s outstanding money
18transmission obligations.
195. The superintendent by rule or by order may allow other
20types of investments that the superintendent determines
21are of sufficient liquidity and quality to be a permissible
22investment. The superintendent is authorized to participate
23in efforts with other state regulators to determine that other
24types of investments are of sufficient liquidity and quality
25to be a permissible investment.
26 Sec. 35. NEW SECTION. 533C.804 Types of permissible
27investments.
281. The following investments are permissible under section
29533C.803:
30a. Cash, including demand deposits, savings deposits, and
31funds in such accounts held for the benefit of the licensee’s
32customers in a federally insured depository financial
33institution.
34b. Cash equivalents including automated clearinghouse items
35in transit to the licensee and automated clearinghouse items or
-46-1international wires in transit to a payee.
2c. Cash in transit via armored car.
3d. Cash in smart safes.
4e. Cash in licensee-owned locations.
5f. Debit card or credit card-funded transmission receivables
6owed by any bank.
7g. Money market mutual funds rated “AAA” by Standard and
8Poor’s 500 stock market index, or the equivalent from any
9eligible rating service.
10h. Certificates of deposit or senior debt obligations of an
11insured depository institution, pursuant to the federal Deposit
12Insurance Act, 12 U.S.C.§1813, as amended, or as defined under
13the federal Credit Union Act, 12 U.S.C.§1751, as amended.
14i. An obligation of the United States or a commission,
15agency, or instrumentality thereof.
16j. An obligation that is guaranteed fully as to principal
17and interest by the United States.
18k. An obligation of a state or a governmental subdivision,
19agency, or instrumentality thereof.
20l. One hundred percent of the surety bond provided for
21under section 533C.802 that exceeds the average daily money
22transmission liability in this state.
23m. The full drawable amount of an irrevocable standby
24letter of credit for which the stated beneficiary is the
25superintendent that stipulates that the beneficiary need only
26draw a sight draft under the letter of credit and present it
27to obtain funds up to the letter of credit amount within seven
28days of presentation of the items required by this section.
29(1) The letter of credit shall conform to the following:
30(a) Be issued by a federally insured depository financial
31institution, a foreign bank that is authorized under federal
32law to maintain a federal agency or federal branch office
33in a state or states, or a foreign bank that is authorized
34under state law to maintain a branch in a state that bears an
35eligible rating, or whose parent company bears an eligible
-47-1rating and such bank is regulated, supervised, and examined
2by the United States federal or state authorities having
3regulatory authority over banks, credit unions, and trust
4companies.
5(b) Be irrevocable, unconditional, and indicate that it is
6not subject to any condition or qualifications outside of the
7letter of credit.
8(c) Not contain reference to any other agreements,
9documents, or entities, or otherwise provide for any security
10interest in the licensee.
11(d) Contain an issue date and expiration date, and expressly
12provide for automatic extension, without written amendment,
13for an additional period of one year from the present or each
14future expiration date, unless the issuer of the letter of
15credit notifies the superintendent in writing by certified
16or registered mail or courier mail or other receipted means,
17at least sixty days prior to any expiration date, that the
18irrevocable letter of credit shall not be extended. In
19the event of any notice of expiration or nonextension of a
20letter of credit issued under this division, the licensee
21shall be required to demonstrate to the satisfaction of the
22superintendent, fifteen days prior to expiration, that the
23licensee maintains and will maintain permissible investments
24in accordance with section 533C.803, subsection 1, upon the
25expiration of the letter of credit. If the licensee is not
26able to do so, the superintendent may draw on the letter of
27credit in an amount up to the amount necessary to meet the
28licensee’s requirements to maintain permissible investments
29in accordance with section 533C.803, subsection 1. Any
30such draw shall be offset against the licensee’s outstanding
31money transmission obligations. The drawn funds shall be
32held in trust by the superintendent or the superintendent’s
33designated agent, to the extent authorized by law, as agent for
34the benefit of the purchasers and holders of the licensee’s
35outstanding money transmission obligations.
-48- 1(2) The letter of credit shall provide that the issuer of
2the letter of credit will honor, at sight, a presentation made
3by the beneficiary to the issuer of the following documents on
4or prior to the expiration date of the letter of credit:
5(a) The original letter of credit, including any
6amendments.
7(b) A written statement from the beneficiary stating that
8any of the following events have occurred:
9(i) The filing of a petition by or against the licensee
10under the federal bankruptcy code, 11 U.S.C.§101 – 110, as
11amended, for bankruptcy or reorganization.
12(ii) The filing of a petition by or against the licensee
13for receivership, or the commencement of any other judicial
14or administrative proceeding for its dissolution or
15reorganization.
16(iii) The seizure of assets of a licensee by the
17superintendent or any other state financial regulatory entity
18pursuant to an emergency order issued in accordance with
19applicable law, on the basis of an action, violation, or
20condition that has caused or is likely to cause the insolvency
21of the licensee.
22(iv) The beneficiary has received notice of expiration on
23nonextension of a letter of credit and the licensee failed to
24demonstrate to the satisfaction of the beneficiary that the
25licensee will maintain permissible investments in accordance
26with section 533C.803, subsection 1, upon the expiration or
27nonextension of the letter of credit.
28(3) The superintendent may designate an agent to serve
29on the superintendent’s behalf as beneficiary to a letter
30of credit so long as the agent and letter of credit meet
31requirements established by the superintendent. The
32superintendent’s agent may serve as agent for multiple
33licensing authorities for a single irrevocable letter of credit
34if the proceeds of the drawable amount for the purposes of this
35section are assigned to the superintendent.
-49- 1(4) The superintendent is authorized and encouraged to
2participate in multistate processes designed to facilitate the
3issuance and administration of letters of credit, including
4but not limited to services provided by the NMLS and state
5regulatory registry, LLC.
62. Unless permitted by the superintendent by rule or by
7order to exceed the limit as set forth herein, the following
8investments are permissible under section 533C.803 to the
9extent specified:
10a. Receivables that are payable to a licensee from its
11authorized delegates in the ordinary course of business
12that are less than seven days old, up to fifty percent of
13the aggregate value of the licensee’s total permissible
14investments.
15b. Of the receivables permissible under subsection 1,
16receivables that are payable to a licensee from a single
17authorized delegate in the ordinary course of business may not
18exceed ten percent of the aggregate value of the licensee’s
19total permissible investments.
20c. The following investments are permissible up to twenty
21percent per category and combined up to fifty percent of
22the aggregate value of the licensee’s total permissible
23investments:
24(1) An up-to-six-month short-term investment bearing an
25eligible rating.
26(2) Commercial paper bearing an eligible rating.
27(3) A bill, note, bond, or debenture bearing an eligible
28rating.
29(4) United States tri-party repurchase agreements
30collateralized at one hundred percent or more with United
31States government or agency securities, municipal bonds, or
32other securities bearing an eligible rating.
33(5) Money market mutual funds rated less than “AAA” and
34equal to or higher than “A-” by Standard and Poor’s 500 stock
35market index, or the equivalent from any other eligible rating
-50-1service.
2(6) A mutual fund or other investment fund composed solely
3and exclusively of one or more permissible investments listed
4in section 533C.804, subsection 1, paragraph “a” through “k”.
5d. Cash, including demand deposits, savings deposits, and
6funds in such accounts held for the benefit of the licensee’s
7customers, at foreign depository institutions are permissible
8up to ten percent of the aggregate value of the licensee’s
9total permissible investments if the licensee has received a
10satisfactory rating in its most recent examination and the
11foreign depository institution fulfills all of the following:
12(1) An eligible rating.
13(2) Registered under the federal Foreign Account Tax
14Compliance Act, Pub.L.No.111-147.
15(3) Not located in any country subject to sanctions from the
16federal office of foreign asset control.
17(4) Not located in a high-risk or noncooperative
18jurisdiction as designated by the international financial
19action task force.
20 Sec. 36. REPEAL. Sections 533C.206, 533C.503, 533C.504,
21533C.505, 533C.506, 533C.507, 533C.705, 533C.706, 533C.707,
22533C.708, 533C.901, 533C.902, 533C.903, and 533C.904, Code
232023, are repealed.
24 Sec. 37. CODE EDITOR DIRECTIVE. The following articles
25shall be changed by the Code editor to substantially conform
26to the following:
271. ARTICLE 2 shall be retitled IMPLEMENTATION,
28CONFIDENTIALITY, SUPERVISION, AND RELATIONSHIP TO FEDERAL LAW.
292. ARTICLE 3 shall be retitled MONEY TRANSMISSION LICENSES.
303. ARTICLE 4 shall be retitled ACQUISITION OF CONTROL AND
31CHANGE OF KEY INDIVIDUAL.
324. ARTICLE 5 shall be retitled AUTHORIZED DELEGATES.
335. ARTICLE 6 shall be retitled REPORTING AND RECORDS.
346. ARTICLE 7 shall be retitled TIMELY TRANSMISSION,
35REFUNDS, AND DISCLOSURES.
-51- 17. ARTICLE 8 shall be retitled PRUDENTIAL STANDARDS.
2EXPLANATION
3The inclusion of this explanation does not constitute agreement with
4the explanation’s substance by the members of the general assembly.
5This bill relates to bank transmission services. The
6bill includes updates to the licensing processes for money
7transmission services seeking to do business in the state, and
8encourages the superintendent of banking to collaborate with
9multistate licensing processes. The bill allows for uniform
10requirements for licensing across states to ensure multi-state
11compliance for a money transmission services business.
12The bill modifies the name of the “Uniform Money Services
13Act” to the “Uniform Money Transmission Modernization Act”.
14The bill defines the terms “acting in concert”, “average
15daily money transmission liability”, “Bank Secrecy Act”,
16“closed loop stored value”, “eligible rating”, “eligible rating
17service”, “federally insured depository financial institution”,
18“in this state”, “individual”, “key individual”, “material
19litigation”, “MSB accredited state”, “nationwide multistate
20licensing system” (NMLS), “outstanding money transmission
21obligations”, “passive investor”, “payroll processing
22services”, “receipt”, “receiving money for transmission”,
23“remit”, and “tangible net worth”.
24The bill modifies the definitions for “control”, “money”,
25“money transmission”, “payment instrument”, “person”, and
26“stored-value”. The bill deletes various definitions.
27The bill provides that the superintendent may require a
28person to provide documentation demonstrating their exemption
29from licensing requirements. Under the bill, exemptions
30are expanded to include additional activities and entities,
31including certain persons that act as intermediaries by
32processing payments, a person appointed as an agent of the
33payee to collect and process payments from a payor to the
34payee provided certain requirements, an individual employed
35and supervised by an exempted entity, a third-party service
-52-1provider or agent under certain conditions, and a person exempt
2by regulation.
3The bill authorizes a superintendent to enter into
4agreements or relationships with other regulatory entities to
5improve efficiencies, utilize software or other processes for
6investigation purposes, accept reports from other government
7entities, and accept audit reports. The superintendent has the
8authority to enforce the bill and promulgate related rules.
9The bill requires that certain financial,
10identification-related, investigation-related, and other
11relevant information remain confidential. Exceptions include
12sharing information for the public interest, where the
13superintendent may disclose otherwise confidential information.
14The release of nonconfidential information shall include
15specific limited identifying information.
16The bill allows for the superintendent to supervise
17and conduct examinations or investigations regarding the
18acquisition of a license for conducting money transmission
19services. A licensee or authorized delegate shall provide
20the superintendent with relevant documents regarding that
21examination or investigation.
22The bill provides that the superintendent shall coordinate
23and effectively participate in relevant multistate networks.
24The bill designates federal law to preempt state money
25transmission law where there are inconsistencies between the
26two.
27The bill prohibits a person from engaging in the business
28of money transmission or advertising, soliciting, or holding
29itself out as providing money transmission unless they are
30licensed under the provisions of the bill, an authorized
31delegate, or fall under an exception.
32The bill encourages consistent state licensing and
33utilization of NMLS. The superintendent is authorized and
34encouraged to implement licensing provisions in a manner
35that is consistent with other states or multistate licensing
-53-1process, and participate in national licensing cooperation
2protocols. The superintendent is authorized and encouraged
3to build relationships or contracts with NMLS to help the
4superintendent maintain records, coordinate multistate efforts,
5process fees, and facilitate communication. The superintendent
6should use NMLS forms where available, and where unavailable,
7create forms that facilitate uniformity. The superintendent
8may waive or modify requirements to participate in the NMLS.
9The bill provides for an application for a license.
10The superintendent shall create an application form. An
11application for a license shall contain specified information,
12including criminal convictions, a description of previous money
13transmission services, a list of proposed authorized delegates
14and locations for money transmission, other states in which the
15applicant is currently engaging in money transmission, as well
16as disciplinary actions, and bankruptcy disclosure. If the
17applicant is a corporation, LLC, partnership, or other legal
18entity, additional information is required to be included on
19the application, including audits, dates of incorporations,
20parent and subsidiary companies, and trading information. An
21applicant shall be charged an application fee of $1,000 which
22shall be refunded upon rejection of an application. The bill
23establishes a license fee in the amount of $500 plus $10 per
24location in Iowa in which business is conducted, or set by
25the superintendent if there is no location, but not to exceed
26$5,000. No refund of a license fee shall be made upon a license
27suspension, revocation, or surrender.
28The bill provides that any individual in control of a
29licensee, applicant, or individual seeking to acquire control
30of a licensee, and each key individual shall provide the
31superintendent with information, including fingerprints, a
32credit report, and relevant litigation. The bill allows for
33different information based on an applicant’s residence.
34The bill provides for the issuance of licenses. An applicant
35must comply with provisions of the bill to be approved for a
-54-1license. The superintendent may extend a 120-day period of
2application review for good cause. The superintendent can
3rely on other multistate license procedures for application
4purposes. The superintendent shall provide written notice of
5denial of an application and include specific reasons for the
6denial.
7The bill allows a license to be renewed annually. The cost
8of the renewal fee shall correspond to the initial licensure
9fee. No refund of a license fee shall be made upon a license
10suspension, revocation, or surrender. A renewal report
11created by the superintendent shall be filed annually with
12the licensee’s renewal fee. If the licensee does not file
13a renewal report by the set deadline, the superintendent may
14charge a $100 per day late fee.
15The bill provides for acquisition of control of a licensee.
16Individuals seeking to acquire control of a licensee shall
17obtain written approval of the superintendent prior to
18acquisition and complete an application in a form created
19by the superintendent. A person is presumed to exercise a
20controlling influence when the person holds the power to vote,
21directly or indirectly, at least 10 percent of the outstanding
22voting shares or voting interests of a licensee or person in
23control of a licensee. Individuals seeking acquisition shall
24submit a $1,000 fee with an application for acquisition. The
25superintendent shall approve or deny the application. The
26superintendent can rely on other multistate license procedures
27for application purposes. The superintendent shall provide
28written notice of denial of an application and include specific
29reasons for the denial. A person may request a determination
30from the superintendent regarding control prior to filing an
31application.
32The bill requires notice regarding a change of key
33individuals. The superintendent may issue a notice of
34disapproval within 90 days of receiving the notice of
35the change and shall contain a statement on the basis of
-55-1disapproval.
2The bill requires a licensee to conduct a background check,
3provide written policies, and comply with requirements of the
4bill before an authorized delegate can act on the licensee’s
5behalf. An authorized delegate shall act in full compliance
6with the bill’s provisions. An authorized delegate and
7licensee shall sign a written contract containing provisions
8related to the scope of the relationship and requirements
9of each party. If the licensee’s license is suspended,
10revoked, surrendered, or expired, the licensee shall provide
11documentation to the superintendent within five business days
12that the licensee has notified all applicable authorized
13delegates, and delegates shall immediately cease to provide
14money transmission as an authorized delegate of the licensee.
15The bill prohibits a person from engaging in money
16transmission on behalf of an unlicensed person.
17The bill requires a quarterly report by a licensee within
1845 days of the close of a quarter. The report shall include
19financial information, state and national transaction
20information, permissible investment information, and additional
21information. The bill requires an annual audited financial
22statement from a licensee within 90 days of the end of each
23fiscal year. A licensee shall be required to file a quarterly
24report of authorized delegates within 45 days of the close of
25a quarter.
26The bill requires a licensee to file a report and submit a
27payment of $1,000 within one business day regarding bankruptcy,
28receivership, dissolution, reorganization, revocation, or
29suspension events. A licensee is required to file a report
30within three business days in events regarding a felony charge
31or conviction of the licensee, a key individual or person in
32control of the licensee, or an authorized delegate.
33The bill requires licensees and authorized delegates to
34comply with federal record keeping and reporting requirements,
35including pursuant to the federal Bank Secrecy Act, 31 U.S.C.
-56-1§5311.
2The bill requires licensees to maintain records, inside
3or outside of the state, for compliance determination. This
4includes ledgers, bank statements, records of obligations,
5lists of names, and information the superintendent requires.
6The bill includes prohibitions on disclosure and
7disclosure allowances. A superintendent’s records relating
8to examinations, supervision, or regulation of a licensed
9individual or authorized delegate are not considered public
10records and are not subject to disclosure. The bill provides
11for exceptions to when information may be disclosed to certain
12parties.
13The bill requires that a licensee transmit money in a timely
14manner unless there is a valid reason to abstain.
15The bill requires a licensee to refund the sender within 10
16days of receipt of a written request for a refund, unless an
17exception occurs, including belief that a crime or violation
18of law, rule, or regulation has occurred, is occurring, or may
19occur.
20The bill requires every licensee or authorized delegate to
21provide a sender a receipt for money received for transmission.
22The receipt shall be communicated in English or the language
23principally used by the licensee or authorized delegate. The
24receipt shall contain applicable information, including the
25name of sender, name of the recipient, the date, and the
26amount.
27The bill provides that a licensee providing payroll
28processing services shall issue reports to clients with details
29of client payroll obligations and make pay stubs available to
30workers. Certain licensees providing these services are exempt
31where the client designated the intended recipients to the
32licensee.
33The bill requires a licensee to maintain a tangible amount
34of net worth at all times. The amount shall be the greater
35of $100,000 or 3 percent of total assets for the first $100
-57-1million, 2 percent of additional assets for $100 million to
2$1 billion, and .5 percent of additional assets for over $1
3billion. Net worth may be demonstrated by the applicant’s
4most recent audit or unaudited financial statements. The
5superintendent may exempt any applicant or licensee for good
6cause.
7The bill requires an applicant for a money transmission
8license to maintain a surety bond of 100 percent of the
9licensee’s average daily money transmission liability for a
10three-month period, or $100,000, whichever is greater, with a
11maximum amount of $500,000. A licensee may exceed the maximum
12amount.
13The bill requires that a licensee maintain permissible
14investments of not less than the total amount of all of its
15outstanding money transmission obligations. Permissible
16investments shall be held in a trust for the benefit of the
17purchaser and holder of the licensee’s outstanding money
18transmission obligation in case of certain financial events.
19Funds drawn on a letter of credit shall cause a superintendent
20to notify applicable regulators under specific circumstances.
21The superintendent may expand the types of investments deemed
22to be permissible.
23The bill provides a list of permissible investments by
24a licensee that have a market value computed in accordance
25with United States generally accepted accounting principles
26of not less than the aggregate amount of all of a licensee’s
27outstanding money transmission obligations. The list of
28permissible investments includes a specific letter of credit
29for which the stated beneficiary is the superintendent subject
30to requirements. The letter of credit shall be irrevocable,
31unconditional, issued by a federally insured depository
32financial institution or an authorized foreign bank, not
33contain reference to other writings or entities, and contain
34an issue date, expiration date, and an automatic extension
35subject to change. Upon the expiration or lack of extension,
-58-1a licensee shall be required to demonstrate sufficient
2permissible investment amounts. If the licensee cannot show
3acceptable permissible investments, the superintendent may
4draw on the letter of credit. The letter of credit shall
5provide that the issuer of the letter of credit will honor the
6letter and a written statement from the beneficiary stating
7that certain significant financial events have occurred. The
8superintendent may designate an agent to serve as beneficiary
9to a letter of credit. The bill provides limits for certain
10investments.
11The bill repeals Code sections 533C.206, 533C.503, 533C.504,
12533C.505, 533C.506, 533C.507, 533C.705, 533C.706, 533C.707,
13533C.708, 533C.901, 533C.902, 533C.903, and 533C.904.
14The Code editor is directed to change the names of articles
15two through eight of Code chapter 533C.
-59-es/rn