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PAG LIN 1 1 SENATE FILE 372 1 2 1 3 AN ACT 1 4 RELATING TO THE LICENSING OF PERSONS PROVIDING MONEY 1 5 TRANSMISSION AND CURRENCY EXCHANGE SERVICES, PROVIDING 1 6 PENALTIES, AND PROVIDING AN EFFECTIVE DATE. 1 7 1 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 9 1 10 ARTICLE 1 1 11 GENERAL PROVISIONS 1 12 Section 1. NEW SECTION. 533C.101 SHORT TITLE. 1 13 This chapter may be cited as the "Uniform Money Services 1 14 Act". 1 15 Sec. 2. NEW SECTION. 533C.102 DEFINITIONS. 1 16 In this chapter: 1 17 1. "Applicant" means a person that files an application 1 18 for a license under this chapter. 1 19 2. "Authorized delegate" means a person a licensee 1 20 designates to provide money services on behalf of the 1 21 licensee. 1 22 3. "Bank" means an institution organized under federal or 1 23 state law which does any of the following: 1 24 a. Accepts demand deposits or deposits that the depositor 1 25 may use for payment to third parties and engages in the 1 26 business of making commercial loans. 1 27 b. Engages in credit card operations and maintains only 1 28 one office that accepts deposits, does not accept demand 1 29 deposits or deposits that the depositor may use for payments 1 30 to third parties, does not accept a savings or time deposit 1 31 less than one hundred thousand dollars, and does not engage in 1 32 the business of making commercial loans. 1 33 4. "Compensation" means any fee, commission, or other 1 34 benefit. 1 35 5. "Conducting the business" means engaging in activities 2 1 of a licensee or money transmitter more than ten times in any 2 2 calendar year for compensation. 2 3 6. "Control" means any of the following: 2 4 a. Ownership of, or the power to vote, directly or 2 5 indirectly, at least twenty-five percent of a class of voting 2 6 securities or voting interests of a licensee or person in 2 7 control of a licensee. 2 8 b. Power to elect a majority of executive officers, 2 9 managers, directors, trustees, or other persons exercising 2 10 managerial authority of a licensee or person in control of a 2 11 licensee. 2 12 c. The power to exercise, directly or indirectly, a 2 13 controlling influence over the management or policies of a 2 14 licensee or person in control of a licensee. 2 15 7. "Credit union" means a cooperative, nonprofit 2 16 association incorporated under chapter 533 or the Federal 2 17 Credit Union Act, 12 U.S.C. } 1751 et seq., that is insured by 2 18 the national credit union administration and includes an 2 19 office of a credit union. 2 20 8. "Currency exchange" means receipt of compensation from 2 21 the exchange of money of one government for money of another 2 22 government. 2 23 9. "Executive officer" means a president, chairperson of 2 24 the executive committee, chief financial officer, responsible 2 25 individual, or other individual who performs similar 2 26 functions. 2 27 10. "Licensee" means a person licensed under this chapter. 2 28 11. "Location" means a place of business at which activity 2 29 conducted by a licensee or money transmitter occurs. 2 30 12. "Monetary value" means a medium of exchange, whether 2 31 or not redeemable in money. 2 32 13. "Money" means a medium of exchange authorized or 2 33 adopted by a domestic or foreign government as a part of its 2 34 currency and that is customarily used and accepted as a medium 2 35 of exchange in the country of issuance. The term includes a 3 1 monetary unit of account established by an intergovernmental 3 2 organization or by agreement between two or more governments. 3 3 14. "Money services" means money transmission or currency 3 4 exchange. 3 5 15. "Money transmission" means any of the following: 3 6 a. Selling payment instruments to one or more persons or 3 7 issuing payment instruments which are sold to one or more 3 8 persons. 3 9 b. Conducting the business of receiving money or monetary 3 10 value for transmission. 3 11 c. Conducting the business of receiving money for obligors 3 12 for the purpose of paying obligors' bills, invoices, or 3 13 accounts. 3 14 16. "Outstanding", with respect to a payment instrument, 3 15 means issued or sold by or for the licensee and reported as 3 16 sold but not yet paid by or for the licensee. 3 17 17. "Payment instrument" means a check, draft, money 3 18 order, traveler's check, stored-value, or other instrument or 3 19 order for the transmission or payment of money or monetary 3 20 value, sold to one or more persons, whether or not that 3 21 instrument or order is negotiable. "Payment instrument" does 3 22 not include an instrument that is redeemable by the issuer or 3 23 an affiliate in merchandise or service, a credit card voucher, 3 24 or a letter of credit. 3 25 18. "Person" means an individual, corporation, business 3 26 trust, estate, trust, partnership, limited liability company, 3 27 association, joint venture, government; governmental 3 28 subdivision, agency or instrumentality; public corporation; or 3 29 any other legal or commercial entity. 3 30 19. "Proceeds" means property acquired or derived directly 3 31 or indirectly from, produced through, realized through, or 3 32 caused by an act or omission and includes any property of any 3 33 kind. 3 34 20. "Property" means anything of value, and includes any 3 35 interest in property, including any benefit, privilege, claim, 4 1 or right with respect to anything of value, whether real or 4 2 personal, tangible or intangible, without reduction for 4 3 expenses incurred for acquisition, maintenance, production, or 4 4 any other purpose. 4 5 21. "Record" means information that is inscribed on a 4 6 tangible medium or that is stored in an electronic or other 4 7 medium and is retrievable in perceivable form. 4 8 22. "Responsible individual" means an individual who is 4 9 employed by a licensee and has principal managerial authority 4 10 over the provision of money services by the licensee in this 4 11 state. 4 12 23. "State" means a state of the United States, the 4 13 District of Columbia, Puerto Rico, the United States Virgin 4 14 Islands, or any territory or insular possession subject to the 4 15 jurisdiction of the United States. 4 16 24. "Stored-value" means a monetary value that is 4 17 evidenced by an electronic record. 4 18 25. "Superintendent" means the superintendent of banking 4 19 for the state of Iowa. 4 20 26. "Transaction" includes a purchase, sale, trade, loan, 4 21 pledge, investment, gift, transfer, transmission, delivery, 4 22 deposit, withdrawal, payment, transfer between accounts, 4 23 exchange of currency, extension of credit, purchase or sale of 4 24 any monetary instrument or stored-value, use of a safe deposit 4 25 box, or any other acquisition or disposition of property by 4 26 whatever means effected. 4 27 27. "Unsafe or unsound practice" means a practice or 4 28 conduct by a person licensed to engage in money transmission 4 29 or an authorized delegate of such a person which creates the 4 30 likelihood of material loss, insolvency, or dissipation of the 4 31 licensee's assets, or otherwise materially prejudices the 4 32 interests of its customers. 4 33 Sec. 3. NEW SECTION. 533C.103 EXCLUSIONS. 4 34 This chapter does not apply to: 4 35 1. The United States or a department, agency, or 5 1 instrumentality thereof. 5 2 2. A money transmission by the United States postal 5 3 service or by a contractor on behalf of the United States 5 4 postal service. 5 5 3. A state, county, city, or any other governmental agency 5 6 or governmental subdivision of a state. 5 7 4. A bank, bank holding company, savings and loan 5 8 association, savings bank, credit union, office of an 5 9 international banking corporation, branch of a foreign bank, 5 10 corporation organized pursuant to the federal Bank Service 5 11 Company Act, 12 U.S.C. } 1861-1867, or corporation organized 5 12 under the federal Edge Act, 12 U.S.C. } 611-633, under the 5 13 laws of a state or the United States. 5 14 5. Electronic funds transfer of governmental benefits for 5 15 a federal, state, county, or governmental agency by a 5 16 contractor on behalf of the United States or a department, 5 17 agency, or instrumentality thereof, or a state or governmental 5 18 subdivision, agency, or instrumentality thereof. 5 19 6. A board of trade designated as a contract market under 5 20 the federal Commodity Exchange Act, 7 U.S.C. } 1-25, or a 5 21 person that, in the ordinary course of business, provides 5 22 clearance and settlement services for a board of trade to the 5 23 extent of its operation as or for such a board. 5 24 7. A registered futures commission merchant under the 5 25 federal commodities laws to the extent of its operation as 5 26 such a merchant. 5 27 8. A person that provides clearance or settlement services 5 28 pursuant to a registration as a clearing agency or an 5 29 exemption from such registration granted under the federal 5 30 securities laws to the extent of its operation as such a 5 31 provider. 5 32 9. An operator of a payment system to the extent that it 5 33 provides processing, clearing, or settlement services, between 5 34 or among persons excluded by this section, in connection with 5 35 wire transfers, credit card transactions, debit card 6 1 transactions, stored-value transactions, automated clearing 6 2 house transfers, or similar funds transfers. 6 3 10. A person registered as a securities broker-dealer 6 4 under federal or state securities laws to the extent of its 6 5 operation as such a broker-dealer. 6 6 11. A delayed deposit services business as defined in 6 7 chapter 533D. 6 8 12. A real estate broker or salesperson as defined in 6 9 chapter 543B. 6 10 13. Pari-mutuel wagering, racetracks, and excursion 6 11 gambling boats as provided in chapters 99D and 99F. 6 12 14. A person engaging in the business of debt management 6 13 that is licensed or exempt from licensing pursuant to section 6 14 533A.2. 6 15 15. An insurance company organized under chapter 508, 514, 6 16 514B, 515, 518, 518A, or 520, or authorized to do the business 6 17 of insurance in Iowa to the extent of its operation as an 6 18 insurance company. 6 19 16. An insurance producer as defined in section 522B.1 to 6 20 the extent of its operation as an insurance producer. 6 21 ARTICLE 2 6 22 MONEY TRANSMISSION LICENSES 6 23 Sec. 4. NEW SECTION. 533C.201 LICENSE REQUIRED. 6 24 1. A person shall not engage in the business of money 6 25 transmission or advertise, solicit, or hold itself out as 6 26 providing money transmission unless the person: 6 27 a. Is licensed under this article. 6 28 b. Is an authorized delegate of a person licensed under 6 29 this article. 6 30 2. A license under this article is not transferable or 6 31 assignable. 6 32 Sec. 5. NEW SECTION. 533C.202 APPLICATION FOR LICENSE. 6 33 1. In this section, "material litigation" means litigation 6 34 that according to generally accepted accounting principles is 6 35 significant to an applicant's or a licensee's financial health 7 1 and would be required to be disclosed in the applicant's or 7 2 licensee's annual audited financial statements, report to 7 3 shareholders, or similar records. 7 4 2. A person applying for a license under this article 7 5 shall do so in a form prescribed by the superintendent. The 7 6 application must state or contain: 7 7 a. The legal name and residential and business addresses 7 8 of the applicant and any fictitious or trade name used by the 7 9 applicant in conducting its business. 7 10 b. A list of any criminal convictions of the applicant and 7 11 any material litigation in which the applicant has been 7 12 involved in the ten-year period next preceding the submission 7 13 of the application. 7 14 c. A description of any money services previously provided 7 15 by the applicant and the money services that the applicant 7 16 seeks to provide in this state. 7 17 d. A list of the applicant's proposed authorized delegates 7 18 and the locations in this state where the applicant and its 7 19 authorized delegates propose to engage in money transmission 7 20 or provide other money services. 7 21 e. A list of other states in which the applicant is 7 22 licensed to engage in money transmission or provide other 7 23 money services and any license revocations, suspensions, or 7 24 other disciplinary action taken against the applicant in 7 25 another state. 7 26 f. Information concerning any bankruptcy or receivership 7 27 proceedings affecting the licensee. 7 28 g. A sample form of contract for authorized delegates, if 7 29 applicable, and a sample form of payment instrument or 7 30 instrument upon which stored-value is recorded, if applicable. 7 31 h. The name and address of any bank through which the 7 32 applicant's payment instruments and stored-value will be paid. 7 33 i. A description of the source of money and credit to be 7 34 used by the applicant to provide money services. 7 35 j. Any other information the superintendent reasonably 8 1 requires with respect to the applicant. 8 2 3. If an applicant is a corporation, limited liability 8 3 company, partnership, or other entity, the applicant shall 8 4 also provide all of the following: 8 5 a. The date of the applicant's incorporation or formation 8 6 and state or country of incorporation or formation. 8 7 b. If applicable, a certificate of good standing from the 8 8 state or country in which the applicant is incorporated or 8 9 formed. 8 10 c. A brief description of the structure or organization of 8 11 the applicant, including any parent or subsidiary of the 8 12 applicant, and whether any parent or subsidiary is publicly 8 13 traded. 8 14 d. The legal name, any fictitious or trade name, all 8 15 business and residential addresses, and the employment, in the 8 16 ten-year period next preceding the submission of the 8 17 application of each executive officer, manager, director, or 8 18 person that has control, of the applicant. 8 19 e. A list of any criminal convictions and material 8 20 litigation in which any executive officer, manager, director, 8 21 or person in control of the applicant has been involved in the 8 22 ten-year period next preceding the submission of the 8 23 application. 8 24 f. A copy of the applicant's audited financial statements 8 25 for the most recent fiscal year and, if available, for the 8 26 two-year period next preceding the submission of the 8 27 application. 8 28 g. A copy of the applicant's unconsolidated financial 8 29 statements for the current fiscal year, whether audited or 8 30 not, and, if available, for the two-year period next preceding 8 31 the submission of the application. 8 32 h. If the applicant is publicly traded, a copy of the most 8 33 recent report filed with the United States securities and 8 34 exchange commission under section 13 of the federal Securities 8 35 Exchange Act of 1934, 15 U.S.C. } 78m. 9 1 i. If the applicant is a wholly owned subsidiary of: 9 2 (1) A corporation publicly traded in the United States, a 9 3 copy of audited financial statements for the parent 9 4 corporation for the most recent fiscal year or a copy of the 9 5 parent corporation's most recent report filed under section 13 9 6 of the federal Securities Exchange Act of 1934, 15 U.S.C. } 9 7 78m. 9 8 (2) A corporation publicly traded outside the United 9 9 States, a copy of similar documentation filed with the 9 10 regulator of the parent corporation's domicile outside the 9 11 United States. 9 12 j. If the applicant has a registered agent in this state, 9 13 the name and address of the applicant's registered agent in 9 14 this state. 9 15 k. Any other information the superintendent reasonably 9 16 requires with respect to the applicant. 9 17 4. A nonrefundable application fee of one thousand dollars 9 18 and a license fee must accompany an application for a license 9 19 under this article. The license fee must be refunded if the 9 20 application is denied. The license fee shall be the sum of 9 21 five hundred dollars plus an additional ten dollars for each 9 22 location in this state at which business is conducted through 9 23 authorized delegates or employees of the licensee, but shall 9 24 not exceed five thousand dollars. Fees for locations added 9 25 after the initial application shall be submitted with the 9 26 quarterly reports pursuant to section 533C.503, subsection 2. 9 27 If the licensee has no locations in this state at which 9 28 business is conducted through authorized delegates or 9 29 employees of the licensee, the license fee shall be set by the 9 30 superintendent, but shall not exceed five thousand dollars. A 9 31 license under this article expires on the next September 30 9 32 after its issuance. The initial license fee is considered an 9 33 annual fee and the superintendent shall prorate the license 9 34 fee, refunding any amount due to a partial license year. 9 35 However, no refund of a license fee shall be made when a 10 1 license is suspended, revoked, or surrendered. 10 2 5. The superintendent may waive one or more requirements 10 3 of subsections 2 and 3, or permit an applicant to submit other 10 4 information in lieu of the required information. 10 5 Sec. 6. NEW SECTION. 533C.203 SECURITY. 10 6 1. Except as otherwise provided in subsection 2, a surety 10 7 bond, letter of credit, or other similar security acceptable 10 8 to the superintendent in the amount of fifty thousand dollars 10 9 plus ten thousand dollars per location, not exceeding a total 10 10 addition of three hundred thousand dollars, must accompany an 10 11 application for a license. If the licensee has no locations 10 12 in this state, the superintendent shall set the bond amount 10 13 not to exceed three hundred thousand dollars. 10 14 2. Security must be in a form satisfactory to the 10 15 superintendent and payable to the state for the benefit of any 10 16 claimant against the licensee to secure the faithful 10 17 performance of the obligations of the licensee with respect to 10 18 money transmission. 10 19 3. The aggregate liability on a surety bond shall not 10 20 exceed the principal sum of the bond. A claimant against a 10 21 licensee may maintain an action on the bond, or the 10 22 superintendent may maintain an action on behalf of the 10 23 claimant. 10 24 4. A surety bond must cover claims for so long as the 10 25 superintendent specifies, but for at least five years after 10 26 the licensee ceases to provide money services in this state. 10 27 However, the superintendent may permit the amount of security 10 28 to be reduced or eliminated before the expiration of that time 10 29 to the extent the amount of the licensee's payment instruments 10 30 or stored-value obligations outstanding in this state is 10 31 reduced. The superintendent may permit a licensee to 10 32 substitute another form of security acceptable to the 10 33 superintendent for the security effective at the time the 10 34 licensee ceases to provide money services in this state. 10 35 5. In lieu of the security prescribed in this section, an 11 1 applicant for a license or a licensee may provide security in 11 2 a form prescribed by the superintendent. 11 3 6. The superintendent may increase the amount of security 11 4 required to a maximum of one million dollars if the financial 11 5 condition of a licensee so requires, as evidenced by reduction 11 6 of net worth, financial losses, or other relevant criteria. 11 7 Sec. 7. NEW SECTION. 533C.204 ISSUANCE OF LICENSE. 11 8 1. When an application is filed under this article, the 11 9 superintendent shall investigate the applicant's financial 11 10 condition and responsibility, financial and business 11 11 experience, character, and general fitness. The 11 12 superintendent may conduct an on-site investigation of the 11 13 applicant, the reasonable cost of which the applicant must 11 14 pay. The superintendent shall issue a license to an applicant 11 15 under this article if the superintendent finds that all of the 11 16 following conditions have been fulfilled: 11 17 a. The applicant has complied with sections 533C.202, 11 18 533C.203, and 533C.206. 11 19 b. The applicant has not been convicted of or pled guilty 11 20 to a felony or an indictable misdemeanor for financial gain 11 21 within the past ten years. 11 22 c. The applicant has paid a fee set by the department of 11 23 public safety, division of criminal investigation and bureau 11 24 of identification, to defray the costs associated with the 11 25 search of criminal history records of the applicant. If the 11 26 applicant is a corporation, the applicant shall pay the fee 11 27 associated with a criminal history record check for the 11 28 directors and officers of the corporation. If the applicant 11 29 is a partnership, the applicant shall pay the fee associated 11 30 with a criminal history record check for each of the partners. 11 31 The superintendent may require the applicant to provide 11 32 additional information from the applicant if the department of 11 33 public safety records indicate that a person with the same 11 34 name has a criminal history. If the applicant is a publicly 11 35 traded corporation or a subsidiary or affiliate of a publicly 12 1 traded corporation, no criminal history record check shall be 12 2 required. 12 3 2. When an application for an original license under this 12 4 article is complete, the superintendent shall promptly notify 12 5 the applicant of the date on which the application was 12 6 determined to be complete and the superintendent shall approve 12 7 or deny the application within one hundred twenty days after 12 8 that date. 12 9 3. The superintendent may for good cause extend the 12 10 application period. 12 11 4. An applicant whose application is denied by the 12 12 superintendent under this article may appeal, within thirty 12 13 days after receipt of the notice of the denial, from the 12 14 denial and request a hearing. The denial of a license shall 12 15 not be deemed a contested case. 12 16 Sec. 8. NEW SECTION. 533C.205 RENEWAL OF LICENSE. 12 17 1. A licensee under this article shall pay an annual 12 18 renewal fee as determined below by no later than September 1 12 19 of the year of expiration. The renewal fee shall be five 12 20 hundred dollars plus an additional ten dollars for each 12 21 location in this state at which business is conducted through 12 22 authorized delegates or employees of the licensee, but shall 12 23 not exceed five thousand dollars. Fees for locations added 12 24 after submission of the renewal application shall be submitted 12 25 with the quarterly reports pursuant to section 533C.503, 12 26 subsection 2. If the licensee has no locations in this state 12 27 at which business is conducted through authorized delegates or 12 28 employees of the licensee, the license fee shall be set by the 12 29 superintendent, but shall not exceed five thousand dollars. 12 30 Licenses issued under chapter 533B, Code 2003, will be 12 31 initially renewed as provided in section 533C.904. 12 32 2. A licensee under this article shall submit a renewal 12 33 report with the renewal fee, in a form prescribed by the 12 34 superintendent. The renewal report must state or contain: 12 35 a. A copy of the licensee's most recent audited annual 13 1 financial statement or, if the licensee is a wholly owned 13 2 subsidiary of another corporation, the most recent audited 13 3 consolidated annual financial statement of the parent 13 4 corporation or the licensee's most recent audited consolidated 13 5 annual financial statement. 13 6 b. The number and monetary amount of payment instruments 13 7 sold by the licensee in this state which have not been 13 8 included in a renewal report, and the monetary amount of 13 9 payment instruments and stored-value currently outstanding. 13 10 c. A description of each material change in information 13 11 submitted by the licensee in its original license application 13 12 which has not been reported to the superintendent on any 13 13 required report. 13 14 d. A list of the licensee's permissible investments and a 13 15 certification that the licensee continues to maintain 13 16 permissible investments according to the requirements set 13 17 forth in sections 533C.601 and 533C.602. 13 18 e. Proof that the licensee continues to maintain adequate 13 19 security as required by section 533C.203; and 13 20 f. A list of the locations in this state where the 13 21 licensee or an authorized delegate of the licensee engages in 13 22 money transmission or provides other money services. 13 23 3. If a licensee does not file a renewal report or pay its 13 24 renewal fee by September 1, or any extension of time granted 13 25 by the superintendent, the superintendent may assess a late 13 26 fee of one hundred dollars per day. 13 27 Sec. 9. NEW SECTION. 533C.206 NET WORTH. 13 28 A licensee under this article shall maintain a net worth of 13 29 at least one hundred thousand dollars plus ten thousand 13 30 dollars per authorized delegate not to exceed five hundred 13 31 thousand dollars determined in accordance with generally 13 32 accepted accounting principles. If the licensee has no 13 33 locations in this state at which business is conducted through 13 34 authorized delegates or employees of the licensee, the minimum 13 35 net worth, not to exceed five hundred thousand dollars, shall 14 1 be set by the superintendent. 14 2 ARTICLE 3 14 3 CURRENCY EXCHANGE LICENSES 14 4 Sec. 10. NEW SECTION. 533C.301 LICENSE REQUIRED. 14 5 1. A person shall not engage in currency exchange or 14 6 advertise, solicit, or hold itself out as providing currency 14 7 exchange for which the person receives revenues equal or 14 8 greater than five percent of total revenues unless the person: 14 9 a. Is licensed under this article. 14 10 b. Is licensed for money transmission under article 2. 14 11 c. Is an authorized delegate of a person licensed under 14 12 article 2. 14 13 2. A license under this article is not transferable or 14 14 assignable. 14 15 Sec. 11. NEW SECTION. 533C.302 APPLICATION FOR LICENSE. 14 16 1. A person applying for a license under this article 14 17 shall do so in a form prescribed by the superintendent. The 14 18 application must state or contain: 14 19 a. The legal name and residential and business addresses 14 20 of the applicant, if the applicant is an individual, or, if 14 21 the applicant is not an individual, the name of each partner, 14 22 executive officer, manager, and director. 14 23 b. The location of the principal office of the applicant. 14 24 c. The complete addresses of other locations in this state 14 25 where the applicant proposes to engage in currency exchange, 14 26 including all limited stations and mobile locations. 14 27 d. A description of the source of money and credit to be 14 28 used by the applicant to engage in currency exchange. 14 29 e. Other information the superintendent reasonably 14 30 requires with respect to the applicant, but not more than the 14 31 superintendent may require under article 2. 14 32 2. A nonrefundable application fee of one thousand dollars 14 33 and the license fee must accompany an application for a 14 34 license under this article. The license fee shall be the sum 14 35 of five hundred dollars plus an additional one hundred dollars 15 1 for each location at which business is conducted, but not to 15 2 exceed two thousand dollars. Fees for locations added after 15 3 the initial application shall be submitted with the quarterly 15 4 reports pursuant to section 533C.503, subsection 2. The 15 5 license fee must be refunded if the application is denied. A 15 6 license under this article expires on the next September 30 of 15 7 an odd-ending year after its issuance. The initial license 15 8 fee is considered a biennial fee and the superintendent shall 15 9 prorate the license fee, refunding any amount due to a partial 15 10 license period. However, no refund of a license fee shall be 15 11 made when a license is suspended, revoked, or surrendered. 15 12 Sec. 12. NEW SECTION. 533C.303 ISSUANCE OF LICENSE. 15 13 1. Upon the filing of an application under this article, 15 14 the superintendent shall investigate the applicant's financial 15 15 condition and responsibility, financial and business 15 16 experience, character, and general fitness. The 15 17 superintendent may conduct an on-site investigation of the 15 18 applicant, the reasonable cost of which the applicant must 15 19 pay. The superintendent shall issue a license to an applicant 15 20 under this article if the superintendent finds that all of the 15 21 following conditions have been fulfilled: 15 22 a. The applicant has complied with section 533C.302. 15 23 b. The applicant has not been convicted of or pled guilty 15 24 to any felony or an indictable misdemeanor for financial gain 15 25 within the past ten years. 15 26 c. The applicant has paid a fee set by the department of 15 27 public safety, division of criminal investigation and bureau 15 28 of identification, to defray the costs associated with the 15 29 search of criminal history records of the applicant. If the 15 30 applicant is a corporation, the applicant shall pay the fee 15 31 associated with a criminal history record check for the 15 32 directors and officers of the corporation. If the applicant 15 33 is a partnership, the applicant shall pay the fee associated 15 34 with a criminal history record check for each of the partners. 15 35 The superintendent may require the applicant to provide 16 1 additional information from the applicant if the department of 16 2 public safety records indicate that a person with the same 16 3 name has a criminal history. If the applicant is a publicly 16 4 traded corporation or a subsidiary or affiliate of a publicly 16 5 traded corporation, no criminal history record check shall be 16 6 required. 16 7 d. The financial condition and responsibility, financial 16 8 and business experience, competence, character, and general 16 9 fitness of the applicant; and the competence, experience, 16 10 character, and general fitness of the executive officers, 16 11 managers, directors, and persons in control of the applicant 16 12 indicate that it is in the interest of the public to permit 16 13 the applicant to engage in currency exchange. 16 14 2. When an application for an original license under this 16 15 article is complete, the superintendent shall promptly notify 16 16 the applicant of the date on which the application was 16 17 determined to be complete and the superintendent shall approve 16 18 or deny the application within one hundred twenty days after 16 19 that date. 16 20 3. The superintendent may for good cause extend the 16 21 application period. 16 22 4. An applicant whose application is denied a license by 16 23 the superintendent under this article may appeal, within 16 24 thirty days after receipt of the notice of the denial, from 16 25 the denial and request a hearing. The denial of a license 16 26 shall not be deemed a contested case. 16 27 Sec. 13. NEW SECTION. 533C.304 RENEWAL OF LICENSE. 16 28 1. A licensee under this article shall pay a biennial 16 29 renewal fee no later than September 1 of an odd-ending year. 16 30 The biennial renewal fee shall be the sum of five hundred 16 31 dollars plus an additional one hundred dollars for each 16 32 location at which business is conducted, but shall not exceed 16 33 two thousand dollars. Fees for locations added after the 16 34 initial application shall be submitted with the quarterly 16 35 reports pursuant to section 533C.503, subsection 2. 17 1 2. A licensee under this article shall submit a renewal 17 2 report with the renewal fee, in a form prescribed by the 17 3 superintendent. The renewal report must state or contain: 17 4 a. A description of each material change in information 17 5 submitted by the licensee in its original license application 17 6 that has not been reported to the superintendent on any 17 7 required report. 17 8 b. A list of the locations in this state where the 17 9 licensee or an authorized delegate of the licensee engages in 17 10 currency exchange. 17 11 3. If a licensee does not file a renewal report and pay 17 12 its renewal fee by September 1 of an odd-ending year, or any 17 13 extension of time granted by the superintendent, the 17 14 superintendent may assess a late fee of one hundred dollars 17 15 per day. 17 16 4. The superintendent for good cause may grant an 17 17 extension of the renewal date. 17 18 ARTICLE 4 17 19 AUTHORIZED DELEGATES 17 20 Sec. 14. NEW SECTION. 533C.401 RELATIONSHIP BETWEEN 17 21 LICENSEE AND AUTHORIZED DELEGATE. 17 22 1. In this section, "remit" means to make direct payments 17 23 of money to a licensee or its representative authorized to 17 24 receive money or to deposit money in a bank in an account 17 25 specified by the licensee. 17 26 2. A contract between a licensee and an authorized 17 27 delegate must require the authorized delegate to operate in 17 28 full compliance with this chapter. The licensee shall furnish 17 29 in a record to each authorized delegate policies and 17 30 procedures for the operation of the money services business. 17 31 3. An authorized delegate shall remit all money owing to 17 32 the licensee in accordance with the terms of the contract 17 33 between the licensee and the authorized delegate. 17 34 4. If a license is suspended or revoked or a licensee does 17 35 not renew its license, the superintendent shall notify all 18 1 authorized delegates of the licensee whose names are in a 18 2 record filed with the superintendent of the suspension, 18 3 revocation, or nonrenewal. After notice is sent or 18 4 publication is made, an authorized delegate shall immediately 18 5 cease to provide money services as a delegate of the licensee. 18 6 5. An authorized delegate shall not provide money services 18 7 outside the scope of activity permissible under the contract 18 8 between the authorized delegate and the licensee, except 18 9 activity in which the authorized delegate is licensed to 18 10 engage under article 2 or 3. An authorized delegate of a 18 11 licensee holds in trust for the benefit of the licensee all 18 12 money net of fees received from money transmission. 18 13 6. A person operating under a written contract with a 18 14 licensee as required under subsection 2 shall not be deemed to 18 15 be conducting unauthorized money services because the licensee 18 16 has failed to properly designate the person as an authorized 18 17 delegate under this chapter provided that the person is 18 18 otherwise operating in full compliance with this chapter. 18 19 Sec. 15. NEW SECTION. 533C.402 UNAUTHORIZED ACTIVITIES. 18 20 A person shall not provide money services on behalf of 18 21 another person not licensed under this chapter. A person who 18 22 engages in that activity provides money services to the same 18 23 extent as if the person were a licensee. 18 24 ARTICLE 5 18 25 EXAMINATIONS – REPORTS – RECORDS 18 26 Sec. 16. NEW SECTION. 533C.501 AUTHORITY TO CONDUCT 18 27 EXAMINATIONS. 18 28 1. The superintendent may conduct an annual examination of 18 29 a licensee upon reasonable notice in a record to the licensee. 18 30 The superintendent may conduct an annual examination of any 18 31 authorized delegate of a licensee upon reasonable notice in a 18 32 record to the authorized delegate and the licensee. 18 33 2. The superintendent may examine a licensee or its 18 34 authorized delegate, at any time, without notice, if the 18 35 superintendent has reason to believe that the licensee or 19 1 authorized delegate is engaging in an unsafe or unsound 19 2 practice or has violated or is violating this chapter or a 19 3 rule adopted or an order issued under this chapter. 19 4 3. The licensee shall pay the reasonable cost of the 19 5 examination. 19 6 4. Information obtained during an examination under this 19 7 chapter may be disclosed only as provided in section 533C.507. 19 8 Sec. 17. NEW SECTION. 533C.502 JOINT EXAMINATIONS. 19 9 1. The superintendent may conduct an on-site examination 19 10 of records listed in section 533C.505 in conjunction with 19 11 representatives of other state agencies or agencies of another 19 12 state or of the federal government. Instead of an 19 13 examination, the superintendent may accept the examination 19 14 report of an agency of this state or of another state or of 19 15 the federal government or a report prepared by an independent 19 16 licensed or certified public accountant. 19 17 2. A joint examination or an acceptance of an examination 19 18 report does not preclude the superintendent from conducting an 19 19 examination as provided by law. A joint report or a report 19 20 accepted under this section is an official report of the 19 21 superintendent for all purposes. 19 22 Sec. 18. NEW SECTION. 533C.503 REPORTS. 19 23 1. A licensee shall file with the superintendent within 19 24 fifteen business days any material changes in information 19 25 provided in a licensee's application as prescribed by the 19 26 superintendent. 19 27 2. A licensee shall file with the superintendent within 19 28 forty-five days after the end of each fiscal quarter a current 19 29 list of all authorized delegates and locations in this state 19 30 where the licensee or an authorized delegate of the licensee 19 31 provides money services. The licensee shall state the name 19 32 and street address of each location and authorized delegate. 19 33 3. A licensee shall file a report with the superintendent 19 34 within one business day after the licensee has reason to know 19 35 of the occurrence of any of the following events: 20 1 a. The filing of a petition by or against the licensee 20 2 under the United States bankruptcy code, 11 U.S.C. } 101 et 20 3 seq., for bankruptcy or reorganization. 20 4 b. The filing of a petition by or against the licensee for 20 5 receivership, the commencement of any other judicial or 20 6 administrative proceeding for its dissolution or 20 7 reorganization, or the making of a general assignment for the 20 8 benefit of its creditors. 20 9 c. The commencement of a proceeding to revoke or suspend 20 10 its license in a state or country in which the licensee 20 11 engages in business or is licensed. 20 12 d. The cancellation or other impairment of the licensee's 20 13 bond or other security. 20 14 e. A charge or conviction of the licensee or of an 20 15 executive officer, manager, or director of, or person in 20 16 control of, the licensee for a felony. 20 17 f. A charge or conviction of an authorized delegate for a 20 18 felony. 20 19 Sec. 19. NEW SECTION. 533C.504 CHANGE OF CONTROL. 20 20 1. A licensee shall: 20 21 a. Request approval from the superintendent of a proposed 20 22 change of control. 20 23 b. Submit a nonrefundable fee of one thousand dollars with 20 24 the request. 20 25 2. After review of a request for approval under subsection 20 26 1, the superintendent may require the licensee to provide 20 27 additional information concerning the proposed persons in 20 28 control of the licensee. The additional information must be 20 29 limited to the same types required of the licensee or persons 20 30 in control of the licensee as part of its original license or 20 31 renewal application. 20 32 3. The superintendent shall approve a request for change 20 33 of control under subsection 1 if, after investigation, the 20 34 superintendent determines that the person or group of persons 20 35 requesting approval has the competence, experience, character, 21 1 and general fitness to operate the licensee or person in 21 2 control of the licensee in a lawful and proper manner and that 21 3 the public interest will not be jeopardized by the change of 21 4 control. 21 5 4. When an application for a change of control under this 21 6 article is complete, the superintendent shall notify the 21 7 licensee in a record of the date on which the request was 21 8 determined to be complete and shall approve or deny the 21 9 request within one hundred twenty days after that date. 21 10 5. The superintendent, by rule or order, may exempt a 21 11 person from any of the requirements of subsection 1, paragraph 21 12 "b", if it is in the public interest to do so. 21 13 6. Subsection 1 does not apply to a public offering of 21 14 securities. 21 15 7. Before filing a request for approval to acquire control 21 16 of a licensee or person in control of a licensee, a person may 21 17 request in a record a determination from the superintendent as 21 18 to whether the person would be considered a person in control 21 19 of a licensee upon consummation of a proposed transaction. If 21 20 the superintendent determines that the person would not be a 21 21 person in control of a licensee, the superintendent shall 21 22 enter an order to that effect and the proposed person and 21 23 transaction is not subject to the requirements of subsections 21 24 1 through 3. 21 25 Sec. 20. NEW SECTION. 533C.505 RECORDS. 21 26 1. A licensee shall maintain the following records for 21 27 determining its compliance with this chapter for at least 21 28 three years: 21 29 a. A record of each payment instrument sold. 21 30 b. A general ledger posted at least monthly containing all 21 31 asset, liability, capital, income, and expense accounts. 21 32 c. Bank statements and bank reconciliation records. 21 33 d. Records of outstanding payment instruments and stored- 21 34 value obligations. 21 35 e. Records of each payment instrument and stored-value 22 1 obligation paid within the three-year period. 22 2 f. A list of the last known names and addresses of all of 22 3 the licensee's authorized delegates. 22 4 g. Any other records the superintendent reasonably 22 5 requires by rule. 22 6 2. The items specified in subsection 1 may be maintained 22 7 in any form of record. 22 8 3. Records may be maintained outside this state if they 22 9 are made accessible to the superintendent on seven business- 22 10 days' notice that is sent in a record. 22 11 4. All records maintained by the licensee as required in 22 12 subsections 1 through 3 shall be open to inspection by the 22 13 superintendent pursuant to 533C.501. 22 14 5. A licensee, authorized delegate, or any officer, 22 15 employee, agent, or any public official or governmental 22 16 employee who keeps or files a record pursuant to this section 22 17 or who communicates or discloses information or records under 22 18 this section is not liable to its customer, to a state or 22 19 local agency, or to any person for any loss or damage caused 22 20 in whole or in part by the making, filing, or governmental use 22 21 of the record, or any information contained in that record. 22 22 6. The licensee shall keep such records as the 22 23 superintendent may require in order to determine whether such 22 24 licensee is complying with the provisions of this chapter and 22 25 with the rules and orders lawfully made by the superintendent 22 26 under this chapter. 22 27 Sec. 21. NEW SECTION. 533C.506 MONEY LAUNDERING REPORTS. 22 28 A licensee and an authorized delegate shall file all 22 29 reports required by federal currency reporting, recordkeeping, 22 30 and suspicious activity reporting requirements as set forth in 22 31 31 U.S.C. } 5311-5330, and 31 C.F.R. } 103.11-103.170. 22 32 Sec. 22. NEW SECTION. 533C.507 DISCLOSURE. 22 33 1. Except as otherwise provided by this chapter, the 22 34 records of the superintendent relating to examinations or 22 35 supervision and regulation of a person licensed pursuant to 23 1 this chapter, or authorized delegates of a person licensed 23 2 pursuant to this chapter, are not public records and are not 23 3 subject to disclosure under chapter 22. Neither the 23 4 superintendent nor any member of the superintendent's staff 23 5 shall disclose any information obtained in the discharge of 23 6 the superintendent's official duties to any person not 23 7 connected with the department, except that the superintendent 23 8 or the superintendent's designee may disclose the information: 23 9 a. To representatives of federal agencies insuring 23 10 accounts in the financial institution. 23 11 b. To representatives of state or federal agencies and 23 12 foreign countries having regulatory or supervisory authority 23 13 over the activities of the financial institution or similar 23 14 financial institutions if those representatives are permitted 23 15 to and do, upon request of the superintendent, disclose 23 16 similar information respecting those financial institutions 23 17 under their regulation or supervision or to those 23 18 representatives who state in writing under oath that they will 23 19 maintain the confidentiality of that information. 23 20 c. To the attorney general of this state. 23 21 d. To a federal or state grand jury in response to a 23 22 lawful subpoena, or pursuant to a county attorney subpoena. 23 23 e. To the auditor of this state for the purpose of 23 24 conducting audits authorized by law. 23 25 2. The superintendent may: 23 26 a. Disclose the fact of filing of applications with the 23 27 department pursuant to this chapter, give notice of a hearing, 23 28 if any, regarding those applications, and announce the 23 29 superintendent's action thereon. 23 30 b. Disclose final decisions in connection with proceedings 23 31 for the suspension or revocation of licenses or certificates 23 32 issued pursuant to this chapter. 23 33 c. Prepare and circulate reports reflecting the assets and 23 34 liabilities of licensees on an aggregate basis, including 23 35 other information considered pertinent to the purpose of each 24 1 report for general statistical information. 24 2 d. Prepare and circulate reports provided by law. 24 3 3. Every official report of the department is prima facie 24 4 evidence of the facts therein stated in any action or 24 5 proceeding wherein the superintendent is a party. 24 6 4. Nothing in this section shall be construed to prevent 24 7 the disclosure of information that is: 24 8 a. Admissible in evidence in any civil or criminal 24 9 proceeding brought by or at the request of the superintendent 24 10 or this state to enforce or prosecute violations of this 24 11 chapter, chapter 706B, or the rules adopted, or orders issued 24 12 pursuant to this chapter. 24 13 b. Requested by or provided to a federal agency, including 24 14 but not limited to the department of defense, department of 24 15 energy, department of homeland security, nuclear regulatory 24 16 commission, and centers for disease control and prevention, to 24 17 assist state and local government with domestic preparedness 24 18 for acts of terrorism. 24 19 5. The attorney general or the department of public safety 24 20 may report any possible violations indicated by analysis of 24 21 the reports required by this chapter to any appropriate law 24 22 enforcement or regulatory agency for use in the proper 24 23 discharge of its official duties. The attorney general or the 24 24 department of public safety shall provide copies of the 24 25 reports required by this chapter to any appropriate 24 26 prosecutorial or law enforcement agency upon being provided 24 27 with a written request for records relating to a specific 24 28 individual or entity and stating that the agency has an 24 29 articulable suspicion that such individual or entity has 24 30 committed a felony offense or a violation of this chapter to 24 31 which the reports are relevant. A person who releases 24 32 information received pursuant to this subsection except in the 24 33 proper discharge of the person's official duties is guilty of 24 34 a serious misdemeanor. 24 35 6. Any report, record, information, analysis, or request 25 1 obtained by the attorney general or department of public 25 2 safety pursuant to this chapter is not a public record as 25 3 defined in chapter 22 and is not subject to disclosure. 25 4 ARTICLE 6 25 5 PERMISSIBLE INVESTMENTS 25 6 Sec. 23. NEW SECTION. 533C.601 MAINTENANCE OF 25 7 PERMISSIBLE INVESTMENTS. 25 8 1. A licensee shall maintain at all times permissible 25 9 investments that have a market value computed in accordance 25 10 with generally accepted accounting principles of not less than 25 11 the aggregate amount of all of its outstanding payment 25 12 instruments and stored-value obligations issued or sold and 25 13 money transmitted by the licensee in the United States. 25 14 2. The superintendent, with respect to any licensees, may 25 15 limit the extent to which a type of investment within a class 25 16 of permissible investments may be considered a permissible 25 17 investment, except for money and certificates of deposit 25 18 issued by a bank. The superintendent by rule may prescribe or 25 19 by order allow other types of investments that the 25 20 superintendent determines to have a safety substantially 25 21 equivalent to other permissible investments. 25 22 3. Permissible investments, even if commingled with other 25 23 assets of the licensee, are held in trust for the benefit of 25 24 the purchasers and holders of the licensee's outstanding 25 25 payment instruments and stored-value obligations in the event 25 26 of bankruptcy or receivership of the licensee. 25 27 Sec. 24. NEW SECTION. 533C.602 TYPES OF PERMISSIBLE 25 28 INVESTMENTS. 25 29 1. Except to the extent otherwise limited by the 25 30 superintendent pursuant to section 533C.601, the following 25 31 investments are permissible under section 533C.601: 25 32 a. Cash, a certificate of deposit, or senior debt 25 33 obligation of an insured depositary institution, as defined in 25 34 section 3 of the Federal Deposit Insurance Act, 12 U.S.C. } 25 35 1813. 26 1 b. Banker's acceptance or bill of exchange that is 26 2 eligible for purchase upon endorsement by a member bank of the 26 3 federal reserve system and is eligible for purchase by a 26 4 federal reserve bank. 26 5 c. An investment bearing a rating of one of the three 26 6 highest grades as defined by a nationally recognized 26 7 organization that rates securities. 26 8 d. An investment security that is an obligation of the 26 9 United States or a department, agency, or instrumentality 26 10 thereof; an investment in an obligation that is guaranteed 26 11 fully as to principal and interest by the United States; or an 26 12 investment in an obligation of a state or a governmental 26 13 subdivision, agency, or instrumentality thereof. 26 14 e. Receivables that are payable to a licensee from its 26 15 authorized delegates, in the ordinary course of business, 26 16 pursuant to contracts which are not past due or doubtful of 26 17 collection if the aggregate amount of receivables under this 26 18 paragraph does not exceed twenty percent of the total 26 19 permissible investments of a licensee and the licensee does 26 20 not hold at one time receivables under this paragraph in any 26 21 one person aggregating more than ten percent of the licensee's 26 22 total permissible investments. 26 23 f. A share or a certificate issued by an open-end 26 24 management investment company that is registered with the 26 25 United States securities and exchange commission under the 26 26 federal Investment Companies Act of 1940, 15 U.S.C. } 80a-1- 26 27 80a-64, and whose portfolio is restricted by the management 26 28 investment company's investment policy to investments 26 29 specified in paragraphs "a" through "d". 26 30 2. The following investments are permissible under section 26 31 533C.601, but only to the extent specified: 26 32 a. An interest-bearing bill, note, bond, or debenture of a 26 33 person whose equity shares are traded on a national securities 26 34 exchange or on a national over-the-counter market, if the 26 35 aggregate of investments under this paragraph does not exceed 27 1 twenty percent of the total permissible investments of a 27 2 licensee and the licensee does not at one time hold 27 3 investments under this paragraph in any one person aggregating 27 4 more than ten percent of the licensee's total permissible 27 5 investments. 27 6 b. A share of a person traded on a national securities 27 7 exchange or a national over-the-counter market or a share or a 27 8 certificate issued by an open-end management investment 27 9 company that is registered with the United States securities 27 10 and exchange commission under the federal Investment Companies 27 11 Act of 1940, 15 U.S.C. } 80a-1-80a-64, and whose portfolio is 27 12 restricted by the management investment company's investment 27 13 policy to shares of a person traded on a national securities 27 14 exchange or a national over-the-counter market, if the 27 15 aggregate of investments under this paragraph does not exceed 27 16 twenty percent of the total permissible investments of a 27 17 licensee and the licensee does not at one time hold 27 18 investments in any one person aggregating more than ten 27 19 percent of the licensee's total permissible investments. 27 20 c. A demand-borrowing agreement made with a corporation or 27 21 a subsidiary of a corporation whose securities are traded on a 27 22 national securities exchange if the aggregate of the amount of 27 23 principal and interest outstanding under demand-borrowing 27 24 agreements under this paragraph does not exceed twenty percent 27 25 of the total permissible investments of a licensee and the 27 26 licensee does not at one time hold principal and interest 27 27 outstanding under demand-borrowing agreements under this 27 28 paragraph with any one person aggregating more than ten 27 29 percent of the licensee's total permissible investments. 27 30 d. Any other investment the superintendent designates, to 27 31 the extent specified by the superintendent. 27 32 3. The aggregate of investments under subsection 2 may not 27 33 exceed fifty percent of the total permissible investments of a 27 34 licensee calculated in accordance with section 533C.601. 27 35 ARTICLE 7 28 1 ENFORCEMENT 28 2 Sec. 25. NEW SECTION. 533C.701 SUSPENSION AND REVOCATION 28 3 – RECEIVERSHIP. 28 4 1. The superintendent may suspend or revoke a license, 28 5 place a licensee in receivership, or order a licensee to 28 6 revoke the designation of an authorized delegate if: 28 7 a. The licensee violates this chapter or a rule adopted or 28 8 an order issued under this chapter. 28 9 b. The licensee does not cooperate with an examination or 28 10 investigation by the superintendent. 28 11 c. The licensee engages in fraud, intentional 28 12 misrepresentation, or gross negligence. 28 13 d. An authorized delegate is convicted of a violation of a 28 14 state or federal anti-money laundering statute, or violates a 28 15 rule adopted or an order issued under this chapter, as a 28 16 result of the licensee's willful misconduct or willful 28 17 blindness. 28 18 e. The competence, experience, character, or general 28 19 fitness of the licensee, authorized delegate, person in 28 20 control of a licensee, or responsible individual of the 28 21 licensee or authorized delegate indicates that it is not in 28 22 the public interest to permit the person to provide money 28 23 services. 28 24 f. The licensee engages in an unsafe or unsound practice. 28 25 g. The licensee is insolvent, suspends payment of its 28 26 obligations, or makes a general assignment for the benefit of 28 27 its creditors. 28 28 h. The licensee does not remove an authorized delegate 28 29 after the superintendent issues and serves upon the licensee a 28 30 final order finding that the authorized delegate has violated 28 31 this chapter. 28 32 2. In determining whether a licensee is engaging in an 28 33 unsafe or unsound practice, the superintendent may consider 28 34 the size and condition of the licensee's money transmission, 28 35 the magnitude of the loss, the gravity of the violation of 29 1 this chapter, and the previous conduct of the person involved. 29 2 Sec. 26. NEW SECTION. 533C.702 SUSPENSION AND REVOCATION 29 3 OF AUTHORIZED DELEGATES. 29 4 1. The superintendent may issue an order suspending or 29 5 revoking the designation of an authorized delegate if the 29 6 superintendent finds that: 29 7 a. The authorized delegate violated this chapter or a rule 29 8 adopted or an order issued under this chapter. 29 9 b. The authorized delegate did not cooperate with an 29 10 examination or investigation by the superintendent. 29 11 c. The authorized delegate engaged in fraud, intentional 29 12 misrepresentation, or gross negligence. 29 13 d. The authorized delegate is convicted of a violation of 29 14 a state or federal anti-money laundering statute. 29 15 e. The competence, experience, character, or general 29 16 fitness of the authorized delegate or a person in control of 29 17 the authorized delegate indicates that it is not in the public 29 18 interest to permit the authorized delegate to provide money 29 19 services. 29 20 f. The authorized delegate is engaging in an unsafe or 29 21 unsound practice. 29 22 2. In determining whether an authorized delegate is 29 23 engaging in an unsafe or unsound practice, the superintendent 29 24 may consider the size and condition of the authorized 29 25 delegate's provision of money services, the magnitude of the 29 26 loss, the gravity of the violation of this chapter or a rule 29 27 adopted or order issued under this chapter, and the previous 29 28 conduct of the authorized delegate. 29 29 3. An authorized delegate may apply for relief from a 29 30 suspension or revocation of designation as an authorized 29 31 delegate according to procedures prescribed by the 29 32 superintendent. 29 33 Sec. 27. NEW SECTION. 533C.703 ORDERS TO CEASE AND 29 34 DESIST. 29 35 1. If the superintendent determines that a violation of 30 1 this chapter or of a rule adopted or an order issued under 30 2 this chapter by a licensee or authorized delegate is likely to 30 3 cause immediate and irreparable harm to the licensee, its 30 4 customers, or the public as a result of the violation, or 30 5 cause insolvency or significant dissipation of assets of the 30 6 licensee, the superintendent may issue an order requiring the 30 7 licensee or authorized delegate to cease and desist from the 30 8 violation. The order becomes effective upon service of it 30 9 upon the licensee or authorized delegate. 30 10 2. The superintendent may issue an order against a 30 11 licensee to cease and desist from providing money services 30 12 through an authorized delegate that is the subject of a 30 13 separate order by the superintendent. 30 14 3. An order to cease and desist remains effective and 30 15 enforceable pending the completion of an administrative 30 16 proceeding pursuant to section 533C.701 or 533C.702. 30 17 4. A licensee or an authorized delegate who is served with 30 18 an order to cease and desist may petition the appropriate 30 19 court, for a judicial order setting aside, limiting, or 30 20 suspending the enforcement, operation, or effectiveness of the 30 21 order pending the completion of an administrative proceeding 30 22 pursuant to section 533C.701 or 533C.702. 30 23 5. An order to cease and desist expires unless the 30 24 superintendent commences an administrative proceeding pursuant 30 25 to section 533C.701 or 533C.702 within ten days after it is 30 26 issued. 30 27 Sec. 28. NEW SECTION. 533C.704 CONSENT ORDERS. 30 28 The superintendent may enter into a consent order at any 30 29 time with a person to resolve a matter arising under this 30 30 chapter or a rule adopted or order issued under this chapter. 30 31 A consent order must be signed by the person to whom it is 30 32 issued or by the person's authorized representative, and must 30 33 indicate agreement with the terms contained in the order. A 30 34 consent order may provide that it does not constitute an 30 35 admission by a person that this chapter or a rule adopted or 31 1 an order issued under this chapter has been violated. 31 2 Sec. 29. NEW SECTION. 533C.705 CIVIL PENALTIES. 31 3 The superintendent may assess a civil penalty against a 31 4 person who violates this chapter or a rule adopted or an order 31 5 issued under this chapter in an amount not to exceed one 31 6 thousand dollars per day for each day the violation is 31 7 outstanding, plus this state's costs and expenses for the 31 8 investigation and prosecution of the matter, including 31 9 reasonable attorney fees. 31 10 Sec. 30. NEW SECTION. 533C.706 CRIMINAL PENALTIES. 31 11 1. A person who intentionally makes a false statement, 31 12 misrepresentation, or false certification in a record filed or 31 13 required to be maintained under this chapter or who 31 14 intentionally makes a false entry or omits a material entry in 31 15 such a record is guilty of a class "D" felony. 31 16 2. A person who knowingly engages in an activity for which 31 17 a license is required under this chapter without being 31 18 licensed under this chapter is guilty of an aggravated 31 19 misdemeanor. 31 20 3. It shall be unlawful for any person to do any of the 31 21 following: 31 22 a. With intent to disguise the fact that money or a 31 23 payment instrument is the proceeds of criminal conduct, or 31 24 with intent to promote, manage, establish, carry on, or 31 25 facilitate the promotion, management, establishment, or 31 26 carrying on of any criminal conduct, to knowingly furnish or 31 27 provide to a licensee, authorized delegate, financial 31 28 institution, person engaged in a trade or business, or any 31 29 officer, employee, agent, or authorized delegate of any of 31 30 them, or to the attorney general or department of public 31 31 safety, any false, inaccurate, or incomplete information; or 31 32 to knowingly conceal a material fact in connection with a 31 33 transaction for which a report is required to be filed 31 34 pursuant to this chapter. 31 35 b. With the intent to disguise the fact that money or a 32 1 payment instrument is the proceeds of criminal conduct, or 32 2 with intent to promote, manage, establish, carry on, or 32 3 facilitate the promotion, management, establishment, or 32 4 carrying on of any criminal conduct, or with intent to evade 32 5 the making or filing of a report required under this chapter, 32 6 or with intent to cause the making or filing of a report that 32 7 contains a material omission or misstatement of fact, to 32 8 conduct or structure a transaction or series of transactions 32 9 by or through one or more licensees, authorized delegates, 32 10 financial institutions, or persons engaged in a trade or 32 11 business. 32 12 4. A person who violates subsection 3 is guilty of a class 32 13 "C" felony and is also subject to a civil penalty of three 32 14 times the value of the property involved in the transaction, 32 15 or, if no transaction is involved, five thousand dollars. 32 16 5. Notwithstanding any other provision of law, each 32 17 violation of this section constitutes a separate, punishable 32 18 offense. 32 19 Sec. 31. NEW SECTION. 533C.707 UNLICENSED PERSONS. 32 20 1. If the superintendent has reason to believe that a 32 21 person has violated or is violating section 533C.201, 32 22 533C.301, 533C.401, or 533C.402, the superintendent may issue 32 23 an order to show cause why an order to cease and desist should 32 24 not issue requiring that the person cease and desist from the 32 25 violation of section 533C.201, 533C.301, 533C.401, or 32 26 533C.402. 32 27 2. In an emergency, the superintendent may petition the 32 28 district court for the issuance of a temporary restraining 32 29 order ex parte pursuant to the rules of civil procedure. 32 30 3. An order to cease and desist becomes effective upon 32 31 service of it upon the person. 32 32 4. An order to cease and desist remains effective and 32 33 enforceable pending the completion of an administrative 32 34 proceeding pursuant to sections 533C.701 and 533C.702. 32 35 5. A person who is served with an order to cease and 33 1 desist under this section may petition the district court for 33 2 a judicial order setting aside, limiting, or suspending the 33 3 enforcement, operation, or effectiveness of the order pending 33 4 the completion of an administrative proceeding pursuant to 33 5 sections 533C.701 and 533C.702. 33 6 6. An order to cease and desist expires unless the 33 7 superintendent commences an administrative proceeding within 33 8 ten days after it is issued. 33 9 Sec. 32. NEW SECTION. 533C.708 INVESTIGATIONS. 33 10 1. The attorney general or county attorney may conduct 33 11 investigations within or outside this state to determine if 33 12 any licensee, authorized delegate, or person engaged in a 33 13 trade or business has failed to file a report required by this 33 14 chapter or has engaged or is engaging in any act, practice, or 33 15 transaction that constitutes a violation of this chapter. 33 16 2. Upon presentation of a subpoena from a prosecuting 33 17 attorney, all licensees, authorized delegates, and financial 33 18 institutions shall make their books and records available to 33 19 the attorney general or county attorney or peace officer 33 20 during normal business hours for inspection and examination in 33 21 connection with an investigation pursuant to this section. 33 22 ARTICLE 8 33 23 ADMINISTRATIVE PROCEDURES 33 24 Sec. 33. NEW SECTION. 533C.801 ADMINISTRATIVE 33 25 PROCEEDINGS. 33 26 All administrative proceedings under this chapter must be 33 27 conducted in accordance with chapter 17A. 33 28 Sec. 34. NEW SECTION. 533C.802 HEARINGS. 33 29 Except as otherwise provided in sections 533C.703 and 33 30 533C.707, the superintendent shall not suspend or revoke a 33 31 license, place a licensee in receivership, issue an order to 33 32 cease and desist, suspend or revoke the designation of an 33 33 authorized delegate, or assess a civil penalty without notice 33 34 and an opportunity to be heard. The superintendent shall also 33 35 hold a hearing when requested to do so by an applicant whose 34 1 application for a license is denied. 34 2 Sec. 35. NEW SECTION. 533C.803 RULES. 34 3 The superintendent may adopt pursuant to chapter 17A such 34 4 reasonable and relevant rules, not inconsistent with this 34 5 chapter, as may be necessary for the enforcement of the 34 6 provisions of this chapter. 34 7 ARTICLE 9 34 8 MISCELLANEOUS PROVISIONS 34 9 Sec. 36. NEW SECTION. 533C.901 UNIFORMITY OF APPLICATION 34 10 AND CONSTRUCTION. 34 11 1. The provisions of this chapter shall be liberally 34 12 construed to effectuate its remedial purposes. Civil remedies 34 13 under this chapter shall be supplemental and not mutually 34 14 exclusive. The civil remedies do not preclude and are not 34 15 precluded by other provisions of law. 34 16 2. The provisions of this chapter shall be applied and 34 17 construed to effectuate its general purpose to make uniform 34 18 the law with respect to the subject of this chapter among 34 19 states enacting the law and to make the reporting requirements 34 20 regarding financial transactions under Iowa law uniform with 34 21 the reporting requirements regarding financial transactions 34 22 under federal law. 34 23 3. The attorney general may enter into reciprocal 34 24 agreements with the attorney general or chief prosecuting 34 25 attorney of any state to effectuate the purposes of this 34 26 chapter. 34 27 Sec. 37. NEW SECTION. 533C.902 MONEY SERVICES LICENSING 34 28 FUND. 34 29 1. A financial services licensing fund is created as a 34 30 separate fund in the state treasury under the authority of the 34 31 banking division of the department of commerce. Moneys 34 32 deposited in the fund shall be used to pay for staffing 34 33 necessary to perform examinations, audits, and other duties 34 34 required of the superintendent and the banking division under 34 35 this chapter. 35 1 2. The fund shall receive moneys including, but not 35 2 limited to, any fees, costs, expenses, or penalties collected 35 3 pursuant to this chapter. 35 4 3. Notwithstanding section 8.33, moneys appropriated to 35 5 the fund and other moneys credited to the fund shall not 35 6 revert at the close of the fiscal year but shall remain in the 35 7 financial services licensing fund and shall remain available 35 8 for expenditure for the purposes designated. 35 9 Sec. 38. NEW SECTION. 533C.903 SEVERABILITY CLAUSE. 35 10 The provisions of this chapter are severable pursuant to 35 11 section 4.12. 35 12 Sec. 39. NEW SECTION. 533C.904 SAVINGS AND TRANSITIONAL 35 13 PROVISIONS. 35 14 1. A license issued under chapter 533B, Code 2003, that is 35 15 in effect immediately before October 1, 2003, remains in force 35 16 as a license under chapter 533B, Code 2003, until the 35 17 license's expiration date. Thereafter, the licensee is deemed 35 18 to have applied for and received a license under this chapter 35 19 and must comply with the renewal requirements set forth in 35 20 this chapter. Licenses issued under chapter 533B, Code 2003, 35 21 will be initially renewed for a period to the next September 35 22 30 with the license renewal fee prorated based on a two 35 23 thousand dollar annual fee. 35 24 2. This chapter applies to the provision of money services 35 25 on or after the effective date of this Act. This chapter does 35 26 not apply to money transmission provided by a licensee who was 35 27 licensed to provide money transmission under chapter 533B, 35 28 Code 2003, and whose license remains in force under this 35 29 section. 35 30 3. A person is not deemed to be in violation of this 35 31 chapter for operating without a license if the person files an 35 32 application within three calendar months after the effective 35 33 date of this Act until the application is denied. 35 34 Sec. 40. Section 524.212, Code 2003, is amended to read as 35 35 follows: 36 1 524.212 PROHIBITION AGAINST DISCLOSURE OF REGULATORY 36 2 INFORMATION. 36 3 The superintendent, deputy superintendent, assistant to the 36 4 superintendent, examiner, or other employee of the banking 36 5 division shall not disclose, in any manner, to any person 36 6 other than the person examined and those regulatory agencies 36 7 referred to in section 524.217, subsection 2, any information 36 8 relating specifically to the supervision and regulation of any 36 9 state bank, persons subject to the provisions of chapter 533A, 36 10533B533C, 536, or 536A, any affiliate of any state bank, or 36 11 an affiliate of a person subject to the provisions of chapter 36 12 533A,533B533C, 536, or 536A, except when ordered to do so by 36 13 a court of competent jurisdiction and then only in those 36 14 instances referred to in section 524.215, subsections 1, 2, 3, 36 15 and 5. 36 16 Sec. 41. Chapter 533B, Code 2003, is repealed. 36 17 Sec. 42. EFFECTIVE DATE. This Act takes effect October 1, 36 18 2003. 36 19 36 20 36 21 36 22 MARY E. KRAMER 36 23 President of the Senate 36 24 36 25 36 26 36 27 CHRISTOPHER C. RANTS 36 28 Speaker of the House 36 29 36 30 I hereby certify that this bill originated in the Senate and 36 31 is known as Senate File 372, Eightieth General Assembly. 36 32 36 33 36 34 36 35 MICHAEL E. MARSHALL 37 1 Secretary of the Senate 37 2 Approved , 2003 37 3 37 4 37 5 37 6 THOMAS J. VILSACK 37 7 Governor
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