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Senate Study Bill 3110 - IntroducedA Bill ForAn Act 1relating to money transmission services, providing
2penalties, and including effective date and retroactive
3applicability provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 533C.102, subsection 2, Code 2024, is
2amended to read as follows:
32. “Authorized delegate” means a person a licensee
4designates to provide money services transmission on behalf of
5the licensee.
6 Sec. 2. Section 533C.103, Code 2024, is amended by adding
7the following new subsection:
8 NEW SUBSECTION. 21. A person appointed as an agent of a
9payor for purposes of providing payroll processing services for
10which the agent would otherwise need to be licensed, provided
11all of the following apply:
12a. There is a written agreement between the payor and the
13agent that directs the agent to provide payroll processing
14services on the payor’s behalf.
15b. The payor holds the agent out to employees and other
16payees as providing payroll processing services on the payor’s
17behalf.
18c. The payor’s obligation to a payee, including an employee
19or any other party entitled to receive funds via the payroll
20processing services provided by the agent, shall not be
21extinguished if the agent fails to remit the funds to the
22payee.
23 Sec. 3. NEW SECTION. 533C.901 Suspension and revocation —
24receivership.
25The superintendent may suspend or revoke a licensee’s
26license, place a licensee in receivership, or order a licensee
27to revoke the designation of an authorized delegate if any of
28the following apply:
291. The licensee violates this chapter, a rule adopted under
30this chapter, or an order issued under this chapter.
312. The licensee does not cooperate with an examination or
32investigation conducted by the superintendent.
333. The licensee engages in fraud, intentional
34misrepresentation, or gross negligence.
354. As a result of the licensee’s willful misconduct or
-1-1willful blindness, an authorized delegate is convicted of a
2violation of a state or federal anti-money laundering statute,
3or violates this chapter, a rule adopted under this chapter, or
4an order issued under this chapter.
55. The competence, experience, character, or general
6fitness of the licensee, authorized delegate, person in control
7of a licensee, or key individual of the licensee or authorized
8delegate indicates that it is not in the public interest to
9permit the person to provide money transmission.
106. The licensee engages in an unsafe or unsound practice.
11In determining whether a licensee is engaging in an unsafe or
12unsound practice, the superintendent may consider the size and
13condition of the licensee’s money transmission, the magnitude
14of any losses, the gravity of any violations of this chapter,
15and the previous conduct of any persons involved.
167. The licensee is insolvent, suspends payment of the
17licensee’s obligations, or makes a general assignment for the
18benefit of the licensee’s creditors.
198. The licensee does not remove an authorized delegate after
20the superintendent issues and serves upon the licensee a final
21order finding that the authorized delegate has violated this
22chapter, a rule adopted under this chapter, or an order issued
23under this chapter.
24 Sec. 4. NEW SECTION. 533C.902 Suspension and revocation of
25authorized delegates.
261. The superintendent may issue an order suspending or
27revoking the designation of an authorized delegate if the
28superintendent finds any of the following apply:
29a. The authorized delegate violated this chapter, a rule
30adopted under this chapter, or an order issued under this
31chapter.
32b. The authorized delegate failed to cooperate with an
33examination or investigation by the superintendent.
34c. The authorized delegate engaged in fraud, intentional
35misrepresentation, or gross negligence.
-2- 1d. The authorized delegate was convicted of a violation of a
2state or federal anti-money laundering statute.
3e. The competence, experience, character, or general
4fitness of the authorized delegate or a person in control of
5the authorized delegate indicates that it is not in the public
6interest to permit the authorized delegate to provide money
7transmission.
8f. The authorized delegate is engaging in an unsafe or
9unsound practice. In determining whether an authorized
10delegate is engaging in an unsafe or unsound practice, the
11superintendent may consider the size and condition of the
12authorized delegate’s provision of money transmission; the
13magnitude of any losses; the gravity of any violations of this
14chapter, a rule adopted under this chapter, or an order issued
15under this chapter; and the previous conduct of the authorized
16delegate.
172. An authorized delegate may apply for relief from a
18suspension or revocation of designation as an authorized
19delegate according to procedures prescribed by the
20superintendent.
21 Sec. 5. NEW SECTION. 533C.903 Orders to cease and desist.
221. a. If the superintendent determines that a violation
23of this chapter, a rule adopted under this chapter, or an
24order issued under this chapter by a licensee or authorized
25delegate is likely to cause immediate and irreparable harm
26to the licensee, the licensee’s customers, or the public, or
27cause insolvency or significant dissipation of assets of the
28licensee, the superintendent may issue an order requiring the
29licensee or authorized delegate to cease and desist from the
30violation.
31b. The superintendent may issue an order for a licensee to
32cease and desist from providing money transmission through an
33authorized delegate that is the subject of a separate order by
34the superintendent.
352. a. If the superintendent has reason to believe that a
-3-1person has violated or is violating section 533C.301, 533C.501,
2or 533C.502, the superintendent may issue an order requiring
3the person to show cause why an order to cease and desist the
4violation should not be issued.
5b. In an emergency under this subsection, the superintendent
6may petition the district court for the issuance of a temporary
7restraining order ex parte pursuant to the rules of civil
8procedure.
93. An order to cease and desist becomes effective upon
10service of the order upon the person, licensee, or authorized
11delegate.
124. An order to cease and desist remains effective and
13enforceable pending the completion of an administrative
14proceeding pursuant to section 533C.908.
155. A person, licensee, or an authorized delegate who is
16served with an order to cease and desist under this section may
17petition the appropriate court for a judicial order setting
18aside, limiting, or suspending the enforcement, operation,
19or effectiveness of the order pending the completion of an
20administrative proceeding pursuant to section 533C.908.
216. An order to cease and desist shall expire ten days after
22the order is issued unless the superintendent commences an
23administrative proceeding pursuant to section 533C.908.
24 Sec. 6. NEW SECTION. 533C.904 Consent orders.
25The superintendent may enter into a consent order at any
26time with a person to resolve a matter arising under this
27chapter, a rule adopted under this chapter, or an order issued
28under this chapter. A consent order must be signed by the
29person to whom the consent order is issued, or by the person’s
30authorized representative, and must indicate agreement with the
31terms contained in the order. A consent order may provide that
32the order does not constitute an admission by the person that
33the person violated this chapter, a rule adopted under this
34chapter, or an order issued under this chapter.
35 Sec. 7. NEW SECTION. 533C.905 Investigations.
-4- 11. The attorney general or a county attorney may conduct an
2investigation within or outside of this state to determine if
3a licensee, an authorized delegate, or a person engaged in a
4trade or business has failed to file a report required by this
5chapter, or has engaged or is engaging in any act, practice, or
6transaction that constitutes a violation of this chapter.
72. Upon presentation of a subpoena from a prosecuting
8attorney, a licensee, an authorized delegate, or a financial
9institution shall make its books and records available to the
10attorney general or county attorney during normal business
11hours for inspection and examination in connection with an
12investigation pursuant to this section.
13 Sec. 8. NEW SECTION. 533C.906 Civil penalties.
14The superintendent may assess a civil penalty against a
15person who violates this chapter, a rule adopted under this
16chapter, or an order issued under this chapter in an amount
17not to exceed one thousand dollars per day for each day the
18violation is outstanding, plus the state’s costs and expenses
19for the investigation and prosecution of the matter, including
20reasonable attorney fees.
21 Sec. 9. NEW SECTION. 533C.907 Criminal penalties.
221. A person who is not licensed under this chapter and
23who knowingly engages in an activity for which a license is
24required under this chapter commits an aggravated misdemeanor.
252. A person commits a class “C” felony, and is subject to a
26civil penalty of three times the value of the property involved
27in the transaction, or, if no transaction is involved, a civil
28penalty of five thousand dollars, if the person does any of the
29following:
30a. With the intent to disguise the fact that money or
31a payment instrument is the proceeds of criminal conduct,
32or with the intent to promote, manage, establish, carry on,
33or facilitate the promotion, management, establishment, or
34carrying on of any criminal conduct, the person knowingly
35furnishes or provides any false, inaccurate, or incomplete
-5-1information to a licensee, authorized delegate, financial
2institution, person engaged in a trade or business, or any
3officer, employee, or their agent, or to the attorney general
4or department of public safety, or knowingly conceals a
5material fact in connection with a transaction for which a
6report is required to be filed pursuant to this chapter.
7b. With the intent to disguise the fact that money or
8a payment instrument is the proceeds of criminal conduct,
9or with the intent to promote, manage, establish, carry on,
10or facilitate the promotion, management, establishment, or
11carrying on of any criminal conduct, or with the intent to
12evade the making or filing of a report required under this
13chapter, or with the intent to cause the making or filing of
14a report that contains a material omission or misstatement of
15fact, the person conducts or structures a transaction or series
16of transactions by or through one or more licensees, authorized
17delegates, financial institutions, or persons engaged in a
18trade or business.
193. A person who intentionally makes a false statement,
20misrepresentation, or false certification in a record filed
21or required to be maintained under this chapter, or who
22intentionally makes a false entry or omits a material entry in
23such a record commits a class “D” felony.
244. Notwithstanding any provision of law to the contrary,
25each violation of this section constitutes a separate,
26punishable offense.
27 Sec. 10. NEW SECTION. 533C.908 Administrative proceedings.
281. Except as otherwise provided in section 533C.903, the
29superintendent shall not suspend or revoke a license, place a
30licensee in receivership, issue an order to cease and desist,
31suspend or revoke the designation of an authorized delegate, or
32assess a civil penalty without notice and an opportunity to be
33heard.
342. The superintendent shall hold a hearing when requested by
35an applicant whose application for a license is denied.
-6- 13. All administrative proceedings under this chapter shall
2be conducted in accordance with chapter 17A.
3 Sec. 11. NEW SECTION. 533C.1001 Uniformity of application
4and construction.
51. This chapter shall be liberally construed to effectuate
6its remedial purposes. Civil remedies under this chapter shall
7be supplemental and not mutually exclusive. The civil remedies
8under this chapter do not preclude and are not precluded by any
9other provision of law.
102. This chapter shall be applied and construed to effectuate
11its general purpose to make uniform the law with respect to the
12subject of this chapter among states enacting the same law,
13and to make the reporting requirements regarding financial
14transactions under Iowa law uniform with the reporting
15requirements regarding financial transactions under federal
16law.
173. The attorney general may enter into reciprocal
18agreements with the attorney general or chief prosecuting
19attorney of any state to effectuate the purposes of this
20chapter.
21 Sec. 12. NEW SECTION. 533C.1002 Financial services
22licensing fund.
231. A financial services licensing fund is created as a
24separate fund in the state treasury under the authority of the
25banking division of the department of insurance and financial
26services. Moneys deposited in the fund shall be used to pay
27for staffing necessary to perform examinations, audits, and
28other duties required of the superintendent and the banking
29division under this chapter.
302. The fund shall receive moneys including but not limited
31to any fees, costs, expenses, or penalties collected pursuant
32to this chapter.
333. Notwithstanding section 8.33, moneys appropriated to the
34fund in this section that remain unencumbered or unobligated,
35and other moneys credited to the fund, shall not revert at the
-7-1close of the fiscal year but shall remain in the financial
2services licensing fund and shall remain available for
3expenditure for the purposes designated.
4 Sec. 13. NEW SECTION. 533C.1003 Applicability.
5This chapter applies to the provision of money transmission
6on or after October 1, 2003.
7 Sec. 14. EFFECTIVE DATE. This Act, being deemed of
8immediate importance, takes effect upon enactment.
9 Sec. 15. RETROACTIVE APPLICABILITY. The following apply
10retroactively to July 1, 2023:
11The sections of this Act enacting sections 533C.901,
12533C.902, 533C.903, 533C.904, 533C.905, 533C.906, 533C.907,
13533C.908, 533C.1001, 533C.1002, and 533C.1003, and the section
14of this Act amending section 533C.102.
15 Sec. 16. CODE EDITOR DIRECTIVE. The Code editor shall
16designate sections 533C.901 through 533C.908, as enacted in
17this Act, as article 9 entitled “Enforcement”, and sections
18533C.1001 through 533C.1003, as enacted in this Act, as article
1910 entitled “Miscellaneous Provisions”.
20EXPLANATION
21The inclusion of this explanation does not constitute agreement with
22the explanation’s substance by the members of the general assembly.
23This bill relates to money transmission services.
24The bill adds an exemption from licensing for a person
25appointed as an agent of a payor for purposes of providing
26payroll processing services for which a license would otherwise
27be required, if there is a written agreement between the payor
28and the agent directing the agent to provide payroll processing
29services, the payor holds the agent out as providing payroll
30processing services on the payor’s behalf, and the payor’s
31obligation to a payee is not extinguished if the agent fails to
32remit the funds to the payee.
33The bill authorizes the superintendent of banking
34(superintendent) to suspend or revoke a license, place a
35licensee in receivership, or order a licensee to revoke
-8-1the designation of an authorized delegate (delegate) in the
2circumstances described in the bill.
3The bill authorizes the superintendent to issue an order
4suspending or revoking the designation of a delegate in
5the circumstances detailed in the bill. A delegate whose
6designation has been suspended or revoked may apply for relief
7from the suspension or revocation according to the procedures
8prescribed by the superintendent.
9The bill establishes the procedure for issuance of orders
10to cease and desist by the superintendent. The superintendent
11may issue an order requiring a licensee or delegate to cease
12and desist from a violation if the superintendent determines
13that the violation is likely to cause immediate and irreparable
14harm to the licensee, the licensee’s customers, or the public,
15or cause insolvency or significant dissipation of assets of
16the licensee. Where a delegate is the subject of a separate
17order by the superintendent, the superintendent may issue an
18order for the licensee to cease and desist from providing
19money transmission through such delegate. The superintendent
20may require an unlicensed person to show cause why an order
21to cease and desist a violation of Code section 533C.301,
22533C.501, or 533C.502 should not be issued. In an emergency,
23the superintendent may petition the district court for a
24temporary restraining order ex parte. An order to cease
25and desist is effective upon service and remains effective
26and enforceable pending the completion of an administrative
27proceeding. A person, licensee, or delegate served with
28an order to cease and desist may petition the court for an
29order setting aside, limiting, or suspending the enforcement,
30operation, or effectiveness of the order pending the completion
31of an administrative proceeding. An order to cease and
32desist expires 10 days after issuance unless an administrative
33proceeding is commenced by the superintendent.
34The superintendent may enter into a consent order with a
35person to resolve a matter arising under Code chapter 533C.
-9-1The consent order must be signed by the person or the person’s
2authorized representative and indicate agreement with the terms
3contained in the order.
4The bill authorizes the attorney general or a county
5attorney to conduct investigations to determine if any
6licensee, delegate, or person engaged in a trade or business
7has failed to file a required report, or has engaged in any
8act, practice, or transaction that constitutes a violation of
9Code chapter 533C. Upon presentation of a subpoena from a
10person specified in the bill, all licensees, delegates, and
11financial institutions shall make their books and records
12available during normal business hours for inspection and
13examination in connection with an investigation.
14The bill authorizes the superintendent to assess civil
15penalties against a person for violation of Code chapter 533C
16in an amount not to exceed $1,000 per day for each day of the
17violation, plus costs and expenses for the investigation and
18prosecution, and reasonable attorney fees.
19Under the bill, a person commits an aggravated misdemeanor
20if the person is not licensed and knowingly engages in an
21activity for which a license is required, punishable by
22confinement for no more than two years and a fine of at least
23$855 but not more than $8,540. A person commits a class “C”
24felony, and is subject to a civil penalty of three times the
25value of the property involved in the transaction, or $5,000,
26where, with the requisite intent as laid out in the bill,
27the person knowingly furnishes or provides to a given party
28any false, inaccurate, or incomplete information; knowingly
29conceals a material fact in connection with a transaction
30for which a report is required to be filed; or, with the
31requisite intent laid out in the bill, conducts or structures
32a transaction by or through a licensee, delegate, financial
33institution, or persons engaged in a trade or business. A
34class “C” felony is punishable by confinement for no more
35than 10 years and a fine of at least $1,370 but not more than
-10-1$13,660. A person commits a class “D” felony if the person
2intentionally makes a false statement, misrepresentation,
3or false certification in a record filed or required to be
4maintained under Code chapter 533C or intentionally makes a
5false entry or omits a material entry in such a record. A class
6“D” felony is punishable by confinement for no more than five
7years and a fine of at least $1,025 but not more than $10,245.
8Each violation constitutes a separate, punishable offense.
9The bill prohibits the superintendent from suspending or
10revoking a license, placing a licensee in receivership, issuing
11an order to cease and desist, suspending or revoking the
12designation of a delegate, or assessing a civil penalty without
13notice and an opportunity to be heard. The superintendent
14is required to hold a hearing when requested to do so by an
15applicant whose application for a license is denied.
16The bill shall be construed to effectuate both its remedial
17and general purposes. Civil remedies are supplemental and
18not mutually exclusive, and are not precluded by any other
19provision of law. The attorney general may enter into
20reciprocal agreements with the attorney general or chief
21prosecuting attorney of any state to effectuate the purposes
22of the bill.
23The bill creates a separate financial services licensing
24fund (fund) in the state treasury under the authority of
25the banking division of the department of commerce. Moneys
26deposited in the fund shall be used to pay for staffing
27necessary to perform duties required of the superintendent and
28the banking division. Moneys appropriated or credited to the
29fund remain in the financial services licensing fund and remain
30available for expenditure for the designated purposes.
31Except for the section of the bill amending Code section
32533C.103, the bill applies retroactively to July 1, 2023.
33The bill takes effect upon enactment.
-11-nls/ko
2penalties, and including effective date and retroactive
3applicability provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 533C.102, subsection 2, Code 2024, is
2amended to read as follows:
32. “Authorized delegate” means a person a licensee
4designates to provide money services transmission on behalf of
5the licensee.
6 Sec. 2. Section 533C.103, Code 2024, is amended by adding
7the following new subsection:
8 NEW SUBSECTION. 21. A person appointed as an agent of a
9payor for purposes of providing payroll processing services for
10which the agent would otherwise need to be licensed, provided
11all of the following apply:
12a. There is a written agreement between the payor and the
13agent that directs the agent to provide payroll processing
14services on the payor’s behalf.
15b. The payor holds the agent out to employees and other
16payees as providing payroll processing services on the payor’s
17behalf.
18c. The payor’s obligation to a payee, including an employee
19or any other party entitled to receive funds via the payroll
20processing services provided by the agent, shall not be
21extinguished if the agent fails to remit the funds to the
22payee.
23 Sec. 3. NEW SECTION. 533C.901 Suspension and revocation —
24receivership.
25The superintendent may suspend or revoke a licensee’s
26license, place a licensee in receivership, or order a licensee
27to revoke the designation of an authorized delegate if any of
28the following apply:
291. The licensee violates this chapter, a rule adopted under
30this chapter, or an order issued under this chapter.
312. The licensee does not cooperate with an examination or
32investigation conducted by the superintendent.
333. The licensee engages in fraud, intentional
34misrepresentation, or gross negligence.
354. As a result of the licensee’s willful misconduct or
-1-1willful blindness, an authorized delegate is convicted of a
2violation of a state or federal anti-money laundering statute,
3or violates this chapter, a rule adopted under this chapter, or
4an order issued under this chapter.
55. The competence, experience, character, or general
6fitness of the licensee, authorized delegate, person in control
7of a licensee, or key individual of the licensee or authorized
8delegate indicates that it is not in the public interest to
9permit the person to provide money transmission.
106. The licensee engages in an unsafe or unsound practice.
11In determining whether a licensee is engaging in an unsafe or
12unsound practice, the superintendent may consider the size and
13condition of the licensee’s money transmission, the magnitude
14of any losses, the gravity of any violations of this chapter,
15and the previous conduct of any persons involved.
167. The licensee is insolvent, suspends payment of the
17licensee’s obligations, or makes a general assignment for the
18benefit of the licensee’s creditors.
198. The licensee does not remove an authorized delegate after
20the superintendent issues and serves upon the licensee a final
21order finding that the authorized delegate has violated this
22chapter, a rule adopted under this chapter, or an order issued
23under this chapter.
24 Sec. 4. NEW SECTION. 533C.902 Suspension and revocation of
25authorized delegates.
261. The superintendent may issue an order suspending or
27revoking the designation of an authorized delegate if the
28superintendent finds any of the following apply:
29a. The authorized delegate violated this chapter, a rule
30adopted under this chapter, or an order issued under this
31chapter.
32b. The authorized delegate failed to cooperate with an
33examination or investigation by the superintendent.
34c. The authorized delegate engaged in fraud, intentional
35misrepresentation, or gross negligence.
-2- 1d. The authorized delegate was convicted of a violation of a
2state or federal anti-money laundering statute.
3e. The competence, experience, character, or general
4fitness of the authorized delegate or a person in control of
5the authorized delegate indicates that it is not in the public
6interest to permit the authorized delegate to provide money
7transmission.
8f. The authorized delegate is engaging in an unsafe or
9unsound practice. In determining whether an authorized
10delegate is engaging in an unsafe or unsound practice, the
11superintendent may consider the size and condition of the
12authorized delegate’s provision of money transmission; the
13magnitude of any losses; the gravity of any violations of this
14chapter, a rule adopted under this chapter, or an order issued
15under this chapter; and the previous conduct of the authorized
16delegate.
172. An authorized delegate may apply for relief from a
18suspension or revocation of designation as an authorized
19delegate according to procedures prescribed by the
20superintendent.
21 Sec. 5. NEW SECTION. 533C.903 Orders to cease and desist.
221. a. If the superintendent determines that a violation
23of this chapter, a rule adopted under this chapter, or an
24order issued under this chapter by a licensee or authorized
25delegate is likely to cause immediate and irreparable harm
26to the licensee, the licensee’s customers, or the public, or
27cause insolvency or significant dissipation of assets of the
28licensee, the superintendent may issue an order requiring the
29licensee or authorized delegate to cease and desist from the
30violation.
31b. The superintendent may issue an order for a licensee to
32cease and desist from providing money transmission through an
33authorized delegate that is the subject of a separate order by
34the superintendent.
352. a. If the superintendent has reason to believe that a
-3-1person has violated or is violating section 533C.301, 533C.501,
2or 533C.502, the superintendent may issue an order requiring
3the person to show cause why an order to cease and desist the
4violation should not be issued.
5b. In an emergency under this subsection, the superintendent
6may petition the district court for the issuance of a temporary
7restraining order ex parte pursuant to the rules of civil
8procedure.
93. An order to cease and desist becomes effective upon
10service of the order upon the person, licensee, or authorized
11delegate.
124. An order to cease and desist remains effective and
13enforceable pending the completion of an administrative
14proceeding pursuant to section 533C.908.
155. A person, licensee, or an authorized delegate who is
16served with an order to cease and desist under this section may
17petition the appropriate court for a judicial order setting
18aside, limiting, or suspending the enforcement, operation,
19or effectiveness of the order pending the completion of an
20administrative proceeding pursuant to section 533C.908.
216. An order to cease and desist shall expire ten days after
22the order is issued unless the superintendent commences an
23administrative proceeding pursuant to section 533C.908.
24 Sec. 6. NEW SECTION. 533C.904 Consent orders.
25The superintendent may enter into a consent order at any
26time with a person to resolve a matter arising under this
27chapter, a rule adopted under this chapter, or an order issued
28under this chapter. A consent order must be signed by the
29person to whom the consent order is issued, or by the person’s
30authorized representative, and must indicate agreement with the
31terms contained in the order. A consent order may provide that
32the order does not constitute an admission by the person that
33the person violated this chapter, a rule adopted under this
34chapter, or an order issued under this chapter.
35 Sec. 7. NEW SECTION. 533C.905 Investigations.
-4- 11. The attorney general or a county attorney may conduct an
2investigation within or outside of this state to determine if
3a licensee, an authorized delegate, or a person engaged in a
4trade or business has failed to file a report required by this
5chapter, or has engaged or is engaging in any act, practice, or
6transaction that constitutes a violation of this chapter.
72. Upon presentation of a subpoena from a prosecuting
8attorney, a licensee, an authorized delegate, or a financial
9institution shall make its books and records available to the
10attorney general or county attorney during normal business
11hours for inspection and examination in connection with an
12investigation pursuant to this section.
13 Sec. 8. NEW SECTION. 533C.906 Civil penalties.
14The superintendent may assess a civil penalty against a
15person who violates this chapter, a rule adopted under this
16chapter, or an order issued under this chapter in an amount
17not to exceed one thousand dollars per day for each day the
18violation is outstanding, plus the state’s costs and expenses
19for the investigation and prosecution of the matter, including
20reasonable attorney fees.
21 Sec. 9. NEW SECTION. 533C.907 Criminal penalties.
221. A person who is not licensed under this chapter and
23who knowingly engages in an activity for which a license is
24required under this chapter commits an aggravated misdemeanor.
252. A person commits a class “C” felony, and is subject to a
26civil penalty of three times the value of the property involved
27in the transaction, or, if no transaction is involved, a civil
28penalty of five thousand dollars, if the person does any of the
29following:
30a. With the intent to disguise the fact that money or
31a payment instrument is the proceeds of criminal conduct,
32or with the intent to promote, manage, establish, carry on,
33or facilitate the promotion, management, establishment, or
34carrying on of any criminal conduct, the person knowingly
35furnishes or provides any false, inaccurate, or incomplete
-5-1information to a licensee, authorized delegate, financial
2institution, person engaged in a trade or business, or any
3officer, employee, or their agent, or to the attorney general
4or department of public safety, or knowingly conceals a
5material fact in connection with a transaction for which a
6report is required to be filed pursuant to this chapter.
7b. With the intent to disguise the fact that money or
8a payment instrument is the proceeds of criminal conduct,
9or with the intent to promote, manage, establish, carry on,
10or facilitate the promotion, management, establishment, or
11carrying on of any criminal conduct, or with the intent to
12evade the making or filing of a report required under this
13chapter, or with the intent to cause the making or filing of
14a report that contains a material omission or misstatement of
15fact, the person conducts or structures a transaction or series
16of transactions by or through one or more licensees, authorized
17delegates, financial institutions, or persons engaged in a
18trade or business.
193. A person who intentionally makes a false statement,
20misrepresentation, or false certification in a record filed
21or required to be maintained under this chapter, or who
22intentionally makes a false entry or omits a material entry in
23such a record commits a class “D” felony.
244. Notwithstanding any provision of law to the contrary,
25each violation of this section constitutes a separate,
26punishable offense.
27 Sec. 10. NEW SECTION. 533C.908 Administrative proceedings.
281. Except as otherwise provided in section 533C.903, the
29superintendent shall not suspend or revoke a license, place a
30licensee in receivership, issue an order to cease and desist,
31suspend or revoke the designation of an authorized delegate, or
32assess a civil penalty without notice and an opportunity to be
33heard.
342. The superintendent shall hold a hearing when requested by
35an applicant whose application for a license is denied.
-6- 13. All administrative proceedings under this chapter shall
2be conducted in accordance with chapter 17A.
3 Sec. 11. NEW SECTION. 533C.1001 Uniformity of application
4and construction.
51. This chapter shall be liberally construed to effectuate
6its remedial purposes. Civil remedies under this chapter shall
7be supplemental and not mutually exclusive. The civil remedies
8under this chapter do not preclude and are not precluded by any
9other provision of law.
102. This chapter shall be applied and construed to effectuate
11its general purpose to make uniform the law with respect to the
12subject of this chapter among states enacting the same law,
13and to make the reporting requirements regarding financial
14transactions under Iowa law uniform with the reporting
15requirements regarding financial transactions under federal
16law.
173. The attorney general may enter into reciprocal
18agreements with the attorney general or chief prosecuting
19attorney of any state to effectuate the purposes of this
20chapter.
21 Sec. 12. NEW SECTION. 533C.1002 Financial services
22licensing fund.
231. A financial services licensing fund is created as a
24separate fund in the state treasury under the authority of the
25banking division of the department of insurance and financial
26services. Moneys deposited in the fund shall be used to pay
27for staffing necessary to perform examinations, audits, and
28other duties required of the superintendent and the banking
29division under this chapter.
302. The fund shall receive moneys including but not limited
31to any fees, costs, expenses, or penalties collected pursuant
32to this chapter.
333. Notwithstanding section 8.33, moneys appropriated to the
34fund in this section that remain unencumbered or unobligated,
35and other moneys credited to the fund, shall not revert at the
-7-1close of the fiscal year but shall remain in the financial
2services licensing fund and shall remain available for
3expenditure for the purposes designated.
4 Sec. 13. NEW SECTION. 533C.1003 Applicability.
5This chapter applies to the provision of money transmission
6on or after October 1, 2003.
7 Sec. 14. EFFECTIVE DATE. This Act, being deemed of
8immediate importance, takes effect upon enactment.
9 Sec. 15. RETROACTIVE APPLICABILITY. The following apply
10retroactively to July 1, 2023:
11The sections of this Act enacting sections 533C.901,
12533C.902, 533C.903, 533C.904, 533C.905, 533C.906, 533C.907,
13533C.908, 533C.1001, 533C.1002, and 533C.1003, and the section
14of this Act amending section 533C.102.
15 Sec. 16. CODE EDITOR DIRECTIVE. The Code editor shall
16designate sections 533C.901 through 533C.908, as enacted in
17this Act, as article 9 entitled “Enforcement”, and sections
18533C.1001 through 533C.1003, as enacted in this Act, as article
1910 entitled “Miscellaneous Provisions”.
20EXPLANATION
21The inclusion of this explanation does not constitute agreement with
22the explanation’s substance by the members of the general assembly.
23This bill relates to money transmission services.
24The bill adds an exemption from licensing for a person
25appointed as an agent of a payor for purposes of providing
26payroll processing services for which a license would otherwise
27be required, if there is a written agreement between the payor
28and the agent directing the agent to provide payroll processing
29services, the payor holds the agent out as providing payroll
30processing services on the payor’s behalf, and the payor’s
31obligation to a payee is not extinguished if the agent fails to
32remit the funds to the payee.
33The bill authorizes the superintendent of banking
34(superintendent) to suspend or revoke a license, place a
35licensee in receivership, or order a licensee to revoke
-8-1the designation of an authorized delegate (delegate) in the
2circumstances described in the bill.
3The bill authorizes the superintendent to issue an order
4suspending or revoking the designation of a delegate in
5the circumstances detailed in the bill. A delegate whose
6designation has been suspended or revoked may apply for relief
7from the suspension or revocation according to the procedures
8prescribed by the superintendent.
9The bill establishes the procedure for issuance of orders
10to cease and desist by the superintendent. The superintendent
11may issue an order requiring a licensee or delegate to cease
12and desist from a violation if the superintendent determines
13that the violation is likely to cause immediate and irreparable
14harm to the licensee, the licensee’s customers, or the public,
15or cause insolvency or significant dissipation of assets of
16the licensee. Where a delegate is the subject of a separate
17order by the superintendent, the superintendent may issue an
18order for the licensee to cease and desist from providing
19money transmission through such delegate. The superintendent
20may require an unlicensed person to show cause why an order
21to cease and desist a violation of Code section 533C.301,
22533C.501, or 533C.502 should not be issued. In an emergency,
23the superintendent may petition the district court for a
24temporary restraining order ex parte. An order to cease
25and desist is effective upon service and remains effective
26and enforceable pending the completion of an administrative
27proceeding. A person, licensee, or delegate served with
28an order to cease and desist may petition the court for an
29order setting aside, limiting, or suspending the enforcement,
30operation, or effectiveness of the order pending the completion
31of an administrative proceeding. An order to cease and
32desist expires 10 days after issuance unless an administrative
33proceeding is commenced by the superintendent.
34The superintendent may enter into a consent order with a
35person to resolve a matter arising under Code chapter 533C.
-9-1The consent order must be signed by the person or the person’s
2authorized representative and indicate agreement with the terms
3contained in the order.
4The bill authorizes the attorney general or a county
5attorney to conduct investigations to determine if any
6licensee, delegate, or person engaged in a trade or business
7has failed to file a required report, or has engaged in any
8act, practice, or transaction that constitutes a violation of
9Code chapter 533C. Upon presentation of a subpoena from a
10person specified in the bill, all licensees, delegates, and
11financial institutions shall make their books and records
12available during normal business hours for inspection and
13examination in connection with an investigation.
14The bill authorizes the superintendent to assess civil
15penalties against a person for violation of Code chapter 533C
16in an amount not to exceed $1,000 per day for each day of the
17violation, plus costs and expenses for the investigation and
18prosecution, and reasonable attorney fees.
19Under the bill, a person commits an aggravated misdemeanor
20if the person is not licensed and knowingly engages in an
21activity for which a license is required, punishable by
22confinement for no more than two years and a fine of at least
23$855 but not more than $8,540. A person commits a class “C”
24felony, and is subject to a civil penalty of three times the
25value of the property involved in the transaction, or $5,000,
26where, with the requisite intent as laid out in the bill,
27the person knowingly furnishes or provides to a given party
28any false, inaccurate, or incomplete information; knowingly
29conceals a material fact in connection with a transaction
30for which a report is required to be filed; or, with the
31requisite intent laid out in the bill, conducts or structures
32a transaction by or through a licensee, delegate, financial
33institution, or persons engaged in a trade or business. A
34class “C” felony is punishable by confinement for no more
35than 10 years and a fine of at least $1,370 but not more than
-10-1$13,660. A person commits a class “D” felony if the person
2intentionally makes a false statement, misrepresentation,
3or false certification in a record filed or required to be
4maintained under Code chapter 533C or intentionally makes a
5false entry or omits a material entry in such a record. A class
6“D” felony is punishable by confinement for no more than five
7years and a fine of at least $1,025 but not more than $10,245.
8Each violation constitutes a separate, punishable offense.
9The bill prohibits the superintendent from suspending or
10revoking a license, placing a licensee in receivership, issuing
11an order to cease and desist, suspending or revoking the
12designation of a delegate, or assessing a civil penalty without
13notice and an opportunity to be heard. The superintendent
14is required to hold a hearing when requested to do so by an
15applicant whose application for a license is denied.
16The bill shall be construed to effectuate both its remedial
17and general purposes. Civil remedies are supplemental and
18not mutually exclusive, and are not precluded by any other
19provision of law. The attorney general may enter into
20reciprocal agreements with the attorney general or chief
21prosecuting attorney of any state to effectuate the purposes
22of the bill.
23The bill creates a separate financial services licensing
24fund (fund) in the state treasury under the authority of
25the banking division of the department of commerce. Moneys
26deposited in the fund shall be used to pay for staffing
27necessary to perform duties required of the superintendent and
28the banking division. Moneys appropriated or credited to the
29fund remain in the financial services licensing fund and remain
30available for expenditure for the designated purposes.
31Except for the section of the bill amending Code section
32533C.103, the bill applies retroactively to July 1, 2023.
33The bill takes effect upon enactment.
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