RCW 19.230.005 Intent. It is the intent of the legislature to establish a state system of licensure and regulation to ensure the safe and sound operation of money transmission and currency exchange businesses, to ensure that these businesses are not used for criminal purposes, to promote confidence in the state’s financial system, and to protect the public interest. [2003 c 287 § 2.]
RCW 19.230.010 Definitions. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) “Affiliate” means any person who directly or indirectly
through one or more intermediaries, controls, is controlled by, or is
under common control with, another person.
(2) “Annual assessment due date” means the date specified in rule
by the director upon which the annual assessment is due.
(3) “Applicant” means a person that files an application for a
license under this chapter, including the applicant’s proposed
responsible individual and executive officers, and persons in control
of the applicant.
(4) “Authorized delegate” means a person a licensee designates to
provide money services on behalf of the licensee. A person that is
exempt from licensing under this chapter cannot have an authorized
delegate.
(5) “Board director” means a natural person who is a member of
the applicant’s or licensee’s board of directors if the applicant is a
corporation or limited liability company, or a partner if the
applicant or licensee is a partnership.
(6) “Closed loop prepaid access” means prepaid access that can
only be redeemed for a limited universe of goods, intangibles,
services, or other items provided by the issuer of the prepaid access,
its affiliates, or others involved in transactions functionally
related to the issuer or its affiliates.
(7) “Control” means:
(a) Ownership of, or the power to vote, directly or indirectly,
at least twenty-five percent of a class of voting securities or voting
interests of a licensee or applicant, or person in control of a
licensee or applicant;
(b) Power to elect a majority of executive officers, managers,
directors, trustees, or other persons exercising managerial authority
of a licensee or applicant, or person in control of a licensee or
applicant; or
(c) Power to exercise directly or indirectly, a controlling
influence over the management or policies of a licensee or applicant,
or person in control of a licensee or applicant.
(8) “Currency exchange” means exchanging the money of one
government for money of another government, or holding oneself out as
able to exchange the money of one government for money of another
government. The following persons are not considered currency
exchangers:
(a) Affiliated businesses that engage in currency exchange for a
business purpose other than currency exchange;
(b) A person who provides currency exchange services for a person
acting primarily for a business, commercial, agricultural, or
investment purpose when the currency exchange is incidental to the
transaction;
(c) A person who deals in coins or a person who deals in money
whose value is primarily determined because it is rare, old, or
collectible; and
(d) A person who in the regular course of business chooses to
accept from a customer the currency of a country other than the United
States in order to complete the sale of a good or service other than
currency exchange, that may include cash back to the customer, and
does not otherwise trade in currencies or transmit money for
compensation or gain.
(9) “Currency exchanger” means a person that is engaged in
currency exchange.
(10) “Director” means the director of financial institutions.
(11) “Executive officer” means a president, chairperson of the
executive committee, chief financial officer, responsible individual,
or other individual who performs similar functions.
(12) “Financial institution” means any person doing business
under the laws of any state or the United States relating to
commercial banks, bank holding companies, savings banks, savings and
loan associations, trust companies, or credit unions.
(13) “Licensee” means a person licensed under this chapter.
“Licensee” also means any person, whether located within or outside of
this state, who fails to obtain a license required by this chapter.
(14) “Material litigation” means litigation that according to
generally accepted accounting principles is significant to an
applicant’s or a licensee’s financial health and would be required to
be disclosed in the applicant’s or licensee’s annual audited financial
statements, report to shareholders, or similar records.
(15) “Mobile location” means a vehicle or movable facility where
money services are provided.
(16) “Money” means a medium of exchange that is authorized or
adopted by the United States or a foreign government or other
recognized medium of exchange. “Money” includes a monetary unit of
account established by an intergovernmental organization or by
agreement between two or more governments.
(17) “Money services” means money transmission or currency
exchange.
(18) “Money transmission” means receiving money or its equivalent
value (equivalent value includes virtual currency) to transmit,
deliver, or instruct to be delivered to another location, inside or
outside the United States, by any means including but not limited to
by wire, facsimile, or electronic transfer. “Money transmission”
includes selling, issuing, or acting as an intermediary for open loop
prepaid access and payment instruments, but not closed loop prepaid
access. “Money transmission” does not include: The provision solely of
connection services to the internet, telecommunications services, or
network access; units of value that are issued in affinity or rewards
programs that cannot be redeemed for either money or virtual
currencies; and units of value that are used solely within online
gaming platforms that have no market or application outside of the
gaming platforms.
(19) “Money transmitter” means a person that is engaged in money
transmission.
(20) “Open loop prepaid access” means prepaid access redeemable
at multiple, unaffiliated merchants or service providers, or automated
teller machines.
(21) “Outstanding money transmission” means the value of all money transmissions reported to the licensee for which the money transmitter has received money or its equivalent value from the customer for transmission, but has not yet completed the money transmission by delivering the money or monetary value to the person designated by the customer.
(22) “Payment instrument” means a check, draft, money order, or
traveler’s check for the transmission or payment of money or its
equivalent value, whether or not negotiable. “Payment instrument” does
not include a credit card voucher, letter of credit, or instrument
that is redeemable by the issuer in goods or services.
(23) “Person” means an individual, corporation, business trust,
estate, trust, partnership, limited liability company, association,
joint venture; government, governmental subdivision, agency, or
instrumentality; public corporation; or any other legal or commercial
entity.
(24) “Prepaid access” means access to money that has been paid in
advance and can be retrieved or transferred through an electronic
device or vehicle, such as a card, code, electronic serial number,
mobile identification number, or personal identification number.
(25) “Record” means information that is inscribed on a tangible
medium, or that is stored in an electronic or other medium, and is
retrievable in perceivable form.
(26) “Responsible individual” means an individual who is employed
by a licensee and has principal managerial authority over the
provision of money services by the licensee in this state.
(27) “State” means a state of the United States, the District of
Columbia, Puerto Rico, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of the
United States.
(28) “Tangible net worth” means the physical worth of a licensee,
calculated by taking a licensee’s assets and subtracting its
liabilities and its intangible assets, such as copyrights, patents,
intellectual property, and goodwill.
(29) “Unsafe or unsound practice” means a practice or conduct by
a licensee or an authorized delegate which creates the likelihood of
material loss, insolvency, or dissipation of the licensee’s assets, or
otherwise materially prejudices the financial condition of the
licensee or the interests of its customers.
(30) “Virtual currency” means a digital representation of value
used as a medium of exchange, a unit of account, or a store of value,
but does not have legal tender status as recognized by the United
States government. “Virtual currency” does not include the software or
protocols governing the transfer of the digital representation of
value or other uses of virtual distributed ledger systems to verify
ownership or authenticity in a digital capacity when the virtual
currency is not used as a medium of exchange. [2017 c 30 § 1; 2013 c
106 § 1. Prior: 2010 c 73 § 1; 2003 c 287 § 3.]
RCW 19.230.020 Application of chapter—Exclusions. This chapter does not apply to:
(1) The United States or a department, agency, or instrumentality
thereof;
(2) The United States postal service or a contractor on behalf of
the United States postal service;
(3) A state, county, city, or a department, agency, or
instrumentality thereof;
(4) A financial institution or its subsidiaries, affiliates, and
service corporations, or any office of an international banking
corporation, branch of a foreign bank, or corporation organized
pursuant to the Bank Service Corporation Act (12 U.S.C. Sec.
1861-1867) or a corporation organized under the Edge Act (12 U.S.C.
Sec. 611-633);
(5) Electronic funds transfer of governmental benefits for a
federal, state, county, or governmental agency by a contractor on
behalf of the United States or a department, agency, or
instrumentality thereof, or a state or governmental subdivision,
agency, or instrumentality thereof;
(6) A board of trade designated as a contract market under the
federal Commodity Exchange Act (7 U.S.C. Sec. 1-25) or a person that,
in the ordinary course of business, provides clearance and settlement
services for a board of trade to the extent of its operation as, or
for, a board of trade;
(7) A registered futures commission merchant under the federal
commodities laws to the extent of its operation as such a merchant;
(8) A person that provides clearance or settlement services under
a registration as a clearing agency, or an exemption from that
registration granted under the federal securities laws, to the extent
of its operation as such a provider;
(9) A person:
(a) Operating a payment system that provides processing,
clearing, or settlement services, between or among persons who are all
excluded by this section, in connection with wire transfers, credit
card transactions, debit card transactions, prepaid access
transactions, automated clearinghouse transfers, or similar funds
transfers;
(b) Who is a contracted service provider of an entity in
subsection (4) of this section that provides processing, clearing, or
settlement services in connection with wire transfers, credit card
transactions, debit card transactions, prepaid access transactions,
automated clearinghouse transfers, or similar funds transfers; or
(c) That facilitates payment for goods or services (not including
money transmission itself) or bill payment through a clearance and
settlement process using bank secrecy act regulated institutions
pursuant to a written contract with the payee and either payment to
the person facilitating the payment processing satisfies the payor’s
obligation to the payee or that obligation is otherwise extinguished;
(10) A person registered as a securities broker-dealer or
investment advisor under federal or state securities laws to the
extent of its operation as such a broker-dealer or investment advisor;
(11) An insurance company, title insurance company, or escrow
agent to the extent that such an entity is lawfully authorized to
conduct business in this state as an insurance company, title
insurance company, or escrow agent and to the extent that they engage
in money transmission or currency exchange as an ancillary service
when conducting insurance, title insurance, or escrow activity;
(12) The issuance, sale, use, redemption, or exchange of closed
loop prepaid access or of payment instruments by a person licensed
under chapter 31.45 RCW;
(13) An attorney, to the extent that the attorney is lawfully
authorized to practice law in this state and to the extent that the
attorney engages in money transmission or currency exchange as an
ancillary service to the practice of law;
(14) A seller or issuer of prepaid access when the funds are
covered by federal deposit insurance immediately upon sale or issue;
(15) A person that transmits wages, salaries, or employee
benefits on behalf of employers when the money transmission or
currency exchange is an ancillary service in a suite of services that
may include, but is not limited to, the following: Facilitate the
payment of payroll taxes to state and federal agencies, make payments
relating to employee benefit plans, make distribution of other
authorized deductions from an employees’ wages or salaries, or
transmit other funds on behalf of an employer in connection with
transactions related to employees; or
(16) The lawful business of bookkeeping or accounting to the
extent the money transmission or currency exchange is an ancillary
service.
The director may, at his or her discretion, waive applicability
of the licensing provisions of this chapter when the director
determines it necessary to facilitate commerce and protect consumers.
The burden of proving the applicability of an exclusion or exception
from licensing is upon the person claiming the exclusion or exception.
The director may adopt rules to implement this section. [2017 c 30 §
2; 2013 c 106 § 2; 2010 c 73 § 2; 2003 c 287 § 4.]
RCW 19.230.030 Money transmitter license required. (1) A person may not engage in the business of money transmission, or advertise, solicit, or hold itself out as providing money transmission, unless the person is:
(a) Licensed as a money transmitter under this chapter;
(b) An authorized delegate of a person licensed as a money
transmitter under this chapter; or
(c) Excluded under RCW 19.230.020.
(2) A money transmitter license is not transferable or
assignable. [2017 c 30 § 3; 2003 c 287 § 5.]
RCW 19.230.033 Multistate licensing system—Director’s discretion. Applicants may be required to make application through a multistate licensing system as prescribed by the director. Existing licensees may be required to transition onto a multistate licensing system as prescribed by the director. [2012 c 17 § 17.]
RCW 19.230.040 Application for a money transmitter license. (1) A person applying for a money transmitter license under this chapter shall do so in a form and in a medium prescribed in rule by the director. The application must state or contain:
(a) The legal name, business addresses, and residential address,
if applicable, of the applicant and any fictitious or trade name used
by the applicant in conducting its business;
(b) The legal name, residential and business addresses, date of
birth, social security number, employment history for the five-year
period preceding the submission of the application of the applicant’s
proposed responsible individual, and documentation that the proposed
responsible individual is a citizen of the United States or has
obtained legal immigration status to work in the United States. In addition, the applicant shall provide the fingerprints of the proposed
responsible individual upon the request of the director;
(c) For the ten-year period preceding submission of the
application, a list of any criminal convictions of the proposed
responsible individual of the applicant, any material litigation in
which the applicant has been involved, and any litigation involving
the proposed responsible individual relating to the provision of money
services;
(d) A description of any money services previously provided by
the applicant and the money services that the applicant seeks to
provide to persons in Washington state;
(e) A list of the applicant’s proposed authorized delegates and
the locations where the applicant and its authorized delegates will
engage in the provision of money services to persons in Washington
state on behalf of the licensee;
(f) A list of other states in which the applicant is licensed to
engage in money transmission, or provide other money services, and any
license revocations, suspensions, restrictions, or other disciplinary
action taken against the applicant in another state;
(g) A list of any license revocations, suspensions, restrictions,
or other disciplinary action taken against any money services business
involving the proposed responsible individual;
(h) Information concerning any bankruptcy or receivership
proceedings involving or affecting the applicant or the proposed
responsible individual;
(i) A sample form of contract for authorized delegates, if
applicable;
(j) A description of the source of money and credit to be used by
the applicant to provide money services; and
(k) Any other information regarding the background, experience,
character, financial responsibility, and general fitness of the
applicant, the applicant’s responsible individual, or authorized
delegates that the director may require in rule.
(2) If an applicant is a corporation, limited liability company,
partnership, or other entity, the applicant shall also provide:
(a) The date of the applicant’s incorporation or formation and
state or country of incorporation or formation;
(b) If applicable, a certificate of good standing from the state
or country in which the applicant is incorporated or formed;
(c) A brief description of the structure or organization of the
applicant, including any parent or subsidiary of the applicant, and
whether any parent or subsidiary is publicly traded;
(d) The legal name, any fictitious or trade name, all business
and residential addresses, date of birth, social security number, and
employment history in the ten-year period preceding the submission of
the application for each executive officer, board director, or person
that has control of the applicant;
(e) If the applicant or its corporate parent is not a publicly
traded entity, the director may request the fingerprints of each
executive officer, board director, or person that has control of the
applicant;
(f) A list of any criminal convictions, material litigation, and
any litigation related to the provision of money services, in the ten-
year period preceding the submission of the application in which any
executive officer, board director, or person in control of the
applicant has been involved;
(g) A copy of the applicant’s audited financial statements for
the most recent fiscal year or, if the applicant is a wholly owned
subsidiary of another corporation, the most recent audited
consolidated annual financial statement of the parent corporation or
the applicant’s most recent audited consolidated annual financial
statement, and in each case, if available, for the two-year period
preceding the submission of the application;
(h) A copy of the applicant’s unconsolidated financial statements
for the current fiscal year, whether audited or not, and, if
available, for the two-year period preceding the submission of the
application;
(i) If the applicant is publicly traded, a copy of the most
recent report filed with the United States securities and exchange
commission under section 13 of the federal Securities Exchange Act of
1934 (15 U.S.C. Sec. 78m);
(j) If the applicant is a wholly owned subsidiary of:
(i) A corporation publicly traded in the United States, a copy of
audited financial statements for the parent corporation for the most
recent fiscal year or a copy of the parent corporation’s most recent
report filed under section 13 of the federal Securities Exchange Act
of 1934 (15 U.S.C. Sec. 78m); or
(ii) A corporation publicly traded outside the United States, a
copy of similar documentation filed with the regulator of the parent
corporation’s domicile outside the United States;
(k) If the applicant has a registered agent in this state, the
name and address of the applicant’s registered agent in this state;
and
(l) Any other information that the director may require in rule
regarding the applicant, each executive officer, or each board
director to determine the applicant’s background, experience,
character, financial responsibility, and general fitness.
(3) A nonrefundable application fee and an initial license fee,
as determined in rule by the director, must accompany an application
for a license under this chapter. The initial license fee must be
refunded if the application is denied.
(4) As part of or in connection with an application for any
license under this section, or periodically upon license renewal, each
officer, director, responsible individual, and owner applicant shall
furnish information concerning his or her identity, including
fingerprints for submission to the Washington state patrol or the
federal bureau of investigation for a state and national criminal
history background check, personal history, experience, business
record, purposes, and other pertinent facts, as the director may
reasonably require. As part of or in connection with an application
for a license under this chapter, or periodically upon license
renewal, the director is authorized to receive criminal history record
information that includes nonconviction data as defined in RCW
10.97.030. The department may only disseminate nonconviction data
obtained under this section to criminal justice agencies. This section
does not apply to financial institutions regulated under chapters
31.12 and 31.13 RCW and Titles 32 and 33 RCW. The requirements of this
subsection do not apply when the applicant or its corporate parents
are publicly traded entities.
(5) For business models that store virtual currency on behalf of
others, the applicant must provide a third-party security audit of all
electronic information and data systems acceptable to the director.
(6) The director or the director’s designated representative may
deny an application for a proposed license or trade name if the
proposed license or trade name is similar to a currently existing
licensee name, including trade names.
(7) The director may waive one or more requirements of this
section or permit an applicant to submit other information in lieu of
the required information. [2017 c 30 § 4; 2013 c 106 § 3; 2003 c 287
- 6.]
RCW 19.230.050 Money transmitters—Surety bond. (1) Each money transmitter licensee shall maintain a surety bond in an amount based on the previous year’s money transmission dollar volume; and the previous year’s payment instrument dollar volume. The minimum surety bond must be at least ten thousand dollars, and not to exceed five hundred fifty thousand dollars. The director may adopt rules to implement this section.
(2) The surety bond shall run to the state of Washington as
obligee, and shall run to the benefit of the state and any person or
persons who suffer loss by reason of a licensee’s or licensee’s
authorized delegate’s violation of this chapter or the rules adopted
under this chapter. A claimant against a money transmitter licensee
may maintain an action on the bond, or the director may maintain an
action on behalf of the claimant.
(3) The surety bond shall be continuous and may be canceled by
the surety upon the surety giving written notice to the director of
its intent to cancel the bond. The cancellation is effective thirty
days after the notice of cancellation is received by the director or
the director’s designee. Whether or not the bond is renewed,
continued, replaced, or modified, including increases or decreases in
the penal sum, it is considered one continuous obligation, and the
surety upon the bond is not liable in an aggregate or cumulative
amount exceeding the penal sum set forth on the face of the bond. In
no event may the penal sum, or any portion thereof, at two or more
points in time, be added together in determining the surety’s
liability.
(4) A surety bond must cover claims for at least five years after
the date of a money transmitter licensee’s violation of this chapter,
or at least five years after the date the money transmitter licensee
ceases to provide money services in this state, whichever is longer.
However, the director may permit the amount of the surety bond to be
reduced or eliminated before the expiration of that time to the extent
the amount of the licensee’s obligations outstanding in this state are
reduced.
(5) In the event that a money transmitter licensee does not
maintain a surety bond in the amount required under subsection (1) of
this section, the director may issue a temporary cease and desist
order under RCW 19.230.260.
(6) The director may increase the amount of the bond required up
to a maximum of one million dollars based on the nature and volume of
business activities, the financial health of the company, and other
criteria specified by the director in rule. [2017 c 30 § 5; 2010 c 73
- 3; 2003 c 287 § 7.]
RCW 19.230.055 Online currency exchangers—Surety bond. (1) Each online currency exchanger licensee shall maintain a surety bond in an amount based on the previous year’s currency exchange dollar volume. The minimum surety bond must be at least ten thousand dollars, and not to exceed fifty thousand dollars. The director may adopt rules to implement this section.
(2) The surety bond shall run to the state of Washington as
obligee, and shall run to the benefit of the state and any person or
persons who suffer loss by reason of a licensee’s violation of this
chapter or the rules adopted under this chapter. A claimant against
the bond may maintain an action on the bond, or the director may
maintain an action on behalf of the claimant.
(3) The surety bond must be continuous and may be canceled by the
surety upon the surety giving written notice to the director of its
intent to cancel the bond. The cancellation is effective thirty days
after the notice of cancellation is received by the director or the
director’s designee. Whether or not the bond is renewed, continued,
replaced, or modified, including increases or decreases in the penal
sum, it is considered one continuous obligation, and the surety upon
the bond is not liable in an aggregate or cumulative amount exceeding
the penal sum set forth on the face of the bond. In no event may the
penal sum, or any portion thereof, at two or more points in time, be
added together in determining the surety’s liability.
(4) A surety bond must cover claims for at least one year after
the date of an online currency exchanger licensee’s violation of this
chapter, or at least one year after the date the online currency
exchanger licensee ceases to provide online currency exchange services
in this state, whichever is longer. However, the director may permit
the amount of the surety bond to be reduced or eliminated before the
expiration of that time to the extent the amount of the licensee’s
obligations outstanding in this state are reduced.
(5) In the event that an online currency exchanger licensee does
not maintain a surety bond in the amount required under subsection (1)
of this section, the director may issue a temporary cease and desist
order under RCW 19.230.260.
(6) The director may increase the amount of the bond required up
to a maximum of one million dollars based on the nature and volume of
the business activities, the financial health of the company, and
other criteria specified by the director in rule. [2017 c 30 § 7.]
RCW 19.230.060 Tangible net worth for money transmitter. A money transmitter licensed under this chapter shall maintain a tangible net worth, determined in accordance with generally accepted accounting principles, as determined in rule by the director. The director shall require a tangible net worth of at least ten thousand dollars and not more than three million dollars. In the event that a licensee’s tangible net worth, as determined in accordance with generally accepted accounting principles, falls below the amount required in rule, the director or the director’s designee may initiate action under RCW 19.230.230 and 19.230.260. The licensee may request a hearing on such an action under chapter 34.05 RCW. [2010 c 73 § 4; 2003 c 287 § 8.]
RCW 19.230.070 Issuance of money transmitter license. (1) When an application for a money transmitter license is filed under this chapter, the director or the director’s designee shall investigate the applicant’s financial condition and responsibility, financial and business experience, competence, character, and general fitness. The director or the director’s designee may conduct an on-site investigation of the applicant, the cost of which must be paid by the applicant as specified in RCW 19.230.320 or rules adopted under this chapter. The director shall issue a money transmitter license to an applicant under this chapter if the director or the director’s designee finds that all of the following conditions have been fulfilled:
(a) The applicant has complied with RCW 19.230.040, 19.230.050,
and 19.230.060;
(b) The financial condition and responsibility, financial and
business experience, competence, character, and general fitness of the
applicant; and the competence, financial and business experience,
character, and general fitness of the executive officers, proposed
responsible individual, board directors, and persons in control of the
applicant; indicate that it is in the interest of the public to permit
the applicant to engage in the business of providing money
transmission services; and
(c) Neither the applicant, nor any executive officer, nor person
who exercises control over the applicant, nor the proposed responsible
individual is listed on the specially designated nationals and blocked
persons list prepared by the United States department of the treasury
or department of state under Presidential Executive Order No. 13224.
(2) The director may for good cause extend the application review
period or condition the issuance of the license.
(3) An applicant whose application is denied by the director
under this chapter may appeal under chapter 34.05 RCW.
(4) A money transmitter license issued under this chapter is
valid from the date of issuance and remains in effect with no fixed
date of expiration unless otherwise suspended or revoked by the
director or unless the license expires for nonpayment of the annual
assessment and any late fee, if applicable.
(5) A money transmitter licensee may surrender a license by
providing the director with a written notice of surrender through the
nationwide licensing system. The written notice of surrender must
include notice of where the records of the licensee will be stored and
the name, address, telephone number, and other contact information of
a responsible party who is authorized to provide access to the
records. The surrender of a license does not reduce or eliminate the
licensee’s civil or criminal liability arising from acts or omissions
occurring prior to the surrender of the license, including any
administrative actions undertaken by the director or the director’s
designee to revoke or suspend a license, to assess fines, to order
payment of restitution, or to exercise any other authority authorized
under this chapter. [2017 c 30 § 6; 2010 c 73 § 5; 2003 c 287 § 9.]
RCW 19.230.080 Currency exchange license required. (1) A person may not engage in the business of currency exchange or advertise, solicit, or hold itself out as able to engage in currency exchange for which the person receives revenue equal to or greater than five percent of total revenues, unless the person is:
(a) Licensed to provide currency exchange under this chapter;
[ 11 ]
(b) Licensed for money transmission under this chapter; or
(c) An authorized delegate of a person licensed under this
chapter.
(2) A license under this chapter is not transferable or
assignable. [2003 c 287 § 10.]
RCW 19.230.090 Application for a currency exchange license. (1) A person applying for a currency exchange license under this chapter shall do so in a form and in a medium prescribed in rule by the director. The application must state or contain:
(a) The legal name, business addresses, and residential address,
if applicable, of the applicant and any fictitious or trade name used
by the applicant in conducting its business, and the legal name,
residential and business addresses, date of birth, social security
number, employment history for the five-year period preceding the
submission of the application; and upon request of the director,
fingerprints of the applicant’s proposed responsible individual and
documentation that the proposed responsible individual is a citizen of
the United States or has obtained legal immigration status to work in
the United States;
(b) For the ten-year period preceding the submission of the
application, a list of any criminal convictions of the proposed
responsible individual of the applicant, any material litigation in
which the applicant has been involved, and any litigation involving
the proposed responsible individual relating to the provision of money
services;
(c) A description of any money services previously provided by
the applicant and the money services that the applicant seeks to
provide in this state;
(d) A list of the applicant’s proposed authorized delegates and
the locations in this state where the applicant and its authorized
delegates propose to engage in currency exchange;
(e) A list of other states in which the applicant engages in
currency exchange or provides other money services and any license
revocations, suspensions, restrictions, or other disciplinary action
taken against the applicant in another state;
(f) A list of any license revocations, suspensions, restrictions,
or other disciplinary action taken against any money services business
involving the proposed responsible individual;
(g) Information concerning any bankruptcy or receivership
proceedings involving or affecting the applicant or the proposed
responsible individual;
(h) A sample form of contract for authorized delegates, if
applicable;
(i) A description of the source of money and credit to be used by
the applicant to provide currency exchange; and
(j) Any other information regarding the background, experience,
character, financial responsibility, and general fitness of the
applicant, the applicant’s responsible individual, or authorized
delegates that the director may require in rule.
(2) If an applicant is a corporation, limited liability company,
partnership, or other entity, the applicant shall also provide:
(a) The date of the applicant’s incorporation or formation and
state or country of incorporation or formation;
(b) If applicable, a certificate of good standing from the state
or country in which the applicant is incorporated or formed;
(c) A brief description of the structure or organization of the
applicant, including any parent or subsidiary of the applicant, and
whether any parent or subsidiary is publicly traded;
(d) The legal name, any fictitious or trade name, all business
and residential addresses, date of birth, social security number, and
employment history in the ten-year period preceding the submission of
the application for each executive officer, board director, or person
that has control of the applicant;
(e) If the applicant or its corporate parent is not a publicly
traded entity, the director may request the fingerprints for each
executive officer, board director, or person that has control of the
applicant; and
(f) A list of any criminal convictions, material litigation, and
any litigation related to the provision of money services, in which
any executive officer, board director, or person in control of the
applicant has been involved in the ten-year period preceding the
submission of the application.
(3) A nonrefundable application fee and an initial license fee,
as determined in rule by the director, must accompany an application
for a currency exchange license under this chapter. The license fee
must be refunded if the application is denied.
(4) The director may waive one or more requirements of subsection
(1) or (2) of this section or permit an applicant to submit other
information in lieu of the required information. [2003 c 287 § 11.]
RCW 19.230.100 Issuance of a currency exchange license— Surrender of license. (1) When an application for a currency exchange license is filed under this chapter, the director or the director’s designee shall investigate the applicant’s financial condition and responsibility, financial and business experience, competence, character, and general fitness. The director or the director’s designee may conduct an on-site investigation of the applicant, the cost of which must be paid by the applicant as specified in RCW 19.230.320 or rules adopted under this chapter. The director shall issue a currency exchange license to an applicant under this chapter if the director or the director’s designee finds that all of the following conditions have been fulfilled:
(a) The applicant has complied with RCW 19.230.090;
(b) The financial and business experience, competence, character,
and general fitness of the applicant; and the competence, financial
and business experience, character, and general fitness of the
executive officers, proposed responsible individual, board directors,
and persons in control of the applicant indicate that it is in the
interest of the public to permit the applicant to engage in the
business of providing currency exchange; and
(c) Neither the applicant, nor any executive officer, nor person
who exercises control over the applicant, nor the proposed responsible
individual are listed on the specially designated nationals and
blocked persons list prepared by the United States department of
treasury or department of state under Presidential Executive Order No.
13224.
(2) The director may for good cause extend the application review
period.
(3) An applicant whose application is denied by the director
under this chapter may appeal under chapter 34.05 RCW.
(4) A currency exchange license issued under this chapter is
valid from the date of issuance and remains in effect with no fixed
date of expiration unless otherwise suspended or revoked by the
director, or unless the license expires for nonpayment of the annual
assessment and any late fee, if applicable.
(5) A currency exchange licensee may surrender a license by
providing the director with a written notice of surrender through the
nationwide licensing system. The written notice of surrender must
include notice of where the records of the licensee will be stored and
the name, address, telephone number, and other contact information of
a responsible party who is authorized to provide access to the
records. The surrender of a license does not reduce or eliminate the
licensee’s civil or criminal liability arising from acts or omissions
occurring prior to the surrender of the license, including any
administrative actions undertaken by the director or the director’s
designee to revoke or suspend a license, to assess fines, to order
payment of restitution, or to exercise any other authority authorized
under this chapter. [2017 c 30 § 8; 2003 c 287 § 12.]
RCW 19.230.110 Annual assessment and annual report. (1) A licensee shall pay an annual assessment as established in rule by the director no later than the annual assessment due date or, if the annual assessment due date is not a business day, on the next business day. A licensee shall pay an annual assessment based on the previous year’s Washington dollar volume of: (a) Money transmissions; (b) payment instruments; (c) currency exchanges; and (d) prepaid access sales. The total minimum assessment must be one thousand dollars per year, and the maximum assessment may not exceed one hundred thousand dollars per year.
(2) A licensee shall submit an accurate annual report with the
annual assessment, in a form and in a medium prescribed by the
director in rule. The annual report must state or contain:
(a) If the licensee is a money transmitter, a copy of the
licensee’s most recent audited annual financial statement or, if the
licensee is a wholly owned subsidiary of another corporation, the most
recent audited consolidated annual financial statement of the parent
corporation or the licensee’s most recent audited consolidated annual
financial statement;
(b) A description of each material change, as defined in rule by
the director, to information submitted by the licensee in its original
license application which has not been previously reported to the
director on any required report;
(c) If the licensee is a money transmitter, a list of the
licensee’s permissible investments and a certification that the
licensee continues to maintain permissible investments according to
the requirements set forth in RCW 19.230.200 and 19.230.210;
(d) If the licensee is a money transmitter, proof that the
licensee continues to maintain an adequate bond as required by RCW
19.230.050; and
(e) A list of the locations where the licensee or an authorized
delegate of the licensee engages in or provides money services to
persons in Washington state.
(3) If a licensee does not file an annual report or pay its
annual assessment by the annual assessment due date, the director or
the director’s designee shall send the licensee a notice of suspension
and assess the licensee a late fee not to exceed twenty-five percent of the annual assessment as established in rule by the director. The
licensee’s annual report and payment of both the annual assessment and
the late fee must arrive in the department’s offices by 5:00 p.m. on
the thirtieth day after the assessment due date or any extension of
time granted by the director, unless that date is not a business day,
in which case the licensee’s annual report and payment of both the
annual assessment and the late fee must arrive in the department’s
offices by 5:00 p.m. on the next occurring business day. If the
licensee’s annual report and payment of both the annual assessment and
late fee do not arrive by such date, the expiration of the licensee’s
license is effective at 5:00 p.m. on the thirtieth day after the
assessment due date, unless that date is not a business day, in which
case the expiration of the licensee’s license is effective at 5:00
p.m. on the next occurring business day. The director, or the
director’s designee, may reinstate the license if, within twenty days
after its effective date, the licensee:
(a) Files the annual report and pays both the annual assessment
and the late fee; and
(b) Did not engage in or provide money services during the period
its license was expired. [2017 c 30 § 9; 2013 c 106 § 4; 2010 c 73 §
6; 2003 c 287 § 13.]
RCW 19.230.120 Relationship between licensee and authorized delegate. (1) In this section, “remit” means to make direct payments of money to a licensee or its representative authorized to receive money or to deposit money in a bank in an account specified by the licensee.
(2) A contract between a licensee and an authorized delegate must
require the authorized delegate to operate in full compliance with
this chapter and the rules adopted under this chapter.
(3) Neither the licensee nor an authorized delegate may authorize
subdelegates.
(4) An authorized delegate shall remit all money owing to the
licensee in accordance with the terms of the contract between the
licensee and the authorized delegate.
(5) If a license is suspended or revoked or a licensee surrenders
its license, the director shall notify all of the licensee’s
authorized delegates whose names are filed with the director, at the
address of record with the director, of the suspension, revocation, or
surrender and shall publish the name of the licensee. An authorized
delegate shall immediately cease to provide money services as a
delegate of the licensee upon receipt of notice, or after publication
is made, that the licensee’s license has been suspended, revoked, or
surrendered.
(6) An authorized delegate may not provide money services other
than those allowed the licensee under its license. In addition, an
authorized delegate may not provide money services outside the scope
of activity permissible under the contract between the authorized
delegate and the licensee, except activity in which the authorized
delegate is authorized to engage under RCW 19.230.030 or 19.230.080.
[2013 c 106 § 5; 2003 c 287 § 14.]
RCW 19.230.130 Authority to conduct examinations and investigations. (1) For the purpose of discovering violations of this chapter or rules adopted under this chapter, discovering unsafe and unsound practices, or securing information lawfully required under
this chapter, the director may at any time, either personally or by
designee, investigate or examine the business and, wherever located,
the books, accounts, records, papers, documents, files, and other
information used in the business of every licensee or its authorized
delegates, and of every person who is engaged in the business of
providing money services, whether the person acts or claims to act
under or without the authority of this chapter. For these purposes,
the director or designated representative shall have free access to
the offices and places of business, books, accounts, papers,
documents, other information, records, files, safes, and vaults of all
such persons. The director or the director’s designee may require the
attendance of and examine under oath all persons whose testimony may
be required about the business or the subject matter of any
investigation, examination, or hearing and may require such person to
produce books, accounts, papers, documents, records, files, and any
other information the director or designated person declares is
relevant to the inquiry. The director may require the production of
original books, accounts, papers, documents, records, files, and other
information; may require that such original books, accounts, papers,
documents, records, files, and other information be copied; or may
make copies himself or herself or by designee of such original books,
accounts, papers, documents, records, files, or other information. The
director or designated person may issue a directive, subpoena, or
subpoena duces tecum requiring attendance or compelling production of
the books, accounts, papers, documents, records, files, or other
information.
(2) The licensee, applicant, or person subject to licensing under
this chapter shall pay the cost of examinations and investigations as
specified in RCW 19.230.320 or rules adopted under this chapter.
(3) Information obtained during an examination or investigation
under this chapter may be disclosed only as provided in RCW
19.230.190. [2017 c 30 § 10; 2003 c 287 § 15.]
RCW 19.230.133 Subpoena authority—Application—Contents—Notice —Fees. (1) The director or authorized assistants may apply for and obtain a superior court order approving and authorizing a subpoena in advance of its issuance. The application may be made in the county where the subpoenaed person resides or is found, or the county where the subpoenaed documents, records, or evidence are located, or in Thurston county. The application must:
(a) State that an order is sought under this section;
(b) Adequately specify the documents, records, evidence, or
testimony; and
(c) Include a declaration made under oath that an investigation
is being conducted for a lawfully authorized purpose related to an
investigation within the department’s authority and that the
subpoenaed documents, records, evidence, or testimony are reasonably
related to an investigation within the department’s authority.
(2) When an application under this section is made to the
satisfaction of the court, the court must issue an order approving the
subpoena. An order under this subsection constitutes authority of law
for the agency to subpoena the documents, records, evidence, or
testimony.
(3) The director or authorized assistants may seek approval and a
court may issue an order under this section without prior notice to
any person, including the person to whom the subpoena is directed and
the person who is the subject of an investigation. An application for
court approval is subject to the fee and process set forth in RCW
36.18.012(3). [2011 c 93 § 6.]
Finding—Intent—2011 c 93: See note following RCW 18.44.425.
RCW 19.230.140 Examinations—Joint and concurrent examinations. (1) The director may: Conduct an on-site examination, participate in a joint or concurrent examination with other state or federal agencies, or investigate the books, accounts, records, papers, documents, files, and other information used in the business of every licensee or its authorized delegates in conjunction with representatives of other state agencies or agencies of another state or of the federal government. The director may accept an examination report or an investigation report of an agency of this state or of another state or of the federal government.
(2) A joint or concurrent examination or investigation, or an
acceptance of an examination or investigation report, does not
preclude the director from conducting an examination or investigation
under this chapter. A joint report or a report accepted under this
section is an official report of the director for all purposes. [2017
c 30 § 11; 2003 c 287 § 16.]
RCW 19.230.150 Reports. (1) A licensee shall file with the director within thirty days any material changes in information provided in a licensee’s application as prescribed in rule by the director. If this information indicates that the licensee is no longer in compliance with this chapter, the director may take any action authorized under this chapter to ensure that the licensee operates in compliance with this chapter.
(2) A licensee shall report all licensee branch locations and all
authorized delegates to the nationwide licensing system within thirty
days of the contractual agreement with the licensee to provide money
services in Washington. Accurate records must be maintained within the
licensing system as prescribed in rule.
(3) A licensee shall file a report with the director within one
business day after the licensee has reason to know of the occurrence
of any of the following events:
(a) The filing of a petition by or against the licensee, or any
authorized delegate of the licensee, under the United States
Bankruptcy Code (11 U.S.C. Sec. 101-110) for bankruptcy or
reorganization;
(b) The filing of a petition by or against the licensee, or any
authorized delegate of the licensee, for receivership, the
commencement of any other judicial or administrative proceeding for
its dissolution or reorganization, or the making of a general
assignment for the benefit of its creditors;
(c) The commencement of a proceeding to revoke, suspend,
restrict, or condition its license, or otherwise discipline or
sanction the licensee, in a state or country in which the licensee
engages in business or is licensed;
(d) The cancellation or other impairment of the licensee’s bond;
(e) A charge or conviction of the licensee or of an executive
officer, responsible individual, board director of the licensee, or
person in control of the licensee, for a felony; or
(f) A charge or conviction of an authorized delegate for a
felony. [2017 c 30 § 12; 2013 c 106 § 6; 2003 c 287 § 17.]
RCW 19.230.152 Reports—Nationwide licensing system. Each licensee shall submit reports of condition through a nationwide licensing system which must be in the form and must contain the information as the director may require. [2017 c 30 § 13; 2014 c 36 § 4.]
RCW 19.230.160 Change of control. (1) A licensee shall:
(a) Provide the director with written notice of a proposed change
of control within fifteen days after learning of the proposed change
of control and at least thirty days prior to the proposed change of
control;
(b) Request approval of the change of control by submitting the
information required in rule by the director; and
(c) Submit, with the notice, a nonrefundable fee as prescribed in
rule by the director.
(2) After review of a request for approval under subsection (1)
of this section, the director may require the licensee to provide
additional information concerning the licensee’s proposed persons in
control. The additional information must be limited to the same types
required of the licensee, or persons in control of the licensee, as
part of its original license application.
(3) The director shall approve a request for change of control
under subsection (1) of this section if, after investigation, the
director determines that the person, or group of persons, requesting
approval meets the criteria for licensing set forth in RCW 19.230.070
and 19.230.100 and that the public interest will not be jeopardized by
the change of control.
(4) Subsection (1) of this section does not apply to a public
offering of securities.
(5) Before filing a request for approval to acquire control of a
licensee, or person in control of a licensee, a person may request in
writing a determination from the director as to whether the person
would be considered a person in control of a licensee upon
consummation of a proposed transaction. If the director determines
that the person would not be a person in control of a licensee, the
director shall respond in writing to that effect and the proposed
person and transaction is not subject to the requirements of
subsections (1) through (3) of this section.
(6) The director may exempt by rule any person from the
requirements of subsection (1)(a) of this section, if it is in the
public interest to do so. [2003 c 287 § 18.]
RCW 19.230.170 Records. (1) A licensee shall maintain the following records for determining its compliance with this chapter for at least five years: (a) A general ledger posted at least monthly containing all
assets, liabilities, capital, income, and expense accounts;
(b) Bank statements and bank reconciliation records;
(c) Monthly reports about permissible investments;
(d) A list of the last known names and addresses of all of the
licensee’s authorized delegates;
(e) Copies of all currency transaction reports and suspicious
activity reports filed in compliance with RCW 19.230.180; and
(f) Any other records required in rule by the director.
(2) The items specified in subsection (1) of this section may be
maintained in any form of record that is readily accessible to the
director or the director’s designee upon request.
(3) Records may be maintained outside this state if they are made
accessible to the director on seven business days’ notice that is sent
in writing.
(4) All records maintained by the licensee are open to inspection
by the director or the director’s designee. [2010 c 73 § 7; 2003 c
287 § 19.]
RCW 19.230.180 Money laundering reports. Every licensee and its authorized delegates shall file all reports required by federal currency reporting, recordkeeping, and suspicious transaction reporting requirements with the appropriate federal agency as set forth in 31 U.S.C. Sec. 5311, 31 C.F.R. Part 1022, and other federal and state laws pertaining to money laundering. Every licensee and its authorized delegates shall maintain copies of these reports in its records in compliance with RCW 19.230.170. [2017 c 30 § 14; 2010 c 73 § 8; 2003 c 287 § 20.]
RCW 19.230.190 Confidentiality. (1) Except as otherwise provided in subsection (2) of this section, all information or reports obtained by the director from an applicant, licensee, or authorized delegate and all information contained in, or related to, examination, investigation, operating, or condition reports prepared by, on behalf of, or for the use of the director, or financial statements, balance sheets, or authorized delegate information, are confidential and are not subject to disclosure under chapter 42.56 RCW.
(2) The director may disclose information not otherwise subject
to disclosure under subsection (1) of this section to representatives
of state or federal agencies who agree in writing to maintain the
confidentiality of the information; or if the director finds that the
release is reasonably necessary for the protection of the public and
in the interests of justice.
(3) This section does not prohibit the director from disclosing
to the public a list of persons licensed or reported with the
department as authorized delegates under this chapter or the
aggregated financial data concerning those licensees. [2017 c 30 §
15; 2005 c 274 § 237; 2003 c 287 § 21.]
RCW 19.230.200 Maintenance of permissible investments. (1)(a) A money transmitter licensee must maintain, at all times, permissible investments that have a market value computed in accordance with generally accepted accounting principles of not less than the amount of the licensee’s average daily transmission liability. Average daily transmission liability means the sum of the daily amounts of a licensee’s outstanding money transmissions, as computed each day of the month divided by the number of days in the month.
(b) A licensee transmitting virtual currencies must hold like-
kind virtual currencies of the same volume as that held by the
licensee but which is obligated to consumers in lieu of the
permissible investments required in (a) of this subsection.
(c) A licensee transmitting both money and virtual currency must
maintain applicable levels and types of permissible investments as
described in (a) and (b) of this subsection.
(2) The director, with respect to any money transmitter licensee,
may limit the extent to which a type of investment within a class of
permissible investments may be considered a permissible investment,
except for money, time deposits, savings deposits, demand deposits,
and certificates of deposit issued by a federally insured financial
institution. The director may prescribe in rule, or by order allow,
other types of investments that the director determines to have a
safety substantially equivalent to other permissible investments.
[2017 c 30 § 16; 2013 c 106 § 7; 2010 c 73 § 9; 2003 c 287 § 22.]
RCW 19.230.210 Types of permissible investments. (1) Except to the extent otherwise limited by the director under RCW 19.230.200, the following investments are permissible for a money transmitter licensee under RCW 19.230.200:
(a) Cash on hand. Time deposits, savings deposits, demand
deposits, certificates of deposit, or senior debt obligations of an
insured depositary institution as defined in section 3 of the federal
Deposit Insurance Act (12 U.S.C. Sec. 1813) or as defined under the
federal Credit Union Act (12 U.S.C. Sec. 1781);
(b) Banker’s acceptance or bill of exchange that is eligible for
purchase upon endorsement by a member bank of the federal reserve
system and is eligible for purchase by a federal reserve bank;
(c) An investment bearing a rating of one of the three highest
grades as defined by a nationally recognized organization that rates
securities;
(d) An investment security that is an obligation of the United
States or a department, agency, or instrumentality thereof; an
investment in an obligation that is guaranteed fully as to principal
and interest by the United States; or an investment in an obligation
of a state or a governmental subdivision, agency, or instrumentality
thereof;
(e) Receivables that are payable to a licensee from its
authorized delegates, in the ordinary course of business, pursuant to
contracts which are not past due or doubtful of collection, if the
aggregate amount of receivables under this subsection (1)(e) does not
exceed thirty percent of the total permissible investments of a
licensee and the licensee does not hold, at one time, receivables
under this subsection (1)(e) in any one person aggregating more than
ten percent of the licensee’s total permissible investments; and
(f) A share or a certificate issued by an open-end management
investment company that is registered with the United States
securities and exchange commission under the Investment Companies Act
of 1940 (15 U.S.C. Sec. 80(a)(1) through (64), and whose portfolio is
restricted by the management company’s investment policy to
investments specified in (a) through (d) of this subsection.
(2) The following investments are permissible under RCW
19.230.200, but only to the extent specified as follows:
(a) An interest-bearing bill, note, bond, or debenture of a
person whose equity shares are traded on a national securities
exchange or on a national over-the-counter market, if the aggregate of
investments under this subsection (2)(a) does not exceed twenty
percent of the total permissible investments of a licensee and the
licensee does not, at one time, hold investments under this subsection
(2)(a) in any one person aggregating more than ten percent of the
licensee’s total permissible investments;
(b) A share of a person traded on a national securities exchange
or a national over-the-counter market or a share or a certificate
issued by an open-end management investment company that is registered
with the United States securities and exchange commission under the
Investment Companies Act of 1940 (15 U.S.C. Sec. 80(a)(1) through
(64), and whose portfolio is restricted by the management company’s
investment policy to shares of a person traded on a national
securities exchange or a national over-the-counter market, if the
aggregate of investments under this subsection (2)(b) does not exceed
twenty percent of the total permissible investments of a licensee and
the licensee does not, at one time, hold investments under this
subsection (2)(b) in any one person aggregating more than ten percent
of the licensee’s total permissible investments;
(c) A demand-borrowing agreement made to a corporation or a
subsidiary of a corporation whose securities are traded on a national
securities exchange, if the aggregate of the amount of principal and
interest outstanding under demand-borrowing agreements under this
subsection (2)(c) does not exceed twenty percent of the total
permissible investments of a licensee and the licensee does not, at
one time, hold principal and interest outstanding under demand-
borrowing agreements under this subsection (2)(c) with any one person
aggregating more than ten percent of the licensee’s total permissible
investments; and
(d) Any other investment the director designates, to the extent
specified in rule by the director.
(3) The aggregate of investments under subsection (2) of this
section may not exceed fifty percent of the total permissible
investments of a licensee.
(4) A licensee may not use any portion of a restricted asset as a
permissible investment. Restricted assets include, but are not limited
to, surety bonds or any other assets pledged to other persons or
entities. The director may establish by rule other restricted assets.
[2017 c 30 § 17; 2010 c 73 § 10; 2003 c 287 § 23.]
RCW 19.230.220 Administrative proceedings. All administrative proceedings under this chapter must be conducted in accordance with the administrative procedure act, chapter 34.05 RCW. Any licensee or authorized delegate subject to a statement of charges and order of intent from the director shall be provided with an opportunity for a hearing as provided for in the administrative procedure act. Unless the person subject to the order appears in person or is represented by counsel at the hearing, the person has consented to issuance of the order. If after a hearing, the director finds by a preponderance of the evidence that grounds for sanctions under this chapter exist, then the director may impose any sanctions authorized by this chapter in a final order. As provided for in RCW 19.230.260, a temporary order to cease and desist is effective upon service upon the licensee or authorized delegate, and remains effective pending a hearing to determine if the order shall become permanent. [2003 c 287 § 24.]
RCW 19.230.230 License suspension, revocation—Receivership.
(1) The director may issue an order to suspend, revoke, or condition a license, place a licensee in receivership, revoke the designation of an authorized delegate, compel payment of restitution by a licensee to damaged parties, require affirmative actions as are necessary by a licensee to comply with this chapter or rules adopted under this chapter, or remove from office or prohibit from participation in the affairs of any authorized delegate or any licensee, or both, any responsible individual, executive officer, person in control, or employee of the licensee, if:
(a) The licensee violates this chapter or a rule adopted or an
order issued under this chapter or is convicted of a violation of a
state or federal money laundering or terrorism statute;
(b) The licensee does not cooperate with an examination,
investigation, or subpoena lawfully issued by the director or the
director’s designee;
(c) The licensee engages in fraud, intentional misrepresentation,
or gross negligence;
(d) An authorized delegate is convicted of a violation of a state
or federal money laundering statute, or violates this chapter or a
rule adopted or an order issued under this chapter as a result of the
licensee’s willful misconduct or deliberate avoidance of knowledge;
(e) The financial condition and responsibility, competence,
experience, character, or general fitness of the licensee, authorized
delegate, person in control of a licensee, or responsible individual
of the licensee or authorized delegate indicates that it is not in the
public interest to permit the person to provide money services;
(f) The licensee engages in an unsafe or unsound practice, or an
unfair and deceptive act or practice;
(g) The licensee is insolvent, fails to maintain the required net
worth, suspends payment of its obligations, or makes a general
assignment for the benefit of its creditors;
(h) The licensee does not remove an authorized delegate after the
director issues and serves upon the licensee a final order including a
finding that the authorized delegate has violated this chapter; or
(i) The licensee, its responsible individual, or any of its
executive officers or other persons in control of the licensee are
listed or become listed on the specially designated nationals and
blocked persons list prepared by the United States department of the
treasury as a potential threat to commit terrorist acts or to finance
terrorist acts.
(2) In determining whether a licensee or other person subject to
this chapter is engaging in an unsafe or unsound practice, the
director may consider the size and condition of the licensee’s money
transmission services, the magnitude of the loss or potential loss to
consumers or others, the gravity of the violation of this chapter, any
action against the licensee by another state or the federal
government, and the previous conduct of the person involved.
(3) The director shall immediately suspend any certification of
licensure issued under this chapter if the holder of the certificate
has been certified pursuant to RCW 74.20A.320 by the department of social and health services as a person who is not in compliance with a
support order. If the person has continued to meet all other
requirements for certification during the suspension, reissuance of
the certificate of licensure shall be automatic upon the director’s
receipt of a release issued by the department of social and health
services stating that the person is in compliance with the order.
[2003 c 287 § 25.]
RCW 19.230.233 Informal settlement of complaints or enforcement actions. Except to the extent prohibited by another statute, the director may engage in informal settlement of complaints or enforcement actions including, but not limited to, payment to the department for purposes of financial literacy and education programs authorized under RCW 43.320.150. [2012 c 17 § 16.]
RCW 19.230.240 Suspension and revocation of authorized delegates. (1) The director may issue an order to suspend, revoke, or condition the designation of an authorized delegate, impose civil penalties, require payment of restitution to damaged parties, require affirmative actions as are necessary to comply with this chapter or the rules adopted under this chapter, or remove from office or prohibit from participation in the affairs of the authorized delegate or licensee, or both, any executive officer, person in control, or employee of the authorized delegate if the director finds that:
(a) The authorized delegate violated this chapter or a rule
adopted or an order issued under this chapter;
(b) The authorized delegate does not cooperate with an
examination, investigation, or subpoena lawfully issued by the
director or the director’s designee;
(c) The authorized delegate engaged in fraud, intentional
misrepresentation, or gross negligence;
(d) The authorized delegate is convicted of a violation of a
state or federal money laundering or terrorism statute;
(e) The competence, experience, character, or general fitness of
the authorized delegate or a person in control of the authorized
delegate indicates that it is not in the public interest to permit the
authorized delegate to provide money services;
(f) The authorized delegate engaged in or is engaging in an
unsafe or unsound practice, or unfair and deceptive act or practice;
or
(g) The authorized delegate, or any of its executive officers or
other persons in control of the authorized delegate, are listed or
become listed on the specially designated nationals and blocked
persons list prepared by the United States department of the treasury
as a potential threat to commit terrorist acts or to finance terrorist
acts.
(2) In determining whether an authorized delegate is engaging in
an unsafe or unsound practice, the director may consider the size and
condition of the authorized delegate’s provision of money services,
the magnitude of the loss or potential loss to consumers or others,
the gravity of the violation of this chapter or a rule adopted or
order issued under this chapter, any action against the authorized
delegate taken by another state or the federal government, and the
previous conduct of the authorized delegate. [2003 c 287 § 26.]
RCW 19.230.250 Unlicensed persons. (1) If the director has reason to believe that a person has violated or is violating RCW 19.230.030 or 19.230.080, the director or the director’s designee may conduct an examination or investigation as authorized under RCW 19.230.130.
(2) If as a result of such investigation or examination, the
director finds that a person has violated RCW 19.230.030 or
19.230.080, the director may issue a temporary cease and desist order
as authorized under RCW 19.230.260.
(3) If as a result of such an investigation or examination, the
director finds that a person has violated RCW 19.230.030 or
19.230.080, the director may issue an order to prohibit the person
from continuing to engage in providing money services, to compel the
person to pay restitution to damaged parties, to impose civil money
penalties on the person, which may include the costs and expenses to
investigate and prosecute violations of this chapter, and to prohibit
from participation in the affairs of any licensee or authorized
delegate, or both, any executive officer, person in control, or
employee of the person.
(4) The director may petition the superior court for the issuance
of a temporary restraining order under the rules of civil procedure.
[2017 c 30 § 18; 2003 c 287 § 27.]
RCW 19.230.260 Temporary orders to cease and desist. (1) If the director determines that a violation of this chapter or of a rule adopted or an order issued under this chapter by a licensee, authorized delegate, or other person subject to this chapter is likely to cause immediate and irreparable harm to the licensee, its customers, or the public as a result of the violation, or cause insolvency or significant dissipation of the assets of the licensee, the director may issue a temporary order to cease and desist requiring the licensee, authorized delegate, or other person subject to this chapter to cease and desist from conducting business in this state or to cease and desist from the violation or undertake affirmative actions as are necessary to comply with this chapter, any rule adopted under this chapter, or order issued by the director under this chapter. The order is effective upon service upon the licensee, authorized delegate, or other person subject to this chapter.
(2) A temporary order to cease and desist remains effective and
enforceable pending the completion of an administrative proceeding
under chapter 34.05 RCW. If, after a hearing, the director finds that
by a preponderance of the evidence, all or any part of the order is
supported by the facts, the director may make the temporary order to
cease and desist permanent under chapter 34.05 RCW.
(3) A licensee, an authorized delegate, or other person subject
to this chapter that is served with a temporary order to cease and
desist may petition the superior court for a judicial order setting
aside, limiting, or suspending the enforcement, operation, or
effectiveness of the order pending the completion of an administrative
proceeding under chapter 34.05 RCW. [2003 c 287 § 28.]
RCW 19.230.270 Consent orders. The director may enter into a consent order at any time with a person to resolve a matter arising under this chapter or a rule adopted or order issued under this chapter. A consent order must be signed by the person to whom it is issued or by the person’s authorized representative, and must indicate
agreement with the terms contained in the order. [2003 c 287 § 29.]
RCW 19.230.280 Violations—Liability. (1) A licensee is liable for any conduct violating this chapter or rules adopted under this chapter committed by employees of the licensee.
(2) A licensee that commits willful misconduct in its supervision
of its authorized delegate or willfully avoids knowledge of its
authorized delegate’s business activities may be subjected to
administrative sanctions for any violations of this chapter or rules
adopted under this chapter by the licensee’s authorized delegates.
(3) The responsible individual is responsible under the license
and may be subjected to administrative sanctions for any violations of
this chapter or rules adopted under this chapter committed by the
licensee or, if the responsible individual commits willful misconduct
in supervising an authorized delegate or willfully avoids knowledge of
an authorized delegate’s business activities, violations committed by
the licensee’s authorized delegates. [2003 c 287 § 30.]
RCW 19.230.290 Civil penalties. The director may assess a civil penalty against a licensee, responsible individual, authorized delegate, or other person that violates this chapter or a rule adopted or an order issued under this chapter in an amount not to exceed one hundred dollars per violation per day for each day the violation is outstanding, plus this state’s costs and expenses for the investigation and prosecution of the matter, including reasonable attorneys’ fees. [2017 c 30 § 19; 2003 c 287 § 31.]
RCW 19.230.300 Criminal penalties. (1) A person that intentionally makes a false statement, misrepresentation, or false certification in a record filed or required to be maintained under this chapter or that intentionally makes a false entry or omits a material entry in that record is guilty of a class C felony under chapter 9A.20 RCW.
(2) A person that knowingly engages in an activity for which a
license is required under this chapter without being licensed under
this chapter and who receives more than five hundred dollars in
compensation within a thirty-day period from this activity is guilty
of a gross misdemeanor under chapter 9A.20 RCW.
(3) A person that knowingly engages in an activity for which a
license is required under this chapter without being licensed under
this chapter and who receives no more than five hundred dollars in
compensation within a thirty-day period from this activity is guilty
of a misdemeanor under chapter 9A.20 RCW. [2003 c 287 § 32.]
RCW 19.230.303 Statute of limitations. The statute of limitations on actions not subject to RCW 4.16.160 that are brought under this chapter by the director is five years. [2014 c 36 § 3.]
RCW 19.230.310 Administration and rule-making powers. The director has the authority and administrative discretion to administer and interpret this chapter to fulfill the intent of the legislature as
expressed in RCW 19.230.005. In accordance with chapter 34.05 RCW, the
director may issue rules under this chapter that are clearly required
to govern the activities of licensees and other persons subject to
this chapter. [2013 c 106 § 8; 2003 c 287 § 33.]
RCW 19.230.320 Fees. (1) The director shall establish fees by rule sufficient to cover the costs of administering this chapter. The director may establish different fees for each type of license authorized under this chapter. These fees may include:
(a) An annual assessment specified in rule by the director paid
by each licensee on or before the annual assessment due date;
(b) A late fee for late payment of the annual assessment as
specified in rule by the director;
(c) An hourly investigation fee to cover the costs of any
investigation of the books and records of a licensee or other person
subject to this chapter;
(d) A nonrefundable application fee to cover the costs of
processing license applications made to the director under this
chapter;
(e) An initial license fee to cover the period from the date of
licensure to the end of the calendar year in which the license is
initially granted; and
(f) A transaction fee or set of transaction fees to cover the
administrative costs associated with processing changes in control,
changes of address, and other administrative changes as specified in
rule by the director.
(2) The director shall ensure that when an examination or
investigation, or any part of the examination or investigation, of any
licensee applicant or person subject to licensing under this chapter,
requires travel and services outside this state by the director or
designee, the licensee applicant or person subject to licensing under
this chapter that is the subject of the examination or investigation
shall pay the actual travel expenses incurred by the director or
designee conducting the examination or investigation.
(3) All moneys, fees, and penalties collected under this chapter
shall be deposited into the financial services regulation account.
(4) The director or designee may waive all or a portion of the
fees and assessments under this chapter. [2017 c 30 § 20; 2010 c 73 §
11; 2003 c 287 § 34.]
RCW 19.230.330 Money transmitter delivery, receipts, and refunds. (1)(a) Every money transmitter licensee and its authorized delegates shall transmit the monetary equivalent of all money or equivalent value received from a customer for transmission, net of any fees, or issue instructions committing the money or its monetary equivalent, to the person designated by the customer within ten business days after receiving the money or equivalent value, unless otherwise ordered by the customer or when the transmission is for the payment of goods or services or unless the licensee or its authorized delegate has reason to believe that a crime has occurred, is occurring, or may occur as a result of transmitting the money. For purposes of this subsection, money is considered to have been transmitted when it is available to the person designated by the customer and a reasonable effort has been made to inform this designated person that the money is available, whether or not the
designated person has taken possession of the money. As used in this
subsection, “monetary equivalent,” when used in connection with a
money transmission in which the customer provides the licensee or its
authorized delegate with the money of one government, and the
designated recipient is to receive the money of another government,
means the amount of money, in the currency of the government that the
designated recipient is to receive, as converted at the retail
exchange rate offered by the licensee or its authorized delegate to
the customer in connection with the transaction.
(b) A money transmitter licensee that accepts money or its
equivalent from consumers purchasing goods or services from third-
party merchants and transmits the money or its equivalent to those
merchants selling the goods or services to the consumer must:
(i) Transmit the money or its equivalent to the merchant within
the time frame agreed upon in the merchant’s agreement with the money
transmitter licensee; and
(ii) Conspicuously disclose to the merchant in the agreement the
money transmitter licensee’s authority to place a hold or delay in
transmittal of consumer money or its equivalent for more than ten
business days and the general circumstances under which the merchant
may be subject to a hold or delay.
(2)(a) Every money transmitter licensee and its authorized
delegates shall provide a receipt to the customer that clearly states
the amount of money presented for transmission and the total of any
fees charged by the licensee. If the rate of exchange for a money
transmission to be paid in the currency of another country is fixed by
the licensee for that transaction at the time the money transmission
is initiated, then the receipt provided to the customer shall disclose
the rate of exchange for that transaction, and the duration, if any,
for the payment to be made at the fixed rate of exchange so specified.
If the rate of exchange for a money transmission to be paid in the
currency of another country is not fixed at the time the money
transmission is sent, the receipt provided to the customer shall
disclose that the rate of exchange for that transaction will be set at
the time the recipient of the money transmission picks up the funds in
the foreign country. The receipt shall also contain the licensee name,
address, and phone number. As used in this section, “fees” does not
include revenue that a licensee or its authorized delegate generates,
in connection with a money transmission, in the conversion of the
money of one government into the money of another government.
(b) Licensees acting as payment processors not excluded from this
chapter do not have to comply with (a) of this subsection if they have
no control over receipts issued by merchants or other parties having
interactions with the consumer.
(3) Every money transmitter licensee and its authorized delegates
shall refund to the customer all moneys received for transmittal
within ten days of receipt of a written request for a refund unless
any of the following occurs:
(a) The moneys have been transmitted and delivered to the person
designated by the customer prior to receipt of the written request for
a refund;
(b) Instructions have been given committing an equivalent amount
of money to the person designated by the customer prior to receipt of
a written request for a refund;
(c) The licensee or its authorized delegate has reason to believe
that a crime has occurred, is occurring, or may potentially occur as a result of transmitting the money as requested by the customer or
refunding the money as requested by the customer; or
(d) The licensee is otherwise barred by law from making a refund.
[2017 c 30 § 22; 2014 c 206 § 1; 2010 c 73 § 12; 2003 c 287 § 35.]
RCW 19.230.340 Prohibited practices. It is a violation of this chapter for any licensee, executive officer, responsible individual, or other person subject to this chapter in connection with the provision of money services to:
(1) Directly or indirectly employ any scheme, device, or artifice
to defraud or mislead any person, including but not limited to
engaging in bait and switch advertising or sales practices;
(2) Directly or indirectly engage in any unfair or deceptive act
or practice toward any person, including but not limited to any false
or deceptive statement about fees or other terms of a money
transmission or currency exchange;
(3) Directly or indirectly obtain property by fraud or
misrepresentation;
(4) Knowingly make, publish, or disseminate any false, deceptive,
or misleading information in the provision of money services;
(5) Knowingly receive or take possession for personal use of any
property of any money services business, other than in payment for
services rendered, and with intent to defraud, omit to make, or cause
or direct to omit to make, a full and true entry thereof in the books
and accounts of the business;
(6) Make or concur in making any false entry, or omit or concur
in omitting any material entry, in the books or accounts of the
business;
(7) Knowingly make or publish to the director or director’s
designee, or concur in making or publishing to the director or
director’s designee any written report, exhibit, or statement of its
affairs or pecuniary condition containing any material statement which
is false, or omit or concur in omitting any statement required by law
to be contained therein; or
(8) Fail to make any report or statement lawfully required by the
director or other public official. [2003 c 287 § 36.]
RCW 19.230.350 Third-party account administrators—Licensure required—Requirements. (1) A third-party account administrator must be licensed as a money transmitter under this chapter and comply with the following additional requirements:
(a) A debtor’s funds must be held in an account at an insured
financial institution;
(b) A debtor owns the funds held in the account and must be paid
accrued interest on the account, if any;
(c) A third-party account administrator may not be owned or
controlled by, or in any way affiliated with, a debt adjuster;
(d) A third-party account administrator may not give or accept
any money or other compensation in exchange for referrals of business
involving a debt adjuster;
(e) A debtor may withdraw from the service provided by a third-
party account administrator at any time without penalty and must
receive all funds in the account, other than funds earned by a debt adjuster in compliance with chapter 18.28 RCW, within seven business
days of the debtor’s request; and
(f) A contract between a third-party account administrator and a
debtor must disclose in precise terms the rate and amount of all
charges and fees. In addition, the contract must include a statement
that is substantially similar to the following: “Under the Washington
Debt Adjusting Act, the total fees you are charged for debt adjusting
services may not exceed fifteen percent of the total amount of debt
you listed on your contract with the debt adjuster. This includes fees
charged by a debt adjuster, a third-party account administrator, and a
financial institution.” The disclosures required by this subsection
(1)(f) must be on the front page of the contract and must be in at
least twelve-point type.
(2) The legislature finds and declares that any violation of this
section substantially affects the public interest and is an unfair and
deceptive act or practice and [an] unfair method of competition in the
conduct of trade or commerce as set forth in RCW 19.86.020. In
addition to all remedies available in chapter 19.86 RCW, a person
injured by a violation of this section may bring a civil action to
recover the actual damages proximately caused by a violation of this
section, or one thousand dollars, whichever is greater.
(3) For purposes of this section and RCW 19.230.360:
(a) “Debt adjuster” has the same meaning as defined in RCW
18.28.010;
(b) “Third-party account administrator” means an independent
entity that holds or administers a dedicated bank account for fees and
payments to creditors, debt collectors, debt adjusters, or debt
adjusting agencies in connection with the renegotiation, settlement,
reduction, or other alteration of the terms of payment or other terms
of a debt. “Third-party account administrator” does not include an
entity that is otherwise exempt from this chapter under RCW
19.230.020. [2012 c 56 § 3.]
Information—Report—2012 c 56: “(1) Any person or entity that provides debt adjusting services, as defined in RCW 18.28.010, in this state shall provide the following information to the department of financial institutions by September 1, 2012:
(a) The percentage of Washington debtors for whom the debt
adjuster provides or provided debt adjusting services in the previous
three years who canceled, terminated, or otherwise stopped using the
debt adjuster’s services without settlement of all of the debtor’s
debts;
(b) The total fees collected from Washington debtors during the
previous three years; and
(c) For each debtor for whom the debt adjuster provides debt
adjusting services:
(i) The number of debts included in the contract between the debt
adjuster and the debtor;
(ii) The principal amount of each debt at the time the contract
was signed;
(iii) Whether each debt is active, terminated, or settled;
(iv) If a debt has been settled, the settlement amount of the
debt and the savings amount; and
(v) The total fees charged to the debtor and how the fees were
calculated.
(2) The department of financial institutions shall submit a
report to the appropriate committees of the legislature summarizing
the information received under subsection (1) of this section by
December 1, 2012.” [2012 c 56 § 5.]
RCW 19.230.360 Third-party account administrators—Record maintenance. (1) A third-party account administrator shall maintain the following records for at least five years:
(a) All contracts the third-party account administrator has
entered into with debtors and debt adjusters;
(b) Account statements identifying and itemizing deposits,
transfers, disbursements, and fees; and
(c) Any other records required in rule by the director.
(2) All records maintained by the third-party account
administrator are open to inspection by the director or the director’s
designee. [2012 c 56 § 4.]
Information—Report—2012 c 56: See note following RCW 19.230.350.
RCW 19.230.370 Virtual currency licensees—Disclosures. (1) Virtual currency licensees must provide to any person seeking to use the licensee’s products or services the disclosures required by subsection (2) of this section.
(2) As applicable, virtual currency licensees must make the
following disclosures:
(a) A schedule of all fees and charges the licensee may assess on
a transaction, how the fees and charges will be calculated if not set
in advance and disclosed, and the timing of the fees and charges.
(b) Whether the product or service provided is insured or
guaranteed by an agency of the United States, such as the federal
deposit insurance corporation or the securities investor protection
corporation or by private insurance against theft or loss, including
cybertheft or theft by other means.
(c) A notice that the transfer of virtual currency or digital
units is irrevocable and any exception to the irrevocability of
transfer.
(d) A notice describing the licensee’s liability for
unauthorized, mistaken, or accidental transfers and, describing the
user’s responsibility for providing notice of such mistake to the
licensee and of general error-resolution rights applicable to any
transaction.
(3) Licensees must provide any additional disclosures the
director may require as set forth in rule.
(4) Disclosures required by this section must be made separately
from any other information provided by the licensee and in a clear and
conspicuous manner. [2017 c 30 § 21.]
RCW 19.230.900 Short title. This chapter may be known and cited as the uniform money services act. [2003 c 287 § 1.]
RCW 19.230.901 Effective date—2003 c 287. This act takes effect October 1, 2003. [2003 c 287 § 37.]
RCW 19.230.902 Implementation. The director or the director’s designee may take such steps as are necessary to ensure that chapter 287, Laws of 2003 is implemented on October 1, 2003. In particular, the director or the director’s designee shall conduct outreach to small businesses and immigrant communities to enhance awareness of and compliance with state and federal laws governing money transmission and currency exchange, and to provide technical assistance in applying for a license under this chapter and understanding the requirements of this chapter. [2003 c 287 § 38.]
RCW 19.230.903 Uniformity of application and construction. In applying and construing this chapter, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it. [2003 c 287 § 39.]