Section 36a-595 – (Formerly Sec. 36-530). Short title: Money Transmission Act.

Universal Citation: CT Gen Stat § 36a-595 (2013) 

Sections 36a-595 to 36a-612, inclusive, shall be known and may be cited as the “Money Transmission Act”.

Section 36a-596 – (Formerly Sec. 36-531). Definitions.

Universal Citation: CT Gen Stat § 36a-596 (2013) 

As used in sections 36a-595 to 36a-612, inclusive:

(1) “Authorized delegate” means a person designated by a person licensed pursuant to sections 36a-595 to 36a-612, inclusive, to provide money transmission services on behalf of such licensed person.

(2) “Electronic payment instrument” means a card or other tangible object for the transmission of money or monetary value or payment of money which contains a microprocessor chip, magnetic stripe, or other means for the storage of information, that is prefunded and for which the value is decremented upon each use, but does not include a card or other tangible object that is redeemable by the issuer in the issuer’s goods or services.

(3) “Holder” means a person, other than a purchaser, who is either in possession of a payment instrument and is the named payee thereon or in possession of a payment instrument issued or endorsed to such person or bearer or in blank. “Holder” does not include any person who is in possession of a lost, stolen or forged payment instrument.

(4) “Licensee” means any person licensed or required to be licensed pursuant to sections 36a-595 to 36a-612, inclusive.

(5) “Monetary value” means a medium of exchange, whether or not redeemable in money.

(6) “Money transmission” means engaging in the business of issuing or selling payment instruments or stored value, receiving money or monetary value for current or future transmission or the business of transmitting money or monetary value within the United States or to locations outside the United States by any and all means including, but not limited to, payment instrument, wire, facsimile or electronic transfer.

(7) “Outstanding” means (A) in the case of a payment instrument or stored value, that: (i) It is sold or issued in the United States; (ii) a report of it has been received by a licensee from its authorized delegates; and (iii) it has not yet been paid by the issuer, and (B) for all other money transmissions, the value reported to the licensee for which the licensee or any authorized delegate 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.

(8) “Payment instrument” means a check, draft, money order, travelers check or electronic payment instrument that evidences either an obligation for the transmission of money or monetary value or payment of money, or the purchase or the deposit of funds for the purchase of such check, draft, money order, travelers check or electronic payment instrument.

(9) “Permissible investment” means: (A) Cash in United States currency; (B) time deposits, as defined in section 36a-2, or other debt instruments of a bank; (C) bills of exchange or bankers acceptances which are eligible for purchase by member banks of the Federal Reserve System; (D) commercial paper of prime quality; (E) interest-bearing bills, notes, bonds, debentures or other obligations issued or guaranteed by: (i) The United States or any of its agencies or instrumentalities, or (ii) any state, or any agency, instrumentality, political subdivision, school district or legally constituted authority of any state if such investment is of prime quality; (F) interest-bearing bills or notes, or bonds, debentures or preferred stocks, traded on any national securities exchange or on a national over-the-counter market, if such debt or equity investments are of prime quality; (G) receivables due from authorized delegates consisting of the proceeds of the sale of payment instruments which are not past due or doubtful of collection; (H) gold; and (I) any other investments approved by the commissioner. Notwithstanding the provisions of this subdivision, if the commissioner at any time finds that an investment of a licensee is unsatisfactory for investment purposes, the investment shall not qualify as a permissible investment.

(10) “Prime quality” of an investment means that it is within the top four rating categories in any rating service recognized by the commissioner unless the commissioner determines for any licensee that only those investments in the top three rating categories qualify as “prime quality”.

(11) “Purchaser” means a person who buys or has bought a payment instrument or who has given money or monetary value for current or future transmission.

(12) “Stored value” means monetary value that is evidenced by an electronic record. For the purposes of this subdivision, “electronic record” means information that is stored in an electronic medium and is retrievable in perceivable form.

(13) “Travelers check” means a payment instrument for the payment of money that contains a provision for a specimen signature of the purchaser to be completed at the time of a purchase of the instrument and a provision for a countersignature of the purchaser to be completed at the time of negotiation.

(P.A. 81-264, S. 2; P.A. 87-9, S. 2, 3; P.A. 92-12, S. 96; P.A. 94-122, S. 276, 340; P.A. 98-192, S. 3; 98-258, S. 4; P.A. 01-56, S. 3; P.A. 02-73, S. 84; P.A. 04-14, S. 3; 04-136, S. 43; P.A. 07-91, S. 8; P.A. 09-208, S. 13; P.A. 13-253, S. 2.)

History: (Revisor’s note: Pursuant to P.A. 87-9 “banking commissioner” was changed editorially by the Revisors to “commissioner of banking”); P.A. 92-12 redesignated Subdivs. and Subparas.; P.A. 94-122 deleted former Subdivs. (1) and (2) defining “commissioner” and “financial institution”, renumbered former Subdivs. (3) through (9) as Subdivs. (1) through (7), deleted Subdiv. (10) defining “person” and renumbered former Subdivs. (11) through (13) as Subdivs. (8) through (10), effective January 1, 1995; Sec. 36-531 transferred to Sec. 36a-596 in 1995; (Revisor’s note: In 1997 the reference in Subdiv. (7) to “… time deposits, as defined in subdivision (55) of section 36a-2 …” was corrected editorially by the Revisors to “… time deposits, as defined in subdivision (62) of section 36a-2 …” to reflect the current internal numbering of that section); P.A. 98-192 added new Subdiv. (1) defining “electronic payment instrument”, made conforming changes and redesignated existing Subdivs. (1) to (10) as Subdivs. (2) to (11); P.A. 98-258 made a technical change in Subdiv. (7); P.A. 01-56 made technical changes in Subdiv. (2) defining “holder”, deleted former Subdiv. (3) defining “instrument” and renumbered existing Subdiv. (4) as Subdiv. (3), added new Subdiv. (4) defining “material litigation”, made technical changes in Subdiv. (5) defining “money order”, added new Subdiv. (6) defining “money transmission” and renumbered existing Subdivs. (6) and (7) as Subdivs. (7) and (8), redefined “outstanding” in redesignated Subdiv. (8), added new Subdiv. (9) defining “payment instrument”, renumbered existing Subdivs. (8) to (11) as Subdivs. (10) to (13) and made technical changes in redesignated Subdivs. (10) to (13); P.A. 02-73 amended Subdiv. (10)(B) by changing reference from Subdiv. (63) to Subdiv. (65) of Sec. 36a-2; P.A. 04-14 added definitions of “monetary value” in new Subdiv. (5) and “stored value” and “electronic record” in new Subdiv. (14), renumbering the existing Subdivs. accordingly, inserted references to “monetary value” and “current or future” transmission in definition of “money transmission”, inserted references to “stored value” in definitions of “money transmission” and “outstanding” and, in Subpara. (A) of the latter definition, inserted “or issued”, and made a technical change in definition of “permissible investment”, effective April 16, 2004; P.A. 04-136 amended Subdiv. (10)(B) to make a technical change, effective May 12, 2004; P.A. 07-91 inserted references to transmission “of money or monetary value” in definitions of “electronic payment instrument” and “payment instrument” in Subdivs. (1) and (10); P.A. 09-208 redefined “licensee” in Subdiv. (3), “outstanding” in Subdiv. (9) and “purchaser” in Subdiv. (13) and defined “unsafe or unsound practice” in Subdiv. (16), effective July 7, 2009; P.A. 13-253 added reference to Secs. 36a-611 and 36a-612, added new Subdiv. (1) defining “authorized delegate”, redesignated existing Subdivs. (1) to (3) as Subdivs. (2) to (4), deleted former Subdiv. (4) defining “material litigation”, deleted former Subdiv. (6) defining “money order”, redesignated existing Subdiv. (7) as Subdiv. (6) and amended same to redefine “money transmission”, deleted former Subdiv. (8) defining “net worth”, redesignated existing Subdiv. (9) as Subdiv. (7) and amended same to redefine “outstanding”, redesignated existing Subdiv. (10) as Subdiv. (8) and amended same to redefine “payment instrument”, redesignated existing Subdiv. (11) as Subdiv. (9) and amended same to redefine “permissible investment”, redesignated existing Subdivs. (12) to (15) as Subdivs. (10) to (13), deleted former Subdiv. (16) defining “unsafe or unsound practice”, and made technical and conforming changes.

Section 36a-597 – (Formerly Sec. 36-532). License required. Penalty.

Universal Citation: CT Gen Stat § 36a-597 (2013) 

(a) No person shall engage in the business of money transmission in this state, or advertise or solicit such services, without a license issued by the commissioner as provided in sections 36a-595 to 36a-612, inclusive, except as an authorized delegate of a person that has been issued a license by the commissioner and in accordance with section 36a-607. A person shall be deemed to be engaged in the business of money transmission in this state if such person: (1) Has a place of business in this state, (2) receives money or monetary value in this state or from a person located in this state, (3) transmits money or monetary value from a location in this state or to a person located in this state, (4) issues stored value or payment instruments that are sold in this state, or (5) sells stored value or payment instruments in this state. The licensee shall promptly notify the commissioner, in writing, of the termination of the contract between such licensee and authorized delegate.

(b) Any person who knowingly engages in the business of money transmission in this state, without obtaining a license, as provided in sections 36a-595 to 36a-612, inclusive, shall be guilty of a class D felony. Each transaction in violation of the provisions of this subsection shall constitute a separate offense.

(P.A. 81-264, S. 3; P.A. 01-56, S. 4; P.A. 03-61, S. 3; P.A. 04-61, S. 1; P.A. 09-208, S. 14; P.A. 13-253, S. 3.)

History: Sec. 36-532 transferred to Sec. 36a-597 in 1995; P.A. 01-56 changed “Connecticut instruments” to “Connecticut payment instruments” and reworded language re money transmission; P.A. 03-61 substituted “or an entity or a person exempt under section 36a-609 and in accordance with” for “as provided in”; P.A. 04-61 designated existing provisions as Subsec. (a) and added new Subsec. (b) re criminal penalty for knowingly engaging in business of issuing Connecticut payment instruments or money transmission without a license; P.A. 09-208 amended Subsec. (a) by removing references to “subagents” of licensees, requiring licensee and agent to notify commissioner in writing of the termination of the contract between them, and making technical changes, effective July 7, 2009; P.A. 13-253 amended Subsec. (a) by deleting references to issuing Connecticut payment instruments, adding provision requiring that money transmission occur in this state and prohibiting the advertising or soliciting of money transmission services without a license, deleting references to Sec. 36a-600, adding reference to Secs. 36a-611 and 36a-612, changing “agent” to “authorized delegate”, deleting provision re entity or person exempt under Sec. 36a-609, adding provision re when person deemed to be engaged in the business of money transmission and making technical changes, and amended Subsec. (b) by deleting reference to issuing Connecticut payment instruments, adding provision requiring that money transmission occur in this state and replacing reference to Sec. 36a-600 with reference to Secs. 36a-595 to 36a-612.

Section 36a-598 – (Formerly Sec. 36-533). Application. Criminal history records check. Abandonment of application. Changes. Notice to commissioner.

Universal Citation: CT Gen Stat § 36a-598 (2013) 

(a) Each application for an initial or renewal license required under sections 36a-595 to 36a-612, inclusive, shall be made in writing and under oath to the commissioner in such form as the commissioner may prescribe. The application shall include:

(1) The exact name of the applicant and, if incorporated, the date of incorporation and the state where incorporated;

(2) The complete address of the principal office from which the business is to be conducted and of the office where the books and records of the applicant are to be maintained;

(3) The complete name and address of each of the applicant’s locations and authorized delegates, if any, through which the applicant intends to engage in the business of money transmission in this state;

(4) The name, title, address and telephone number of the person to whom notice of the commissioner’s approval or disapproval of the application shall be sent and to whom any inquiries by the commissioner concerning the application shall be directed;

(5) The name and residence address of the individual, if the applicant is an individual; the partners, if the applicant is a partnership; the directors, trustees, principal officers, and any shareholder owning ten per cent or more of each class of its securities, if the applicant is a corporation or association; or the members, if the applicant is a limited liability company;

(6) (A) A copy of the applicant’s audited financial statements for the most recent fiscal year, (B) if the applicant is a wholly-owned subsidiary of another corporation, (i) the most recent audited consolidated annual financial statements of the parent corporation or the applicant’s most recent audited consolidated annual financial statement, and (ii) the most recent audited unconsolidated financial statement of the applicant, including its balance sheet and receipts and disbursements for the preceding year, (C) if the applicant is publicly traded, a copy of the most recent 10-K report that such applicant filed with the Securities Exchange Commission or, if the applicant is a wholly-owned subsidiary of a publicly traded company, a copy of the parent company’s most recent 10-K report that was filed with the Securities and Exchange Commission, and (D) if the applicant or parent company of a wholly-owned subsidiary applicant is publicly traded on a foreign exchange, a copy of documentation similar to the report filed pursuant to subparagraph (C) of this subdivision that was filed with the applicable securities regulator;

(7) A list of the applicant’s permissible investments, the book and market values of such investments, and the dollar amount of the applicant’s aggregate outstanding money transmissions (A) as of the date of the financial statement filed in accordance with subdivision (6) of this subsection; and (B) as of a date no earlier than thirty business days prior to the filing of the application;

(8) The history of material litigation for the five-year period prior to the date of the application of the individual, if the applicant is an individual; the partners, if the applicant is a partnership; the directors, trustees, principal officers and any shareholder owning ten per cent or more of each class of its securities, if the applicant is a corporation or association; or the members, if the applicant is a limited liability company, and sufficient information pertaining to the history of material litigation, in a form acceptable to the commissioner, on such individual or the partners, directors, trustees, principal officers, members and any shareholder owning ten per cent or more of each class of the applicant’s securities. For purposes of this section, “material litigation” means any litigation that, according to generally accepted accounting principles, is deemed significant to a person’s financial health and that such person is required to reference in an annual audited financial statement, a report to shareholders or a similar document;

(9) (A) The history of criminal convictions of the individual, if the applicant is an individual; the partners, if the applicant is a partnership; the directors, trustees, principal officers and any shareholder owning ten per cent or more of each class of its securities if the applicant is a corporation or association; or the members, if the applicant is a limited liability company, and (B) sufficient information pertaining to the history of criminal convictions, in a form acceptable to the commissioner, on such individual or the partners, directors, trustees, principal officers, members and any shareholder owning ten per cent or more of each class of the applicant’s securities;

(10) (A) The surety bond required by subsection (a) of section 36a-602, if applicable;

(B) A list of the investments maintained in accordance with subsection (d) of section 36a-602, if applicable, and the book and market values of any such investments (i) as of the date of the financial statement filed in accordance with subdivision (6) of this subsection; and (ii) as of a date no earlier than thirty business days prior to the filing of the application;

(11) A statement describing the type of money transmission business that will be conducted by the applicant in this state;

(12) The name and address of any financial institution used by the applicant for its money transmission business in this state;

(13) For each authorized delegate, a sample of the contract evidencing the proposed arrangement between the applicant and the authorized delegate; and

(14) Any other information the commissioner may require.

(b) The commissioner, in accordance with section 29-17a, may conduct a state and national criminal history records check of the individual applicant and of each partner, director, trustee, principal officer, member and shareholder owning ten per cent or more of each class of the securities of the applicant. The commissioner may deem an application for a license to engage in the business of money transmission in this state abandoned if the applicant fails to respond to any request for information required under sections 36a-595 to 36a-612, inclusive, or any regulations adopted pursuant to said sections. The commissioner shall notify the applicant, in writing, that if the applicant fails to submit such information not later than sixty days after such request, the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license under sections 36a-595 to 36a-612, inclusive.

(c) An applicant or licensee shall notify the commissioner, in writing, of any change in the information provided in the application for license or most recent renewal of such license not later than fifteen days after the applicant or licensee has reason to know of such change.

(d) A licensee shall not change the name specified on its license unless, prior to such change in name, the licensee files an application with the commissioner accompanied by the name change fee specified in subsection (a) of section 36a-599 and receives the approval of the commissioner.

(e) A licensee shall provide a written notice to the commissioner not later than one business day after the licensee has reason to know of the occurrence of any of the following events:

(1) The filing of a petition by or against the licensee under the United States Bankruptcy Code for bankruptcy or reorganization;

(2) The filing of a petition by or against 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;

(3) The commencement of a proceeding to revoke or suspend its license to engage in money transmission in another state or a foreign country, or other formal or informal regulatory action by any governmental agency against the licensee and the reasons therefor;

(4) The commencement of any action by the Attorney General or the attorney general of any other state and the reasons therefor;

(5) The cancellation or other impairment of the licensee’s bond or other security, including notice of claims filed against the licensee’s bond or other security;

(6) A conviction or indictment of the licensee or of a partner, director, trustee, principal officer, member or shareholder owning ten per cent or more of each class of the licensee’s securities for a misdemeanor involving the money transmission business or a felony; or

(7) A conviction or indictment of an authorized delegate for a misdemeanor involving the money transmission business or a felony.

(P.A. 81-264, S. 4; P.A. 92-12, S. 97; P.A. 94-122, S. 277, 340; P.A. 98-192, S. 4; P.A. 01-56, S. 5; P.A. 03-19, S. 84; P.A. 04-14, S. 4; P.A. 05-46, S. 11; P.A. 08-119, S. 11; P.A. 09-208, S. 15; P.A. 11-216, S. 35; P.A. 13-253, S. 4.)

History: P.A. 92-12 redesignated Subsecs. and Subdivs.; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-533 transferred to Sec. 36a-598 in 1995; P.A. 98-192 amended Subdiv. (9) by adding reference to electronic payment instrument and making conforming changes; P.A. 01-56 amended Subdiv. (5) by changing 20% stock ownership threshold to 10% ownership of securities and required name and addresses of persons holding securities, added new Subdiv. (8) re history of material litigation and criminal convictions, renumbered existing Subdivs. (8) to (10) as Subdivs. (9) to (11), added language re money transmission in Subdivs. (3) and (10) and made technical and conforming changes throughout; P.A. 03-19 made a technical change in Subdiv. (10), effective May 12, 2003; P.A. 04-14 designated existing provisions as Subsec. (a), and amended same by inserting in Subdivs. (5) and (8) new Subpara. (D) re managers, if applicant is a limited liability company, inserting reference to “managers” in Subdiv. (5), and making technical changes in Subdivs. (7)(A) and (9)(B), and inserted new Subsec. (b) requiring applicant or licensee to notify commissioner of any change in information provided; P.A. 05-46 added Subsec. (c) to prohibit licensee from changing the name specified on license unless licensee files application, pays name change fee specified in Sec. 36a-599(a) and receives approval of commissioner; P.A. 08-119 amended Subsec. (a) to make a technical change and to replace “managers” with “members” in Subdivs. (5)(D) and (8)(D); P.A. 09-208 amended Subsec. (a) by deleting provision in Subdiv. (5) requiring applicants to submit sufficient information to commissioner as commissioner deems necessary to make the findings required under Sec. 36a-600, adding new Subdiv. (9) requiring applicants to submit information concerning criminal convictions, redesignating existing Subdiv. (9) as Subdiv. (10), deleting Subpara. (C) therein re commissioner to defer compliance, redesignating existing Subdivs. (10) and (11) as Subdivs. (11) and (12), and making conforming and technical changes, and added Subsec. (d) requiring licensee to provide written notice to commissioner upon the occurrence of events listed in Subdivs. (1) to (7); P.A. 11-216 amended Subsec. (a)(9) to delete provision re ten-year period re history of criminal convictions, added new Subsec. (b) authorizing commissioner to conduct state and national criminal history records check of applicant and each partner, director, trustee, principal officer, member and shareholder owning at least 10% of each class of securities of applicant and re abandonment of application, and redesignated existing Subsecs. (b) to (d) as Subsecs. (c) to (e); P.A. 13-253 amended Subsec. (a) by adding reference to Secs. 36a-611 and 36a-612, by changing “branches, subsidiaries, affiliates and agents” to “locations and authorized delegates” and adding provision requiring that money transmission occur in this state in Subdiv. (3), by adding provision re a copy of audited financial statements for the most recent fiscal year and, if a wholly-owned subsidiary, the most recent audited consolidated annual financial statements of the parent corporation or most recent audited consolidated annual financial statement of the applicant, deleting requirement that financial statements be prepared by an independent certified public accountant, and adding provision re a 10-K report for publicly traded applicants or a report similar to a 10-K if publicly traded on a foreign exchange in Subdiv. (6), by changing “payment instruments” to “money transmissions” in Subdiv. (7), by adding definition of “material litigation” in Subdiv. (8), by replacing former provision with provision requiring a statement describing the type of money transmission business to be conducted in the state in Subdiv. (11), by adding new Subdivs. (12) and (13) re name and address of financial institution used and sample of contract, and by redesignating existing Subdiv. (12) as Subdiv. (14), amended Subsec. (b) by adding provision requiring that money transmission occur in this state and adding references to Secs. 36a-611 and 36a-612, amended Subsec. (c) by deleting “promptly” and adding provision re notification to occur not later than 15 days after the applicant or licensee has reason to know of the change, amended Subsec. (e) by adding “or indictment” in Subdivs. (6) and (7), deleting reference to Connecticut payment instruments in Subdiv. (6) and changing “agent” to “authorized delegate” and adding “misdemeanor involving the money transmission business” in Subdiv. (7), and made technical changes.

Section 36a-599 – (Formerly Sec. 36-534). Investigation, license and name change fees. Term of license. Surrender of license.

Universal Citation: CT Gen Stat § 36a-599 (2013) 

(a) Each application for an initial license shall be accompanied by a nonrefundable investigation fee of six hundred twenty-five dollars and a nonrefundable license fee of two thousand two hundred fifty dollars, except that if such application is filed not earlier than one year before the date such license will expire, the applicant shall pay a nonrefundable investigation fee of six hundred twenty-five dollars and a nonrefundable license fee of one thousand two hundred fifty dollars. Each application for a renewal license shall be accompanied by a nonrefundable license fee of two thousand two hundred fifty dollars. Each licensee shall pay to the commissioner a nonrefundable name change fee of two hundred dollars for each application to change a name. No licensee shall use any name other than the name specified on the license issued by the commissioner.

(b) A license issued pursuant to sections 36a-595 to 36a-612, inclusive, shall expire at the close of business on September thirtieth of the odd-numbered year following its issuance, unless renewed or earlier surrendered, suspended or revoked pursuant to said sections. Not later than fifteen days after a licensee ceases to engage in the business of money transmission in this state for any reason, including a business decision to terminate operations in this state, license revocation, bankruptcy or voluntary dissolution, such licensee shall provide written notice of surrender and surrender to the commissioner its license for each location in which such licensee has ceased to engage in such business. The written notice of surrender shall identify the location where the records of the licensee will be stored and the name, address and telephone number of an individual 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 commissioner to revoke or suspend a license, assess a civil penalty, order restitution or exercise any other authority provided to the commissioner.

(P.A. 81-264, S. 5; P.A. 88-150, S. 8; P.A. 92-89, S. 15, 20; P.A. 98-192, S. 5; P.A. 01-56, S. 6; P.A. 05-46, S. 12; P.A. 06-35, S. 7; P.A. 08-119, S. 12; June Sp. Sess. P.A. 09-3, S. 381; P.A. 13-253, S. 5.)

History: P.A. 88-150 amended Subsec. (a) by increasing the investigation fee to $500 and increasing the license fee to $500, and deleted obsolete Subsec. (c) concerning license fees and the term of a license; P.A. 92-89 deleted the $500 investigation fee and increased the license fee from $500 to $1,000 in Subsec. (a); Sec. 36-534 transferred to Sec. 36a-599 in 1995; P.A. 98-192 amended Subsec. (a) by imposing a nonrefundable investigation fee of $500; P.A. 01-56 amended Subsec. (a) by eliminating the investigation fee for a renewal license and by making conforming language changes re renewal license fee and refund of fees; P.A. 05-46 amended Subsec. (a) to add provision re nonrefundable name change fee of $100 for each application to change a name; P.A. 06-35 amended Subsec. (a) to increase fee for original license from $1,000 to $2,000, to add exception that if application is filed not earlier than one year before date the license expires, applicant shall pay nonrefundable investigation fee of $500 and license fee of $1,000, to increase license fee for renewal license from $1,000 to $2,000, to provide that if license expires on June 30, 2007, fee shall be $2,250, and to prohibit licensee from using any name other than that specified on license issued by commissioner, and amended Subsec. (b) to provide that license expires at close of business on September thirtieth of odd-numbered year following issuance, unless renewed, surrendered, suspended or revoked, except that license renewed effective July 1, 2007, expires on September 30, 2009, and to delete reference to license expiration on thirtieth day of June following date of issuance; P.A. 08-119 amended Subsec. (b) to add requirement for surrender of license when licensee ceases to engage in the business of issuing Connecticut payment instruments or of money transmission; June Sp. Sess. P.A. 09-3 amended Subsec. (a) to increase fees; P.A. 13-253 amended Subsec. (a) by changing “original” to “initial”, making the license fee nonrefundable and deleting provision re license that expires on June 30, 2007, and amended Subsec. (b) to add reference to Secs. 36a-611 and 36a-612, delete reference to renewals effective July 1, 2007, delete reference to issuing Connecticut payment instruments, add provisions re written notice of surrender, delete requirement that surrender be in person or by registered or certified mail, and add provision re surrender of a license does not reduce or eliminate the licensee’s civil or criminal liability.

Section 36a-600 – (Formerly Sec. 36-536). Investigation of applicant. Issuance of license. Authority of commissioner to deny application for license.

Universal Citation: CT Gen Stat § 36a-600 (2013) 

(a) Upon the filing of an application for an initial license, and the payment of the fees for investigation and license, the commissioner shall investigate the financial condition and responsibility, financial and business experience, character and general fitness of the applicant. The commissioner may issue a license if the commissioner finds that:

(1) The applicant’s financial condition is sound;

(2) The applicant’s business will be conducted honestly, fairly, equitably, carefully and efficiently within the purposes and intent of sections 36a-595 to 36a-612, inclusive, and in a manner commanding the confidence and trust of the community;

(3) (A) If the applicant is an individual, such individual is in all respects properly qualified and of good character, (B) if the applicant is a partnership, each partner is in all respects properly qualified and of good character, (C) if the applicant is a corporation or association, each president, chairperson of the executive committee, senior officer responsible for the corporation’s business, chief financial officer or any other person who performs similar functions as determined by the commissioner, director, trustee and each shareholder owning ten per cent or more of each class of the securities of such corporation is in all respects properly qualified and of good character, or (D) if the applicant is a limited liability company, each member is in all respects properly qualified and of good character;

(4) The applicant is in compliance with the provisions of sections 36a-602 to 36a-604, inclusive;

(5) No person on behalf of the applicant knowingly has made any incorrect statement of a material fact in the application, or in any report or statement made pursuant to sections 36a-595 to 36a-612, inclusive;

(6) No person on behalf of the applicant knowingly has omitted to state any material fact necessary to give the commissioner any information lawfully required by the commissioner; and

(7) The applicant has paid the investigation fee and license fee required under section 36a-599.

(b) The commissioner may deny an application if the commissioner finds that the applicant or any of its partners, directors, trustees, principal officers or shareholders owning ten per cent or more of the shares of the applicant or members (1) are listed on the specially designated nationals and blocked persons list prepared by the United States Department of the Treasury, or (2) have been convicted of any misdemeanor involving any aspect of the money transmission business or any felony. Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80.

(P.A. 81-264, S. 7; P.A. 94-122, S. 278, 340; P.A. 01-56, S. 7; P.A. 04-14, S. 5; P.A. 08-119, S. 13; P.A. 09-208, S. 16; P.A. 11-216, S. 36; P.A. 13-253, S. 6.)

History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-536 transferred to Sec. 36a-600 in 1995; P.A. 01-56 amended Subsec. (a) by adding new Subdiv. (3) re good character of various persons as applicants and by renumbering existing Subdivs. (3) to (5) as Subdivs. (4) to (6); P.A. 04-14 amended Subsec. (b) to require that applicant pay investigation and license fee required under Sec. 36a-599; P.A. 08-119 added Subsec. (a)(3)(D) re applicant that is a limited liability company; P.A. 09-208 added Subsec. (c) authorizing commissioner to deny application based on certain convictions; P.A. 11-216 amended Subsec. (c) to delete provision re ten-year period re misdemeanor and felony convictions and delete “Connecticut” re payment instruments; P.A. 13-253 amended Subsec. (a) by changing “original” to “initial”, deleting provision re conditional approval and adding provision authorizing commissioner to issue a license, adding reference to Secs. 36a-611 and 36a-612 in Subdiv. (2), deleting reference to Sec. 36a-603 and adding reference to Sec. 36a-602 in Subdiv. (4), adding reference to Sec. 36a-611 and 36a-612 in Subdiv. (5) and adding Subdiv. (7) re payment of fees, deleted former Subsec. (b) re conditional approval, and redesignated existing Subsec. (c) as Subsec. (b) and amended same by adding Subdiv. (1) re applicants or members listed on the specially designated nationals and blocked persons list, designating existing provision re conviction as Subdiv. (2) and making a technical change.

Section 36a-601 – (Formerly Sec. 36-537). Renewal of license. Automatic suspension of renewal license. Notice. Opportunity for hearing.

Universal Citation: CT Gen Stat § 36a-601 (2013) 

(a) A license may be renewed for the ensuing twenty-four-month period upon the filing of an application containing all information required by section 36a-598. Such renewal application shall be filed on or before September first of the year in which the license expires. Any renewal application filed with the commissioner after September first shall be accompanied by a one-hundred-dollar late fee and any such filing shall be deemed to be timely and sufficient for purposes of subsection (b) of section 4-182. If an application for a renewal license has been filed with the commissioner on or before the date the license expires, the license sought to be renewed shall continue in full force and effect until the issuance by the commissioner of the renewal license applied for or until the commissioner has notified the licensee in writing of the commissioner’s refusal to issue such renewal license together with the grounds upon which such refusal is based. The commissioner may refuse to issue a renewal license on any ground on which the commissioner might refuse to issue an initial license.

(b) If the commissioner determines that a check filed with the commissioner to pay an investigation or license fee has been dishonored or if made by ACH, has been returned, the commissioner shall automatically suspend a renewal license that has been issued but is not yet effective. The commissioner shall give the licensee notice of the automatic suspension pending proceedings for refusal to renew such license and an opportunity for a hearing on such actions in accordance with section 36a-51.

(P.A. 81-264, S. 8; P.A. 94-122, S. 279, 340; P.A. 01-56, S. 8; P.A. 04-14, S. 6; P.A. 06-35, S. 8; P.A. 13-253, S. 7.)

History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-537 transferred to Sec. 36a-601 in 1995; P.A. 01-56 added reference to Sec. 36a-598(9) and eliminated fee for investigation associated with renewal; P.A. 04-14 designated existing provisions as Subsec. (a), making a technical change therein, and added new Subsec. (b) requiring commissioner to automatically suspend renewal license if commissioner determines that a check filed to pay an investigation or license fee has been dishonored and requiring commissioner to give notice of the automatic suspension pending proceedings for refusal to renew such license and an opportunity for a hearing in accordance with Sec. 36a-51; P.A. 06-35 amended Subsec. (a) to provide that license may be renewed for ensuing twenty-four-month period, rather than twelve-month period, to delete reference to information required by Sec. 36a-598 (a)(6) to (9), to require that renewal application be filed on or before September first of year in which license expires, or in the case of license that expires on June 30, 2007, on or before June 1, 2007, to provide that renewal application filed after September first, or in the case of license that expires on June 30, 2007, after June 1, 2007, shall be accompanied by $100 late fee and that any such filing shall be deemed timely and sufficient for purposes of Sec. 4-182(b), and to substitute reference to the date “the license expires” for the date “the commissioner has specified”; P.A. 13-253 amended Subsec. (a) by deleting references to application for license that expires on June 30, 2007, and changing “original” to “initial” and amended Subsec. (b) by adding reference to a check made by ACH that has been returned.

Section 36a-602 – (Formerly Sec. 36-538). Surety bond. Investments in lieu of surety bond.

Universal Citation: CT Gen Stat § 36a-602 (2013) 

(a) As a condition for the issuance and retention of the license, applicants for a license and licensees shall file with the commissioner a surety bond, the form of which shall be approved by the Attorney General, issued by a bonding company or insurance company authorized to do business in this state. The bond shall be conditioned upon the licensee and the licensee’s authorized delegates faithfully performing all obligations with respect to the licensee’s money transmission business in this state and conducting such business in this state consistent with the provisions of sections 36a-595 to 36a-612, inclusive. The bond shall be in favor of the commissioner, run concurrently with the period of the license and be in the principal sum of not less than: (1) Three hundred thousand dollars for any applicant and any licensee with an average weekly amount of money transmissions in this state of less than three hundred thousand dollars for the most recent twelve-month period ending June thirtieth, (2) five hundred thousand dollars for any licensee with an average weekly amount of money transmissions in this state equal to or greater than three hundred thousand dollars but less than or equal to five hundred thousand dollars for the most recent twelve-month period ending June thirtieth, or (3) one million dollars for any licensee with an average weekly amount of money transmissions in this state exceeding five hundred thousand dollars for the most recent twelve-month period ending June thirtieth. For purposes of this section, “money transmissions” includes (A) money or monetary value received or transmitted in this state, and (B) stored value and payment instruments issued or sold in this state.

(b) The proceeds of the bond, even if commingled with other assets of the licensee, shall be deemed by operation of law to be held in trust for the benefit of any claimants against the licensee to serve the faithful performance of the obligations of the licensee and the licensee’s authorized delegates with respect to the licensee’s money transmission business in this state in the event of the bankruptcy of the licensee, and shall be immune from attachment by creditors or judgment creditors. Any person who may be damaged as a result of the failure by the licensee or the licensee’s authorized delegates to perform obligations with respect to the licensee’s money transmission business in this state may proceed against the licensee’s bond to recover damages. The commissioner may proceed on such bond against the principal or surety thereon, or both, to collect any civil penalty imposed upon the licensee pursuant to subsection (a) of section 36a-50, any restitution imposed pursuant to subsection (c) of section 36a-50, and any unpaid costs of examination of the licensee as determined pursuant to subdivision (6) of subsection (c) of section 36a-65. The bond shall cover claims for damages arising from the licensee’s money transmission business in this state made not later than two years from the date of the act, error or omission that allegedly caused or resulted in such damages. When an action is commenced on a licensee’s bond, the commissioner may require the filing of a new bond and, immediately upon recovery on any action on the bond, the licensee shall file a new bond. If the commissioner finds that the financial condition of a licensee so requires, as evidenced by the reduction of tangible net worth, financial losses or potential losses as a result of a violation of sections 36a-595 to 36a-612, inclusive, the commissioner may require one or more additional bonds meeting the standards set forth in this section. The licensee shall file any such additional bonds not later than ten days after receipt of the commissioner’s written notice of such requirement.

(c) The surety company may cancel the bond at any time by a written notice to the licensee, stating the date cancellation shall take effect. Such notice shall be sent by certified mail to the licensee at least thirty days prior to the date of cancellation. A surety bond shall not be cancelled unless the surety company notifies the commissioner in writing not less than thirty days prior to the effective date of cancellation. After receipt of such notification from the surety company, the commissioner shall give written notice to the licensee of the date such bond cancellation shall take effect. The commissioner shall automatically suspend the license on such date, unless the licensee, prior to such date, submits (1) a letter of reinstatement of the bond from the surety company, (2) a new bond, (3) evidence that all of the principal sum of such surety bond has been invested as provided in subsection (d) of this section, (4) a new bond that replaces the surety bond in part and evidence that the remaining part of the principal sum of such surety bond has been invested as provided in subsection (d) of this section, or (5) evidence that the licensee has ceased business and has surrendered the license. After a license has been automatically suspended, the commissioner shall give the licensee notice of the automatic suspension pending proceedings for revocation or refusal to renew such license and an opportunity for a hearing on such actions in accordance with section 36a-51 and require the licensee to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section.

(d) In lieu of all or part of the principal sum of such surety bonds, applicants for a license and licensees may invest such sum as provided in this subsection. The book or market value, whichever is lower, of such investments shall be equal to the amount of the bond required by subsection (a) of this section less the amount of the bond filed with the commissioner by the applicant or licensee. Such applicants and licensees shall keep such investments with such banks, Connecticut credit unions or federal credit unions as such applicants or licensees may designate and the commissioner may approve, and subject to such conditions as the commissioner deems necessary for the protection of consumers and in the public interest. As used in this subsection, “investments” means: (1) Dollar deposits; and (2) interest-bearing bills, notes, bonds, debentures or other obligations issued or guaranteed by (A) the United States or any of its agencies or instrumentalities, or (B) any state, or any agency, instrumentality, political subdivision, school district or legally constituted authority of any state if such investment is of prime quality. The investments shall secure the same obligation as would a surety bond filed under this section. The investments shall be held at such banks or credit unions to cover claims during the period the license remains in full force and effect and the succeeding two years after such license has been surrendered, revoked or suspended or has expired in accordance with the provisions of sections 36a-595 to 36a-612, inclusive. The licensee shall be permitted to collect interest on such investments and at any time to exchange, examine and compare such investments. The investments made pursuant to this section, even if commingled with other assets of the licensee, shall be deemed by operation of law to be held in trust for the benefit of any claimants against the licensee to serve the faithful performance of the obligations of the licensee and the licensee’s authorized delegates with respect to the licensee’s money transmission business in this state in the event of the bankruptcy of the licensee, and shall be immune from attachment by creditors or judgment creditors.

(P.A. 81-264, S. 9; P.A. 91-306, S. 1; P.A. 94-122, S. 280, 340; P.A. 98-192, S. 6; P.A. 01-56, S. 9; P.A. 02-111, S. 39; P.A. 03-61, S. 4; P.A. 04-14, S. 7; P.A. 06-35, S. 9; P.A. 07-91, S. 9; P.A. 09-208, S. 17; P.A. 13-253, S. 8.)

History: P.A. 91-306 amended Subsec. (a) by deleting existing provisions re amount of bond and added Subdivs. (1), (2) and (3) re principal sum of bond; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-538 transferred to Sec. 36a-602 in 1995; P.A. 98-192 amended Subsec. (a) by adding provision re two-year time period for bond to remain in place and adding specific requirements for licensees that engage in the business of receiving money for transmitting the same; P.A. 01-56 amended Subsec. (a) by changing “Connecticut instruments” to “Connecticut payment instruments”, by rewording language re money transmission and by replacing provisions re trust fund with provisions re proceeds of bond deemed to be held in trust for benefit of claimants, and amended Subsec. (c) by replacing provisions re investment maintained in trust with provisions re investments deemed to be held in trust for benefit of claimants; P.A. 02-111 amended Subsec. (a) by adding provision re authority of commissioner to proceed on bond to collect civil penalty imposed pursuant to Sec. 36a-50(a); P.A. 03-61 changed “corporate surety bond” to “surety bond” throughout, amended Subsec. (a) by revising provisions re approval of form, coverage of bond and beginning of two-year period and by adding provision re surrendered, revoked, suspended or expired license and amended Subsec. (c) by inserting “Connecticut”; P.A. 04-14 amended Subsec. (a)(1), (2) and (3) to replace references to “equivalent thereof” with references to “monetary value received or transmitted, whichever amount is greater”, and to insert references to “monetary value” in provisions re proceeds of the bond to be held in trust for benefit of claimants against licensee, added new Subsec. (b) re cancellation of surety bond and automatic suspension of license and redesignated existing Subsecs. (b) and (c) as new Subsecs. (c) and (d), respectively, revising internal reference accordingly, effective April 16, 2004; P.A. 06-35 amended Subsec. (c) to require applicants and licensees to keep investments with such banks, Connecticut credit unions or federal credit unions as applicants or licensees designate, to require that investments be held subject to such conditions as commissioner deems necessary for protection of consumers and in the public interest and to define “investments” to include “dollar deposits” and “interest-bearing” bills, notes, bonds, debentures or other obligations, deleting former Subdiv. designators (1) and (2), reference to “in accordance with such regulations as the commissioner may adopt”, and Subsec. designator (d), to add provision requiring investments to be held at banks or credit unions to cover claims during period license remains in effect and the succeeding two years after license has been surrendered, revoked or suspended or has expired, and to make conforming changes, effective May 8, 2006; P.A. 07-91 amended Subsec. (a) to insert references to “Connecticut” payment instruments and transmission of “monetary value”, and amended Subsec. (c) to insert references to transmission or payment of “monetary value” and to make a technical change; P.A. 09-208 amended Subsec. (b) by requiring commissioner to give written notice to licensee of the effective date of a bond cancellation, by providing that license shall be automatically suspended unless licensee submits letter of reinstatement from the surety company or a new bond, and by making conforming and technical changes; P.A. 13-253 amended Subsec. (a) by adding provision requiring that bond be conditioned upon faithful performance of all obligations with respect to money transmission business in this state, deleting provisions re bond covering claims arising during licensure period and bond amounts being dependent upon daily balances and adding provisions re bond running concurrently with period of the license and being in a sum dependent upon the amount of applicant’s average weekly transmissions, designated provisions re proceeds of the bond as new Subsec. (b) and amended same to add reference to licensee’s authorized delegates, replace provision re sale and issuance of Connecticut payment instruments or transmission of money with provision re licensee’s money transmission business in this state, add provision re person damaged as a result of a failure to perform obligations may proceed against the bond to recover damages, delete provision re lowering principal sum of bond, add provision re commissioner to proceed on bond to collect any restitution imposed pursuant to Sec. 36a-50 and any unpaid costs of examination, add provision re bond to cover claims for damages and add provision re commissioner to require filing of new bond when action is commenced on licensee’s bond or if licensee’s financial condition so requires, redesignated existing Subsec. (b) as Subsec. (c) and amended same by making technical changes, and redesignated existing Subsec. (c) as Subsec. (d) and amended same to add reference to Secs. 36a-611 and 36a-612, add reference to the licensee’s authorized delegates and replace provision re sale and issuance of Connecticut payment instruments or transmission of money with provision re licensee’s money transmission business in this state.

Section 36a-603 – (Formerly Sec. 36-539). Investments equal to amount of outstanding money transmissions in this state. Permissible investments.

Universal Citation: CT Gen Stat § 36a-603 (2013) 

(a) Each licensee shall at all times maintain permissible investments having a value, computed in accordance with generally accepted accounting principles, at least equal to the aggregate amount of its outstanding money transmissions in this state, provided the value of receivables due from authorized delegates consisting of the proceeds of the sale of payment instruments that are not past due or doubtful of collection shall not exceed thirty per cent of the permissible investments held by the licensee and receivables due from any one person shall not exceed ten per cent of the value of permissible investments held by the licensee.

(b) As used in subsection (a) of this section, “value” means the lower of book or market value, except that with regard to debt obligations which the licensee as a matter of policy retains until maturity, “value” means the greater of book or market value unless the commissioner orders that for some or all investments of a particular licensee, “value” means the lower of book or market value.

(c) Permissible investments, even if commingled with other assets of the licensee, shall be deemed by operation of law to be held in trust for the benefit of any claimants against the licensee to serve the faithful performance of the obligations of the licensee and the licensee’s authorized delegates with respect to the licensee’s money transmission business in this state in the event of the bankruptcy of the licensee, and shall be immune from attachment by creditors or judgment creditors.

(P.A. 81-264, S. 10; P.A. 01-56, S. 10; P.A. 04-14, S. 8; P.A. 07-91, S. 10; P.A. 13-253, S. 9.)

History: Sec. 36-539 transferred to Sec. 36a-603 in 1995; P.A. 01-56 amended Subsec. (a) by making a technical change and added new Subsec. (c) re permissible investments deemed to be held in trust for benefit of claimants; P.A. 04-14 amended Subsec. (a) to insert reference to “stored value”, and amended Subsec. (c) to insert references to “monetary value”, effective April 16, 2004; P.A. 07-91 amended Subsecs. (a) and (c) to insert reference to “Connecticut” payment instruments; P.A. 13-253 amended Subsec. (a) to change “Connecticut payment instruments and stored value” to “money transmissions in this state” and add provision re value of receivables due from authorized delegates and amended Subsec. (c) to add reference to licensee’s authorized delegates and replace provision re sale and issuance of Connecticut payment instruments or transmission of money with provision re licensee’s money transmission business in this state.

Section 36a-604 – (Formerly Sec. 36-540). Net worth requirements.

Universal Citation: CT Gen Stat § 36a-604 (2013) 

(a) Each licensee which issues or sells payment instruments in this state which are checks, drafts or money orders shall at all times have a tangible net worth of at least one hundred thousand dollars.

(b) Each licensee which issues or sells payment instruments in this state which are travelers checks or electronic payment instruments shall at all times have a tangible net worth of at least one million dollars.

(c) Each licensee that engages in the business of money transmission in this state, except by issuing or selling stored value or payment instruments, shall at all times have a tangible net worth of at least five hundred thousand dollars. Each licensee that issues or sells stored value in this state shall at all times have a tangible net worth of at least one million dollars or a higher amount as determined by the commissioner, in accordance with generally accepted accounting principles.

(P.A. 81-264, S. 11; P.A. 98-192, S. 7; P.A. 01-56, S. 11; P.A. 04-14, S. 9; P.A. 05-74, S. 3; P.A. 07-72, S. 7; P.A. 13-253, S. 10.)

History: Sec. 36-540 transferred to Sec. 36a-604 in 1995; P.A. 98-192 amended Subsec. (b) by adding reference to electronic payment instruments and added new Subsec. (c) re net worth requirements for licensees that engage in the business of receiving money for transmitting the same; P.A. 01-56 amended Subsecs. (a) and (b) by changing “Connecticut instruments” to “Connecticut payment instruments” and amended Subsec. (c) by rewording language re money transmission; P.A. 04-14 amended Subsec. (c) to insert exception re issuing stored value and provision requiring each licensee that engages in business of money transmission by issuing stored value to have at all times a net worth of at least $500,000 or a higher amount as determined by the commissioner, effective April 16, 2004; P.A. 05-74 amended Subsec. (c) to make a technical change, effective June 2, 2005; P.A. 07-72 made a technical change in Subsec. (c); P.A. 13-253 amended Subsec. (a) to delete “Connecticut” and add “or sells”, “in this state”, “checks, drafts or” and “tangible”, amended Subsec. (b) to delete “Connecticut” and add “or sells”, “in this state” and “tangible” and amended Subsec. (c) to add “in this state”, “or selling”, “or payment instruments” and “tangible”, change “engages in the business of money transmission by issuing” to “issues or sells” and change “five hundred thousand dollars” to “one million dollars”.

Section 36a-605 – (Formerly Sec. 36-541). Examination of licensees.

Universal Citation: CT Gen Stat § 36a-605 (2013) 

In connection with the examination of a licensee under section 36a-17, the commissioner may also examine the authorized delegates of such licensee. The commissioner, in lieu of conducting an examination, may accept the report of examination of any other state or federal supervisory agency or any organization affiliated with or representing such supervisory agency with respect to the examination or other supervision of any person subject to the provisions of sections 36a-595 to 36a-612, inclusive, or a report prepared by an independent accounting firm, and reports so accepted are considered for purposes of sections 36a-595 to 36a-612, inclusive, as an official examination report of the commissioner.

(P.A. 81-264, S. 12; P.A. 87-9, S. 2, 3; P.A. 94-122, S. 281, 340; P.A. 01-56, S. 12; P.A. 04-14, S. 10; P.A. 08-176, S. 78; P.A. 09-208, S. 18; P.A. 13-253, S. 11.)

History: (Revisor’s note: Pursuant to P.A. 87-9 “banking department” was changed editorially by the Revisors to “department of banking”); P.A. 94-122 deleted language allowing authorized employees of the commissioner to examine a licensee’s books and records, language allowing employees of a licensee to be examined by the commissioner and language requiring a licensee to pay the cost of such examination, effective January 1, 1995; Sec. 36-541 transferred to Sec. 36a-605 in 1995; P.A. 01-56 deleted existing provisions re commissioner’s examination of licensee, added new Subsec. (a) re examination under Sec. 36a-17 or acceptance of a report in lieu thereof and added new Subsec. (b) permitting the commissioner to enter into cooperative, coordinating and information-sharing agreements; P.A. 04-14 amended Subsec. (b) to provide that agreement may include provisions re assessment or sharing of fees for examination or supervision; P.A. 08-176 deleted former Subsec. (b) re information sharing agreements and made a technical change, effective July 1, 2008; P.A. 09-208 removed reference to subagents of licensee; P.A. 13-253 changed “agents” to “authorized delegates” and added references to Secs. 36a-611 and 36a-612.

Section 36a-606 – (Formerly Sec. 36-542). Annual financial reports required.

Universal Citation: CT Gen Stat § 36a-606 (2013) 

(a) On or before the thirtieth day of April each year, each licensee shall file with the commissioner:

(1) (A) A copy of audited financial statements for the most recent fiscal year, (B) if a wholly-owned subsidiary of another corporation, (i) the most recent audited consolidated annual financial statements of the parent corporation or the licensee’s most recent audited consolidated annual financial statement, and (ii) the most recent audited unconsolidated financial statement of the licensee, including its balance sheet and receipts and disbursements for the preceding year, (C) if publicly traded, a copy of the most recent 10-K report that was filed with the Securities and Exchange Commission or, if the licensee is a wholly-owned subsidiary of a publicly-traded company, a copy of the parent company’s most recent 10-K report that was filed with said commission, and (D) if a licensee or parent company of a wholly-owned subsidiary licensee is publicly traded on a foreign exchange, a copy of documentation similar to the report filed pursuant to subparagraph (C) of this subdivision that was filed with the applicable securities regulator;

(2) A list of permissible investments, the book and market value of such investments, and the dollar amount of the licensee’s aggregate outstanding money transmissions; and

(3) A list of investments maintained in accordance with subsection (d) of section 36a-602, if applicable, the book and market values of such investments and the dollar amount of the licensee’s aggregate outstanding money transmissions in this state.

(b) The lists and other information filed as provided in subdivisions (2) and (3) of subsection (a) of this section shall be as of the same date as the financial statement filed in accordance with subdivision (1) of subsection (a) of this section.

(c) The commissioner may require of any licensee such additional reports, under oath, certified, or otherwise, concerning such licensee’s business in this state as the commissioner may consider necessary for the enforcement of sections 36a-595 to 36a-612, inclusive.

(P.A. 81-264, S. 13; P.A. 94-122, S. 282, 340; P.A. 01-56, S. 13; P.A. 04-14, S. 11; P.A. 13-253, S. 12.)

History: P.A. 94-122 changed “he” to “the commissioner”, effective January 1, 1995; Sec. 36-542 transferred to Sec. 36a-606 in 1995; P.A. 01-56 amended Subsec. (a)(2) and (3) by changing “instruments” to “payment instruments”; P.A. 04-14 amended Subsec. (a)(3) to substitute “subsection (c)” for “subsection (b)” in reference to Sec. 36a-602 and to add reference to “stored value”, effective April 16, 2004; P.A. 13-253 amended Subsec. (a) to replace former provisions with requirement that licensee file a copy of audited financial statements for most recent fiscal year or the most recent 10-K report or similar report in Subdiv. (1), to change “payment instruments” to “money transmissions” in Subdiv. (2) and to change “(c)” to “(d)” and “Connecticut payment instruments and stored value” to “money transmissions in this state” in Subdiv. (3), and amended Subsec. (c) to add reference to Secs. 36a-611 and 36a-612.

Section 36a-606a – Federal reporting requirements.

Universal Citation: CT Gen Stat § 36a-606a (2013) 

Each licensee shall comply with the applicable provisions of the Currency and Foreign Transactions Reporting Act, 31 USC Section 5311 et seq., as from time to time amended, and any regulations adopted under such provisions, as from time to time amended and, upon request, shall provide proof of such compliance to the commissioner. In addition to any other remedies provided by law, a violation of such federal law or regulation shall be deemed a violation of this section and a basis upon which the commissioner may take enforcement action pursuant to section 36a-608.

(P.A. 98-192, S. 8; P.A. 99-36, S. 32; P.A. 13-253, S. 13.)

History: P.A. 99-36 made a technical change; P.A. 13-253 added provisions re proof of compliance to be sent to commissioner upon request and re enforcement action by commissioner.

Section 36a-607 – (Formerly Sec. 36-543). Conduct of business by authorized delegate.

Universal Citation: CT Gen Stat § 36a-607 (2013) 

(a) A licensee may conduct its business at one or more locations within this state as follows:

(1) The business may be conducted by the licensee or through or by means of such authorized delegates as the licensee may periodically designate or appoint. The licensee shall notify the commissioner of all authorized delegates that act on its behalf. An authorized delegate may not engage in the business of money transmission in this state on behalf of a licensee through or by means of any person who is not an authorized delegate of the licensee.

(2) No license under sections 36a-595 to 36a-612, inclusive, shall be required of any authorized delegate.

(3) Each authorized delegate shall, from the moment of receipt, hold the proceeds of a sale or delivery of a licensee’s money transmissions in this state in trust for the benefit of such licensee.

(4) A licensee shall be liable for the loss caused to any purchaser or holder of the licensee’s payment instruments or stored value sold in this state by the failure of an authorized delegate to forward to the licensee the amount due from the proceeds of a sale or delivery of the licensee’s payment instruments or stored value, or money or monetary value received for transmission.

(5) The licensee shall enter into a contract with each of its authorized delegates that requires the authorized delegate to operate in full compliance with sections 36a-595 to 36a-612, inclusive, and provides that appointment of the authorized delegate is not effective during any period when the license of the licensee has been suspended. The licensee shall provide each authorized delegate with policies and procedures sufficient to ensure compliance with sections 36a-595 to 36a-612, inclusive.

(6) 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.

(7) An authorized delegate shall not provide money transmission services in this state outside the scope of activity permissible under the contract between the authorized delegate and the licensee.

(b) For purposes of subsection (a) of this section, “licensee” means any person that has obtained a license from the commissioner as provided in section 36a-600.

(P.A. 81-264, S. 14; P.A. 92-12, S. 98; P.A. 01-56, S. 14; P.A. 03-61, S. 5; P.A. 07-91, S. 11; P.A. 09-208, S. 19; P.A. 13-253, S. 14.)

History: P.A. 92-12 redesignated Subdivs.; Sec. 36-543 transferred to Sec. 36a-607 in 1995; P.A. 01-56 amended Subdivs. (3) and (4) by changing “Connecticut instruments” to “Connecticut payment instruments” and amended Subdiv. (4) by adding language re money transmission; P.A. 03-61 designated existing provisions as Subsec. (a) and added Subsec. (b) providing that licensee includes entity or person exempt under Sec. 36a-609; P.A. 07-91 amended Subsec. (a)(4) to insert reference to “monetary value”; P.A. 09-208 amended Subsec. (a) by prohibiting agent of a licensee from engaging in the business of issuing Connecticut payment instruments or of money transmission on behalf of a licensee through or by means of a subagent in Subdiv. (1), by deleting references to subagents in Subdivs. (1) to (4) and making a conforming change in Subdiv. (3), and by adding Subdivs. (5) to (7) re contracts between licensees and their agents and amended Subsec. (b) by redefining “licensee”; P.A. 13-253 amended Subsec. (a) by changing references to agent to references to authorized delegate, requiring notification of authorized delegates acting on licensee’s behalf, deleting reference to issuing Connecticut payment instruments, adding requirement that money transmission occur in this state and changing “subagent” to “any person who is not an authorized delegate of the licensee” in Subdiv. (1), adding reference to Secs. 36a-611 and 36a-612 and changing “agent of a licensee” to “authorized delegate” in Subdiv. (2), changing “agent of a licensee” to “authorized delegate” and “Connecticut payment instruments” to “money transmissions in this state” in Subdiv. (3), deleting “Connecticut”, adding “or stored value sold in this state” and changing “agent of the licensee” to “authorized delegate” in Subdiv. (4), changing references to agent to references to authorized delegate and adding references to Secs. 36a-611 and 36a-612 in Subdiv. (5), and changing references to agent to references to authorized delegate in Subdivs. (6) and (7), and amended Subsec. (b) by deleting reference to any entity or person exempt under Sec. 36a-609 and making a technical change.

Section 36a-608 – (Formerly Sec. 36-544). Enforcement powers of commissioner.

Universal Citation: CT Gen Stat § 36a-608 (2013) 

(a) The commissioner shall make such investigations as the commissioner considers necessary to determine whether any licensee or any other person has violated, is violating or is about to violate any of the provisions of sections 36a-595 to 36a-612, inclusive, or whether any licensee has acted in such manner as otherwise would justify the suspension or revocation of the license. The provisions of section 36a-17 shall apply to such investigation. For purposes of this section, “unsafe or unsound practice” means a practice or conduct by a licensee or an authorized delegate that is likely to result in a material loss, insolvency or dissipation of the licensee’s assets or otherwise materially prejudice the interests of purchasers.

(b) The commissioner may suspend or revoke a license or take any other action, in accordance with section 36a-51, on any ground on which the commissioner might refuse to issue an initial license, for any violation of sections 36a-595 to 36a-612, inclusive, or of any regulation adopted under said sections, for noncompliance with an order that the commissioner may issue under said sections to a licensee, for failure of the licensee to pay a judgment ordered by any court within or outside this state within thirty days after the judgment becomes final or within thirty days after expiration or termination of a stay of execution of the judgment, for engaging in fraud, intentional misrepresentation or gross negligence, or for engaging in an unsafe or unsound practice.

(c) Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any provision of sections 36a-595 to 36a-612, inclusive, or any regulation adopted under said sections, or any licensee has failed to pay a judgment ordered by any court within or outside of this state thirty days after the date on which the judgment becomes final or thirty days after the date of the expiration or termination of a stay of execution of the judgment, or engaged in fraud, intentional misrepresentation or gross negligence, or engaged in an unsafe or unsound practice, the commissioner may take action against such person in accordance with sections 36a-50 and 36a-52.

(d) The commissioner may order a licensee to terminate its relationship with any authorized delegate if the commissioner finds that: (1) The authorized delegate violated any provision of sections 36a-595 to 36a-612, inclusive, or any regulation adopted under said sections or any other law or regulation applicable to the conduct of its business; (2) the authorized delegate failed to cooperate with an examination or investigation by the commissioner; (3) the authorized delegate engaged in fraud, intentional misrepresentation, or gross negligence or misappropriated funds; (4) the authorized delegate has been convicted of a violation of a state or federal anti-money laundering statute; (5) the competence, experience, character or general fitness of the authorized delegate or a manager, partner, director, trustee, principal officer, member or shareholder owning ten per cent or more of each class of the authorized delegate’s securities demonstrates that it would not be in the public interest to permit such authorized delegate to engage in the business of money transmission in this state on behalf of a licensee; (6) the authorized delegate is engaging in an unsafe or unsound practice; or (7) the authorized delegate is convicted of any act involving fraud or dishonesty.

(P.A. 81-264, S. 15; P.A. 94-122, S. 283, 340; P.A. 01-56, S. 15; P.A. 07-91, S. 22; P.A. 09-208, S. 20; P.A. 13-253, S. 15.)

History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-544 transferred to Sec. 36a-608 in 1995; P.A. 01-56 amended Subsec. (a) to add provision re person who “is about to violate”, amended Subsec. (b) by eliminating requirement that violation be wilful and amended Subsec. (d) by referencing subagent; P.A. 07-91 amended Subsec. (b) to authorize commissioner to take any other action, in accordance with Sec. 36a-51, effective June 5, 2007; P.A. 09-208 amended Subsec. (b) by authorizing commissioner to suspend or revoke a license or to take any other authorized action if the licensee engaged in fraud, intentional misrepresentation or gross negligence, or engaged in an unsafe and unsound practice, and by making technical changes, amended Subsec. (c) to authorize commissioner to take action against any licensee who has failed to pay a judgment ordered by a court or has engaged in fraud, intentional misrepresentation or gross negligence, or engaged in an unsafe and unsound practice, and by referencing Sec. 36a-52, and amended Subsec. (d) by replacing former provisions with Subdivs. (1) to (6) authorizing commissioner to order licensee to terminate its agency relationship under certain circumstances; P.A. 13-253 amended Subsec. (a) to add “is violating”, add reference to Secs. 36a-611 and 36a-612 and amended definition of “unsafe or unsound practice”, amended Subsec. (b) to change “original” to “initial”, add reference to Secs. 36a-611 and 36a-612 and make a technical change, amended Subsec. (c) to add reference to Secs. 36a-611 and 36a-612 and make a technical change, and amended Subsec. (d) to change references to agent to references to authorized delegate, add reference to Secs. 36a-611 and 36a-612, replace provision re refusal of agent to allow examination with provision re failure of authorized delegate to cooperate with an examination or investigation by commissioner in Subdiv. (2), add Subdiv. (7) re conviction of an authorized delegate and make a technical change.

Section 36a-609 – (Formerly Sec. 36-545). Exemptions.

Universal Citation: CT Gen Stat § 36a-609 (2013) 

The provisions of sections 36a-597 to 36a-607, inclusive, and sections 36a-611 and 36a-612 shall not apply to:

(1) Any federally insured federal bank, out-of-state bank, Connecticut bank, Connecticut credit union, federal credit union or out-of-state credit union, provided such institution does not engage in the business of money transmission in this state through any person who is not (A) a federally insured federal bank, out-of-state bank, Connecticut bank, Connecticut credit union, federal credit union or out-of-state credit union, (B) a person licensed pursuant to sections 36a-595 to 36a-612, inclusive, or an authorized delegate acting on behalf of such licensed person, or (C) a person exempt pursuant to subdivision (2) or (3) of this section;

(2) The United States Postal Service and any contractor that engages in the business of money transmission in this state on behalf of the United States Postal Service; and

(3) A person whose activity is limited to the electronic funds transfer of governmental benefits for or on behalf of a federal, state or other governmental agency, quasi-governmental agency or government sponsored enterprise.

(P.A. 81-264, S. 16; P.A. 91-357, S. 58, 78 P.A. 92-12, S. 99; P.A. 94-122, S. 284, 340; P.A. 01-56, S. 16; P.A. 03-61, S. 6; P.A. 04-14, S. 12; P.A. 09-208, S. 21; P.A. 13-253, S. 16.)

History: P.A. 91-357 deleted reference to the Federal Savings and Loan Insurance Corporation from Subsec. (a); P.A. 92-12 redesignated Subdivs.; P.A. 94-122 changed “financial institution” to “bank”, effective January 1, 1995; Sec. 36-545 transferred to Sec. 36a-609 in 1995; P.A. 01-56 amended Subdiv. (1) by replacing reference to banks with insurable deposits with list of specific types of financial institutions and amended Subdiv. (3) by replacing former provisions re telegraph or cable company with language re electronic funds transfer of governmental benefits; P.A. 03-61 substituted “36a-597 to 36a-606a” for “36a-595 to 36a-610”, amended Subdiv. (1) by deleting “Except in its capacity as an agent of a licensee”, substituting “federally insured federal bank” for “federally insured bank” and deleting “Connecticut credit union”, inserted new Subdiv. (2) re exemption for any Connecticut bank or Connecticut credit union and redesignated existing Subdivs. (2) and (3) as new Subdivs. (3) and (4); P.A. 04-14 amended Subdiv. (1) to add reference to “monetary value”, effective April 16, 2004; P.A. 09-208 deleted reference to subagent in Subdiv. (1); P.A. 13-253 replaced reference to Sec. 36a-606a with reference to Sec. 36a-607 and added references to Secs. 36a-611 and 36a-612, amended Subdiv. (1) to add references to Connecticut bank and Connecticut credit union, change “issue or sell Connecticut payment instruments or transmit money or monetary value” to “engage in the business of money transmission in this state”, change “agent” to “any person”, add Subparas. (B) and (C) re licensed or exempt person and designate provision re federally insured institutions as Subpara. (A), deleted former Subdiv. (2) re Connecticut bank or credit union, redesignated existing Subdiv. (3) as Subdiv. (2) and amended same to add “any contractor that engages in the business of money transmission in this state on behalf of the United States Postal Service”, and redesignated existing Subdiv. (4) as Subdiv. (3).

Section 36a-610 – (Formerly Sec. 36-546). Regulations.

Universal Citation: CT Gen Stat § 36a-610 (2013) 

The commissioner may adopt regulations, in accordance with chapter 54, which are necessary or appropriate for the administration of sections 36a-595 to 36a-609, inclusive, and sections 36a-611 and 36a-612.

(P.A. 81-264, S. 17; P.A. 01-56, S. 17; P.A. 13-253, S. 17.)

History: Sec. 36-546 transferred to Sec. 36a-610 in 1995; P.A. 01-56 changed “enforcement” to “administration” and made technical changes; P.A. 13-253 added references to Secs. 36a-611 and 36a-612.

Section 36a-611 – Maintenance of records.

Universal Citation: CT Gen Stat § 36a-611 (2013) 

(a) Each licensee, as defined in section 36a-596, shall maintain and prepare such records as will enable the Banking Commissioner to determine whether the licensee and any of its authorized delegates are complying with the provisions of sections 36a-595 to 36a-609, inclusive, this section, and section 36a-612 at the office named in the license, or, if requested by the commissioner, shall make such records available at such office or send such records to the commissioner by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt, not later than five business days after such request by the commissioner. Upon request, the commissioner may grant a licensee additional time to make such records available or send such records to the commissioner.

(b) Each licensee shall maintain the following records for at least five years:

(1) A record of each payment instrument or stored-value obligation sold within this state;

(2) A general ledger posted at least monthly containing all asset, liability, capital, income and expense accounts;

(3) Bank statements and bank reconciliation records;

(4) Records of outstanding money transmissions in this state;

(5) Records of each payment instrument and stored value obligation paid during the previous five years;

(6) A list of the last known names and addresses of all of the licensee’s authorized delegates; and

(7) Any other records the commissioner may require.

(P.A. 13-253, S. 18.)

Section 36a-612 – Notification of change in list of authorized delegates or locations.

Universal Citation: CT Gen Stat § 36a-612 (2013) 

A licensee, as defined in section 36a-596, shall notify the Banking Commissioner in writing not later than fifteen days after any change in the list of the licensee’s authorized delegates or locations where the licensee or the licensee’s authorized delegates engage in the business of money transmission in this state. Such notice shall state the name and address of each location and authorized delegate removed or added to the licensee’s list.