- 2500. Definitions
As used in this chapter:
(1) “Authorized delegate” means a person located in this State that a licensee designates to provide money services on behalf of the licensee.
(2) “Check cashing” means receiving at least $500.00 compensation within a 30-day period for taking payment instruments or prepaid access, other than traveler’s checks, in exchange for money, payment instruments, or prepaid access delivered to the person delivering the payment instrument or prepaid access at the time and place of delivery without any agreement specifying when the person taking the payment instrument will present it for collection.
(3) “Currency exchange” means receipt of revenues equal to or greater than five percent of total revenues from the exchange of money of one government for money of another government.
(4) “Limited station” means private premises where a check casher is authorized to engage in check cashing for not more than two days of each week solely for the employees of the particular employer or group of employers specified in the check casher license application.
(5) “Mobile location” means a vehicle or a movable facility where check cashing occurs.
(6) “Monetary value” means a medium of exchange, whether or not redeemable in money.
(7) “Money” means a medium of exchange that is authorized or adopted by the United States or a foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more governments.
(8) “Money services” means money transmission, check cashing, or currency exchange.
(9) “Money transmission” means to engage in the business of selling or issuing payment instruments, selling or issuing prepaid access, or receiving money or monetary value for transmission to a location within or outside the United States.
(10) “Outstanding,” with respect to a payment instrument, means issued or sold by or for the licensee and which has been reported as sold but not yet paid by or for the licensee.
(11) “Payment instrument” means a check, draft, money order, traveler’s check, or other instrument for the transmission or payment of money or monetary value, whether or not negotiable. The term does not include a credit card voucher, letter of credit, or instrument that is redeemable by the issuer in goods or services.
(12) “Prepaid access” means funds or monetary value represented in digital electronic format, including virtual currency, whether or not specially encrypted, that are stored or capable of storage on electronic media and are retrievable and transferable electronically.
(13) “Virtual currency” means a digital representation of value that:
(A) can be a medium of exchange, a unit of account, or a store of value;
(B) has an equivalent value in money or acts as a substitute for money;
(C) may be centralized or decentralized; and
(D) can be exchanged for money or other convertible virtual currency. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2009, No. 137 (Adj. Sess.), § 1b; 2011, No. 78 (Adj. Sess.), § 14, eff. April 2, 2012; 2017, No. 22, § 11, eff. May 4, 2017; 2019, No. 20, § 40.)
- 2501. Exclusions
(a) This chapter does not apply to:
(1) the United States or a department, agency, or instrumentality thereof;
(2) the sale or issuance of payment instruments or prepaid access, or money transmission, by the U.S. Postal Service or by a contractor on behalf of the U.S. Postal Service;
(3) a state, county, city, or any other governmental agency or governmental subdivision within a state;
(4) a financial institution as defined in subdivision 11101(32) of this title, a financial institution holding company as defined in subdivision 11101(33) of this title, a credit union, an office of an international banking corporation, a branch of a foreign bank, a corporation organized pursuant to the Bank Services Company Act, an independent trust company organized under chapter 77 of this title or an entity organized under the laws of another state that is regulated by its home state in an equivalent manner to an independent trust company, or a corporation organized under the Edge Act under the laws of a state or the United States if the person does not issue, sell, or provide payment instruments or prepaid access through an authorized delegate that is not such a person;
(5) electronic funds transfer of governmental benefits for a federal, state, 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 Commodity Exchange Act 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 such 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 pursuant to a registration as a clearing agency or an exemption from such 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 excluded by this section or licensees, in connection with wire transfers, credit card transactions, debit card transactions, prepaid access transactions, automated clearing house transfers, or similar funds transfers to the extent of its operation as such;
(B) that 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 institutions regulated under the Bank Secrecy Act 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 under federal or state securities laws to the extent of its operation as such a broker-dealer;
(11) the sale or issuance of prepaid access by a school to its students and employees;
(12) a seller of goods or services that cashes payment instruments incidental to or independent of a sale and does not charge for cashing the payment instrument in excess of $1.00 per instrument; or
(13) a debt adjuster licensed pursuant to chapter 133 of this title when engaged in the business of debt adjustment.
(b) The Commissioner may issue an order exempting any person from this chapter when such person is performing services for the benefit of the United States or a department, agency, or instrumentality thereof, or for the benefit of any state, county, city, or any other governmental agency or governmental subdivision within a state. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2001, No. 143 (Adj. Sess.), § 59, eff. June 21, 2002; 2005, No. 36, § 1, eff. June 1, 2005; 2017, No. 22, § 12, eff. May 4, 2017; 2019, No. 20, § 41.)
- 2502. License required
(a) A person shall not engage in money transmission without:
(1) obtaining a license under subchapter 2 of this chapter; or
(2) being an authorized delegate of a person licensed under subchapter 2 of this chapter.
(b) A person shall not engage in check cashing or currency exchange without:
(1) obtaining a license under subchapter 3 of this chapter;
(2) obtaining a license for money transmission under subchapter 2 of this chapter; or
(3) being an authorized delegate of a person licensed under subchapter 2 of this chapter.
(c) A person not licensed under this chapter or not an authorized delegate of a licensee is engaged in providing money services if the person advertises those services, solicits to provide those services, or holds itself out as providing those services.
(d) A license is not transferable or assignable.
(e) A licensee shall file with the Commissioner any name proposed to be used in connection with a money service business or location pursuant to this chapter. The Commissioner shall not approve a proposed name if the Commissioner determines that the name may be misleading or likely to confuse the public, or deceptively similar to any name in use in this State.
(f) A licensee shall register each remote access unit, commonly referred to as a “kiosk,” where a consumer may access money transmission services, including buying or selling virtual currency. Each kiosk is subject to the disclosure requirements established in section 10302 of this title. If a kiosk is owned by a person other than the licensee and the owner charges an additional fee to the consumer for access to the licensee’s services, the owner is also subject to the disclosure requirements of chapter 200 of this title. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2021, No. 139 (Adj. Sess.), § 7, eff. May 27, 2022.)
- 2505. License required
A person licensed under this subchapter or that is an authorized delegate of a person licensed under this subchapter may engage in money transmission and may also engage in check cashing or currency exchange without obtaining a separate license under subchapter 3 of this chapter. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002.)
- § 2506. Application for license; additional information
(a) In addition to the information required by section 2102 of this title, an application for a license under this subchapter shall state or contain:
(1) a description of any money services previously provided by the applicant and the money services that the applicant seeks to provide in this State;
(2) 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 money transmission or provide other money services;
(3) a list of other states in which the applicant is licensed to engage in money transmission or provide other money services and information concerning any bankruptcy or receivership proceedings affecting the licensee;
(4) a sample form of contract for authorized delegates, if applicable, and a sample form of payment instrument or instrument upon which prepaid access is recorded if applicable;
(5) the name and address of any financial institution through which the applicant’s payment instruments and prepaid access obligations will be paid; and
(6) a description of the source of money and credit to be used by the applicant to provide money services
(b) The Commissioner may waive one or more requirements of this section or permit an applicant to submit substituted information in lieu of the required information. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2009, No. 134 (Adj. Sess.), § 20; 2011, No. 78 (Adj. Sess.), § 15, eff. April 2, 2012; 2019, No. 20, § 42.)
- § 2507. Security
(a) Except as otherwise provided in subsection (b) of this section, the following rules apply:
(1) A surety bond, letter of credit, or other similar security acceptable to the Commissioner of not less than $100,000.00 shall accompany an application for a license.
(2) If an applicant proposes to provide money services at more than one location through authorized delegates or otherwise, the amount of the security shall be increased by $10,000.00 per location, not exceeding a total of $500,000.00.
(b) The Commissioner may increase the amount of security required to a maximum of $2,000,000.00 based upon the financial condition of a licensee, as evidenced by reduction of net worth, financial losses, or other relevant criteria.
(c) Security shall be in a form satisfactory to the Commissioner, and payable to the State for use of the State and for the benefit of any claimant against the licensee and its authorized delegates to secure the faithful performance of the obligations of the licensee and its authorized delegates with respect to money transmission.
(d) The aggregate liability on a surety bond may not exceed the principal sum of the bond. A claimant against a licensee or its authorized delegate may maintain an action directly against the bond, or the Commissioner may maintain an action on behalf of the claimant against the bond. The power vested in the Commissioner by this subsection shall be in addition to any other powers of the Commissioner under this chapter.
(e) A surety bond shall cover claims effective for as long as the Commissioner specifies, but for at least five years after the licensee ceases to provide money services in this State. However, the Commissioner may permit the amount of security to be reduced or eliminated before the expiration of that time to the extent the amount of the licensee’s payment instruments or prepaid access obligations outstanding in this State is reduced. The Commissioner may permit a licensee to substitute another form of security acceptable to the Commissioner for the security effective at the time the licensee ceases to provide money services in this State.
(f) In lieu of the security prescribed in this section, an applicant for a license or a licensee may provide security in a form otherwise permitted by the Commissioner. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2019, No. 20, § 43.)
- § 2508. Repealed. 2019, No. 20, § 44.
- § 2509. Repealed. 2019, No. 20, § 45.
- § 2510. Net worth
A licensee under this subchapter shall maintain a net worth of at least $100,000.00, determined in accordance with generally accepted accounting principles. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002.)
- § 2511. Activities of money transmitters; receipts and refunds
(a) Every money transmitter licensee and its authorized delegates shall provide a receipt to the customer that clearly states the name, address, and telephone number of the licensee; the amount of money presented for transmission; and the total of any fees charged by the licensee.
(1) 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.
(2) 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 the transaction will be set at the time the recipient of the money transmission picks up the funds in the foreign country.
(3) 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) Every money transmitter licensee and its authorized delegates shall refund to the customer within 10 days of receipt of a written request for a refund all monies received for transmittal unless any of the following occurs:
(1) Prior to receipt of the written request for a refund, the monies have been transmitted and delivered to the person designated by the customer.
(2) Prior to receipt of a written request for a refund, instructions have been given committing an equivalent amount of money to the person designated by the customer.
(3) 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.
(4) The licensee is otherwise barred by law from making a refund. (Added 2017, No. 22, § 13.)