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| Home > Statutes > Usa Arizona |
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USA Statutes : arizona
Title : Banks and Financial Institutions
Chapter : TRANSMITTERS OF MONEY
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6-1201 Definitions
In this chapter, unless the context otherwise requires:
1. "Authorized delegate" means a person designated by the licensee under section
6-1208.
2. "Check cashing" means exchanging for compensation a check, debit card payment
order, draft, money order, traveler's check or payment instrument of a licensee for money
delivered to the presenter at the time and place of the presentation.
3. "Control" means ownership of fifteen per cent or more of a licensee or
controlling person, or the power to vote fifteen per cent or more of the outstanding
voting securities of a licensee or controlling person. For the purpose of determining
the percentage controlled by any one person, that person's interest shall be aggregated
with the interest of any other person controlled by that person or an officer, partner or
authorized delegate of that person, or by a spouse, parent or child of that person.
4. "Controlling person" means a person directly or indirectly in control of a
licensee.
5. "Engage in the business" means conducting activities regulated under this
chapter more than ten times in any calendar year for compensation or in the expectation
of compensation. For purposes of this paragraph, "compensation" means any fee,
commission or other benefit.
6. "Foreign money exchange" means exchanging for compensation money of the United
States government or a foreign government to or from money of another government at a
conspicuously posted exchange rate at the time and place of the presentation of the money
to be exchanged.
7. "Licensee" means a person licensed under this chapter.
8. "Location" means a place of business at which activity regulated by this chapter
occurs.
9. "Money" means a medium of exchange that is authorized or adopted by a domestic
or foreign government as a part of its currency and that is customarily used and accepted
as a medium of exchange in the country of issuance.
10. "Money accumulation business" means obtaining money from a money transmitter as
part of any activity that is carried on for financial gain if the money that is obtained
by all persons acting in concert in the activity, in amounts of one thousand dollars or
more, totals over fifty thousand dollars in the preceding twelve-month period. Money
accumulation business does not include a person who is subject to the reporting
requirements under 31 United States Code section 5313. The exception that is established
by 31 United States Code section 5331, subsection (c), paragraph 1 does not apply to
persons who are engaged in the money accumulation business.
11. "Money transmitter" means a person who is located or doing business in this
state, including a check casher and a foreign money exchanger, and who does any of the
following:
(a) Sells or issues payment instruments.
(b) Engages in the business of receiving money for the transmission of or
transmitting money.
(c) Engages in the business of exchanging payment instruments or money into any
form of money or payment instrument.
(d) Engages in the business of receiving money for obligors for the purpose of
paying that obligor's bills, invoices or accounts.
(e) Meets the definition of a bank, financial agency or financial institution as
prescribed by 31 United States Code section 5312 or 31 Code of Federal Regulations
section 103.11.
12. "Outstanding payment instruments" means unpaid payment instruments whose sale
has been reported to a licensee.
13. "Payment instrument" means a check, draft, money order, traveler's check or
other instrument or order for the transmission or payment of money sold to one or more
persons whether or not that instrument or order is negotiable. Payment instrument does
not include an instrument that is redeemable by the issuer in merchandise or service, a
credit card voucher or a letter of credit.
14. "Permissible investment" means any of the following:
(a) Money on hand or on deposit in the name of the licensee.
(b) Certificates of deposit or other debt instruments of a bank, savings and loan
association or credit union.
(c) Bills of exchange or time drafts that are drawn on and accepted by a bank,
otherwise known as banker's acceptances, and that are eligible for purchase by member
banks of the federal reserve system.
(d) Commercial paper bearing a rating of one of the three highest grades as defined
by a nationally recognized organization that rates these securities.
(e) Securities, obligations or other instruments whose payment is guaranteed by the
general taxing authority of the issuer, of the United States or of any state or by any
other governmental entity or any political subdivision or instrumentality of a
governmental entity and that bear a rating of one of the three highest grades by a
nationally recognized investment service organization that has been engaged regularly in
rating state and municipal issues for at least five years.
(f) Stocks, bonds or other obligations of a corporation organized in any state of
the United States, the District of Columbia, the Commonwealth of Puerto Rico or the
several territories organized by Congress that bear a rating of one of the three highest
grades by a nationally recognized investment service organization that has been engaged
regularly in rating corporate securities for at least five years.
(g) Any receivable that is due to a licensee from its authorized delegate pursuant
to a contract between the licensee and authorized delegate as prescribed in section
6-1208 if the amount of investment in those receivables does not exceed ninety per cent
of the total amount of those receivables after subtracting the amount of those
receivables that are past due or doubtful of collection.
15. "Responsible individual" means a person who is employed by a licensee and who
has principal active management authority over the business of the licensee in this state
that is regulated under this chapter.
16. "Trade or business" has the same meaning prescribed in section 162 of the
internal revenue code of 1954 and includes the money accumulation business.
17. "Transmitting money" means the transmission of money by any means including
transmissions within this country or to or from locations abroad by payment instrument,
wire, facsimile internet or any other electronic transfer, courier or otherwise.
18. "Traveler's check" means an instrument identified as a traveler's check on its
face or commonly recognized as a traveler's check and issued in a money multiple of
United States or foreign currency with a provision for a specimen signature of the
purchaser to be completed at the time of purchase and a countersignature of the purchaser
to be completed at the time of negotiation. 6-1202 License required
A. A person shall not sell or issue payment instruments, engage in the business of
receiving money for transmission or transmitting money, engage in the business of
exchanging payment instruments or money into any form of money or payment instrument or
engage in the business of receiving money for obligors for the purpose of paying that
obligor's bills, invoices or accounts without first obtaining a license as provided in
this chapter or becoming an authorized delegate of a licensee with respect to those
activities. A licensee is under the jurisdiction of the department. A person who is not
licensed under this chapter or who is not an authorized delegate of a licensee with
respect to those activities is presumed to be engaged in a business that is regulated by
this chapter and that requires a license if he advertises, solicits or holds himself out
as being in the business of selling or issuing payment instruments, of receiving money
for transmission or transmitting money or of converting one form of money to another form
of money.
B. No person other than a corporation organized and in good standing under the laws
of the state of its incorporation or, if a corporation organized under the laws of a
country other than the United States and in good standing under the laws of the country
of its incorporation and authorized to do business in this state, may apply for or be
issued a license as provided in this chapter.
C. A person engages in business activity regulated by this chapter in this state if
any of the following applies:
1. Conduct constituting any element of the regulated activity occurs in this state.
2. Conduct occurs outside this state and constitutes an attempt, offer or
conspiracy to engage in the activity within this state and an act in furtherance of the
attempt, offer or conspiracy occurs within this state.
3. As part of a business activity described by this section a person knowingly
transmits money into this state or makes payments in this state without disclosing the
identity of each person on whose behalf money was transmitted or payment was made.
6-1203 Exemptions
A. This chapter does not apply to:
1. The United States or any department or agency of the United States.
2. This state, including any political subdivision of this state.
B. This chapter does not apply to the following if engaged in the regular course of
their respective businesses, except that the provisions of article 2 of this chapter
apply to:
1. A bank, financial institution holding company, credit union, savings and loan
association or savings bank, whether organized under the laws of any state or the United
States when the term "money transmitter" is used.
2. A person who engages in check cashing or foreign money exchange and engages in
other activity regulated under this chapter only as an authorized delegate of a licensee
acting within the scope of the contract between the authorized delegate and the licensee.
3. A person licensed pursuant to chapter 5, 6, 7 or 8 of this title, chapter 9,
article 2 of this title, chapter 12.1 of this title or title 32, chapter 9.
6-1204 Application for license; fees
A. Each application for a license shall be made in writing, under oath and in the
form prescribed by the superintendent. The application shall contain at least the
following:
1. Copies of the articles of incorporation for the applicant, a listing of all
trade names or fictitious names used by the applicant and other information concerning
the corporate status of the applicant.
2. The address of the applicant's principal place of business, the address of each
location where the applicant intends to transact business in this state, including any
branch offices, and the name and address of each location of any authorized delegates.
3. For each executive officer and director of the applicant and for each executive
officer and director of any controlling person, unless the controlling person is a
publicly traded company on a recognized national exchange and has assets in excess of
four hundred million dollars, a statement of personal history in the form prescribed by
the superintendent.
4. An identification statement for each branch manager and responsible individual
including all of the following:
(a) Name and any aliases or previous names used.
(b) Date and place of birth.
(c) Alien registration information, if applicable.
(d) Employment history and residence addresses for the preceding fifteen years.
(e) Social security number.
(f) Criminal convictions, excluding traffic offenses.
5. The name and address of each authorized delegate.
6. The identity of any account in any financial institution through which the
applicant intends to conduct any business regulated under this chapter.
7. A financial statement audited by a licensed independent certified public
accountant.
B. Each application shall be accompanied by the nonrefundable application fee and
an annual fee as prescribed in section 6-126.
6-1205.01 Net worth requirements
A. Each applicant for a license shall have and each licensee shall maintain at all
times a net worth of at least one hundred thousand dollars, calculated according to
generally accepted accounting principles.
B. Any licensee who is engaged in the business regulated under this chapter at more
than one location pursuant to section 6-1207 or through authorized delegates pursuant to
section 6-1208 shall have an additional net worth of fifty thousand dollars for each
location or authorized delegate located in this state, as applicable, to a maximum of
five hundred thousand dollars.
C. A licensee whose business conducts a total of more than five hundred thousand
dollars in transactions that involve transmitting money in an amount of one thousand
dollars or more during the preceding year shall maintain net worth in addition to the
amounts required by subsections A and B of this section. The additional net worth shall
be not less than ten per cent of the total of such transactions conducted in this state,
calculated according to generally accepted accounting principles to a maximum of five
hundred thousand dollars.
6-1205 Bond required; conditions; notice; cancellation; substitution
A. Each application for a license shall be accompanied by and each licensee shall
maintain at all times a bond executed by the licensee as principal and a surety company
authorized to do business in this state as surety. The bond shall be in the amount of
twenty-five thousand dollars for a licensee with five or fewer authorized delegates and
locations, one hundred thousand dollars for a licensee with more than five but fewer than
twenty-one authorized delegates and locations and an additional five thousand dollars for
each authorized delegate and location in excess of twenty but fewer than two hundred one
authorized delegates and locations, to a maximum of two hundred fifty thousand dollars
and an additional five thousand dollars for each authorized delegate and location in
excess of two hundred authorized delegates and locations, to a maximum of five hundred
thousand dollars.
B. The bond shall be conditioned on the faithful compliance of the licensee,
including its directors, officers, authorized delegates and employees, with this
chapter. The bond shall be payable to any person injured by the wrongful act, default,
fraud or misrepresentation of the licensee, his authorized delegates or his employees or
to the state for the benefit of the person injured. Only one bond is required for any
licensee irrespective of the number of officers, directors, locations, employees or
authorized delegates of that licensee.
C. The bond shall remain in effect until cancelled by the surety, which
cancellation may be had only after thirty days' written notice to the
superintendent. That cancellation does not affect any liability incurred or accrued
during the thirty day period.
D. In lieu of the bond prescribed in this section, an applicant for a license or a
licensee may deposit with the superintendent cash or alternatives to cash acceptable to
the superintendent in the amount of the required bond. Notwithstanding section 35-155,
subsection E, the principal amount of the deposit shall be released only on written
authorization of the superintendent or on the order of a court of competent
jurisdiction. The principal amount of the deposit shall not be released to the licensee
before the expiration of five years from the first occurrence of any of the following:
1. The date of substitution of a bond for a cash alternative unless the
superintendent determines in his discretion that the bond constitutes adequate security
for all past, present or future obligations of the licensee. After that determination,
the cash alternative may be immediately released.
2. The surrender of the license.
3. The revocation of the license.
4. The expiration of the license.
E. Notwithstanding subsections A through D of this section, if the required amount
of the bond is reduced, whether by change in the number of authorized delegates or
locations or by legislative action, a cash deposit in lieu of that bond shall not be
correspondingly reduced but shall be maintained at the higher amount until the expiration
of three years from the effective date of the reduction in the required amount of that
bond unless the superintendent in his discretion determines otherwise.
6-1206 Issuance of license; renewal
A. On the filing of a complete application, the superintendent shall investigate
the financial condition and responsibility, financial and business experience, character
and general fitness of the applicant. In his discretion, the superintendent may conduct
an on-site investigation of the applicant, the reasonable cost of which shall be borne by
the applicant. The superintendent shall issue a license to an applicant if the
superintendent finds that all of the following conditions are met:
1. The applicant has complied with sections 6-1204, 6-1205 and 6-1205.01.
2. The competence, experience and integrity of the officers, directors and
controlling persons and any proposed management personnel indicate that it would be in
the interest of the public to permit such person to participate in the affairs of a
licensee.
3. The applicant has paid the required license fee.
B. The superintendent shall approve or deny every application for an original
license within one hundred twenty days after the date an application is complete, which
period may be extended by the written consent of the applicant. The superintendent
shall notify the applicant of the date on which the application is determined to be
complete. In the absence of approval or denial of the application or consent to the
extension of the one hundred twenty day period, the application is deemed approved and
the superintendent shall issue the license effective as of the first business day after
that one hundred twenty day period or any extended period.
C. A licensee shall pay a renewal fee as prescribed in section 6-126 on or before
November 1 of each year. The renewal fee shall be accompanied by a renewal application
in the form prescribed by the superintendent. A license for which no renewal fee and
application have been received by November 1 shall be suspended. A licensee may renew a
suspended license no later than December 1 of the year of expiration by paying the
renewal fee plus one hundred dollars for each day the renewal fee and application were
not received by the superintendent. A license expires on December 1 of each year, unless
earlier renewed, surrendered or revoked. A license shall not be granted to the holder of
an expired license or to an incorporator, director or officer of the holder of an expired
license except on compliance with the requirements provided in this article for an
original license.
6-1207 Principal and branch offices; notices
A. A licensee shall designate and maintain a principal place of business for the
transaction of business regulated by this chapter. If a licensee maintains one or more
places of business in this state, the licensee shall designate a place of business in
this state as its principal place of business for purposes of this section. The license
shall specify the address of the principal place of business and shall designate a
responsible individual for its principal place of business.
B. If a licensee maintains one or more locations in this state in addition to a
principal place of business, and those locations are to be under the control of the
licensee and not under the control of authorized delegates as prescribed in section
6-1208, the licensee shall obtain a branch office license from the superintendent for
each additional location by filing an application as required by the superintendent at
the time the licensee files its license application. If branch offices are added by the
licensee, the licensee shall file with the superintendent an application for a branch
office license with the licensee's next quarterly fiscal report prescribed by section
6-1211. The superintendent shall issue a branch office license if the superintendent
determines that the licensee has complied with the provisions of this subsection. The
license shall indicate on its face the address of the branch office and shall designate a
manager for each branch office to oversee that office. The superintendent may disapprove
the designated manager then or at any later time if the superintendent finds that the
competence, experience and integrity of the branch manager warrants disapproval. A
person may be designated as the manager for more than one branch. The licensee shall
submit a fee as prescribed in section 6-126 for each branch office license.
C. A licensee shall prominently display the money transmitter license in its
principal place of business and the branch office license in each branch office. Each
authorized delegate shall prominently display at each location a notice in a form
prescribed by the superintendent that indicates that the authorized delegate is an
authorized delegate of a licensee under this chapter.
D. If the address of the principal place of business or any branch office is
changed, the licensee shall immediately notify the superintendent of the change. The
superintendent shall endorse the change of address on the license for a fee as prescribed
in section 6-126.
6-1208 Authorized delegates of licensee; reports
A. A licensee may conduct the business regulated under this chapter at one or more
locations in this state through authorized delegates designated by the licensee.
B. Each contract between a licensee and an authorized delegate shall require the
authorized delegate to operate in full compliance with the law and shall contain as an
appendix a current copy of this chapter. The licensee shall provide each authorized
delegate with operating policies and procedures sufficient to permit compliance by the
delegate with the provisions of title 13, chapter 23 and this chapter and rules adopted
pursuant to this chapter. The licensee shall promptly update the policies and procedures
to permit compliance with those laws and rules.
C. An authorized delegate is not liable for any obligation imposed on its licensee
by this chapter with respect to the business for which it is a delegate. On suspension
or revocation of a license or the failure of a licensee to renew its license, the
superintendent shall notify all delegates of the licensee who are on record with the
department of the department's action. On receipt of this notice, an authorized delegate
shall immediately cease to operate as a delegate of that licensee.
6-1209 Cease and desist orders; examinations
A. In addition to his authority under section 6-137, the superintendent may issue
an order to cease and desist against a licensee, requiring the licensee to cease
conducting its business through an authorized delegate and to take appropriate
affirmative action, pursuant to section 6-137, if the superintendent finds that:
1. The authorized delegate has violated, is violating or is about to violate any
applicable law or rule or order of the superintendent.
2. The authorized delegate has failed to cooperate with an examination or
investigation by the superintendent or the attorney general authorized by this title.
3. The competence, experience, integrity or overall moral character of the
authorized delegate or any controlling person of the authorized delegate indicates that
it would not be in the interest of the public to permit that person to participate in the
business regulated under this chapter.
4. The financial condition of the authorized delegate is such that it might
prejudice the interests of the public in the conduct of the business regulated under this
chapter.
5. The authorized delegate has engaged, is engaging or is about to engage in any
unsafe or unsound act, practice or transaction or an act, practice or transaction that
constitutes a violation of this title or of any rule or order of the superintendent.
B. Any business for which a license is required by this chapter conducted by an
authorized delegate outside the scope of authority conferred in the contract between the
authorized delegate and the licensee is unlicensed activity. An authorized delegate of a
licensee holds in trust for the benefit of the licensee all monies received from the sale
or delivery of the licensee's payment instruments or monies received for
transmission. If an authorized delegate commingles any such monies with any monies or
other property owned or controlled by the authorized delegate, a trust against all
commingled proceeds and other monies or property owned or controlled by the authorized
delegate is imposed in favor of the licensee in an amount equal to the amount of the
proceeds due the licensee.
C. An authorized delegate is subject to examination by the superintendent at the
discretion of the superintendent. The licensee is responsible for the payment of an
assessment for the examination of its authorized delegates to the extent that the
examination relates to the activities conducted by the authorized delegate on behalf of
the licensee. That assessment shall be made at the rate set by the superintendent for
examination of an enterprise pursuant to section 6-125, subsection B, and payment of that
assessment shall be made as prescribed by section 6-125.
6-1210 Suspension or revocation of licenses
The superintendent may suspend or revoke a license if the superintendent finds any
of the following:
1. The licensee has made a material misstatement or suppressed or withheld
information on an application for a license or any document required to be filed with the
superintendent.
2. A fact or condition exists that, if it had existed or had been known at the time
the licensee applied for its license, would have been grounds for denying the
application.
3. The licensee is insolvent as defined in section 47-1201.
4. The licensee has violated any provision of title 13, chapter 23, this chapter or
rules adopted pursuant to this chapter or any order of the superintendent.
5. An authorized delegate of the licensee has violated any provision of title 13,
chapter 23, this chapter or rules adopted thereunder or any order of the superintendent
as a result of a course of negligent failure to supervise or as a result of the wilful
misconduct of the licensee.
6. The licensee refuses to permit the superintendent or the attorney general to
make any examination authorized by this title.
7. The licensee knowingly fails to make any report required by this chapter.
8. The licensee fails to pay a judgment entered in favor of a claimant, plaintiff
or creditor in an action arising out of the licensee's business regulated under this
article within thirty days after the judgment becomes final or within thirty days after
expiration or termination of a stay of execution or other stay of proceedings, whichever
is later. If execution on the judgment is stayed by court order, operation of law or
otherwise, proceedings to suspend or revoke the license for failure of the licensee to
comply with that judgment may not be commenced by the superintendent under this
subsection until thirty days after that stay.
9. The licensee has been convicted in any state of a felony or of any crime
involving a breach of trust or dishonesty.
6-1211 Reports
Each licensee shall file with the superintendent within forty-five days after the
end of each fiscal quarter a consolidated financial statement including a balance sheet,
income and expense statements and a list of all authorized delegates, branch managers,
responsible individuals and locations within this state that have been added or
terminated by the licensee within the fiscal quarter. Information regarding branch
managers and responsible individuals shall include the information prescribed in section
6-1204, subsection A, paragraph 4. For locations and authorized delegates, the licensee
shall include the name and street address of each location and authorized delegate.
6-1212 Permissible investments
A. Every licensee shall maintain at all times permissible investments that comply
with either of the following:
1. A market value computed in accordance with generally accepted accounting
principles of not less than the aggregate amount of all of its outstanding payment
instruments.
2. A net carrying value computed in accordance with generally accepted accounting
principles of not less than the aggregate amount of all of its outstanding payment
instruments, provided the market value of these permissible investments is at least
ninety-five per cent of the net carrying value.
B. Notwithstanding any other provision of this chapter, the superintendent, with
respect to any particular licensee or all licensees, may limit the extent to which any
class of permissible investments as defined in section 6-1201 may be considered a
permissible investment, except for money and certificates of deposit. The superintendent
may by rule prescribe or by order allow other types of investments which the
superintendent determines to have substantially equivalent safety as other permissible
investments to be considered a permissible investment under this chapter.
6-1213 Records
A. Each licensee shall keep and use in its business books, accounts and records in
accordance with generally accepted accounting principles that will enable the
superintendent to determine whether that licensee is complying with the provisions of
this chapter. Each licensee and authorized delegate shall preserve its records for at
least five years after making the final entry on any transaction. Each authorized
delegate shall keep records as required by the superintendent.
B. For each authorized delegate, the licensee shall maintain records that
demonstrate that the licensee conducted a reasonable background investigation of each
authorized delegate. A licensee shall preserve those records for at least five years
after the authorized delegate's most recent designation by the licensee. For an
authorized delegate designated after November 1, 1991, the records shall be available at
all times, and for an authorized delegate designated on or before November 1, 1991, the
records shall be available at all times after November 1, 1992.
C. The records of the licensee regarding the business regulated under this chapter
shall be maintained at its principal place of business or, with notice to the
superintendent, at another location designated by the licensee. If the records are
maintained outside this state, the superintendent may require that the licensee make
those records available to the superintendent at his office not more than five business
days after demand. The superintendent may further require that those records be
accompanied by an individual who is available to answer questions regarding those records
and the business regulated under this chapter. The superintendent may require the
appearance of a specific individual or may request the licensee to designate an
individual knowledgeable with regard to the records and the business. The individual
appearing with the records shall be available to the superintendent for up to three
business days.
D. On-site examinations of records prescribed by this chapter may be conducted in
conjunction with representatives of other state agencies or agencies of another state or
of the federal government as determined by the superintendent. In lieu of an on-site
examination, the superintendent may accept the examination report of an agency of this
state or of another state or of the federal government or a report prepared by an
independent licensed certified public accountant. Joint examination or acceptance of an
examination report shall not be deemed a waiver of examination assessments provided by
law, and joint reports and reports accepted under this subsection are considered an
official report of the department for all purposes. Information obtained by examinations
prescribed by this article shall be disclosed only as provided in section 6-129.
6-1214 Liability of licensees
Each licensee is liable for the payment of all moneys covered by payment instruments
that it sells or issues in any form in this state whether directly or through an
authorized delegate and whether as a maker or drawer or as money received for obligors or
for transmission by any means whether or not that instrument is a negotiable instrument
under the laws of this state.
6-1215 Notice of source of instrument; transaction records
A. Every payment instrument sold by a licensee directly or through an authorized
delegate shall bear the name of the licensee and a unique consecutive number clearly
stamped or imprinted on it.
B. For every transaction involving the receipt of money from a customer, the
licensee or authorized delegate who receives the money shall maintain written records of
the transaction. The records may be reduced to computer or other electronic medium. The
records collectively shall contain the name of the licensee, the street address of the
location where the money was received, the name and street address of the customer if
reported to the licensee or authorized delegate, the approximate date of the transaction,
the name or other information from which, together with other contemporaneous records,
the superintendent can determine the identity of those employees of the licensee or
authorized delegate who may have conducted the transaction and the amount of the
transaction. The information required by this section shall be available through the
licensee or authorized delegate who received the money for at least five years from the
date of the transaction.
6-1216 Acquisition of control
A. A person shall not directly or indirectly acquire control of a licensee or
controlling person without the prior written approval of the superintendent, except as
otherwise provided by this section.
B. An application for approval to acquire control of a licensee shall be in writing
in a form prescribed by the superintendent and shall be accompanied by information as the
superintendent may require. The application shall be accompanied by the fee prescribed
in section 6-126. The superintendent shall act on the application within one hundred
twenty days after the date on which the application is complete, unless the applicant
consents in writing to an extended period. An application that is not denied or approved
within that period shall be deemed approved as of the first business day after the
expiration of that period.
C. The superintendent shall deny the application to acquire control of a licensee
if he finds that the acquisition of control is contrary to law or determines that
disapproval is reasonably necessary to protect the interest of the public. In making
that determination, the superintendent shall consider both of the following:
1. Whether the financial condition of the person that seeks to control the licensee
might jeopardize the financial condition of the licensee or prejudice the interests of
the public in the conduct of the business regulated under this chapter.
2. Whether the competence, experience, integrity and overall moral character of the
person that seeks to control the licensee, or the officers, directors and controlling
persons of the person that seeks to control the licensee, indicate that it would not be
in the interest of the public to permit that person to control the licensee.
D. Nothing in this section prohibits a person from negotiating or entering into
agreements subject to the condition that the acquisition of control will not be effective
until approval of the superintendent is obtained.
E. This section does not apply to any of the following persons or transactions:
1. A registered dealer who acts as an underwriter or member of a selling group in a
public offering of the voting securities of a licensee or controlling person of a
licensee.
2. A person who acts as proxy for the sole purpose of voting at a designated
meeting of the security holders of a licensee or controlling person of a licensee.
3. A person who acquires control of a licensee or controlling person of a licensee
by devise or descent.
4. A person who acquires control of a licensee or controlling person as a personal
representative, custodian, guardian, conservator, trustee or any other officer appointed
by a court of competent jurisdiction or by operation of law.
5. A pledgee of a voting security of a licensee or controlling person who does not
have the right, as pledgee, to vote that security.
6. A person or transaction that the superintendent by rule or order exempts in the
public interest.
F. Before filing an application for approval to acquire control, a person may
request in writing a determination from the superintendent as to whether that person will
be deemed in control on consummation of a proposed transaction. If the superintendent
determines in response to that request that the person will not be in control within the
meaning of this chapter, the superintendent shall enter an order to that effect and the
proposed transaction is not subject to the requirements of this section.
6-1217 Appointment of superintendent as agent for service of process; forwarding of process; consent to jurisdiction
A. A licensee, an authorized delegate or a person who knowingly engages in business
activities that are regulated under this chapter with or without filing an application is
deemed to have done both of the following:
1. Consented to the jurisdiction of the courts of this state for all actions
arising under this chapter.
2. Appointed the superintendent as his lawful agent for the purpose of accepting
service of process in any action, suit or proceeding that may arise under this chapter.
B. Within three business days after service of process upon the superintendent, the
superintendent shall transmit by certified mail copies of all lawful process accepted by
the superintendent as an agent to that person at its last known address. Service of
process shall be considered complete three business days after the superintendent
deposits the copies of the documents in the United States mail.
6-1218 Prohibited transactions
A person shall not engage in conduct requiring a license under this chapter as an
authorized delegate of a principal if that principal is not licensed under this
chapter. A person who does so shall be deemed to be the principal seller, issuer or
actor, and not merely an authorized delegate, and is liable to the holder, remitter or
customer as the principal.
6-1241 Reports to the attorney general; investigation; violation; classification
A. Within thirty days after any transaction or series or pattern of transactions
that is conducted or attempted by, at or through the business and that involves or
aggregates five thousand dollars or more in funds or other assets, each licensee and
authorized delegate of a licensee and each money transmitter shall file with the attorney
general's office in a form prescribed by the attorney general a report of the transaction
or series or pattern of transactions if the licensee, authorized delegate or money
transmitter knows, suspects or has reason to suspect that the activity either:
1. Involves funds that are derived from illegal activities, is intended or
conducted in order to hide or disguise funds or other assets that are derived from
illegal activities, including, without limitation, the ownership, nature, source,
location or control of the funds or other assets, as part of a plan to violate or evade
any law or regulation or to avoid any transaction reporting requirement under this
chapter or may constitute a possible money laundering violation under section 13-2317 or
another racketeering violation as defined in section 13-2301.
2. Has no business or apparent lawful purpose or is not the sort of activity in
which the particular customer would normally be expected to engage and the licensee,
authorized delegate or money transmitter knows of no reasonable explanation for the
activity after examining the available facts, including the background and possible
purpose of the activity.
B. A licensee, authorized delegate or money transmitter that is required to file a
report regarding business conducted in this state pursuant to the currency and foreign
transactions reporting act (31 United States Code sections 5311 through 5326, including
any special measures that are established under 31 United States Code section 5318A, and
31 Code of Federal Regulations part 103 or 12 Code of Federal Regulations section 21.11)
shall file a duplicate of that report with the attorney general.
C. All persons who are engaged in a trade or business and who receive more than ten
thousand dollars in money in one transaction or who receive more than ten thousand
dollars in money through two or more related transactions shall complete and file with
the attorney general the information required by 31 United States Code section 5331 and
the federal regulations relating to this section concerning reports relating to cash
received in trade or business.
D. A licensee, authorized delegate or money transmitter that is regulated under the
currency and foreign transactions reporting act (31 United States Code section 5325 and
31 Code of Federal Regulations part 103) and that is required to make available
prescribed records to the secretary of the United States department of treasury on
request at any time shall follow the same prescribed procedures and create and maintain
the same prescribed records relating to each transaction.
E. In addition to the requirements under subsection D of this section and in
connection with each transaction that involves transmitting money in an amount of one
thousand dollars or more, whether sending or receiving, a licensee or, for transactions
conducted through an authorized delegate, an authorized delegate shall retain a record of
each of the following:
1. The name and social security or taxpayer identification number, if any, of the
individual presenting the transaction and the person and the entity on whose behalf the
transaction is to be effected.
2. The type and number of the customer's verified photographic identification, as
described in 31 Code of Federal Regulations section 103.28.
3. The customer's current occupation.
4. The customer's current residential address.
5. The customer's signature.
F. Subsection E of this section does not apply to transactions by which the
licensee's customer is making a bill payment either to a commercial creditor pursuant to
a contract between the licensee and the commercial creditor or to a utility company.
G. Each licensee shall create records that reflect the provision of updated
operating policies and procedures pursuant to section 6-1208, subsection B and of
instruction that promotes compliance with this chapter, title 13, chapter 23 and 31
United States Code section 5318, including the identification of the provider and the
material and instruction that were provided.
H. On request of the attorney general, a county attorney or the superintendent, a
licensee, authorized delegate or money transmitter shall make any records that are
created pursuant to this section available to the attorney general, a county attorney or
the superintendent at any time.
I. A licensee or, for transactions conducted through an authorized delegate, an
authorized delegate shall maintain any customer identification records that are created
pursuant to subsection E of this section for three years. After three years, the licensee
or, for transactions conducted through an authorized delegate, the authorized delegate
shall deliver the customer identification records to the attorney general. The attorney
general shall make the records available on request to the superintendent or a county
attorney but shall not otherwise distribute the customer identification records without a
court order. The customer identification records shall not be used for any purpose other
than for criminal and civil prosecution and the prevention and detection of fraud and
other criminal conduct.
J. If the superintendent or the attorney general finds that reasonable grounds
exist for requiring additional record keeping and reporting in order to carry out the
purposes of this chapter and to prevent the evasion of this chapter, the superintendent
or the attorney general may:
1. Issue an order requiring any group of licensees, authorized delegates or money
transmitters in a geographic area to do any of the following:
(a) Obtain information regarding transactions that involve total dollar amounts or
denominations of five hundred dollars or more, including the names of any persons
participating in those transactions and any persons or entities on whose behalf they are
to be effected.
(b) Maintain records of that information for at least five years and make those
records available to the attorney general and the superintendent.
(c) File a report with the attorney general and the superintendent regarding any
transaction in the manner prescribed in the order.
2. Issue an order exempting any group of licensees or authorized delegates from the
requirements of subsection E of this section based on the geographic area, the volume of
business conducted, the record of compliance with the reporting requirements of this
chapter and other objective criteria.
K. An order issued pursuant to subsection J of this section is not effective for
more than one hundred eighty days unless renewed after finding that reasonable grounds
exist for continuation of the order.
L. The timely filing of a report required by this section with the appropriate
federal agency shall be deemed compliance with the reporting requirements of this
section, unless the attorney general has notified the superintendent that reports of that
type are not regularly and comprehensively transmitted by that federal agency to the
attorney general.
M. This chapter does not preclude a licensee, authorized delegate, money
transmitter, financial institution or person engaged in a trade or business from
instituting contact with and disclosing customer financial records to appropriate state
or local law enforcement agencies if the licensee, authorized delegate, money
transmitter, financial institution or person has information that may be relevant to a
possible violation of any criminal statute or to the evasion or attempted evasion of any
reporting requirement of this chapter.
N. A licensee, authorized delegate, money transmitter, financial institution,
person engaged in a trade or business or director, officer, employee, agent or authorized
delegate of any of them that keeps or files a record as prescribed by this section, that
communicates or discloses information or records under subsection M of this section or
that requires another to make any such disclosure is not liable to any person under any
law or rule of this state or any political subdivision of this state or under any
contract or other legally enforceable agreement, including any arbitration agreement, for
the disclosure or for the failure to provide notice of the disclosure to the person who
is the subject of the disclosure or to any other person who is identified in the
disclosure. This subsection shall be construed to be consistent with 31 United States
Code section 5318(g)(3).
O. The attorney general may report any possible violations indicated by analysis of
the reports required by this chapter to any appropriate law enforcement agency for use in
the proper discharge of its official duties. If an officer or employee of this state or
any political subdivision of this state receives a report pursuant to 31 United States
Code section 5318(g), the report shall be disclosed only as provided in 31 United States
Code section 5318(g). A person who releases information received pursuant to this
subsection except in the proper discharge of official duties is guilty of a class 2
misdemeanor.
P. The requirements of this section shall be construed to be consistent with the
requirements of the currency and foreign transactions reporting act (31 United States
Code sections 5311 through 5326 and federal regulations prescribed under those sections)
unless the context otherwise requires.
Q. A person who refuses to permit any lawful investigation by the superintendent, a
county attorney or the attorney general or who refuses to make records available to the
superintendent, a county attorney or the attorney general pursuant to subsection H of
this section is guilty of a class 6 felony.
6-1242 Investigations
A. The attorney general may conduct investigations within or outside this state to
determine if a licensee, authorized delegate, money transmitter, financial institution or
person engaged in a trade or business has failed to file a report required by this
article or has engaged or is engaging in an act, practice or transaction that constitutes
a money laundering violation as provided in section 13-2317.
B. On request of the attorney general, all licensees, authorized delegates, money
transmitters and financial institutions shall make their books and records available to
the attorney general during normal business hours for inspection and examination in
connection with an investigation pursuant to this section.
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