HB5056eng 93RD GENERAL ASSEMBLY

HB5056 Engrossed LRB093 21020 SAS 47033 b

AN ACT concerning financial regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Transmitters of Money Act is amended by changing Sections 40, 45, and 75 as follows:

(205 ILCS 657/40)

Sec. 40. Renewals of license.

(a) As a condition for renewal of a license, a licensee must submit to the Director, and the Director must receive, on or before December 1 of each year, an application for renewal made in writing and under oath on a form prescribed by the Director. A licensee whose application for renewal is not received by the Department on or before December 31 shall not have its license renewed and shall be required to submit to the Director an application for a new license in accordance with Section 25. Upon a showing of good cause, the Director may extend the deadline for the filing of an application for renewal. The application for renewal of a license shall contain or be accompanied by all of the following:

(1) The name of the licensee and the address of the principal place of business of the licensee.

(2) (Blank) A list of all locations where the licensee is conducting business under its license and a list of all authorized sellers through whom the licensee is conducting business under its license, including the name and business address of each authorized seller.

(3) Audited financial statements covering the past year of operations, prepared in accordance with generally accepted accounting principles, showing the financial condition of the licensee. The licensee shall submit the audited financial statement after the application for renewal has been approved. The audited financial statement must be received by the Department no later than 120 days after the end of the licensee's fiscal year. If the licensee is a wholly owned subsidiary or is eligible to file consolidated federal income tax returns with its parent, the licensee may submit unaudited financial statements if accompanied by the audited financial statements of the parent company for its most recently ended year.

(4) A statement of the dollar amount and number of money transmissions and payment instruments sold, issued, exchanged, or transmitted in this State by the licensee and its authorized sellers for the past year.

(5) A statement of the dollar amount of uncompleted money transmissions and payment instruments outstanding or in transit, in this State, as of the most recent quarter available.

(6) The annual license renewal fees and any penalty fees as provided by Section 45 of this Act.

(7) Evidence sufficient to prove to the satisfaction of the Director that the licensee has complied with all requirements under Section 20 relating to its net worth, under Section 30 relating to its surety bond or other security, and under Section 50 relating to permissible investments.

(8) A statement of a change in information provided by the licensee in its application for a license or its previous applications for renewal including, but not limited to, new directors, officers, authorized sellers, or clearing banks and material changes in the operation of the licensee's business.

(b) Each licensee must submit to the Director as of the close of business on December 31 of each year a written description of the licensee's general procedures by which it intends to enter into contracts to engage in money transmission in this State. This description must include the licensee's policies and procedures and other details regarding all of the following matters:

(1) The number of authorized sellers and projected sales volume for travelers checks, money orders and all other transmission instruments sold.

(2) The procedures for authorized seller selection, including the method of ascertaining the authorized sellers' credit standing.

(3) The procedures that authorized sellers shall follow relating to:

(A) recordkeeping;

(B) safeguarding travelers checks, money orders, and all other instruments or orders for the transmission or payment of money;

(C) remittance of proceeds of sales of travelers checks, money orders, and all other instruments or orders for transmission or for payment of money sold to the public, including the time within which such proceeds are required to be remitted to the licensee and remittance procedures; and

(D) reporting procedures to be followed by authorized sellers when reporting to the licensee the sale of travelers checks, money orders, and all other instruments or orders for the transmission or payment of money sold to the public, including but not limited to the time within which such sales are to be reported to the licensee, and procedures for reporting such sales.

(4) Procedures for distributing policies and procedures pertaining to authorized sellers and the licensee's program to ensure authorized sellers' compliance.

(5) The licensee's policy relating to loans to and investment in authorized sellers except loans and investments made by a regulated financial institution in the ordinary course of its business.

(6) Such other information and documentation as the Director may require. Such information shall be provided within 45 days of December 31, and at such other times as the Director may require.

In addition, each licensee shall submit to the Director as of the close of business on December 31 of each year a listing in alphabetical order of its authorized sellers in this State showing their full names and addresses and licensee assigned identification number grouped by the category of transmission activity the licensee has authorized the authorized sellers to conduct on its behalf.

(c) Where possible, all information required to be provided under this Section must be provided by electronic means.

(Source: P.A. 92-400, eff. 1-1-02.)

(205 ILCS 657/45)

Sec. 45. Fees.

(a) The Director shall charge and collect fees, which shall be nonrefundable unless otherwise indicated, in accordance with the provisions of this Act as follows:

(1) For applying for a license, an application fee of $100 and a license fee, which shall be refunded if the application is denied or withdrawn, of $100 plus $50 $10 for each location at which the applicant and its authorized sellers are conducting business or propose to conduct business excepting the applicant's principal place of business.

(2) For renewal of a license, a fee of $100 plus $50 $10 for each location at which the licensee and its authorized sellers are conducting business, except the licensee's principal place of business.

(3) For an application to add an authorized seller location, $50 $10 for each authorized seller location.

(4) For service of process or other notice upon the Director as provided by Section 100, a fee of $10.

(5) For an application for renewal of a license received by the Department after December 1, a penalty fee of $10 per day for each day after December 1 in addition to any other fees required under this Act unless an extension of time has been granted by the Director.

(6) For failure to submit financial statements as required by Section 40, a penalty fee of $10 per day for each day the statement is late unless an extension of time has been granted by the Director.

(b) Beginning one year after the effective date of this Act, the Director may, by rule, amend the fees set forth in this Section.

(c) All moneys received by the Department under this Act shall be deposited into the Financial Institutions Fund.

(Source: P.A. 92-400, eff. 1-1-02.)

(205 ILCS 657/75)

Sec. 75. Authorized sellers.

(a) A licensee may conduct the business regulated under this Act at one or more locations in this State through authorized sellers designated by the licensee.

(b) A licensee shall not allow a person to act as its authorized seller until all applicable requirements of this Act have been complied with and the name and address of the person, on a form prescribed by the Director, along with all applicable fees have been submitted to the Department by the licensee.

(c) A licensee shall enter into a contract with its authorized seller detailing the nature and scope of the relationship between the licensee and the authorized seller. The contract between a licensee and an authorized seller must require the authorized seller to operate in full compliance with the laws of this State and of the United States. The licensee shall provide the Director with the sample written contract.

Each written contract between a licensee and an authorized seller entered into or renewed after the effective date of this amendatory Act of the 93rd General Assembly shall provide all of the following:

(1) A description of the category or categories of money transmission activity the licensee is authorized to lawfully engage in under its license that it may do through an agent.

(2) An acknowledgment that the Director reserves the right to inspect, with or without prior notice to the licensee or the licensee's authorized sellers, the books and records of the authorized sellers of the licensee.

(3) That authorized sellers shall not sell any travelers check, money order, or other money transmission instrument in this State unless the name of the licensee shall clearly appear on the face of the instrument and the licensee shall not condition its engagement as obligor under the payment instrument upon the remittance of the proceeds of sale from the authorized seller.

(4) That an authorized seller shall not sell any travelers check, money order, or other money transmission instrument in this State unless the authorized seller has provided the Director with a written and irrevocable consent to examine, have access to, and retain copies of all of its books and records, wherever maintained, relating to these activities.

(5) That authorized sellers in this State are under a duty to act only as authorized under the agency contract and that an authorized seller that exceeds its authority is subject to cancellation of the agency contract and may result in further disciplinary action against the licensee by the Director.

For each contract entered into before the effective date of this amendatory Act of the 93rd General Assembly, a notice containing the information in items (1) through (5) of this subsection shall be sent by each licensee to each of its agents in Illinois within 45 days after the effective date of this amendatory Act of the 93rd General Assembly.

(d) The financial responsibility of a licensee for the actions of its authorized seller shall not exceed the amount of funds received by the authorized seller on behalf of its licensee for transmission.

(e) An authorized seller has an affirmative duty not to (1) commit fraud or misrepresentation and (2) submit fraudulent statements to the licensee. A licensee shall, as soon as practical, report to the Director and to any other appropriate official of this State or of the United States when it has probable cause to believe an authorized seller has violated the affirmative duty set forth in this subsection.

(f) The licensee shall require the authorized seller to hold in trust for the licensee from the moment of receipt the proceeds of any business transacted under this Act in an amount equal to the amount of proceeds due the licensee less the amount due the authorized seller. The funds shall remain the property of the licensee whether or not commingled by the authorized seller with its own funds. In the event that the license is revoked by the Director, all proceeds then held in trust by authorized sellers of that licensee shall be deemed to have been assigned to the Director. If an authorized seller fails to remit funds to the licensee in accordance with the time specified in its contract with the licensee, the licensee may bring a civil action against the authorized seller for 3 times the actual damages. The Director may provide by rule a maximum remittance time for authorized sellers.

(g) A licensee shall, upon discovery, immediately report to the Director, and an authorized seller, shall upon discovery, immediately report to its licensee, the theft or loss of any payment instrument from the licensee or authorized seller in Illinois, having a value in excess of $100 or an aggregate value of $1,000 in any 3 month period.

(h) Upon suspension or revocation of a license, the failure of a licensee to renew its license, or the denial of the renewal of a license, the licensee shall notify its authorized sellers of the Director's action and require them to immediately cease operation as its authorized sellers.

(i) A licensee shall report the removal of an authorized seller location or the termination of operations of an authorized seller location to the Director on a quarterly basis.

(j) No authorized seller shall act outside its scope of authority as defined by this Act and by its contract with the licensee with regard to any transaction regulated by this Act.

(Source: P.A. 88-643, eff. 1-1-95.)