Full Text of SB3670 103rd General Assembly
SB3670 103RD GENERAL ASSEMBLY | | | 103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024 SB3670 Introduced 2/9/2024, by Sen. Laura Ellman SYNOPSIS AS INTRODUCED: | | New Act | | 205 ILCS 657/Act rep. | |
| Creates the Uniform Money Transmission Modernization Act. Provides that the provisions supersede the Transmitters of Money Act. Sets forth provisions concerning money transmission licenses; acquisition of control; reporting and records; authorized delegates; timely transmission, refunds, and disclosures; prudential standards; and enforcement. Repeals the Transmitters of Money Act. Makes other changes. Effective January 1, 2026. |
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| | A BILL FOR |
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| 1 | | AN ACT concerning regulation. | 2 | | Be it enacted by the People of the State of Illinois, | 3 | | represented in the General Assembly: | 4 | | ARTICLE I. Title & Purpose | 5 | | Section 1-1. Short title. This Act may be cited as the | 6 | | Uniform Money Transmission Modernization Act. | 7 | | Section 1-2. Purpose. | 8 | | (a) This Act is designed to replace existing State money | 9 | | transmission laws currently codified under the Transmitters of | 10 | | Money Act. It is the intent of the General Assembly that the | 11 | | provisions of this Act accomplish the following: | 12 | | (1) ensure states can coordinate in all areas of | 13 | | regulation, licensing, and supervision to eliminate | 14 | | unnecessary regulatory burden and more effectively utilize | 15 | | regulator resources; | 16 | | (2) protect the public from financial crime; | 17 | | (3) standardize the types of activities that are | 18 | | subject to licensing or otherwise exempt from licensing; | 19 | | and | 20 | | (4) modernize safety and soundness requirements to | 21 | | ensure customer funds are protected in an environment that | 22 | | supports innovative and competitive business practices. |
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| 1 | | (b) The provisions of this Act shall be liberally | 2 | | construed to effectuate its purposes. | 3 | | ARTICLE II. Definitions | 4 | | Section 2-1. Definitions. As used in this Act: | 5 | | "Acting in concert" means persons knowingly acting | 6 | | together with a common goal of jointly acquiring control of a | 7 | | licensee whether or not pursuant to an express agreement. | 8 | | "Authorized delegate" means a person delegated by a | 9 | | licensee to engage in money transmission on behalf of the | 10 | | licensee. | 11 | | "Average daily money transmission liability" means the | 12 | | amount of the licensee's outstanding money transmission | 13 | | obligations in this State at the end of each day in a given | 14 | | period of time, added together, and divided by the total | 15 | | number of days in the given period of time. For purposes of | 16 | | calculating average daily money transmission liability under | 17 | | this Act for any licensee required to do so, the given period | 18 | | of time shall be the quarters ending March 31, June 30, | 19 | | September 30, and December 31. | 20 | | "Bank Secrecy Act" means the Bank Secrecy Act, 31 U.S.C. | 21 | | 5311, et seq. and its implementing rules and regulations, as | 22 | | amended and recodified from time to time. | 23 | | "Bill payment service" means the business of transmitting | 24 | | money on behalf of an Illinois person for the purposes of |
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| 1 | | paying the person's bills. | 2 | | "Closed loop stored value" means stored value that is | 3 | | redeemable by the issuer only for goods or services provided | 4 | | by the issuer or its affiliate or franchisees of the issuer or | 5 | | its affiliate, except to the extent required by applicable law | 6 | | to be redeemable in cash for its cash value. | 7 | | "Control" means, when in reference to a person: | 8 | | (1)(A) the power to vote, directly or indirectly, at | 9 | | least 25% of the outstanding voting shares or voting | 10 | | interests of a licensee or person in control of a | 11 | | licensee; | 12 | | (B) the power to elect or appoint a majority of key | 13 | | individuals or executive officers, managers, | 14 | | directors, trustees, or other persons exercising | 15 | | managerial authority of a person in control of a | 16 | | licensee; or | 17 | | (C) the power to exercise, directly or indirectly, | 18 | | a controlling influence over the management or | 19 | | policies of a licensee or person in control of a | 20 | | licensee. | 21 | | (2) Rebuttable presumption of control. | 22 | | (A) A person is presumed to exercise a controlling | 23 | | influence when the person holds the power to vote, | 24 | | directly or indirectly, at least 10% of the | 25 | | outstanding voting shares or voting interests of a | 26 | | licensee or person in control of a licensee. |
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| 1 | | (B) A person presumed to exercise a controlling | 2 | | influence as defined by this Section can rebut the | 3 | | presumption of control if the person is a passive | 4 | | investor. | 5 | | (3) For purposes of determining the percentage of a | 6 | | person controlled by any other person, the person's | 7 | | interest shall be aggregated with the interest of any | 8 | | other immediate family member, including the person's | 9 | | spouse, parents, children, siblings, mothers-in-law and | 10 | | fathers-in-law, sons-in-law and daughters-in-law, | 11 | | brothers-in-law and sisters-in-law, and any other person | 12 | | who shares such person's home. | 13 | | "Department" means the Department of Financial and | 14 | | Professional Regulation. | 15 | | "Eligible rating" means a credit rating of any of the 3 | 16 | | highest rating categories provided by an eligible rating | 17 | | service, whereby each category may include rating category | 18 | | modifiers such as "plus" or "minus" for S&P, or the equivalent | 19 | | for any other eligible rating service. For purposes of this | 20 | | definition, long-term credit ratings are deemed eligible if | 21 | | the rating is equal to "A-" or higher by S&P, or the equivalent | 22 | | from any other eligible rating service; short-term credit | 23 | | ratings are deemed eligible if the rating is equal to or higher | 24 | | than "A-2" or "SP-2" by S&P, or the equivalent from any other | 25 | | eligible rating service; if ratings differ among eligible | 26 | | rating services, the highest rating shall apply when |
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| 1 | | determining whether a security bears an eligible rating. | 2 | | "Eligible rating service" means any nationally recognized | 3 | | statistical rating organization as defined by the U.S. | 4 | | Securities and Exchange Commission, and any other organization | 5 | | designated by the Secretary by rule or order. | 6 | | "Federally insured depository financial institution" means | 7 | | a bank, credit union, savings and loan association, trust | 8 | | company, savings association, savings bank, industrial bank, | 9 | | or industrial loan company organized under the laws of the | 10 | | United States or any state of the United States, if the bank, | 11 | | credit union, savings and loan association, trust company, | 12 | | savings association, savings bank, industrial bank, or | 13 | | industrial loan company has federally insured deposits. | 14 | | "In this State" means at a physical location within this | 15 | | State for a transaction requested in person. For a transaction | 16 | | requested electronically or by phone, the provider of money | 17 | | transmission may determine if the person requesting the | 18 | | transaction is in this State by relying on other information | 19 | | provided by the person regarding the location of the | 20 | | individual's residential address or a business entity's | 21 | | principal place of business or other physical address | 22 | | location, and any records associated with the person that the | 23 | | provider of money transmission may have that indicate such | 24 | | location, including, but not limited to, an address associated | 25 | | with an account. | 26 | | "Individual" means a natural person. |
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| 1 | | "Key individual" means any individual ultimately | 2 | | responsible for establishing or directing policies and | 3 | | procedures of the licensee, such as an executive officer, | 4 | | manager, director, or trustee. | 5 | | "Licensee" means a person licensed under this Act. | 6 | | "Material litigation" means litigation, that according to | 7 | | United States generally accepted accounting principles, is | 8 | | significant to a person's financial health and would be | 9 | | required to be disclosed in the person's annual audited | 10 | | financial statements, report to shareholders, or similar | 11 | | records. | 12 | | "Money" means a medium of exchange that is authorized or | 13 | | adopted by the United States or a foreign government as part of | 14 | | its currency and that is customarily used and accepted as a | 15 | | medium of exchange in the country of issuance. "Money" | 16 | | includes a monetary unit of account established by an | 17 | | intergovernmental organization or by agreement between 2 or | 18 | | more governments. | 19 | | "Monetary value" means a medium of exchange, whether or | 20 | | not redeemable in money. | 21 | | "Money transmission" means any of the following: | 22 | | (1) Selling or issuing payment instruments to a person | 23 | | located in this State. | 24 | | (2) Selling or issuing stored value to a person | 25 | | located in this State. | 26 | | (3) Receiving money for transmission from a person |
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| 1 | | located in this State or transmitting money in this State. | 2 | | "Money transmission" includes bill payment services and | 3 | | payroll processing services. "Money transmission" does not | 4 | | include the provision solely of online or telecommunications | 5 | | services or network access. | 6 | | "MSB accredited state agency" means a state agency that is | 7 | | accredited by the Conference of State Bank Supervisors and | 8 | | Money Transmitter Regulators Association for money | 9 | | transmission licensing and supervision. | 10 | | "Multistate licensing process" means any agreement entered | 11 | | into by and among state regulators relating to coordinated | 12 | | processing of applications for money transmission licenses, | 13 | | applications for the acquisition of control of a licensee, | 14 | | control determinations, or notice and information requirements | 15 | | for a change of key individuals. | 16 | | "NMLS" means the Nationwide Multistate Licensing System | 17 | | and Registry developed by the Conference of State Bank | 18 | | Supervisors and the American Association of Residential | 19 | | Mortgage Regulators and owned and operated by the State | 20 | | Regulatory Registry, LLC, or any successor or affiliated | 21 | | entity, for the licensing and registration of persons in | 22 | | financial services industries. | 23 | | "Outstanding money transmission obligations" means any of | 24 | | the following: | 25 | | (1) Any payment instrument or stored value issued or | 26 | | sold by the licensee to a person located in the United |
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| 1 | | States or reported as sold by an authorized delegate of | 2 | | the licensee to a person that is located in the United | 3 | | States that has not yet been paid or refunded by or for the | 4 | | licensee or escheated in accordance with applicable | 5 | | abandoned property laws; or | 6 | | (2) Any money received for transmission by the | 7 | | licensee or an authorized delegate in the United States | 8 | | from a person located in the United States that has not | 9 | | been received by the payee, refunded to the sender, or | 10 | | escheated in accordance with applicable abandoned property | 11 | | laws. | 12 | | For purposes of this definition, "in the United States" | 13 | | includes, to the extent applicable, a person in any state, | 14 | | territory, or possession of the United States; the District of | 15 | | Columbia; the Commonwealth of Puerto Rico; or a U.S. military | 16 | | installation that is located in a foreign country. | 17 | | "Passive investor" means a person that: | 18 | | (1) does not have the power to elect a majority of key | 19 | | individuals or executive officers, managers, directors, | 20 | | trustees, or other persons exercising managerial authority | 21 | | of a person in control of a licensee; | 22 | | (2) is not employed by and does not have any | 23 | | managerial duties of the licensee or person in control of | 24 | | a licensee; | 25 | | (3) does not have the power to exercise, directly or | 26 | | indirectly, a controlling influence over the management or |
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| 1 | | policies of a licensee or person in control of a licensee; | 2 | | and | 3 | | (4) either: | 4 | | (A) attests to items (1), (2), and (3), in a form | 5 | | and in a medium prescribed by the Secretary; or | 6 | | (B)commits to the passivity characteristics of | 7 | | items (1), (2), and (3), in a written document. | 8 | | "Payment instrument" means a written or electronic check, | 9 | | draft, money order, traveler's check, or other written or | 10 | | electronic instrument for the transmission or payment of money | 11 | | or monetary value, whether or not negotiable. "Payment | 12 | | instrument" does not include stored value or any instrument | 13 | | that (1) is redeemable by the issuer only for goods or services | 14 | | provided by the issuer or its affiliate or franchisees of the | 15 | | issuer or its affiliate, except to the extent required by | 16 | | applicable law to be redeemable in cash for its cash value; or | 17 | | (2) not sold to the public but issued and distributed as part | 18 | | of a loyalty, rewards, or promotional program. | 19 | | "Payroll processing services" means receiving money for | 20 | | transmission pursuant to a contract with a person to deliver | 21 | | wages or salaries, make payment of payroll taxes to State and | 22 | | federal agencies, make payments relating to employee benefit | 23 | | plans, or make distributions of other authorized deductions | 24 | | from wages or salaries. "Payroll processing services" does not | 25 | | include an employer performing payroll processing services on | 26 | | its own behalf or on behalf of its affiliate. |
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| 1 | | "Person" means any individual, general partnership, | 2 | | limited partnership, limited liability company, corporation, | 3 | | trust, association, joint stock corporation, or other | 4 | | corporate entity identified by the Secretary. | 5 | | "Receiving money for transmission" or "money received for | 6 | | transmission" means receiving money or monetary value in the | 7 | | United States for transmission within or outside the United | 8 | | States by electronic or other means. | 9 | | "Secretary" means the Secretary of Financial and | 10 | | Professional Regulation, the acting Secretary, or a person | 11 | | authorized by the Secretary. | 12 | | "Stored value" means monetary value representing a claim | 13 | | against the issuer evidenced by an electronic or digital | 14 | | record, and that is intended and accepted for use as a means of | 15 | | redemption for money or monetary value, or payment for goods | 16 | | or services. "Stored value" includes, but is not limited to, | 17 | | "prepaid access" as defined by 31 CFR Section 1010.100, as | 18 | | amended or recodified from time to time. Notwithstanding the | 19 | | foregoing, "stored value" does not include a payment | 20 | | instrument or closed loop stored value, or stored value not | 21 | | sold to the public but issued and distributed as part of a | 22 | | loyalty, rewards, or promotional program. | 23 | | "Tangible net worth" means the aggregate assets of a | 24 | | licensee excluding all intangible assets, less liabilities, as | 25 | | determined in accordance with United States generally accepted | 26 | | accounting principles. |
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| 1 | | ARTICLE III. Exemptions | 2 | | Section 3-1. Exemptions. This Act does not apply to: | 3 | | (1) An operator of a payment system to the extent that it | 4 | | provides processing, clearing, or settlement services, between | 5 | | or among persons exempted by this Section or licensees, in | 6 | | connection with wire transfers, credit card transactions, | 7 | | debit card transactions, stored value transactions, automated | 8 | | clearinghouse transfers, or similar funds transfers. | 9 | | (2) A person appointed as an agent of a payee to collect | 10 | | and process a payment from a payor to the payee for goods or | 11 | | services, other than money transmission itself, provided to | 12 | | the payor by the payee, if: | 13 | | (A) there exists a written agreement between the payee | 14 | | and the agent directing the agent to collect and process | 15 | | payments from payors on the payee's behalf; | 16 | | (B) the payee holds the agent out to the public as | 17 | | accepting payments for goods or services on the payee's | 18 | | behalf; and | 19 | | (C) payment for the goods and services is treated as | 20 | | received by the payee upon receipt by the agent so that the | 21 | | payor's obligation is extinguished and there is no risk of | 22 | | loss to the payor if the agent fails to remit the funds to | 23 | | the payee. | 24 | | (3) A person that acts as an intermediary by processing |
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| 1 | | payments between an entity that has directly incurred an | 2 | | outstanding money transmission obligation to a sender, and the | 3 | | sender's designated recipient, if the entity: | 4 | | (A) is properly licensed or exempt from licensing | 5 | | requirements under this Act; | 6 | | (B) provides a receipt, electronic record, or other | 7 | | written confirmation to the sender identifying the entity | 8 | | as the provider of money transmission in the transaction; | 9 | | and | 10 | | (C) bears sole responsibility to satisfy the | 11 | | outstanding money transmission obligation to the sender, | 12 | | including the obligation to make the sender whole in | 13 | | connection with any failure to transmit the funds to the | 14 | | sender's designated recipient. | 15 | | (4) The United States or a department, agency, or | 16 | | instrumentality thereof, or its agent. | 17 | | (5) Money transmission by the United States Postal Service | 18 | | or by an agent of the United States Postal Service. | 19 | | (6) A State, county, city, or any other governmental | 20 | | agency or governmental subdivision or instrumentality of a | 21 | | State, or its agent. | 22 | | (7) A federally insured depository financial institution, | 23 | | bank holding company, office of an international banking | 24 | | corporation, foreign bank that establishes a federal branch | 25 | | pursuant to the International Bank Act, 12 U.S.C. 3102, as | 26 | | amended or recodified from time to time, corporation organized |
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| 1 | | pursuant to the Bank Service Corporation Act, 12 U.S.C. | 2 | | Sections 1861 through 1867, as amended or recodified from time | 3 | | to time, or corporation organized under the Edge Act, 12 | 4 | | U.S.C. Sections 611 through 633, as amended or recodified from | 5 | | time to time, under the laws of a state or the United States. | 6 | | (8) Electronic funds transfer of governmental benefits for | 7 | | a federal, State, county, or governmental agency by a | 8 | | contractor on behalf of the United States or a department, | 9 | | agency, or instrumentality thereof, or on behalf of a State or | 10 | | governmental subdivision, agency, or instrumentality thereof. | 11 | | (9) A board of trade designated as a contract market under | 12 | | the federal Commodity Exchange Act, 7 U.S.C. Section 1 et | 13 | | seq., as amended or recodified from time to time, or a person | 14 | | that, in the ordinary course of business, provides clearance | 15 | | and settlement services for a board of trade to the extent of | 16 | | its operation as or for such a board. | 17 | | (10) A registered futures commission merchant under the | 18 | | federal commodities laws to the extent of its operation as | 19 | | such a merchant. | 20 | | (11) A person registered as a securities broker-dealer | 21 | | under federal or State securities laws to the extent of its | 22 | | operation as such a broker-dealer. | 23 | | (12) An individual employed by a licensee, authorized | 24 | | delegate, or any person exempted from the licensing | 25 | | requirements of the Act when acting within the scope of | 26 | | employment and under the supervision of the licensee, |
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| 1 | | authorized delegate, or exempted person as an employee and not | 2 | | as an independent contractor. | 3 | | (13) A person expressly appointed as a third-party service | 4 | | provider to or agent of an entity exempt under paragraph (7) or | 5 | | (16), solely to the extent that: | 6 | | (A) such service provider or agent is engaging in | 7 | | money transmission on behalf of and pursuant to a written | 8 | | agreement with the exempt entity that sets forth the | 9 | | specific functions that the service provider or agent is | 10 | | to perform; and | 11 | | (B) the exempt entity assumes all risk of loss and all | 12 | | legal responsibility for satisfying the outstanding money | 13 | | transmission obligations owed to purchasers and holders of | 14 | | the outstanding money transmission obligations upon | 15 | | receipt of the purchaser's or holder's money or monetary | 16 | | value by the service provider or agent. | 17 | | (14) Any other person, transaction, or class of persons or | 18 | | transactions exempted by rule or any other person or | 19 | | transaction exempted by the Secretary's order on a finding | 20 | | that the licensing of the person is not necessary to achieve | 21 | | the purposes of this Act. | 22 | | (15) Currency exchanges licensed under the Currency | 23 | | Exchange Act to the extent of its operation as such a currency | 24 | | exchange. | 25 | | (16) A credit union organized under the laws of the United | 26 | | States or any state of the United States with member share |
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| 1 | | accounts insured by an insurer approved by the credit union's | 2 | | primary financial regulatory agency. An out-of-state-credit | 3 | | union may not conduct any activity in this State that is not | 4 | | authorized for a credit union chartered under the law of this | 5 | | State. | 6 | | Section 3-2. Authority to require demonstration of | 7 | | exemption. The Secretary may require that any person or entity | 8 | | claiming to be exempt from licensing pursuant to Section 3-1 | 9 | | provide information and documentation to the Secretary | 10 | | demonstrating that it qualifies for any claimed exemption. The | 11 | | burden of proving the applicability of an exemption is upon | 12 | | the person claiming the exclusion or exception. | 13 | | ARTICLE IV. Implementation, Confidentiality, Supervision & | 14 | | Relationship to Federal Law | 15 | | Section 4-1. Implementation. | 16 | | (a) In order to carry out the purposes of this Act, the | 17 | | Secretary may, subject to the provisions of subsections (a) | 18 | | and (b) of Section 4-2: | 19 | | (1) enter into agreements or relationships with other | 20 | | government officials or federal and State regulatory | 21 | | agencies and regulatory associations in order to improve | 22 | | efficiencies and reduce regulatory burden by standardizing | 23 | | methods or procedures, and sharing resources, records or |
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| 1 | | related information obtained under this Act; | 2 | | (2) use, hire, contract, or employ analytical systems, | 3 | | methods, or software to examine or investigate any person | 4 | | subject to this Act. | 5 | | (3) accept, from other state or federal government | 6 | | agencies or officials, licensing, examination, or | 7 | | investigation reports made by such other state or federal | 8 | | government agencies or officials; and | 9 | | (4) accept audit reports made by an independent | 10 | | certified public accountant or other qualified third-party | 11 | | auditor for an applicant or licensee and incorporate the | 12 | | audit report in any report of examination or | 13 | | investigation. | 14 | | (b) The Department shall have the broad administrative | 15 | | authority to administer, interpret and enforce this Act, and | 16 | | adopt rules or regulations implementing this Act and to | 17 | | recover the cost of administering and enforcing this Act by | 18 | | imposing and collecting proportionate and equitable fees and | 19 | | costs associated with applications, examinations, | 20 | | investigations, and other actions required to achieve the | 21 | | purpose of this Act. The Department's rulemaking authority | 22 | | shall include, but not be limited to: | 23 | | (1) such rules and regulations in connection with the | 24 | | activities of licensees as may be necessary and | 25 | | appropriate for the protection of consumers in this State; | 26 | | (2) such rules and regulations as may be necessary and |
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| 1 | | appropriate to define improper or fraudulent business | 2 | | practices in connection with the activities of licensees; | 3 | | (3) such rules and regulations as may define the terms | 4 | | used in this Act and as may be necessary and appropriate to | 5 | | interpret and implement the provisions of this Act; | 6 | | (4) such rules and regulations as may be necessary for | 7 | | the implementation or enforcement of this Act; and | 8 | | (5) such rules and regulations establishing fees the | 9 | | Secretary deems necessary to cover the cost of | 10 | | administration of this Act. | 11 | | Section 4-2. Confidentiality. | 12 | | (a) Except as otherwise provided in this Section, all | 13 | | information or reports obtained by the Secretary from an | 14 | | applicant, licensee, or authorized delegate, and all | 15 | | information contained in or related to an examination, | 16 | | investigation, operating report, or condition report prepared | 17 | | by, on behalf of, or for the use of the Secretary, or financial | 18 | | statements, balance sheets, or authorized delegate | 19 | | information, are confidential and are not subject to | 20 | | disclosure under the Freedom of Information Act. | 21 | | (b) The Secretary may disclose information not otherwise | 22 | | subject to disclosure under subsection (a) to representatives | 23 | | of State or federal agencies who promise in a record that they | 24 | | will maintain the confidentiality of the information or where | 25 | | the Secretary finds that the release is reasonably necessary |
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| 1 | | for the protection and interest of the public. | 2 | | (c) This Section does not prohibit the Secretary from | 3 | | disclosing to the public a list of all licensees or the | 4 | | aggregated financial or transactional data concerning those | 5 | | licensees. | 6 | | (d) Information contained in the records of the Department | 7 | | that is not confidential and may be made available to the | 8 | | public either on the Department's website, upon receipt by the | 9 | | Department of a written request, or in NMLS shall include: | 10 | | (1) the name, business address, telephone number, and | 11 | | unique identifier of a licensee; | 12 | | (2) the business address of a licensee's registered | 13 | | agent for service; | 14 | | (3) the name, business address, and telephone number | 15 | | of all authorized delegates; | 16 | | (4) the terms of or a copy of any bond filed by a | 17 | | licensee, if confidential information, including, but not | 18 | | limited to, prices and fees, for such bond is redacted; | 19 | | (5) copies of any final orders of the Department | 20 | | relating to any violation of this Act or regulations | 21 | | implementing this Act; and | 22 | | (e) Imposition of an administrative action under this Act | 23 | | is not confidential. | 24 | | (f) The Secretary, in his or her sole discretion, may | 25 | | disclose otherwise confidential information when he or she | 26 | | determines disclosure is in the public interest. |
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| 1 | | Section 4-3. Supervision. | 2 | | (a) The Secretary may conduct an examination or | 3 | | investigation of a licensee or authorized delegate or | 4 | | otherwise take independent action authorized by this Act or by | 5 | | a rule adopted or order issued under this Act as reasonably | 6 | | necessary or appropriate to administer and enforce this Act, | 7 | | rules and regulations implementing this Act, and other | 8 | | applicable law, including the Bank Secrecy Act and the USA | 9 | | PATRIOT ACT. The Secretary may: | 10 | | (1) conduct an examination either on-site or off-site | 11 | | as the Secretary may reasonably require; | 12 | | (2) conduct an examination in conjunction with an | 13 | | examination conducted by representatives of other state | 14 | | agencies or agencies of another state or of the federal | 15 | | government; | 16 | | (3) accept the examination report of another state | 17 | | agency or an agency of another state or of the federal | 18 | | government, or a report prepared by an independent | 19 | | accounting firm, which on being accepted is considered for | 20 | | all purposes as an official report of the Secretary; and | 21 | | (4) summon and examine under oath a key individual or | 22 | | employee of a licensee or authorized delegate and require | 23 | | the person to produce records regarding any matter related | 24 | | to the condition and business of the licensee or | 25 | | authorized delegate. |
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| 1 | | (b) A licensee or authorized delegate shall provide, and | 2 | | the Secretary shall have full and complete access to, all | 3 | | records the Secretary may reasonably require to conduct a | 4 | | complete examination. The records must be provided at the | 5 | | location and in the format specified by the Secretary, | 6 | | however, the Secretary may utilize multistate record | 7 | | production standards and examination procedures when such | 8 | | standards will reasonably achieve the requirements of this | 9 | | subsection. | 10 | | (c) Unless otherwise directed by the Secretary, a licensee | 11 | | shall pay all costs reasonably incurred in connection with an | 12 | | examination of the licensee or the licensee's authorized | 13 | | delegates. | 14 | | Section 4-4. Networked supervision. | 15 | | (a) To efficiently and effectively administer and enforce | 16 | | this Act and to minimize regulatory burden, the Secretary is | 17 | | authorized and encouraged to participate in multistate | 18 | | supervisory processes established between states and | 19 | | coordinated through the Conference of State Bank Supervisors, | 20 | | Money Transmitter Regulators Association, and affiliates and | 21 | | successors thereof for all licensees that hold licenses in | 22 | | this State and other states. As a participant in multistate | 23 | | supervision, the Secretary may: | 24 | | (1) cooperate, coordinate, and share information with | 25 | | other state and federal regulators in accordance with |
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| 1 | | Section 4-2; | 2 | | (2) enter into written cooperation, coordination, or | 3 | | information-sharing contracts or agreements with | 4 | | organizations the membership of which is made up of state | 5 | | or federal governmental agencies; and | 6 | | (3) cooperate, coordinate, and share information with | 7 | | organizations the membership of which is made up of state | 8 | | or federal governmental agencies, if the organizations | 9 | | agree in writing to maintain the confidentiality and | 10 | | security of the shared information in accordance with | 11 | | Section 4-2. | 12 | | (b) The Secretary may not waive, and nothing in this | 13 | | Section constitutes a waiver of, the Secretary's authority to | 14 | | conduct an examination or investigation or otherwise take | 15 | | independent action authorized by this Act or a rule adopted or | 16 | | order issued under this Act to enforce compliance with | 17 | | applicable State or federal law. | 18 | | (c) A joint examination or investigation, or acceptance of | 19 | | an examination or investigation report, does not waive an | 20 | | examination assessment provided for in this Act. | 21 | | Section 4-5. Relationship to federal law. | 22 | | (a) If State money transmission jurisdiction is | 23 | | conditioned on a federal law, any inconsistencies between a | 24 | | provision of this Act and the federal law governing money | 25 | | transmission shall be governed by the applicable federal law |
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| 1 | | to the extent of the inconsistency. | 2 | | (b) In the event of any inconsistencies between this Act | 3 | | and a federal law that governs pursuant to subsection (a), the | 4 | | Secretary may provide interpretive rule or guidance that: | 5 | | (1) identifies the inconsistency; and | 6 | | (2) identifies the appropriate means of compliance | 7 | | with federal law. | 8 | | ARTICLE V. Money Transmission Licenses | 9 | | Section 5-1. License required. | 10 | | (a) A person may not engage in the business of money | 11 | | transmission or advertise, solicit, or hold oneself out as | 12 | | providing money transmission unless the person is licensed | 13 | | under this Act. | 14 | | (b) Subsection (a) does not apply to: | 15 | | (1) A person who is an authorized delegate of a person | 16 | | licensed under this Act acting within the scope of | 17 | | authority conferred by a written contract with the | 18 | | licensee; or | 19 | | (2) A person who is exempt pursuant to Section 3-1 and | 20 | | does not engage in money transmission outside the scope of | 21 | | such exemption. | 22 | | (c) A license issued under Section 5-5 is not transferable | 23 | | or assignable. |
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| 1 | | Section 5-2. Consistent State licensing. | 2 | | (a) To establish consistent licensing between this State | 3 | | and other states, the Secretary is authorized and encouraged | 4 | | to: | 5 | | (1) implement all licensing provisions of this Act in | 6 | | a manner that is consistent with other states that have | 7 | | adopted this Act or multistate licensing processes; and | 8 | | (2) participate in nationwide protocols for licensing | 9 | | cooperation and coordination among state regulators | 10 | | provided that such protocols are consistent with this Act. | 11 | | (b) In order to fulfill the purposes of this Act, the | 12 | | Secretary is authorized and encouraged to establish | 13 | | relationships or contracts with NMLS or other entities | 14 | | designated by NMLS to enable the Secretary to: | 15 | | (1) collect and maintain records; | 16 | | (2) coordinate multistate licensing processes and | 17 | | supervision processes; | 18 | | (3) process fees; and | 19 | | (4) facilitate communication between this State and | 20 | | licensees or other persons subject to this Act. | 21 | | (c) The Secretary is authorized and encouraged to utilize | 22 | | NMLS for all aspects of licensing in accordance with this Act, | 23 | | including, but not limited to, license applications, | 24 | | applications for acquisitions of control, surety bonds, | 25 | | reporting, criminal history background checks, credit checks, | 26 | | fee processing, and examinations. |
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| 1 | | (d) The Secretary is authorized and encouraged to utilize | 2 | | NMLS forms, processes, and functionalities in accordance with | 3 | | this Act. If NMLS does not provide functionality, forms, or | 4 | | processes for a provision of this Act, the Secretary is | 5 | | authorized and encouraged to strive to implement the | 6 | | requirements in a manner that facilitates uniformity with | 7 | | respect to licensing, supervision, reporting, and regulation | 8 | | of licensees which are licensed in multiple jurisdictions. | 9 | | (e) For the purpose of participating in NMLS, the | 10 | | Secretary is authorized to waive or modify, in whole or in | 11 | | part, by rule, regulation or order, any or all of the | 12 | | requirements and to establish new requirements as reasonably | 13 | | necessary to participate in NMLS. | 14 | | Section 5-3. Application for license. | 15 | | (a) Applicants for a license shall apply in a form and in a | 16 | | medium as prescribed by the Secretary. Each such form shall | 17 | | contain content as set forth by rule, regulation, instruction | 18 | | or procedure of the Secretary and may be changed or updated by | 19 | | the Secretary in accordance with applicable law in order to | 20 | | carry out the purposes of this Act and maintain consistency | 21 | | with NMLS licensing standards and practices. The application | 22 | | must state or contain, as applicable: | 23 | | (1) the legal name and residential and business | 24 | | addresses of the applicant and any fictitious or trade | 25 | | name used by the applicant in conducting its business; |
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| 1 | | (2) a list of any criminal convictions of the | 2 | | applicant and any material litigation in which the | 3 | | applicant has been involved in the 10-year period | 4 | | preceding the submission of the application; | 5 | | (3) a description of any money transmission previously | 6 | | provided by the applicant and the money transmission that | 7 | | the applicant seeks to provide in this State; | 8 | | (4) a list of the applicant's proposed authorized | 9 | | delegates and the locations in this State where the | 10 | | applicant and its authorized delegates propose to engage | 11 | | in money transmission; | 12 | | (5) a list of other states in which the applicant is | 13 | | licensed to engage in money transmission and any license | 14 | | revocations, suspensions, or other disciplinary action | 15 | | taken against the applicant in another state; | 16 | | (6) information concerning any bankruptcy or | 17 | | receivership proceedings affecting the licensee or a | 18 | | person in control of a licensee; | 19 | | (7) a sample form of contract for authorized | 20 | | delegates, if applicable; | 21 | | (8) a sample form of payment instrument or stored | 22 | | value, as applicable; | 23 | | (9) the name and address of any federally insured | 24 | | depository financial institution through which the | 25 | | applicant plans to conduct money transmission; and | 26 | | (10) any other information the Secretary or NMLS |
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| 1 | | reasonably requires with respect to the applicant. | 2 | | (b) If an applicant is a corporation, limited liability | 3 | | company, partnership, or other legal entity, the applicant | 4 | | shall also provide: | 5 | | (1) the date of the applicant's incorporation or | 6 | | formation and State or country of incorporation or | 7 | | formation; | 8 | | (2) if applicable, a certificate of good standing from | 9 | | the State or country in which the applicant is | 10 | | incorporated or formed; | 11 | | (3) a brief description of the structure or | 12 | | organization of the applicant, including any parents or | 13 | | subsidiaries of the applicant, and whether any parents or | 14 | | subsidiaries are publicly traded; | 15 | | (4) the legal name, any fictitious or trade name, all | 16 | | business and residential addresses, and the employment, as | 17 | | applicable, in the 10-year period preceding the submission | 18 | | of the application of each key individual and person in | 19 | | control of the applicant; | 20 | | (5) a list of any criminal convictions and material | 21 | | litigation in which a person in control of the applicant | 22 | | that is not an individual has been involved in the 10-year | 23 | | period preceding the submission of the application; | 24 | | (6) a copy of audited financial statements of the | 25 | | applicant for the most recent fiscal year and for the | 26 | | 2-year period preceding the submission of the application; |
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| 1 | | (7) a certified copy of unaudited financial statements | 2 | | of the applicant for the most recent fiscal quarter; | 3 | | (8) if the applicant is a publicly traded corporation, | 4 | | a copy of the most recent report filed with the United | 5 | | States Securities and Exchange Commission under Section 13 | 6 | | of the federal Securities Exchange Act of 1934, 15 U.S.C. | 7 | | 78m, as amended or recodified from time to time; | 8 | | (9) if the applicant is a wholly owned subsidiary of: | 9 | | (A) a corporation publicly traded in the United | 10 | | States, a copy of audited financial statements for the | 11 | | parent corporation for the most recent fiscal year or | 12 | | a copy of the parent corporation's most recent report | 13 | | filed under Section 13 of the federal Securities | 14 | | Exchange Act of 1934, 15 U.S.C. 78m, as amended or | 15 | | recodified from time to time; or | 16 | | (B) a corporation publicly traded outside the | 17 | | United States, a copy of similar documentation filed | 18 | | with the regulator of the parent corporation's | 19 | | domicile outside the United States; | 20 | | (10) the name and address of the applicant's | 21 | | registered agent in this State; and | 22 | | (11) any other information the Secretary reasonably | 23 | | requires with respect to the applicant. | 24 | | A nonrefundable application fee must accompany an | 25 | | application for a license under this Section in accordance | 26 | | with 38 Ill. Adm. Code 205.35, as amended or recodified from |
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| 1 | | time to time. | 2 | | (c) The Secretary may waive one or more requirements of | 3 | | subsections (a) and (b) or permit an applicant to submit other | 4 | | information instead of the required information. | 5 | | Section 5-4. Information requirements for certain | 6 | | individuals. | 7 | | (a) Any individual in control of a licensee or applicant, | 8 | | any individual that seeks to acquire control of a licensee, | 9 | | and each key individual shall furnish to the Secretary through | 10 | | NMLS the following items: | 11 | | (1) The individual's fingerprints for submission to | 12 | | the Federal Bureau of Investigation and the Secretary for | 13 | | purposes of a national criminal history background check | 14 | | unless the person currently resides outside of the United | 15 | | States and has resided outside of the United States for | 16 | | the last 10 years. | 17 | | (2) Personal history and experience in a form and in a | 18 | | medium prescribed by the Secretary, to obtain the | 19 | | following: | 20 | | (A) an independent credit report from a consumer | 21 | | reporting agency unless the individual does not have a | 22 | | social security number, in which case, this | 23 | | requirement shall be waived; | 24 | | (B) information related to any criminal | 25 | | convictions or pending charges; and |
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| 1 | | (C) information related to any regulatory or | 2 | | administrative action and any civil litigation | 3 | | involving claims of fraud, misrepresentation, | 4 | | conversion, mismanagement of funds, breach of | 5 | | fiduciary duty, or breach of contract. | 6 | | (b) If the individual has resided outside of the United | 7 | | States at any time in the last 10 years, the individual shall | 8 | | also provide an investigative background report prepared by an | 9 | | independent search firm that meets the following requirements: | 10 | | (1) At a minimum, the search firm shall: | 11 | | (A) demonstrate that it has sufficient knowledge, | 12 | | resources, and employs accepted and reasonable | 13 | | methodologies to conduct the research of the | 14 | | background report; and | 15 | | (B) not be affiliated with or have an interest | 16 | | with the individual it is researching. | 17 | | (2) At a minimum, the investigative background report | 18 | | shall be written in the English language and shall contain | 19 | | the following: | 20 | | (A) if available in the individual's current | 21 | | jurisdiction of residency, a comprehensive credit | 22 | | report, or any equivalent information obtained or | 23 | | generated by the independent search firm to accomplish | 24 | | such report, including a search of the court data in | 25 | | the countries, provinces, states, cities, towns, and | 26 | | contiguous areas where the individual resided and |
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| 1 | | worked; | 2 | | (B) criminal records information for the past 10 | 3 | | years, including, but not limited to, felonies, | 4 | | misdemeanors, or similar convictions for violations of | 5 | | law in the countries, provinces, states, cities, | 6 | | towns, and contiguous areas where the individual | 7 | | resided and worked; | 8 | | (C) employment history; | 9 | | (D) media history, including an electronic search | 10 | | of national and local publications, wire services, and | 11 | | business applications; and | 12 | | (E) financial services-related regulatory history, | 13 | | including, but not limited to, money transmission, | 14 | | securities, banking, insurance, and mortgage related | 15 | | industries. | 16 | | Section 5-5. Issuance of license. | 17 | | (a) When an application for an original license under this | 18 | | Act appears to include all the items and addresses of all of | 19 | | the matters that are required, the application is complete and | 20 | | the Secretary shall promptly notify the applicant in a record | 21 | | of the date on which the application is determined to be | 22 | | complete, and: | 23 | | (1) unless extended by the Secretary pursuant to the | 24 | | Secretary's discretion, the Secretary shall approve or | 25 | | deny the application within 120 days after the completion |
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| 1 | | date; or | 2 | | (2) if the application is not approved or denied | 3 | | within 120 days after the completion date or any extension | 4 | | thereof: | 5 | | (A) the application is approved; and | 6 | | (B) the license takes effect as of the first | 7 | | business day after expiration of the 120-day period. | 8 | | (b) A determination by the Secretary that an application | 9 | | is complete and is accepted for processing means only that the | 10 | | application, on its face, appears to include all of the items, | 11 | | including the Criminal Background Check response from the | 12 | | Federal Bureau of Investigation, and address all of the | 13 | | matters that are required, and is not an assessment of the | 14 | | substance of the application or of the sufficiency of the | 15 | | information provided. | 16 | | (c) When an application is filed and considered complete | 17 | | under this Section, the Secretary shall investigate the | 18 | | applicant's financial condition and responsibility, financial | 19 | | and business experience, character, and general fitness. The | 20 | | Secretary may conduct an on-site investigation of the | 21 | | applicant, the reasonable cost of which the applicant must | 22 | | pay. The Secretary shall issue a license to an applicant under | 23 | | this Section if the Secretary finds that all of the following | 24 | | conditions have been fulfilled: | 25 | | (1) the applicant has complied with Sections 5-3 and | 26 | | 5-4; and |
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| 1 | | (2) the financial condition and responsibility, | 2 | | financial and business experience, competence, character, | 3 | | and general fitness of the applicant and the competence, | 4 | | experience, character, and general fitness of the key | 5 | | individuals and persons in control of the applicant | 6 | | indicate that it is in the interest of the public to permit | 7 | | the applicant to engage in money transmission. | 8 | | (d) If an applicant avails itself or is otherwise subject | 9 | | to a multistate licensing process: | 10 | | (1) the Secretary is authorized and encouraged to | 11 | | accept the investigation results of a lead investigative | 12 | | state for the purpose of subsection (c) if the lead | 13 | | investigative state has sufficient staffing, expertise, | 14 | | and minimum standards; or | 15 | | (2) if the Department is a lead investigative state, | 16 | | the Secretary is authorized and encouraged to investigate | 17 | | the applicant pursuant to subsection (c) and the | 18 | | timeframes established by agreement through the multistate | 19 | | licensing process, however, in no case shall such | 20 | | timeframe be noncompliant with the application period in | 21 | | paragraph (1) of subsection (a). | 22 | | (e) The Secretary shall issue a formal written notice of | 23 | | the denial of a license application within 30 days after the | 24 | | decision to deny the application. The Secretary shall set | 25 | | forth the specific reasons for the denial of the application | 26 | | in the notice of denial and serve the applicant, either |
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| 1 | | personally or by certified mail. Service by certified mail | 2 | | shall be deemed completed when the notice is deposited into | 3 | | the U.S. Mail. An applicant whose application is denied by the | 4 | | Secretary under this Section may submit a written request for | 5 | | a hearing that shall include the particular reasons why the | 6 | | applicant believes that the decision to deny the application | 7 | | was incorrect, within 10 days after service of the notice of | 8 | | the denial. If an applicant submits a timely request for a | 9 | | hearing, the Secretary shall schedule a hearing after the | 10 | | request for a hearing unless otherwise agreed to by the | 11 | | parties. The Secretary shall conduct hearings pursuant to this | 12 | | Section and in accordance with 38 Ill. Adm. Code 100, as | 13 | | amended or recodified from time to time. | 14 | | (f) The initial license term shall begin on the day that | 15 | | the application is approved. The license shall expire on | 16 | | December 31 of the year in which the license term began, unless | 17 | | the initial license date is between November 1 and December | 18 | | 31, in which instance the initial license term shall run | 19 | | through December 31 of the following year. | 20 | | Section 5-6. Renewal of license. | 21 | | (a) A license under this Act shall be renewed annually. | 22 | | (b) An annual renewal fee in accordance with 38 Ill. Adm. | 23 | | Code 205.35, as amended or recodified from time to time, shall | 24 | | be paid to the Department. The renewal term shall be for a | 25 | | period of one year and shall begin on January 1 of each year |
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| 1 | | after the initial license term and shall expire on December 31 | 2 | | of the year the renewal term begins. | 3 | | (c) A licensee shall submit a renewal report, in a form and | 4 | | in a medium prescribed by the Secretary by December 1 of each | 5 | | year. The form requires any information deemed necessary by | 6 | | the Secretary to review a renewal application. At a minimum, | 7 | | the renewal report must state or contain a description of each | 8 | | material change in information submitted by the licensee in | 9 | | its original license application which has not been reported | 10 | | to the Secretary and a statement of the dollar amount and | 11 | | number of money transmissions and payment instruments sold, | 12 | | issued, exchanged, or transmitted in this State by the | 13 | | licensee and its authorized delegate for the past 4 completed | 14 | | calendar quarters. | 15 | | (d) The Secretary, in his or her discretion, may grant an | 16 | | extension of the renewal date. | 17 | | (e) The Secretary is authorized and encouraged to utilize | 18 | | NMLS to process license renewals if such functionality is | 19 | | consistent with this Section. | 20 | | (f) The Secretary shall issue a formal written notice of | 21 | | the denial of renewal within 30 days after the decision to deny | 22 | | the renewal. The Secretary shall set forth the specific | 23 | | reasons for denying the renewal in the notice of denial and | 24 | | serve the licensee, either personally or by certified mail. | 25 | | Service by certified mail shall be deemed completed when the | 26 | | notice is deposited into the U.S. Mail. A licensee whose |
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| 1 | | renewal is denied by the Secretary under this Section may | 2 | | submit a written request for a hearing that shall include the | 3 | | particular reasons why the licensee believes that the decision | 4 | | to deny the renewal was incorrect within 10 days after service | 5 | | of the notice of the denial. If a licensee submits a timely | 6 | | request for a hearing, the Secretary shall schedule a hearing | 7 | | unless otherwise agreed to by the parties. The Secretary shall | 8 | | conduct hearings pursuant to this Section and in accordance | 9 | | with 38 Ill. Adm. Code 100, as amended or recodified from time | 10 | | to time. The expiring license shall be deemed to continue in | 11 | | force until 10 days after the service of the notice of denial | 12 | | or, if a timely hearing is requested during that period, until | 13 | | a final order is entered pursuant to a hearing. | 14 | | Section 5-7. Maintenance of license. | 15 | | (a) If a licensee does not continue to meet the | 16 | | qualifications or satisfy the requirements that apply to an | 17 | | applicant for a new money transmission license, the Secretary | 18 | | may suspend or revoke the licensee's license in accordance | 19 | | with the procedures established by this Act or other | 20 | | applicable State law for such suspension or revocation. | 21 | | (b) An applicant for a money transmission license must | 22 | | demonstrate that it meets or will meet, and a money | 23 | | transmission licensee must at all times meet, the requirements | 24 | | in Article X of this Act. |
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| 1 | | Section 5-8. Fees. | 2 | | The expenses of administering this Act, including | 3 | | investigations and examinations provided for in this Act, | 4 | | shall be borne by and assessed against entities regulated by | 5 | | this Act. The Department may establish fees by rule, including | 6 | | in the following categories: | 7 | | (1) investigation of licensees and license applicant | 8 | | fees; | 9 | | (2) examination fees; | 10 | | (3) contingent fees; and | 11 | | (4) such other categories as may be required to | 12 | | administer this Act. | 13 | | (b) The Secretary shall charge and collect fees, which | 14 | | shall be nonrefundable unless otherwise indicated, in | 15 | | accordance with 38 Ill. Adm. Code 205, as amended or | 16 | | recodified from time to time. | 17 | | (c) All fees currently assessed in accordance with 38 Ill. | 18 | | Adm. Code 205, as amended or recodified from time to time, | 19 | | shall remain in effect until amended by rule in accordance | 20 | | with this Act. Except for money required to be deposited into | 21 | | the TOMA Consumer Protection Fund pursuant to this Act, all | 22 | | moneys received by the Department shall be deposited into the | 23 | | Financial Institution Fund. Failure to pay any required fee by | 24 | | the due date shall subject the licensee to a penalty fee of $25 | 25 | | per day and disciplinary action. |
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| 1 | | Section 5-9. Liability of licensees. A licensee is liable | 2 | | for the payment of all moneys covered by payment instruments | 3 | | that it sells or issues in any form in this State through its | 4 | | authorized delegate and all moneys it receives itself or | 5 | | through its authorized delegate for transmission by any means | 6 | | whether or not any instrument is a negotiable instrument under | 7 | | the laws of this State. | 8 | | ARTICLE VI. Acquisition of Control and Change of Key | 9 | | Individual | 10 | | Section 6-1. Acquisition of control. | 11 | | (a) Any person, or group of persons acting in concert, | 12 | | seeking to acquire control of a licensee shall obtain the | 13 | | written approval of the Secretary before acquiring control. An | 14 | | individual is not deemed to acquire control of a licensee and | 15 | | is not subject to this Section when that individual becomes a | 16 | | key individual in the ordinary course of business. | 17 | | (b) A person, or group of persons acting in concert, | 18 | | seeking to acquire control of a licensee shall, in cooperation | 19 | | with the licensee: | 20 | | (1) submit an application in a form and in a medium | 21 | | prescribed by the Secretary; and | 22 | | (2) submit a nonrefundable fee of $1,000 with the | 23 | | request for approval. | 24 | | (c) Upon request, the Secretary may permit a licensee or |
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| 1 | | the person, or group of persons acting in concert, to submit | 2 | | some or all information required by the Secretary pursuant to | 3 | | subsection (b) without using NMLS. | 4 | | (d) The application required by subsection (b) shall | 5 | | include information required by Section 5-4 for any new key | 6 | | individuals that have not previously completed the | 7 | | requirements of Section 5-4 for a licensee. | 8 | | (e) When an application for acquisition of control under | 9 | | this Section appears to include all the items and address all | 10 | | of the matters that are required, the application shall be | 11 | | considered complete and: | 12 | | (1) unless extended by the Secretary pursuant to the | 13 | | Secretary's discretion, the Secretary shall approve or | 14 | | deny the application within 60 days after the completion | 15 | | date; or | 16 | | (2) if the application is not approved or denied | 17 | | within 60 days after the completion date or any extension | 18 | | thereof: | 19 | | (A) the application is approved; and | 20 | | (B) the person, or group of persons acting in | 21 | | concert, are not prohibited from acquiring control. | 22 | | (f) A determination by the Secretary that an application | 23 | | is complete and is accepted for processing means only that the | 24 | | application, on its face, appears to include all of the items | 25 | | and address all of the matters that are required, and is not an | 26 | | assessment of the substance of the application or of the |
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| 1 | | sufficiency of the information provided. | 2 | | (g) When an application is filed and considered complete | 3 | | under subsection (e), the Secretary shall investigate the | 4 | | financial condition and responsibility, financial and business | 5 | | experience, character, and general fitness of the person, or | 6 | | group of persons acting in concert, seeking to acquire | 7 | | control. The Secretary shall approve an acquisition of control | 8 | | pursuant to this Section if the Secretary finds that all of the | 9 | | following conditions have been fulfilled: | 10 | | (1) The requirements of subsections (b) and (d) have | 11 | | been met, as applicable; and | 12 | | (2) the financial condition and responsibility, | 13 | | financial and business experience, competence, character, | 14 | | and general fitness of the person, or group of persons | 15 | | acting in concert, seeking to acquire control; and the | 16 | | competence, experience, character, and general fitness of | 17 | | the key individuals and persons that would be in control | 18 | | of the licensee after the acquisition of control indicate | 19 | | that it is in the interest of the public to permit the | 20 | | person, or group of persons acting in concert, to control | 21 | | the licensee. | 22 | | (h) If an applicant avails itself or is otherwise subject | 23 | | to a multistate licensing process: | 24 | | (1) the Secretary is authorized and encouraged to | 25 | | accept the investigation results of a lead investigative | 26 | | state for the purpose of subsection (g) if the lead |
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| 1 | | investigative state has sufficient staffing, expertise, | 2 | | and minimum standards; or | 3 | | (2) if the Department is a lead investigative state, | 4 | | the Secretary is authorized and encouraged to investigate | 5 | | the applicant pursuant to subsection (g) and the | 6 | | timeframes established by agreement through the multistate | 7 | | licensing process. | 8 | | (i) The Secretary shall issue a formal written notice of | 9 | | the denial of an application to acquire control within 30 days | 10 | | after the decision to deny the application. The Secretary | 11 | | shall set forth the specific reasons for the denial of the | 12 | | application in the notice of denial and serve the applicant, | 13 | | either personally or by certified mail. Service by certified | 14 | | mail shall be deemed completed when the notice is deposited | 15 | | into the U.S. mail. An applicant whose application is denied | 16 | | by the Secretary under this subsection (i) may submit a | 17 | | written request for hearing which shall include the particular | 18 | | reasons why the applicant believes that the decision to deny | 19 | | the application was incorrect, within 10 days after service of | 20 | | the notice of denial. If an applicant submits a timely request | 21 | | for a hearing, the Secretary shall schedule a hearing unless | 22 | | otherwise agreed to by the parties. The Secretary shall | 23 | | conduct hearings pursuant to this Section and in accordance | 24 | | with 38 Ill. Adm. Code 100, as amended or recodified from time | 25 | | to time. | 26 | | (j) The requirements of subsections (a) and (b) do not |
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| 1 | | apply to any of the following: | 2 | | (1) a person that acts as a proxy for the sole purpose | 3 | | of voting at a designated meeting of the shareholders or | 4 | | holders of voting shares or voting interests of a licensee | 5 | | or a person in control of a licensee; | 6 | | (2) a person that acquires control of a licensee by | 7 | | devise or descent; | 8 | | (3) a person that acquires control of a licensee as a | 9 | | personal representative, custodian, guardian, | 10 | | conservator, or trustee, or as an officer appointed by a | 11 | | court of competent jurisdiction or by operation of law; | 12 | | (4) a person that is exempt under paragraphs (7) or | 13 | | (16) of Section 3-1; | 14 | | (5) A person that the Secretary determines is not | 15 | | subject to subsection (a) based on the public interest; | 16 | | (6) A public offering of securities of a licensee or a | 17 | | person in control of a licensee; or | 18 | | (7) An internal reorganization of a person in control | 19 | | of the licensee where the ultimate person in control of | 20 | | the licensee remains the same. | 21 | | (k) Persons in paragraphs (2), (3), (4), (6), and (7) of | 22 | | subsection (j) in cooperation with the licensee shall notify | 23 | | the Secretary within 15 days after the acquisition of control. | 24 | | (l) Streamlined acquisition of control. | 25 | | (1) The requirements of subsections (a) and (b) do not | 26 | | apply to a person that has complied with and received |
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| 1 | | approval to engage in money transmission under this Act or | 2 | | was identified as a person in control in a prior | 3 | | application filed with and approved by the Secretary or by | 4 | | an MSB accredited state agency pursuant to a multistate | 5 | | licensing process, if: | 6 | | (A) the person has not had a license revoked or | 7 | | suspended or controlled a licensee that has had a | 8 | | license revoked or suspended while the person was in | 9 | | control of the licensee in the previous 5 years; | 10 | | (B) if the person is a licensee, the person is well | 11 | | managed and has received at least a satisfactory | 12 | | rating for compliance at its most recent examination | 13 | | by an MSB accredited state agency if such rating was | 14 | | given; | 15 | | (C) the licensee to be acquired is projected to | 16 | | meet the requirements of Article X of this Act after | 17 | | the acquisition of control is completed, and if the | 18 | | person acquiring control is a licensee, that licensee | 19 | | is also projected to meet the requirements of Article | 20 | | X of this Act after the acquisition of control is | 21 | | completed; | 22 | | (D) the licensee to be acquired will not implement | 23 | | any material changes to its business plan as a result | 24 | | of the acquisition of control, and if the person | 25 | | acquiring control is a licensee, that licensee also | 26 | | will not implement any material changes to its |
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| 1 | | business plan as a result of the acquisition of | 2 | | control; and | 3 | | (E) the person provides notice of the acquisition | 4 | | in cooperation with the licensee and attests to this | 5 | | subsection in a form and in a medium prescribed by the | 6 | | Secretary. | 7 | | (2) If the notice is not denied within 30 days after | 8 | | the date on which the notice was determined to be | 9 | | complete, the notice is deemed approved. | 10 | | (m) Before filing an application for approval to acquire | 11 | | control of a licensee a person may request in writing a | 12 | | determination from the Secretary as to whether the person | 13 | | would be considered a person in control of a licensee upon | 14 | | consummation of a proposed transaction. If the Secretary | 15 | | determines that the person would not be a person in control of | 16 | | a licensee, the proposed person and transaction is not subject | 17 | | to the requirements of subsections (a) and (b). | 18 | | (n) If a multistate licensing process includes a | 19 | | determination pursuant to subsection (m) and an applicant | 20 | | avails itself or is otherwise subject to the multistate | 21 | | licensing process: | 22 | | (1) The Secretary is authorized and encouraged to | 23 | | accept the control determination of a lead investigative | 24 | | state with sufficient staffing, expertise, and minimum | 25 | | standards for the purpose of subsection (m); or | 26 | | (2) If the Department is a lead investigative state, |
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| 1 | | the Secretary is authorized and encouraged to investigate | 2 | | the applicant pursuant to subsection (m) and the | 3 | | timeframes established by agreement through the multistate | 4 | | licensing process. | 5 | | Section 6-2. Notice and information requirements for a | 6 | | change of key individuals. | 7 | | (a) A licensee adding or replacing any key individual | 8 | | shall: | 9 | | (1) provide notice in a manner prescribed by the | 10 | | Secretary within 15 days after the effective date of the | 11 | | key individual's appointment; and | 12 | | (2) provide information as required by Section 5-4 | 13 | | within 45 days after the effective date. | 14 | | (b) The Secretary may issue a formal written notice of | 15 | | denial of key individual within 90 days after the date on which | 16 | | the notice provided pursuant to subsection (a) was determined | 17 | | to be complete if the competence, experience, character, or | 18 | | integrity of the individual would not be in the best interests | 19 | | of the public or the customers of the licensee to permit the | 20 | | individual to be a key individual of such licensee. | 21 | | (c) The Secretary shall set forth the specific reasons for | 22 | | the denial in the notice of denial and serve the licensee and | 23 | | the denied individual, either personally, or by certified | 24 | | mail. Service by certified mail shall be deemed completed when | 25 | | the notice is deposited into the U.S. Mail. A licensee who has |
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| 1 | | been denied by the Secretary under this subsection (c) may | 2 | | submit a written request for hearing which shall include the | 3 | | particular reasons why the licensee believes that the decision | 4 | | to deny was incorrect, within 10 days after service of the | 5 | | notice of the denial. If a licensee submits a timely request | 6 | | for a hearing, the Secretary shall schedule a hearing after | 7 | | the request for a hearing unless otherwise agreed to by the | 8 | | parties. The Secretary shall conduct hearings pursuant to this | 9 | | Section and in accordance with 38 Ill. Adm. Code 100. | 10 | | (d) If the notice provided pursuant to subsection (a) is | 11 | | not denied within 90 days after the date on which the notice | 12 | | was determined to be complete, or any extension thereof, the | 13 | | key individual is deemed approved. | 14 | | (e) If a multistate licensing process includes a key | 15 | | individual notice review and denial process pursuant to this | 16 | | Section and the licensee avails itself or is otherwise subject | 17 | | to the multistate licensing process: | 18 | | (1) the Secretary is authorized and encouraged to | 19 | | accept the determination of another state; | 20 | | (2) if the investigating state has sufficient | 21 | | staffing, expertise, and minimum standards for the purpose | 22 | | of this Section; or | 23 | | (3) if the Department is a lead investigative state, | 24 | | the Secretary is authorized and encouraged to investigate | 25 | | the applicant pursuant to subsection (b) and the | 26 | | timeframes established by agreement through the multistate |
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| 1 | | licensing process. | 2 | | ARTICLE VII. Reporting and Records | 3 | | Section 7-1. Report of condition. | 4 | | (a) Each licensee, under penalty of perjury, shall submit | 5 | | a report of condition within 45 days of the end of the calendar | 6 | | quarter, or within any extended time as the Secretary may | 7 | | prescribe. | 8 | | (b) The report of condition shall include: | 9 | | (1) financial information at the licensee level; | 10 | | (2) nationwide and state-specific money transmission | 11 | | transaction information in every jurisdiction in the | 12 | | United States where the licensee is licensed to engage in | 13 | | money transmission; | 14 | | (3) permissible investments report; | 15 | | (4) transaction destination country reporting for | 16 | | money received for transmission, if applicable; and | 17 | | (5) any other information the Secretary reasonably | 18 | | requires with respect to the licensee. The Secretary is | 19 | | authorized and encouraged to utilize NMLS for the | 20 | | submission of the report required by subsection (a) and is | 21 | | authorized to change or update as necessary the | 22 | | requirements of this Section to carry out the purposes of | 23 | | this Act and maintain consistency with NMLS reporting. | 24 | | (c) The information required by paragraph (4) of |
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| 1 | | subsection (b) shall only be included in a report of condition | 2 | | submitted within 45 days of the end of the fourth calendar | 3 | | quarter. | 4 | | Section 7-2. Audited financial statements. | 5 | | (a) Each licensee shall, within 90 days after the end of | 6 | | each fiscal year, or within any extended time as the Secretary | 7 | | may prescribe, file with the Secretary: | 8 | | (1) an audited financial statement of the licensee for | 9 | | the fiscal year prepared in accordance with United States | 10 | | generally accepted accounting principles; and | 11 | | (2) any other information as the Secretary may | 12 | | reasonably require. | 13 | | (b) The audited financial statements shall be prepared by | 14 | | an independent certified public accountant or independent | 15 | | public accountant who is satisfactory to the Secretary; | 16 | | (c) The audited financial statements shall include or be | 17 | | accompanied by a certificate of opinion of the independent | 18 | | certified public accountant or independent public accountant | 19 | | that is satisfactory in form and content to the Secretary. If | 20 | | the opinion or certificate is qualified, the licensee must | 21 | | make a separate report to the Secretary notifying them of the | 22 | | qualified opinion or certification. If the certificate or | 23 | | opinion is qualified, the Secretary may order the licensee to | 24 | | take any action as the Secretary may find necessary to enable | 25 | | the certified public accountant or independent public |
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| 1 | | accountant to remove the qualification. | 2 | | Section 7-3. Authorized delegate reporting. | 3 | | (a) Each licensee shall submit a report of authorized | 4 | | delegates within 45 days of the end of the calendar quarter. | 5 | | The Secretary is authorized and encouraged to utilize NMLS for | 6 | | the submission of the report required by this Section provided | 7 | | that such functionality is consistent with the requirements of | 8 | | this Section. | 9 | | (b) The authorized delegate report shall include, at a | 10 | | minimum, each authorized delegate's: | 11 | | (1) company legal name; | 12 | | (2) taxpayer employer identification number; | 13 | | (3) principal provider identifier; | 14 | | (4) physical address; | 15 | | (5) mailing address; | 16 | | (6) any business conducted in other states; | 17 | | (7) any fictitious or trade name; | 18 | | (8) contact person name, phone number, and email; | 19 | | (9) start date as licensee's authorized delegate; | 20 | | (10) end date acting as licensee's authorized | 21 | | delegate, if applicable; | 22 | | (11) court orders pursuant to Section 8-3; and | 23 | | (12) Any other information the Secretary reasonably | 24 | | requires with respect to the authorized delegate. |
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| 1 | | Section 7-4. Reports of certain events. | 2 | | (a) A licensee shall file a report with the Secretary | 3 | | within one business day after the licensee has reason to know | 4 | | of the occurrence of any of the following events: | 5 | | (1) the filing of a petition by or against the | 6 | | licensee under the United States Bankruptcy Code, 11 | 7 | | U.S.C. Sections 101 through 110, as amended or recodified | 8 | | from time to time, for bankruptcy or reorganization; | 9 | | (2) the filing of a petition by or against the | 10 | | licensee for receivership, the commencement of any other | 11 | | judicial or administrative proceeding for its dissolution | 12 | | or reorganization, or the making of a general assignment | 13 | | for the benefit of its creditors; or | 14 | | (3) the commencement of a proceeding to revoke or | 15 | | suspend its license in a state or country in which the | 16 | | licensee engages in business or is licensed. | 17 | | (b) A licensee shall file a report with the Secretary | 18 | | within 3 business days after the licensee has reason to know of | 19 | | the occurrence of any of the following events: | 20 | | (1) a charge or conviction of the licensee or of a key | 21 | | individual or person in control of the licensee for a | 22 | | felony; or | 23 | | (2) a charge or conviction of an authorized delegate | 24 | | for a felony. | 25 | | Section 7-5. Bank Secrecy Act reports. A licensee and an |
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| 1 | | authorized delegate shall file all reports required by federal | 2 | | currency reporting, recordkeeping, and suspicious activity | 3 | | reporting requirements as set forth in the Bank Secrecy Act | 4 | | and other federal and State laws pertaining to money | 5 | | laundering. The timely filing of a complete and accurate | 6 | | report required under this Section with the appropriate | 7 | | federal agency is deemed compliant with the requirements of | 8 | | this Section. | 9 | | Section 7-6. Records. | 10 | | (a) Licensee shall maintain the following records, for | 11 | | determining its compliance with this Act, for at least 3 | 12 | | years: | 13 | | (1) a record of each outstanding money transmission | 14 | | obligation sold; | 15 | | (2) a general ledger posted at least monthly | 16 | | containing all asset, liability, capital, income, and | 17 | | expense accounts; | 18 | | (3) bank statements and bank reconciliation records; | 19 | | (4) records of outstanding money transmission | 20 | | obligations; | 21 | | (5) records of each outstanding money transmission | 22 | | obligation paid within the 3-year period; | 23 | | (6) a list of the last known names and addresses of all | 24 | | of the licensee's authorized delegates; and | 25 | | (7) any other records the Secretary reasonably |
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| 1 | | requires by rule. | 2 | | (b) The records specified in subsection (a) may be | 3 | | maintained in electronic or other retrievable form of record. | 4 | | (c) The records specified in subsection (a) shall be | 5 | | maintained at the licensee's principal place of business or, | 6 | | with notice to the Secretary, at another location designated | 7 | | by the licensee. If the records are maintained outside this | 8 | | State, the licensee shall make them accessible to the | 9 | | Secretary on 7 business-days' notice. | 10 | | (d) All records maintained by the licensee as required in | 11 | | subsections (a) through (c) are open to inspection by the | 12 | | Secretary pursuant to subsection (a) of Section 4-3. | 13 | | (e) A licensee shall require and its authorized delegates | 14 | | must preserve for at least 3 years all documents relating to | 15 | | money transmission activities, unless the data embodied in | 16 | | those documents has been transmitted for recordation by the | 17 | | licensee. | 18 | | ARTICLE VIII. Authorized Delegates | 19 | | Section 8-1. Relationship between licensee and authorized | 20 | | delegate. | 21 | | (a) As used in this Section, "remit" means to make direct | 22 | | payments of money to a licensee or its representative | 23 | | authorized to receive money or to deposit money in a bank in an | 24 | | account specified by the licensee. |
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| 1 | | (b) Before a licensee is authorized to conduct business | 2 | | through an authorized delegate or allows a person to act as the | 3 | | licensee's authorized delegate, the licensee must: | 4 | | (1) adopt, and update as necessary, written policies | 5 | | and procedures reasonably designed to ensure that the | 6 | | licensee's authorized delegates comply with applicable | 7 | | State and federal law; | 8 | | (2) enter into a written contract that complies with | 9 | | subsection (d); and | 10 | | (3) conduct a reasonable risk-based background | 11 | | investigation sufficient for the licensee to determine | 12 | | whether the authorized delegate has complied and will | 13 | | likely comply with applicable State and federal law. | 14 | | (c) An authorized delegate must operate in full compliance | 15 | | with this Act. | 16 | | (d) The written contract required by subsection (b) must | 17 | | be signed by the licensee and the authorized delegate and, at a | 18 | | minimum, must: | 19 | | (1) expressly appoint the person signing the contract | 20 | | as the licensee's authorized delegate with the authority | 21 | | to conduct money transmission on behalf of the licensee; | 22 | | (2) set forth the nature and scope of the relationship | 23 | | between the licensee and the authorized delegate and the | 24 | | respective rights and responsibilities of the parties; | 25 | | (3) require the authorized delegate to agree to fully | 26 | | comply with all applicable State and federal laws, rules, |
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| 1 | | and regulations pertaining to money transmission, | 2 | | including this Act and regulations implementing this Act, | 3 | | relevant provisions of the Bank Secrecy Act, and the USA | 4 | | PATRIOT ACT; | 5 | | (4) require the authorized delegate to remit and | 6 | | handle money and monetary value in accordance with the | 7 | | terms of the contract between the licensee and the | 8 | | authorized delegate; | 9 | | (5) impose a trust on money and monetary value net of | 10 | | fees received for money transmission for the benefit of | 11 | | the licensee; | 12 | | (6) require the authorized delegate to prepare and | 13 | | maintain records as required by this Act or regulations | 14 | | implementing this Act, or as reasonably requested by the | 15 | | Secretary; | 16 | | (7) acknowledge that the authorized delegate consents | 17 | | to examination or investigation by the Secretary; | 18 | | (8) state that the licensee is subject to regulation | 19 | | by the Secretary and that, as part of that regulation, the | 20 | | Secretary may suspend or revoke an authorized delegate | 21 | | designation or require the licensee to terminate an | 22 | | authorized delegate designation; and | 23 | | (9) acknowledge receipt of the written policies and | 24 | | procedures required under paragraph (1) of subsection (b). | 25 | | (e) If the licensee's license is suspended, revoked, | 26 | | surrendered, or expired, the licensee must, within 5 business |
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| 1 | | days, provide documentation to the Secretary that the licensee | 2 | | has notified all applicable authorized delegates of the | 3 | | licensee whose names are in a record filed with the Secretary | 4 | | of the suspension, revocation, surrender, or expiration of a | 5 | | license. Upon suspension, revocation, surrender, or expiration | 6 | | of a license, applicable authorized delegates shall | 7 | | immediately cease to provide money transmission as an | 8 | | authorized delegate of the licensee. | 9 | | (f) An authorized delegate of a licensee holds in trust | 10 | | for the benefit of the licensee all money net of fees received | 11 | | from money transmission. If any authorized delegate commingles | 12 | | any funds received from money transmission with any other | 13 | | funds or property owned or controlled by the authorized | 14 | | delegate, all commingled funds and other property shall be | 15 | | considered held in trust in favor of the licensee in an amount | 16 | | equal to the amount of money net of fees received from money | 17 | | transmission. | 18 | | (g) An authorized delegate may not use a subdelegate to | 19 | | conduct money transmission on behalf of a licensee. | 20 | | Section 8-2. Unauthorized activities. A person shall not | 21 | | engage in the business of money transmission on behalf of a | 22 | | person not licensed under this Act or not exempt pursuant to | 23 | | Article III of this Act. A person that engages in such activity | 24 | | provides money transmission to the same extent as if the | 25 | | person were a licensee, and shall be jointly and severally |
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| 1 | | liable with the unlicensed or nonexempt person. | 2 | | Section 8-3. Prohibited authorized delegates. | 3 | | (a) The circuit court in an action brought by a licensee | 4 | | shall have jurisdiction to grant appropriate equitable or | 5 | | legal relief, including, without limitation, prohibiting the | 6 | | authorized delegate from directly or indirectly acting as an | 7 | | authorized delegate for any licensee in this State and the | 8 | | payment of restitution, damages or other monetary relief, if | 9 | | the circuit court finds that an authorized delegate failed to | 10 | | remit money in accordance with the written contract required | 11 | | by subsection (b) of Section 8-1 or as otherwise directed by | 12 | | the licensee or required by law. | 13 | | (b) If the circuit court issues an order prohibiting a | 14 | | person from acting as an authorized delegate for any licensee | 15 | | pursuant to subsection (a), the licensee that brought the | 16 | | action shall report the order to the Secretary within 30 days | 17 | | and shall report the order through NMLS within 90 days. | 18 | | (c) An authorized delegate who holds money in trust for | 19 | | the benefit of a licensee and knowingly fails to remit more | 20 | | than $1,000 of such money is guilty of a Class 3 felony. | 21 | | (d) An authorized delegate who holds money in trust for | 22 | | the benefit of a licensee and knowingly fails to remit no more | 23 | | than $999 of such money is guilty of a Class A misdemeanor. | 24 | | ARTICLE IX. Timely Transmission, Refunds, and Disclosures |
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| 1 | | Section 9-1. Timely transmission. | 2 | | (a) Every licensee shall forward all money received for | 3 | | transmission in accordance with the terms of the agreement | 4 | | between the licensee and the sender, which shall be no more | 5 | | than 3 business days after the receipt of the money to be | 6 | | transmitted, unless the licensee has a reasonable belief or a | 7 | | reasonable basis to believe that the sender may be a victim of | 8 | | fraud or that a crime or violation of law, rule, or regulation | 9 | | has occurred, is occurring, or may occur. | 10 | | (b) If a licensee fails to forward money received for | 11 | | transmission in accordance with this Section, the licensee | 12 | | must respond to inquiries by the sender with the reason for the | 13 | | failure unless providing a response would violate a State or | 14 | | federal law, rule, or regulation. | 15 | | Section 9-2. Refunds. | 16 | | (a) This Section does not apply to: | 17 | | (1) money received for transmission subject to the | 18 | | federal Remittance Rule, 12 CFR Part 1005, Subpart B, as | 19 | | amended or recodified from time to time; or | 20 | | (2) money received for transmission pursuant to a | 21 | | written agreement between the licensee and payee to | 22 | | process payments for goods or services provided by the | 23 | | payee. | 24 | | (b) Every licensee shall refund to the sender within 10 |
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| 1 | | days after receipt of the sender's written request for a | 2 | | refund of any and all money received for transmission unless | 3 | | any of the following occurs: | 4 | | (1) the money has been forwarded within 10 days after | 5 | | the date on which the money was received for transmission; | 6 | | (2) instructions have been given committing an | 7 | | equivalent amount of money to the person designated by the | 8 | | sender within 10 days of the date on which the money was | 9 | | received for transmission; | 10 | | (3) the agreement between the licensee and the sender | 11 | | instructs the licensee to forward the money at a time that | 12 | | is beyond 10 days after the date on which the money was | 13 | | received for transmission; if funds have not yet been | 14 | | forwarded in accordance with the terms of the agreement | 15 | | between the licensee and the sender, the licensee shall | 16 | | issue a refund in accordance with the other provisions of | 17 | | this Section; or | 18 | | (4) the refund is requested for a transaction that the | 19 | | licensee has not completed based on a reasonable belief or | 20 | | a reasonable basis to believe that a crime or violation of | 21 | | law, rule, or regulation has occurred, is occurring, or | 22 | | may occur. | 23 | | (5) the refund request does not enable the licensee | 24 | | to: | 25 | | (A) identify the sender's name and address or | 26 | | telephone number; or |
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| 1 | | (B) identify the particular transaction to be | 2 | | refunded if the sender has multiple transactions | 3 | | outstanding. | 4 | | Section 9-3. Receipts. | 5 | | (a) As used in this Section, "receipt" means a paper | 6 | | receipt, electronic record, or other written confirmation. For | 7 | | a transaction conducted in person, the receipt may be provided | 8 | | electronically if the sender requests or agrees to receive an | 9 | | electronic receipt. For a transaction conducted electronically | 10 | | or by phone, a receipt may be provided electronically. All | 11 | | electronic receipts shall be provided in a retainable form. | 12 | | (b) Every licensee or its authorized delegate shall | 13 | | provide the sender a receipt for money received for | 14 | | transmission. | 15 | | (1) The receipt shall contain the following | 16 | | information, as applicable: | 17 | | (A) the name of the sender; | 18 | | (B) the name of the designated recipient; | 19 | | (C) the date of the transaction; | 20 | | (D) the unique transaction or identification | 21 | | number; | 22 | | (E) the name of the licensee, NMLS Unique ID, the | 23 | | licensee's business address, and the licensee's | 24 | | customer service telephone number; | 25 | | (F) the amount of the transaction in United States |
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| 1 | | dollars; | 2 | | (G) any fee charged by the licensee to the sender | 3 | | for the transaction; and | 4 | | (H) any taxes collected by the licensee from the | 5 | | sender for the transaction. | 6 | | (2) The receipt required by this Section shall be in | 7 | | English and in the language principally used by the | 8 | | licensee or authorized delegate to advertise, solicit, or | 9 | | negotiate, either orally or in writing, for a transaction | 10 | | conducted in person, electronically or by phone, if other | 11 | | than English. | 12 | | (c) This Section does not apply to: | 13 | | (1) money received for transmission subject to the | 14 | | federal Remittance Rule, 12 CFR Part 1005, Subpart B, as | 15 | | amended or recodified from time to time; | 16 | | (2) money received for transmission pursuant to a | 17 | | written agreement between the licensee and payee to | 18 | | process payments for goods or services provided by the | 19 | | payee; | 20 | | (3) payroll processing services; or | 21 | | (4) as authorized in the Secretary's sole discretion. | 22 | | Section 9-4. Notice. Every licensee or authorized delegate | 23 | | shall include on a receipt or disclose on the licensee's | 24 | | website or mobile application the name and phone number of the | 25 | | Department and a statement that the licensee's customers can |
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| 1 | | contact the Department with questions or complaints about the | 2 | | licensee's money transmission services. | 3 | | Section 9-5. Disclosures for payroll processing services. | 4 | | (a) A licensee that provides payroll processing services | 5 | | shall: | 6 | | (1) issue reports to clients detailing client payroll | 7 | | obligations in advance of the payroll funds being deducted | 8 | | from an account; and | 9 | | (2) make worker paystubs or an equivalent statement | 10 | | available to workers. | 11 | | (b) Subsection (a) does not apply to a licensee providing | 12 | | payroll processing services where the licensee's client | 13 | | designates the intended recipients to the licensee and is | 14 | | responsible for providing the disclosures required by | 15 | | paragraph (2) of subsection (a). | 16 | | ARTICLE X. Prudential Standards | 17 | | Section 10-1. Net worth. | 18 | | (a) A licensee under this Act shall maintain at all times a | 19 | | tangible net worth of the greater of $100,000 or 3% of total | 20 | | assets for the first $100,000,000, 2% of additional assets for | 21 | | $100,000,000 to $1,000,000,000, and 0.5% of additional assets | 22 | | for over $1,000,000,000. | 23 | | (b) Tangible net worth must be demonstrated at initial |
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| 1 | | application by the applicant's most recent financial | 2 | | statements pursuant to paragraph (6) of subsection (b) of | 3 | | Section 5-3. | 4 | | (c) Notwithstanding the provisions of this Section, the | 5 | | Secretary shall have discretionary authority to exempt, in | 6 | | part or in whole, from the requirements of this Section any | 7 | | applicant or licensee. | 8 | | Section 10-2. Surety bond. | 9 | | (a) An applicant for a money transmission license must | 10 | | provide, and a licensee at all times must maintain, security | 11 | | consisting of a surety bond in a form satisfactory to the | 12 | | Secretary. The bond shall run to the State of Illinois for the | 13 | | benefit of any claimant against the applicant or licensee with | 14 | | respect to the receipt, handling, transmission, and payment of | 15 | | money by the licensee or authorized delegate in connection | 16 | | with the licensed operations. A claimant damaged by a breach | 17 | | of the conditions of a bond shall have a right to action upon | 18 | | the bond for damages suffered thereby and may bring suit | 19 | | directly on the bond, or the Secretary may bring suit on behalf | 20 | | of the claimant. | 21 | | (b) The amount of the required security shall be the | 22 | | greater of $1,000,000 or an amount equal to 100% of the | 23 | | licensee's average daily money transmission liability in this | 24 | | State calculated for the most recently completed quarter, up | 25 | | to a maximum of $2,000,000; |
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| 1 | | (c) A licensee that maintains a bond in the maximum amount | 2 | | provided for in subsection (b) is not required to calculate | 3 | | its average daily money transmission liability in this State | 4 | | for purposes of this Section. | 5 | | (d) A licensee may exceed the maximum required bond amount | 6 | | pursuant to paragraph (5) of subsection (a) of Section 10-4. | 7 | | (e) After receiving a license, the licensee must maintain | 8 | | the required bond plus net worth until 3 years after it ceases | 9 | | to do business in this State unless all outstanding payment | 10 | | instruments are eliminated or the provisions under the Revised | 11 | | Uniform Unclaimed Property Act have become operative and are | 12 | | adhered to by the licensee. Notwithstanding this provision, | 13 | | however, the amount required to be maintained may be reduced | 14 | | to the extent that the amount of the licensee's payment | 15 | | instruments outstanding in this State are reduced. | 16 | | (f) Instead of a paper surety bond, each licensee and | 17 | | applicant shall file and maintain an electronic surety bond in | 18 | | NMLS or in a manner otherwise authorized by the Secretary. | 19 | | Section 10-3. Maintenance of permissible investments. | 20 | | (a) A licensee shall maintain at all times permissible | 21 | | investments that have a market value computed in accordance | 22 | | with United States generally accepted accounting principles of | 23 | | not less than the aggregate amount of all of its outstanding | 24 | | money transmission obligations. | 25 | | (b) Except for permissible investments enumerated in |
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| 1 | | subsection (a) of Section 10-4, the Secretary, with respect to | 2 | | any licensee, may by rule or order limit the extent to which a | 3 | | specific investment maintained by a licensee within a class of | 4 | | permissible investments may be considered a permissible | 5 | | investment, if the specific investment represents undue risk | 6 | | to customers, not reflected in the market value of | 7 | | investments. | 8 | | (c) Permissible investments, even if commingled with other | 9 | | assets of the licensee, are held in trust for the benefit of | 10 | | the purchasers and holders of the licensee's outstanding money | 11 | | transmission obligations in the event of insolvency, the | 12 | | filing of a petition by or against the licensee under the | 13 | | United States Bankruptcy Code, 11 U.S.C. Sections 101 through | 14 | | 110, as amended or recodified from time to time, for | 15 | | bankruptcy or reorganization, the filing of a petition by or | 16 | | against the licensee for receivership, the commencement of any | 17 | | other judicial or administrative proceeding for its | 18 | | dissolution or reorganization, or in the event of an action by | 19 | | a creditor against the licensee who is not a beneficiary of | 20 | | this statutory trust. No permissible investments impressed | 21 | | with a trust pursuant to this subsection shall be subject to | 22 | | attachment, levy of execution, or sequestration by order of | 23 | | any court, except for a beneficiary of this statutory trust. | 24 | | (d) Upon the establishment of a statutory trust in | 25 | | accordance with subsection (c) or when any funds are drawn on a | 26 | | letter of credit pursuant to paragraph (4) of subsection (a) |
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| 1 | | of Section 10-4, the Secretary shall notify the applicable | 2 | | regulator of each state in which the licensee is licensed to | 3 | | engage in money transmission, if any, of the establishment of | 4 | | the trust or the funds drawn on the letter of credit, as | 5 | | applicable. Notice shall be deemed satisfied if performed | 6 | | pursuant to a multistate agreement or through NMLS. Funds | 7 | | drawn on a letter of credit, and any other permissible | 8 | | investments held in trust for the benefit of the purchasers | 9 | | and holders of the licensee's outstanding money transmission | 10 | | obligations, are deemed held in trust for the benefit of such | 11 | | purchasers and holders on a pro rata and equitable basis in | 12 | | accordance with statutes pursuant to which permissible | 13 | | investments are required to be held in this State, and other | 14 | | states, as applicable. Any statutory trust established | 15 | | hereunder shall be terminated upon extinguishment of all of | 16 | | the licensee's outstanding money transmission obligations. | 17 | | (e) The Secretary by rule or by order may allow other types | 18 | | of investments that the Secretary determines are of sufficient | 19 | | liquidity and quality to be a permissible investment. The | 20 | | Secretary is authorized to participate in efforts with other | 21 | | state regulators to determine that other types of investments | 22 | | are of sufficient liquidity and quality to be a permissible | 23 | | investment. | 24 | | Section 10-4. Types of permissible investments. | 25 | | (a) The following investments are permissible under |
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| 1 | | Section 10-3: | 2 | | (1) cash, including demand deposits, savings deposits, | 3 | | and funds in such accounts held for the benefit of the | 4 | | licensee's customers in a federally insured depository | 5 | | financial institution, and cash equivalents including ACH | 6 | | items in transit to the licensee and ACH items or | 7 | | international wires in transit to a payee, cash in transit | 8 | | via armored car, cash in smart safes, cash in | 9 | | licensee-owned locations, debit card or credit card-funded | 10 | | transmission receivables owed by any bank, or money market | 11 | | mutual funds rated "AAA" by S&P, or the equivalent from | 12 | | any eligible rating service; | 13 | | (2) certificates of deposit or senior debt obligations | 14 | | of an insured depository institution, as defined in | 15 | | Section 3 of the Federal Deposit Insurance Act, 12 U.S.C. | 16 | | 1813, as amended or recodified from time to time, or as | 17 | | defined under the federal Credit Union Act, 12 U.S.C. | 18 | | 1781, as amended or recodified from time to time; | 19 | | (3) an obligation of the United States or a | 20 | | commission, agency, or instrumentality thereof; an | 21 | | obligation that is guaranteed fully as to principal and | 22 | | interest by the United States; or an obligation of a State | 23 | | or a governmental subdivision, agency, or instrumentality | 24 | | thereof; | 25 | | (4) the full drawable amount of an irrevocable standby | 26 | | letter of credit for which the stated beneficiary is the |
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| 1 | | Secretary that stipulates that the beneficiary need only | 2 | | draw a sight draft under the letter of credit and present | 3 | | it to obtain funds up to the letter of credit amount within | 4 | | 7 days of presentation of the items required by | 5 | | subparagraph (C) of this paragraph. | 6 | | (A) The letter of credit must: | 7 | | (i) be issued by a federally insured | 8 | | depository financial institution, a foreign bank | 9 | | that is authorized under federal law to maintain a | 10 | | federal agency or federal branch office in a State | 11 | | or states, or a foreign bank that is authorized | 12 | | under State law to maintain a branch in a State | 13 | | that (I) bears an eligible rating or whose parent | 14 | | company bears an eligible rating; and (II) is | 15 | | regulated, supervised, and examined by United | 16 | | States federal or State authorities having | 17 | | regulatory authority over banks, credit unions, | 18 | | and trust companies; | 19 | | (ii) be irrevocable, unconditional, and | 20 | | indicate that it is not subject to any condition | 21 | | or qualifications outside of the letter of credit; | 22 | | (iii) not contain reference to any other | 23 | | agreements, documents, or entities, or otherwise | 24 | | provide for any security interest in the licensee; | 25 | | and | 26 | | (iv) contain an issue date and expiration date |
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| 1 | | and expressly provide for automatic extension, | 2 | | without a written amendment, for an additional | 3 | | period of one year from the present or each future | 4 | | expiration date, unless the issuer of the letter | 5 | | of credit notifies the Secretary in writing by | 6 | | certified or registered mail or courier mail or | 7 | | other receipted means, at least 60 days before any | 8 | | expiration date, that the irrevocable letter of | 9 | | credit will not be extended. | 10 | | (B) If any notice of expiration or nonextension of | 11 | | a letter of credit issued under subdivision (iv) of | 12 | | subparagraph (A), then the licensee shall be required | 13 | | to demonstrate to the satisfaction of the Secretary, | 14 | | 15 days before expiration, that the licensee maintains | 15 | | and will maintain permissible investments in | 16 | | accordance with subsection (a) of Section 10-3 upon | 17 | | the expiration of the letter of credit. If the | 18 | | licensee is not able to do so, the Secretary may draw | 19 | | on the letter of credit in an amount up to the amount | 20 | | necessary to meet the licensee's requirements to | 21 | | maintain permissible investments in accordance with | 22 | | subsection (a) of Section 10-3. Any such draw shall be | 23 | | offset against the licensee's outstanding money | 24 | | transmission obligations. The drawn funds shall be | 25 | | held in trust by the Secretary or the Secretary's | 26 | | designated agent, to the extent authorized by law, as |
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| 1 | | agent for the benefit of the purchasers and holders of | 2 | | the licensee's outstanding money transmission | 3 | | obligations. | 4 | | (C) The letter of credit shall provide that the | 5 | | issuer of the letter of credit will honor, at sight, a | 6 | | presentation made by the beneficiary to the issuer of | 7 | | the following documents on or before the expiration | 8 | | date of the letter of credit: | 9 | | (i) the original letter of credit, including | 10 | | any amendments; and | 11 | | (ii) a written statement from the beneficiary | 12 | | stating that any of the following events have | 13 | | occurred: | 14 | | (I) the filing of a petition by or against | 15 | | the licensee under the United States | 16 | | Bankruptcy Code, 11 U.S.C. Sections 101 | 17 | | through 110, as amended or recodified from | 18 | | time to time, for bankruptcy or | 19 | | reorganization; | 20 | | (II) the filing of a petition by or | 21 | | against the licensee for receivership, or the | 22 | | commencement of any other judicial or | 23 | | administrative proceeding for its dissolution | 24 | | or reorganization; | 25 | | (III) the seizure of assets of a licensee | 26 | | by the Secretary pursuant to an emergency |
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| 1 | | order issued in accordance with applicable | 2 | | law, on the basis of an action, violation, or | 3 | | condition that has caused or is likely to | 4 | | cause the insolvency of the licensee; or | 5 | | (IV) the beneficiary has received notice | 6 | | of expiration or nonextension of a letter of | 7 | | credit and the licensee failed to demonstrate | 8 | | to the satisfaction of the beneficiary that | 9 | | the licensee will maintain permissible | 10 | | investments in accordance with subsection (a) | 11 | | of Section 10-3 upon the expiration or | 12 | | nonextension of the letter of credit. | 13 | | (D) The Secretary may designate an agent to serve | 14 | | on the Secretary's behalf as beneficiary to a letter | 15 | | of credit so long as the agent and letter of credit | 16 | | meet requirements established by the Secretary. The | 17 | | Secretary's agent may serve as agent for multiple | 18 | | licensing authorities for a single irrevocable letter | 19 | | of credit if the proceeds of the drawable amount for | 20 | | the purposes of this Section are assigned to the | 21 | | Secretary. | 22 | | (E) The Secretary is authorized and encouraged to | 23 | | participate in multistate processes designed to | 24 | | facilitate the issuance and administration of letters | 25 | | of credit, including, but not limited to, services | 26 | | provided by the NMLS and State Regulatory Registry, |
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| 1 | | LLC. | 2 | | (5) 100% of the surety bond or deposit provided for | 3 | | under Section 10-2 that exceeds the average daily money | 4 | | transmission liability in this State. | 5 | | (b) Unless permitted by the Secretary by rule or by order | 6 | | to exceed the limit as set forth herein, the following | 7 | | investments are permissible under Section 10-3 to the extent | 8 | | specified: | 9 | | (1) receivables that are payable to a licensee from | 10 | | its authorized delegates in the ordinary course of | 11 | | business that are less than 7 days old, up to 50% of the | 12 | | aggregate value of the licensee's total permissible | 13 | | investments; | 14 | | (2) of the receivables permissible under paragraph (1) | 15 | | of this subsection (b), receivables that are payable to a | 16 | | licensee from a single authorized delegate in the ordinary | 17 | | course of business may not exceed 10% of the aggregate | 18 | | value of the licensee's total permissible investments. | 19 | | (3) the following investments are permissible up to | 20 | | 20% per category and combined up to 50% of the aggregate | 21 | | value of the licensee's total permissible investments: | 22 | | (A) a short-term, of up to 6 months, investment | 23 | | bearing an eligible rating; | 24 | | (B) commercial paper bearing an eligible rating; | 25 | | (C) a bill, note, bond, or debenture bearing an | 26 | | eligible rating; |
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| 1 | | (D) U.S. tri-party repurchase agreements | 2 | | collateralized at 100% or more with U.S. government or | 3 | | agency securities, municipal bonds, or other | 4 | | securities bearing an eligible rating; | 5 | | (E) money market mutual funds rated less than | 6 | | "AAA" and equal to or higher than "A-" by S&P, or the | 7 | | equivalent from any other eligible rating service; and | 8 | | (F) a mutual fund or other investment fund | 9 | | composed solely and exclusively of one or more | 10 | | permissible investments listed in paragraphs (1) | 11 | | through (3) of subsection (a). | 12 | | (4) cash, including demand deposits, savings deposits, | 13 | | and funds in such accounts held for the benefit of the | 14 | | licensee's customers, at foreign depository institutions | 15 | | are permissible up to 10% of the aggregate value of the | 16 | | licensee's total permissible investments if the licensee | 17 | | has received a satisfactory rating in its most recent | 18 | | examination and the foreign depository institution: | 19 | | (A) has an eligible rating; | 20 | | (B) is registered under the Foreign Account Tax | 21 | | Compliance Act; | 22 | | (C) is not located in any country subject to | 23 | | sanctions from the Office of Foreign Asset Control; | 24 | | and | 25 | | (D) is not located in a high-risk or | 26 | | non-cooperative jurisdiction as designated by the |
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| 1 | | Financial Action Task Force. | 2 | | ARTICLE XI. Enforcement | 3 | | Section 11-1. Prohibited acts and practices for licensees. | 4 | | It is a violation of this Act for a licensee, or other person | 5 | | subject to this Act to: | 6 | | (1) directly or indirectly employ any scheme, device, | 7 | | or artifice to defraud or mislead any person, including, | 8 | | but not limited to, engaging in bait and switch | 9 | | advertising or sales practices; | 10 | | (2) directly or indirectly engage in any unfair or | 11 | | deceptive act or practice toward any person, including, | 12 | | but not limited to, any false or deceptive statement about | 13 | | fees or other terms of a money transmission or currency | 14 | | exchange; | 15 | | (3) directly or indirectly obtain property by fraud or | 16 | | misrepresentation; | 17 | | (4) knowingly make, publish, or disseminate any false, | 18 | | deceptive, or misleading information in the provision of | 19 | | money services; | 20 | | (5) knowingly receive or take possession for personal | 21 | | use of any property of any money services business, other | 22 | | than in payment for services rendered, and with intent to | 23 | | defraud, omit to make, or cause or direct to omit to make, | 24 | | a full and true entry thereof in the books and accounts of |
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| 1 | | the business; | 2 | | (6) make or concur in making any false entry, or omit | 3 | | or concur in omitting any material entry, in the books or | 4 | | accounts of the business; | 5 | | (7) knowingly make or publish to the Secretary or the | 6 | | Secretary's designee, or concur in making or publishing to | 7 | | the Secretary or the Secretary's designee any written | 8 | | report, exhibit, or statement of its affairs or pecuniary | 9 | | condition containing any material statement which is | 10 | | false, or omit or concur in omitting any statement | 11 | | required by law to be contained therein; | 12 | | (8) fail to make any report or statement lawfully | 13 | | required by the Secretary or other public official; | 14 | | (9) demonstrate by course of conduct, negligence or | 15 | | incompetence in performing any act directly or indirectly | 16 | | relating to licensed activity; | 17 | | (10) engage in unsafe and unsound practices directly | 18 | | or indirectly relating to licensed activity; or | 19 | | (11) fail to comply with the provisions of this Act or | 20 | | with any lawful order or agreement, rule, or regulations | 21 | | made or issued under the provisions of this Act. | 22 | | Section 11-2. Suspension and revocation of licenses. | 23 | | (a) The Secretary may issue an order to suspend or revoke a | 24 | | license of a licensee or order a licensee to revoke the | 25 | | designation of an authorized delegate if: |
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| 1 | | (1) the licensee has failed to comply with any | 2 | | provision of this Act, or any order, decision, finding, | 3 | | rule, regulation or direction of the Secretary lawfully | 4 | | made pursuant to the authority of this Act; | 5 | | (2) the licensee does not cooperate with an | 6 | | examination or investigation by the Secretary; | 7 | | (3) the licensee engages in fraud, intentional | 8 | | misrepresentation, or gross negligence; | 9 | | (4) an authorized delegate is convicted of a violation | 10 | | of a State or federal anti-money laundering statute, or | 11 | | violates a rule adopted or an order issued under this Act, | 12 | | as a result of the licensee's willful misconduct or | 13 | | grossly negligent inattention to its legal obligations; | 14 | | (5) the competence, experience, character, or general | 15 | | fitness of the licensee, authorized delegate, person in | 16 | | control of a licensee, key individual, or responsible | 17 | | person of the authorized delegate indicates that it is not | 18 | | in the public interest to permit the person to provide | 19 | | money transmission; | 20 | | (6) the licensee engages in an unsafe or unsound | 21 | | practice; | 22 | | (7) the licensee is insolvent, suspends payment of its | 23 | | obligations, or makes a general assignment for the benefit | 24 | | of its creditors; | 25 | | (8) the licensee does not remove an authorized | 26 | | delegate after the Secretary issues and serves upon the |
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| 1 | | licensee a final order including a finding that the | 2 | | authorized delegate has violated this Act; | 3 | | (9) a fact or condition exists that, if it had existed | 4 | | or had been known at the time the licensee applied for its | 5 | | license, would have been ground for denying the | 6 | | application; | 7 | | (10) the licensee knowingly fails to make a report | 8 | | required by this Act; | 9 | | (11) the licensee fails to pay a judgment entered in | 10 | | favor of a claimant, plaintiff, or credit in an action | 11 | | arising out of the licensee's business regulated under | 12 | | this Act within 30 days after the judgment becomes final | 13 | | or within 30 days after the expiration or termination of a | 14 | | stay of execution; | 15 | | (12) the licensee has been convicted under the laws of | 16 | | this State, another state, or the United States of a | 17 | | felony or of a crime involving breach of trust or | 18 | | dishonesty; or | 19 | | (13) the licensee violates the Illinois Uniform | 20 | | Revised Unclaimed Property Act. | 21 | | (b) In determining whether a licensee is engaging in an | 22 | | unsafe or unsound practice, the Secretary may consider the | 23 | | size and condition of the licensee's money transmission, the | 24 | | magnitude of the loss, the gravity of the violation of this | 25 | | Act, and the previous conduct of the person involved. | 26 | | (c) In every case in which a license is suspended or |
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| 1 | | revoked, the Secretary shall issue a formal written notice of | 2 | | the suspension or revocation, setting forth the specific | 3 | | reasons for the suspension or revocation of the license and | 4 | | serve the licensee, either personally or by certified mail. | 5 | | Service by certified mail shall be deemed completed when the | 6 | | notice is deposited into U.S. Mail and the order of suspension | 7 | | or revocation of a license shall take effect upon service of | 8 | | the order. | 9 | | (d) A licensee whose license has been suspended or revoked | 10 | | by the Secretary under this Section may request a hearing, in | 11 | | writing, within 10 days after the date of service. If a | 12 | | licensee submits a timely request for a hearing, the order | 13 | | shall be stayed until a final administrative order is entered | 14 | | and the Secretary shall schedule a hearing unless otherwise | 15 | | agreed to by the parties. | 16 | | (e) The Secretary shall conduct hearings pursuant to this | 17 | | Section and in accordance with 38 Ill. Adm. Code 100, as | 18 | | amended or recodified from time to time. | 19 | | Section 11-3. Suspension and revocation of authorized | 20 | | delegates. | 21 | | (a) The Secretary may issue an order to suspend or revoke | 22 | | the designation of an authorized delegate, if the Secretary | 23 | | finds that: | 24 | | (1) the authorized delegate has failed to comply with | 25 | | any provision of this Act or any order, decision, finding, |
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| 1 | | rule, regulation, or direction of the Secretary lawfully | 2 | | made pursuant to the authority of this Act; | 3 | | (2) the authorized delegate does not cooperate with an | 4 | | examination or investigation by the Secretary; | 5 | | (3) the authorized delegate engages in fraud, | 6 | | intentional misrepresentation, or gross negligence; | 7 | | (4) the authorized delegate is convicted of a | 8 | | violation of a State or federal anti-money laundering | 9 | | statute; | 10 | | (5) the competence, experience, character, or general | 11 | | fitness of the authorized delegate or a person in control | 12 | | of the authorized delegate indicates that it is not in the | 13 | | public interest to permit the authorized delegate to | 14 | | provide money transmission; or | 15 | | (6) the authorized delegate engages in an unsafe or | 16 | | unsound practice. | 17 | | (b) In determining whether an authorized delegate is | 18 | | engaging in an unsafe or unsound practice, the Secretary may | 19 | | consider the size and condition of the authorized delegate's | 20 | | provision of money transmission, the magnitude of the loss, | 21 | | the gravity of the violation of this Act or a rule adopted or | 22 | | order issued under this Act, and the previous conduct of the | 23 | | authorized delegate. | 24 | | (c) In every case in which the designation of an | 25 | | authorized delegate is suspended or revoked, the Secretary | 26 | | shall issue a formal written notice of the suspension or |
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| 1 | | revocation, setting forth the specific reasons for the | 2 | | suspension or revocation of the designation and serve the | 3 | | authorized delegate, either personally or by certified mail. | 4 | | Service by certified mail shall be deemed completed when the | 5 | | notice is deposited into U.S. Mail and the order of suspension | 6 | | or revocation of a license shall take effect upon service of | 7 | | the order. | 8 | | (d) An authorized delegate whose designation has been | 9 | | suspended or revoked by the Secretary under this Section may | 10 | | request a hearing, in writing, within 10 days after the date of | 11 | | service. If an authorized delegate submits a timely request | 12 | | for a hearing, the order shall be stayed until a final | 13 | | administrative order is entered and the Secretary shall | 14 | | schedule a hearing unless otherwise agreed to by the parties. | 15 | | (e) The Secretary shall conduct hearings pursuant to this | 16 | | Section and in accordance with 38 Ill. Adm. Code 100, as | 17 | | amended or recodified from time to time. | 18 | | Section 11-4. Orders to cease and desist; civil penalties. | 19 | | (a) If the Secretary determines that a licensee, an | 20 | | authorized delegate, or any other person has engaged or is | 21 | | engaged in practices contrary to this Act, the rules adopted | 22 | | under this Act, or an order issued under this Act, the | 23 | | Secretary may issue an order requiring the licensee or | 24 | | authorized delegate to cease and desist from the violation. | 25 | | The order becomes effective upon service of it upon the |
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| 1 | | licensee or authorized delegate. | 2 | | (b) The Secretary may issue an order against a licensee to | 3 | | cease and desist from providing money transmission through an | 4 | | authorized delegate that is the subject of a separate order by | 5 | | the Secretary. | 6 | | (c) The Secretary may, in addition to or without the | 7 | | issuance of a cease and desist order, assess a penalty of up to | 8 | | $1,000 against a licensee or other person for each violation | 9 | | of this Act, the rules adopted under this Act, or an order | 10 | | issued under this Act as set forth in Section 11-6. The | 11 | | issuance of an order under this Section shall not be a | 12 | | prerequisite to the taking of any action by the Secretary | 13 | | under this Section or any other Section of this Act. | 14 | | (d) The Secretary shall issue a formal written notice of | 15 | | the cease and desist order, setting forth the specific reasons | 16 | | for the order and serve the licensee or the authorized | 17 | | delegate, either personally or by certified mail. Service by | 18 | | certified mail shall be deemed completed when the notice is | 19 | | deposited in United States mail. | 20 | | Section 11-5. Consent orders; settlements. | 21 | | (a) The Secretary may enter into a consent order or | 22 | | settlement agreement at any time with a person to resolve a | 23 | | matter arising under this Act, the rules adopted under this | 24 | | Act, or order issued under this Act. A consent order or | 25 | | settlement agreement must be signed by the person to whom it is |
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| 1 | | issued or by the person's authorized representative, and must | 2 | | indicate agreement with the terms contained in the order. A | 3 | | consent order or settlement agreement may provide that it does | 4 | | not constitute an admission by a person that this Act or a rule | 5 | | adopted or an order issued under this Act has been violated. | 6 | | (b) Notwithstanding the issuance of a consent order or | 7 | | settlement agreement, the Secretary may seek civil or criminal | 8 | | penalties or compromise civil penalties concerning matter | 9 | | encompassed by the consent order unless the consent order by | 10 | | its terms expressly precludes the Secretary from doing so. | 11 | | (c) The Secretary is authorized to compromise, settle, and | 12 | | collect civil penalties and administrative penalties, as set | 13 | | by rule, with any person for violations of this Act or of any | 14 | | rule or order issued or adopted under this Act. | 15 | | Section 11-6. Criminal penalties. A person who engages in | 16 | | conduct requiring a license under this Act and fails to obtain | 17 | | a license from the Secretary or knowingly makes a false | 18 | | statement, misrepresentation, or false certification in an | 19 | | application, financial statement, account record, report, or | 20 | | other document filed or required to be maintained or filed | 21 | | under this Act or who knowingly makes a false entry or omits a | 22 | | material entry in a document is guilty of a Class 3 felony. | 23 | | Section 11-7. Civil penalties. The Secretary may assess a | 24 | | civil penalty against a person that violates this Act, a rule |
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| 1 | | adopted or an order issued under this Act in an amount not to | 2 | | exceed $1,000 per day for each day the violation is | 3 | | outstanding, plus this State's costs and expenses for the | 4 | | investigation and prosecution of the matter, including | 5 | | reasonable attorney's fees. Each transaction in violation of | 6 | | this Act or the rules adopted under this Act or issued under | 7 | | this Act, for each day that a violation continues shall be a | 8 | | separate offense. | 9 | | Section 11-8. Unlicensed persons. Any person who, without | 10 | | the required license, engages in conduct requiring a license | 11 | | under this Act shall be liable to the Department in an amount | 12 | | equal to the greater of (1) $5,000 or (2) an amount of money | 13 | | accepted for transmission plus an amount equal to 3 times the | 14 | | amount accepted for transmission. The Department shall cause | 15 | | any funds so recovered to be deposited into the TOMA Consumer | 16 | | Protection Fund. | 17 | | Section 11-9. Judicial review. All final administrative | 18 | | decisions of the Department under this Act are subject to | 19 | | judicial review under the Administrative Review Law and any | 20 | | rules adopted under the Administrative Review Law. | 21 | | ARTICLE XII. Miscellaneous Provisions | 22 | | Section 12-1. Uniformity of application and construction. |
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| 1 | | In applying and construing this Act, consideration must be | 2 | | given to the need to promote uniformity of the law with respect | 3 | | to its subject matter among states that enact it. | 4 | | Section 12-2. Severability. The provisions of this Act are | 5 | | severable under Section 1.31 of the Statute on Statutes. | 6 | | Section 12-3. Transition period. | 7 | | (a) Licensees pursuant to the Transmitters of Money Act in | 8 | | good standing on the effective date of this Act shall be | 9 | | licensed under this Act upon the filing of and approval by the | 10 | | Department of a renewal application in accordance with Section | 11 | | 5-6 and may continue to operate lawfully as a licensee in this | 12 | | State unless and until their next renewal application after | 13 | | the effective date is denied by the Department. An authorized | 14 | | seller of licensee pursuant to the Transmitters of Money Act | 15 | | in good standing as of the effective date shall become an | 16 | | authorized delegate of a licensee upon the filing of and | 17 | | approval by the Department of a renewal application by the | 18 | | licensee in accordance with Section 5-6 and may continue to | 19 | | operate lawfully in this State as an authorized delegate of a | 20 | | licensee unless and until the licensee's next renewal | 21 | | application after the effective date is denied by the | 22 | | Department. | 23 | | (b) A person licensed in this State to engage in the | 24 | | business of money transmission and their authorized sellers |
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| 1 | | shall not be subject to the provisions of this Act, to the | 2 | | extent that this Act conflicts with the Transmitters of Money | 3 | | Act or this Act establishes new requirements not imposed under | 4 | | the Transmitters of Money Act, until the licensee renews its | 5 | | current license or for 6 months after the effective date of | 6 | | this Act, whichever is later, so long as they comply with the | 7 | | Transmitters of Money Act and its implementing rules. | 8 | | (c) Notwithstanding subsection (a), a licensee shall only | 9 | | be required to amend its authorized delegate contracts for | 10 | | contracts entered into or amended after the effective date of | 11 | | this Act or the completion of any transition period | 12 | | contemplated under subsection (b). Nothing herein shall be | 13 | | construed as limiting an authorized delegate's obligations to | 14 | | operate in full compliance with this Act as required by | 15 | | subsection (c) of Section 8-1 after the time period set forth | 16 | | in subsection (b). | 17 | | (d) A person not required to be licensed pursuant to the | 18 | | Transmitters of Money Act shall not be required to be licensed | 19 | | and comply with this Act until January 1, 2026, unless the | 20 | | Secretary extends the time by rule. | 21 | | (e) Except as otherwise stated, this Act supersedes the | 22 | | Transmitters of Money Act. | 23 | | Section 12-4. TOMA Consumer Protection Fund. | 24 | | (a) The special income-earning fund in the State treasury | 25 | | is known as the TOMA Consumer Protection Fund. |
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| 1 | | (b) All moneys paid into the fund together with all | 2 | | accumulated undistributed income thereon shall be held as a | 3 | | special fund in the State treasury. The fund shall be used | 4 | | solely for the purpose of providing restitution to consumers | 5 | | who have suffered monetary loss arising out of a transaction | 6 | | regulated by this Act. | 7 | | (c) The fund shall be applied only to restitution when | 8 | | restitution has been ordered by the Secretary. Restitution | 9 | | shall not exceed the amount actually lost by the consumer. The | 10 | | fund shall not be used for the payment of any attorney or other | 11 | | fees. | 12 | | (d) The fund shall be subrogated to the amount of the | 13 | | restitution, and the Secretary shall request the Attorney | 14 | | General to engage in all reasonable collection steps to | 15 | | collect restitution from the party responsible for the loss | 16 | | and reimburse the fund. | 17 | | (e) Notwithstanding any other provisions of this Section, | 18 | | the payment of restitution from the fund shall be a matter of | 19 | | grace and not of right, and no consumer shall have any vested | 20 | | rights in the fund as a beneficiary or otherwise. Before | 21 | | seeking restitution from the fund, the consumer or beneficiary | 22 | | seeking payment of restitution shall apply for restitution on | 23 | | a form provided by the Secretary. The form shall include any | 24 | | information the Secretary may reasonably require in order to | 25 | | determine that restitution is appropriate. | 26 | | (f) Notwithstanding any other provision of this Section, |
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| 1 | | moneys in the TOMA Consumer Protection Fund may be transferred | 2 | | to the Professions Indirect Cost Fund, as authorized under | 3 | | Section 2105-300 of the Department of Professional Regulation | 4 | | Law of the Civil Administrative Code of Illinois. | 5 | | Article XIII. Token Currency | 6 | | Section 13-1. Definitions. As used in this Article: | 7 | | "Covered person" means a person required to obtain a | 8 | | license pursuant to this Article. | 9 | | "Insured depository institution" means a federally insured | 10 | | depository financial institution as defined in this Act or an | 11 | | insured credit union exempt pursuant to paragraph (16) of | 12 | | Section 3-1 of this Act. | 13 | | "National currency" means United States coins, Federal | 14 | | Reserve notes, or other lawful money under 12 U.S.C. 411; | 15 | | money issued by a central bank; or money issued by an | 16 | | intergovernmental organization pursuant to an agreement by one | 17 | | or more governments. | 18 | | "Token currency" means a digital representation of value: | 19 | | (1) the issuer of which (A) is obligated to convert, | 20 | | redeem, or repurchase for a fixed amount of money or | 21 | | monetary value denominated in national currency or (B) | 22 | | represents will maintain, or creates the reasonable | 23 | | expectation that it will maintain, a stable value relative | 24 | | to the value of a fixed amount of money or monetary value |
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| 1 | | denominated in national currency; and | 2 | | (2) that is not (A) a national currency or (B) a | 3 | | security issued by an investment company registered under | 4 | | the Investment Company Act of 1940, 15 U.S.C. 80a et seq. | 5 | | "Token currency" includes, without limitation, any | 6 | | interest or instrument commonly known as a "dollar token," | 7 | | "electronic money token," or "stablecoin". | 8 | | "Token currency business activity" means engaging in the | 9 | | business of token currency issuance or token currency | 10 | | transmission. | 11 | | "Token currency issuance" means issuing token currency in | 12 | | this State or to a person located in this State. | 13 | | "Token currency issuer" means a covered person engaged in | 14 | | token currency issuance. | 15 | | "Token currency transmission" means: | 16 | | (1) selling token currency to a person located in this | 17 | | State; or | 18 | | (2) receiving token currency for transmission from a | 19 | | person located in this State or transmitting token | 20 | | currency in this State. | 21 | | Section 13-2. Scope. Nothing in this Article shall limit | 22 | | the authority of an insured depository institution to engage | 23 | | in activities permissible pursuant to applicable State and | 24 | | federal law, including accepting or receiving deposits and | 25 | | issuing token currency that represent deposits, or to limit |
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| 1 | | the authority of the Secretary or federal banking agencies to | 2 | | implement and interpret applicable law or establish | 3 | | limitations and conditions on such activities. | 4 | | Section 13-3. Conditions precedent to engaging in token | 5 | | currency issuance or transmission. | 6 | | (a) Except as provided in paragraphs (2) or (3) of | 7 | | subsection (b)of this Section, a covered person engaged in | 8 | | token currency issuance or token currency transmission is | 9 | | engaged in the business of money transmission and is subject | 10 | | to the requirements of this Act. | 11 | | (b) A covered person shall not engage in token currency | 12 | | issuance, or hold himself or herself out as being able to | 13 | | engage in token currency issuance, unless the covered person | 14 | | is: | 15 | | (1) licensed in this State by the Secretary pursuant | 16 | | to Section 5-5 of this Act; or | 17 | | (2) an insured depository institution. | 18 | | (c) A covered person shall not engage in token currency | 19 | | transmission, or hold himself or herself out as being able to | 20 | | engage in token currency transmission, with or on behalf of | 21 | | another person unless the covered person is: | 22 | | (1) licensed in this State by the Secretary pursuant | 23 | | to Section 5-5 of this Act; or | 24 | | (2) exempt from licensing under Section 3-1 of this | 25 | | Act. |
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| 1 | | Section 13-4. Required disclosures. | 2 | | (a) A covered person that engages in token currency | 3 | | business activity shall provide to a person who uses the | 4 | | covered person's products or services the disclosures required | 5 | | by subsection (b) of this Section and any additional | 6 | | disclosure the Secretary, by rule, determines reasonably | 7 | | necessary for the protection of persons. The Secretary may | 8 | | determine, by rule, the time and form required for disclosure. | 9 | | A disclosure required by this Section must be made separately | 10 | | from any other information provided by the covered person, in | 11 | | a clear manner, and in a record the person may keep. | 12 | | (b) Before establishing a relationship with a person, a | 13 | | covered person shall disclose: | 14 | | (1) a schedule of fees and charges the covered person | 15 | | may assess, the manner by which fees and charges will be | 16 | | calculated if the fees or changes are not set in advance | 17 | | and disclosed, and the timing of the fees and charges; | 18 | | (2) that the product or service provided by the | 19 | | covered person is not guaranteed by the United States | 20 | | Government, covered by deposit insurance by the Federal | 21 | | Deposit Insurance Corporation, or by share insurance of | 22 | | the National Credit Union Administration; | 23 | | (3) the irrevocability of a transfer or exchange and | 24 | | any exception to irrevocability; | 25 | | (4) a description of: |
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| 1 | | (A) the covered person's liability for an | 2 | | unauthorized, mistaken, or accidental transfer or | 3 | | exchange; | 4 | | (B) the person's responsibility to provide notice | 5 | | to the covered person of an unauthorized, mistaken, or | 6 | | accidental transfer or exchange; | 7 | | (C) the basis for any recovery by the person from | 8 | | the covered person in case of an unauthorized, | 9 | | mistaken, or accidental transfer or exchange; | 10 | | (D) general error-resolution rights applicable to | 11 | | the transfer or exchange; and | 12 | | (E) the method for the person to update the | 13 | | person's contact information with the covered person; | 14 | | (5) that the date or time when the transfer or | 15 | | exchange is made and the person's account is debited may | 16 | | differ from the date or time when the person initiates the | 17 | | instruction to make the transfer or exchange; | 18 | | (6) whether the person has a right to stop a | 19 | | pre-authorized payment or revoke authorization for a | 20 | | transfer and the procedure to initiate a stop-payment | 21 | | order or revoke authorization for a subsequent transfer; | 22 | | (7) the person's right to receive a receipt, trade | 23 | | ticket, or other evidence of the transfer or exchange; | 24 | | (8) the person's right to at least 14 days prior | 25 | | notice of a change in the covered person's fee schedule, | 26 | | other terms and conditions that have a material impact on |
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| 1 | | token currency business activity with the person, or the | 2 | | policies applicable to the person's account; and | 3 | | (9) that token currency is not currently recognized as | 4 | | legal tender by Illinois or the United States. | 5 | | (c) Except as otherwise provided in subsection (d) of this | 6 | | Section, at the conclusion of a token currency transaction | 7 | | with or on behalf of a person, a covered person shall provide | 8 | | the person a confirmation in a record which contains: | 9 | | (1) the name and contact information of the covered | 10 | | person, including information the person may need to ask a | 11 | | question or file a complaint; | 12 | | (2) the type, value, date, precise time, and amount of | 13 | | the transaction; and | 14 | | (3) the fee charged for the transaction, including any | 15 | | charge for conversion of token currency to other money or | 16 | | monetary value. | 17 | | (d) If a covered person discloses that he or she will | 18 | | provide a daily confirmation in the initial disclosure under | 19 | | subsection (c) of this Section, the covered person may elect | 20 | | to provide a single, daily confirmation for all transactions | 21 | | with or on behalf of a person on that day instead of a per | 22 | | transaction confirmation. | 23 | | Section 13-5. Custody and protection of token currency on | 24 | | behalf of another person. | 25 | | (a) A covered person that has custody or control of token |
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| 1 | | currency for a person shall: | 2 | | (1) at all times hold an amount of each type of token | 3 | | currency sufficient to satisfy the aggregate entitlements | 4 | | of the person to the type of token currency; | 5 | | (2) segregate such token currency from the other | 6 | | assets of the covered person; and | 7 | | (3) not sell, transfer, assign, lend, hypothecate, | 8 | | pledge, or otherwise use or encumber such token currency, | 9 | | except for the sale, transfer, or assignment of such token | 10 | | currency at the direction of such other person. | 11 | | (b) If a covered person violates subsection (a) of this | 12 | | Section, the property interests of the person in the token | 13 | | currency are pro rata property interests in the type of token | 14 | | currency to which the person is entitled without regard to the | 15 | | time the person became entitled to the token currency or the | 16 | | covered person obtained custody or control of the token | 17 | | currency. | 18 | | (c) Token currency subject to this Section is: | 19 | | (1) held for the persons entitled to the token | 20 | | currency under subsection (a) of this Section; | 21 | | (2) not property of the covered person; and | 22 | | (3) not subject to the claims of creditors of the | 23 | | covered person. | 24 | | (d) Token currency subject to this Section, even if | 25 | | commingled with other assets of the covered person, are held | 26 | | in trust for the benefit of the person entitled to the token |
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| 1 | | currency under subsection (a) of this Section, in the event of | 2 | | insolvency, the filing of a petition by or against the covered | 3 | | person under 11 U.S.C. Sections et seq., as amended or | 4 | | recodified from time to time, for bankruptcy or | 5 | | reorganization, the filing of a petition by or against the | 6 | | covered person for receivership, the commencement of any other | 7 | | judicial or administrative proceeding for its dissolution or | 8 | | reorganization, or in the event of an action by a creditor | 9 | | against the covered person who is not a beneficiary of this | 10 | | statutory trust. No token currency impressed with a trust | 11 | | pursuant to this subsection shall be subject to attachment, | 12 | | levy of execution, or sequestration by order of any court, | 13 | | except for a beneficiary of this statutory trust. | 14 | | Section 13-6. Books and records. | 15 | | (a) A covered person shall maintain, for all token | 16 | | currency business activity with or on behalf of a person for | 17 | | 5years after the date of the activity, a record of all of the | 18 | | following: | 19 | | (1) Any transaction of the covered person with or on | 20 | | behalf of another person or for the covered person's | 21 | | account in this State, including: | 22 | | (A) the identity of the person; | 23 | | (B) the form of the transaction; | 24 | | (C) the amount, date, and payment instructions | 25 | | given by the person; and |
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| 1 | | (D) the account number, name, and physical address | 2 | | of: | 3 | | (i) the parties to the transaction that are | 4 | | customers or account holders of the covered | 5 | | person; and | 6 | | (ii) to the extent practicable, any other | 7 | | party to the transaction. | 8 | | (2) The aggregate number of transactions and aggregate | 9 | | value of transactions by the covered person with or on | 10 | | behalf of other persons and for the covered person's | 11 | | account in this State, expressed in United States Dollar | 12 | | equivalent of token currency for the previous 12 calendar | 13 | | months. | 14 | | (3) Any transaction in which the covered person | 15 | | exchanged one form of token currency for money or monetary | 16 | | value or another form of token currency with or on behalf | 17 | | of another person. | 18 | | (4) A general ledger maintained at least monthly that | 19 | | lists all assets, liabilities, capital, income, and | 20 | | expenses of the covered person. | 21 | | (5) Any report of condition or other reports to the | 22 | | Department, at such times and in such form, as the | 23 | | Department may request. | 24 | | (6) Bank statements and bank reconciliation records | 25 | | for the covered person and the name, account number, and | 26 | | United States Postal Service address of any bank or credit |
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| 1 | | union the covered person uses in the conduct of its token | 2 | | currency business activity with or on behalf of another | 3 | | person. | 4 | | (7) A report of any dispute regarding token currency | 5 | | business activity with or on behalf of a person. | 6 | | (b) A covered person shall maintain records required by | 7 | | this Section in a form that enables the Department to | 8 | | determine whether the covered person is in compliance with | 9 | | this Act, any court order, and the laws of this State. | 10 | | (c) If a covered person maintains records outside this | 11 | | State that pertain to token currency business activity with or | 12 | | on behalf of a person, then the covered person shall make the | 13 | | records available to the Department not later than 3 days | 14 | | after request, or, on a determination of good cause by the | 15 | | Department at a later time. | 16 | | (d) All records maintained by a covered person, an | 17 | | affiliate, or a service provider are subject to inspection by | 18 | | the Department. | 19 | | Section 13-7. Compliance; material changes. | 20 | | (a) A covered person must comply with all provisions of | 21 | | this Act to the extent applicable to the covered person's | 22 | | activities and maintain appropriate controls to conduct his or | 23 | | her token currency business activities in a safe and sound | 24 | | manner and in compliance with any applicable State and federal | 25 | | law, rule, regulation, or order, or condition imposed in |
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| 1 | | writing by the Secretary. | 2 | | (b) Each covered person must notify the Department and | 3 | | submit a written plan at least 60 days before engaging in a | 4 | | materially new token currency business activity or making a | 5 | | material change to an existing token currency business | 6 | | activity. The written plan shall describe the proposed | 7 | | materially new token currency business activity or the | 8 | | proposed material change, demonstrate that the covered person | 9 | | has established appropriate policies and practices to | 10 | | identify, measure, monitor, and control the risks of the | 11 | | proposed activity, and include such other information as | 12 | | requested by the Department. The Secretary may, by rule or | 13 | | order, impose limitations and conditions as the Secretary | 14 | | deems necessary or appropriate on covered persons proposing to | 15 | | engage in a materially new token currency business activity or | 16 | | a material change to an existing token currency business | 17 | | activity. | 18 | | Section 13-8. Additional prudential standards. | 19 | | (a) A token currency issuer shall at all times maintain | 20 | | reserves backing its token currency outstanding on at least a | 21 | | one-to-one basis and comprising only the following assets: | 22 | | (1) National currency; | 23 | | (2) Central bank reserve deposits; | 24 | | (3) Funds held as insured demand deposits or insured | 25 | | share accounts at insured depository institutions; |
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| 1 | | (4) U.S. Treasury bills with a maturity of 90 days or | 2 | | less; | 3 | | (5) repurchase agreements with a maturity of 7 days or | 4 | | less that are backed by U.S. Treasury bills with a | 5 | | maturity of 90 days or less; and | 6 | | (6) similar high-quality liquid assets, as defined by | 7 | | rule by the Department. | 8 | | (b) With respect to the reserves described in subsection | 9 | | (a) of this Section, a token currency issuer shall: | 10 | | (1) obtain a monthly attestation and examination of | 11 | | management's assertions pertaining to the composition and | 12 | | value of the reserve assets by an independent certified | 13 | | public accountant licensed in the United States and | 14 | | applying the attestation standards of the American | 15 | | Institute of Certified Public Accountants. | 16 | | (2) segregate such reserves from the other assets of | 17 | | the token currency issuer. | 18 | | (3) not pledge, rehypothecate, or reuse the reserves, | 19 | | except for the purpose of creating liquidity to meet | 20 | | reasonable expectations of requests to redeem token | 21 | | currency, subject to rule adopted or order issued by the | 22 | | Secretary. | 23 | | (c) The reserves described in subsection (a) of this | 24 | | Section, even if commingled with other assets of the covered | 25 | | person, are held in trust for the benefit of the purchaser or | 26 | | holder of the covered person's outstanding token currency |
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| 1 | | obligations in the event of insolvency, the filing of a | 2 | | petition by or against the licensee under the United States | 3 | | Bankruptcy Code, 11 U.S.C. Sections et seq., as amended or | 4 | | recodified from time to time, for bankruptcy or | 5 | | reorganization, the filing of a petition by or against the | 6 | | covered person for receivership, the commencement of any other | 7 | | judicial or administrative proceeding for its dissolution or | 8 | | reorganization, or in the event of an action by a creditor | 9 | | against the covered person who is not a beneficiary of this | 10 | | statutory trust. No reserves impressed with a trust pursuant | 11 | | to this subsection shall be subject to attachment, levy of | 12 | | execution, or sequestration by order of any court, except for | 13 | | a beneficiary of this statutory trust. | 14 | | (d) A token currency issuer shall disclose the monthly | 15 | | attestation report required by paragraph (1) of subsection (b) | 16 | | of this Section on the website of the token currency issuer, in | 17 | | a form satisfactory to the Department, not more than 30 days | 18 | | after the end of the period covered by the attestation. | 19 | | (e) A token currency issuer shall establish a process to | 20 | | allow redemption of token currency within a reasonable | 21 | | timeframe, as determined by rule or order by the Secretary. | 22 | | The timeframe to establish a process to allow redemption of | 23 | | token currency may not be longer than 2 business days after the | 24 | | redemption request. In extraordinary circumstances where the | 25 | | Secretary concludes that redemption would likely jeopardize | 26 | | the reserve-backing requirement of subsection (c) of this |
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| 1 | | Section or the orderly liquidation of reserves, the Secretary | 2 | | has the authority to vary this requirement as the Secretary | 3 | | deems necessary. | 4 | | (f) In addition to the prudential standards under this | 5 | | Section and Article X of this Act, the Secretary may, by rule | 6 | | or order, establish additional capital, liquidity, and risk | 7 | | management requirements to ensure the financial integrity and | 8 | | ongoing operations of covered persons based on an assessment | 9 | | of the specific risks applicable to a covered person or class | 10 | | of covered persons. | 11 | | Section 13-9. Implementation. | 12 | | (a) In addition to the fees charged and collected under | 13 | | Section 5-8 of this Act and 38 Ill. Adm. Code 205, as amended | 14 | | or recodified from time to time, the Department shall charge | 15 | | and collect fees from a covered person, which shall be | 16 | | nonrefundable unless otherwise indicated, for the expenses of | 17 | | administering this Article, as follows: | 18 | | (1) Each covered person shall pay $150 for each hour | 19 | | or part thereof for each examiner or staff assigned to the | 20 | | supervision of the covered person plus actual travel costs | 21 | | for any examination of token currency business activity | 22 | | pursuant to the Act. | 23 | | (2) Each covered person shall pay an annual assessment | 24 | | fee on token currency business activity, which may be | 25 | | billed, yearly, quarterly, or some other frequency, based |
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| 1 | | on the total United States Dollar value of token currency | 2 | | issued or transmitted in this State and applying fee rates | 3 | | at least equal to the rates applicable to money | 4 | | transmission volume under 38 Ill. Adm. Code 205.35, as | 5 | | amended or recodified from time to time. | 6 | | (3) Each covered person shall pay to the Department | 7 | | his or her pro rata share of the cost for administration of | 8 | | this Article that exceeds other fees listed in this | 9 | | subsection, as estimated by the Department, for the | 10 | | current year and any deficit actually incurred in the | 11 | | administration of the Article in prior years. Each covered | 12 | | person's share under this paragraph shall initially be | 13 | | divided equally among licensees engaged in token currency | 14 | | business activity. | 15 | | (4) Beginning one year after the effective date of | 16 | | this Act, the Department may, by rule, amend the fees set | 17 | | forth in this subsection in accordance with this Act. The | 18 | | Department is authorized to consider setting fees for | 19 | | token currency business activity based on the value of | 20 | | token currency transacted held in custody by a covered | 21 | | person, and volume of a token currency or volume of token | 22 | | currency transacted by covered persons or held in custody | 23 | | by a covered person. | 24 | | (b) The Secretary is authorized to coordinate and consult | 25 | | with the Board of Governors of the Federal Reserve System, | 26 | | other federal banking agencies, and any law enforcement |
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| 1 | | officials and regulatory agencies that the Secretary | 2 | | determines to have an appropriate regulatory interest in the | 3 | | implementation of this Article. | 4 | | (c) In addition to such powers and rulemaking authority as | 5 | | prescribed elsewhere in this Act, the Department is hereby | 6 | | authorized and empowered to adopt rules consistent with the | 7 | | purposes of this Article, including, but not limited to: | 8 | | (1) such rules in connection with the activities of a | 9 | | covered person as may be necessary and appropriate for the | 10 | | protection of the residents of this State; | 11 | | (2) such rules as may be necessary and appropriate to | 12 | | define improper or fraudulent business practices in | 13 | | connection with the activity of a covered person; | 14 | | (3) rules as may define the terms used in this Article | 15 | | and as may be necessary and appropriate to interpret and | 16 | | implement the provisions of this Article; | 17 | | (4) rules that may be necessary for the implementation | 18 | | or enforcement of this Article; | 19 | | (5) rules establishing fees the Secretary deems | 20 | | necessary to cover the cost of administration of this | 21 | | Article; and | 22 | | (6) rules in connection with the activity of a covered | 23 | | person as may be necessary and appropriate for the safety | 24 | | and soundness of such covered persons and the stability of | 25 | | the financial system in this State. |
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| 1 | | Article 900. Amendatory Provisions | 2 | | (205 ILCS 657/Act rep.) | 3 | | Section 900-5. The Transmitters of Money Act is repealed. | 4 | | Section 999-99 | | | . Effective date. This Act takes effect upon | 5 | | becoming law, except that the changes to the Transmitters of | 6 | | Money Act take effect January 1, 2026. |
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