HF 1311

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to commerce; providing for the licensing of 
  1.3             money transmitters; prescribing the powers and duties 
  1.4             of the commissioner; proposing coding for new law as 
  1.5             Minnesota Statutes, chapter 53B. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [53B.01] [CITATION.] 
  1.8      This chapter may be cited as the "Minnesota Money 
  1.9   Transmitters Act." 
  1.10     Sec. 2.  [53B.02] [LICENSE REQUIRED.] 
  1.11     On or after January 1, 2002, no person except those exempt 
  1.12  pursuant to section 53B.04 shall engage in the business of money 
  1.13  transmission without a license as provided in this chapter.  A 
  1.14  licensee may conduct business in this state at one or more 
  1.15  locations, directly or indirectly owned, or through one or more 
  1.16  authorized delegates, or both, under a single license granted to 
  1.17  the licensee. 
  1.18     Sec. 3.  [53B.03] [DEFINITIONS.] 
  1.19     Subdivision 1.  [SCOPE.] For purposes of this chapter, the 
  1.20  terms in subdivisions 2 to 17 apply unless the context requires 
  1.21  otherwise. 
  1.22     Subd. 2.  [APPLICANT.] "Applicant" means a person filing an 
  1.23  application for a license under this chapter. 
  1.24     Subd. 3.  [AUTHORIZED DELEGATE.] "Authorized delegate" 
  1.25  means an entity designated by the licensee under this chapter to 
  2.1   sell or issue payment instruments or engage in the business of 
  2.2   transmitting money on behalf of a licensee. 
  2.3      Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
  2.4   commissioner of commerce. 
  2.5      Subd. 5.  [CONTROL.] "Control" means ownership of, or the 
  2.6   power to vote, 25 percent or more of the outstanding voting 
  2.7   securities of a licensee or controlling person.  For purposes of 
  2.8   determining the percentage of a licensee controlled by any 
  2.9   person, the person's interest must be aggregated with the 
  2.10  interest of any other person controlled by the person or by any 
  2.11  spouse, parent, or child of the person. 
  2.12     Subd. 6.  [CONTROLLING PERSON.] "Controlling person" means 
  2.13  any person in control of a licensee. 
  2.14     Subd. 7.  [ELECTRONIC INSTRUMENT.] "Electronic instrument" 
  2.15  means a card or other tangible object for the transmission or 
  2.16  payment of money that contains a microprocessor chip, magnetic 
  2.17  stripe, or other means for the storage of information, that is 
  2.18  prefunded and for which the value is decreased upon each use.  
  2.19  The term does not include a card or other tangible object that 
  2.20  is redeemable by the issuer in the issuer's goods or services. 
  2.21     Subd. 8.  [EXECUTIVE OFFICER.] "Executive officer" means 
  2.22  the licensee's president, chair of the executive committee, 
  2.23  senior officer responsible for the licensee's business, chief 
  2.24  financial officer, and any other person who performs similar 
  2.25  functions. 
  2.26     Subd. 9.  [KEY SHAREHOLDER.] "Key shareholder" means any 
  2.27  person, or group of persons acting in concert, who is the owner 
  2.28  of 25 percent or more of any voting class of an applicant's 
  2.29  stock. 
  2.30     Subd. 10.  [LICENSEE.] "Licensee" means a person licensed 
  2.31  under this chapter. 
  2.32     Subd. 11.  [MATERIAL LITIGATION.] "Material litigation" 
  2.33  means any litigation that, according to generally accepted 
  2.34  accounting principles, is considered significant to an 
  2.35  applicant's or licensee's financial health and would be required 
  2.36  to be referenced in that entity's annual audited financial 
  3.1   statements, report to shareholders, or similar documents. 
  3.2      Subd. 12.  [MONEY TRANSMISSION.] "Money transmission" means 
  3.3   selling or issuing payment instruments or engaging in the 
  3.4   business of receiving money for transmission or transmitting 
  3.5   money within the United States or to locations abroad by any and 
  3.6   all means, including but not limited to payment instrument, 
  3.7   wire, facsimile, or electronic transfer. 
  3.8      Subd. 13.  [OUTSTANDING PAYMENT INSTRUMENT.] "Outstanding 
  3.9   payment instrument" means any payment instrument issued by the 
  3.10  licensee that has been sold in the United States directly by the 
  3.11  licensee or any payment instrument issued by the licensee that 
  3.12  has been sold by an authorized delegate of the licensee in the 
  3.13  United States, that has been reported to the licensee as having 
  3.14  been sold, and that has not yet been paid by or for the licensee.
  3.15     Subd. 14.  [PAYMENT INSTRUMENT.] "Payment instrument" means 
  3.16  any electronic or written check, draft, money order, travelers 
  3.17  check, or other electronic or written instrument or order for 
  3.18  the transmission or payment of money, sold or issued to one or 
  3.19  more persons, whether or not the instrument is negotiable.  The 
  3.20  term does not include any credit card voucher, letter of credit, 
  3.21  or instrument that is redeemable by the issuer in goods or 
  3.22  services. 
  3.23     Subd. 15.  [PERMISSIBLE INVESTMENTS.] "Permissible 
  3.24  investments" means: 
  3.25     (1) cash; 
  3.26     (2) certificates of deposit or other debt obligations of a 
  3.27  financial institution, either domestic or foreign; 
  3.28     (3) bills of exchange or time drafts drawn on and accepted 
  3.29  by a commercial bank, otherwise known as bankers' acceptances, 
  3.30  that are eligible for purchase by member banks of the Federal 
  3.31  Reserve system; 
  3.32     (4) any investment bearing a rating of one of the three 
  3.33  highest grades as defined by a nationally recognized 
  3.34  organization that rates these securities; 
  3.35     (5) investment securities that are obligations of the 
  3.36  United States, its agencies or instrumentalities, or obligations 
  4.1   that are guaranteed fully as to principal and interest of the 
  4.2   United States, or any obligations of any state, municipality, or 
  4.3   any political subdivision of a state or municipality; 
  4.4      (6) shares in a money market mutual fund, interest-bearing 
  4.5   bills or notes or bonds, debentures, or stock traded on any 
  4.6   national securities exchange or on a national over-the-counter 
  4.7   market, or mutual funds primarily composed of these securities 
  4.8   or a fund composed of one or more permissible investments; 
  4.9      (7) any demand borrowing agreement or agreements made to a 
  4.10  corporation or a subsidiary of a corporation whose capital stock 
  4.11  is listed on a national exchange; 
  4.12     (8) receivables that are due to a licensee from its 
  4.13  authorized delegates under a contract described in section 
  4.14  53B.18, that are not past due or doubtful of collection; or 
  4.15     (9) any other investments or security device approved by 
  4.16  the commissioner. 
  4.17     Subd. 16.  [PERSON.] "Person" means any individual, 
  4.18  corporation, limited liability company, business trust, general 
  4.19  or limited partnership, association, sole proprietorship, or 
  4.20  similar organization. 
  4.21     Subd. 17.  [REMIT.] "Remit" means either to make direct 
  4.22  payment of the funds to the licensee or its representatives 
  4.23  authorized to receive those funds or to deposit the funds in a 
  4.24  bank, credit union, or savings association or other similar 
  4.25  financial institution in an account specified by the licensee. 
  4.26     Sec. 4.  [53B.04] [EXEMPTIONS.] 
  4.27     Authorized delegates of a licensee, acting within the scope 
  4.28  of authority conferred by a written contract as described in 
  4.29  section 53B.18 are not required to obtain a license under this 
  4.30  chapter.  This chapter does not apply to: 
  4.31     (1) the United States or any department, agency, or 
  4.32  instrumentality of the United States; 
  4.33     (2) the United States Post Office; 
  4.34     (3) the state or any political subdivision of the state; 
  4.35     (4) banks, bank holding companies, credit unions, savings 
  4.36  associations, savings banks, or mutual banks organized under the 
  5.1   laws of any state or the United States, provided that they do 
  5.2   not issue or sell payment instruments through authorized 
  5.3   delegates who are not banks, bank holding companies, credit 
  5.4   unions, savings associations, savings banks, or mutual banks; 
  5.5   and 
  5.6      (5) the provision of electronic transfer of government 
  5.7   benefits for any federal, state, or county governmental agency 
  5.8   as defined in Federal Reserve Board Regulation E, by a 
  5.9   contractor for and on behalf of the United States or any 
  5.10  department, agency, or instrumentality of the United States, or 
  5.11  any state or any political subdivision of the state. 
  5.12     Sec. 5.  [53B.05] [LICENSE QUALIFICATIONS.] 
  5.13     Subdivision 1. [NET WORTH.] Each licensee under this 
  5.14  chapter shall at all times have a net worth of not less than 
  5.15  $100,000, calculated in accordance with generally accepted 
  5.16  accounting principles.  Licensees engaging in money transmission 
  5.17  at more than one location or through authorized delegates shall 
  5.18  have an additional net worth of $50,000 per location or 
  5.19  authorized delegate located in the state, as applicable, to a 
  5.20  maximum of $500,000. 
  5.21     Subd. 2.  [CORPORATE APPLICANT; GOOD STANDING.] Every 
  5.22  corporate applicant, at the time of the filing of an application 
  5.23  for a license under this chapter and at all times after a 
  5.24  license is issued, must be in good standing in the state of its 
  5.25  incorporation.  All noncorporate applicants shall, at the time 
  5.26  of the filing of an application for a license under this chapter 
  5.27  and at all times after a license is issued, be registered or 
  5.28  qualified to do business in the state. 
  5.29     Sec. 6.  [53B.06] [PERMISSIBLE INVESTMENTS AND STATUTORY 
  5.30  TRUST.] 
  5.31     (a) Each licensee under this chapter must at all times 
  5.32  possess permissible investments having an aggregate market 
  5.33  value, calculated in accordance with generally accepted 
  5.34  accounting principles, of not less than the aggregate face 
  5.35  amount of all outstanding payment instruments issued or sold by 
  5.36  the licensee in the United States.  This requirement may be 
  6.1   waived by the commissioner if the dollar volume of a licensee's 
  6.2   outstanding payment instruments does not exceed the bond or 
  6.3   other security devices posted by the licensee under section 
  6.4   53B.08. 
  6.5      (b) Permissible investments, even if commingled with other 
  6.6   assets of the licensee, are considered to be held in trust for 
  6.7   the benefit of the purchasers and holders of the licensee's 
  6.8   outstanding payment instruments in the event of the bankruptcy 
  6.9   of the licensee. 
  6.10     Sec. 7.  [53B.07] [LICENSE APPLICATION.] 
  6.11     Subdivision 1.  [REQUIREMENTS.] An application for a 
  6.12  license under this chapter must be made in writing, under oath, 
  6.13  and in a form prescribed by the commissioner. 
  6.14     Subd. 2.  [GENERAL CONTENTS.] An application must contain: 
  6.15     (1) the exact name of the applicant, the applicant's 
  6.16  principal address, any fictitious or trade name used by the 
  6.17  applicant in the conduct of its business, and the location of 
  6.18  the applicant's business records; 
  6.19     (2) the history of the applicant's material litigation and 
  6.20  criminal convictions for the five-year period prior to the date 
  6.21  of the application; 
  6.22     (3) a description of the activities conducted by the 
  6.23  applicant and a history of operations; 
  6.24     (4) a description of the business activities in which the 
  6.25  applicant seeks to be engaged in the state; 
  6.26     (5) a list identifying the applicant's proposed authorized 
  6.27  delegates in the state, if any, at the time of the filing of the 
  6.28  license application; 
  6.29     (6) a sample authorized delegate contract, if applicable; 
  6.30     (7) a sample form of payment instrument, if applicable; 
  6.31     (8) the location or locations at which the applicant and 
  6.32  its authorized delegates, if any, propose to conduct the 
  6.33  licensed activities in the state; and 
  6.34     (9) the name and address of the clearing bank or banks on 
  6.35  which the applicant's payment instruments will be drawn or 
  6.36  through which these payment instruments will be payable. 
  7.1      Subd. 3.  [ADDITIONAL INFORMATION FROM CORPORATIONS.] If 
  7.2   the applicant is a corporation, the applicant must also provide: 
  7.3      (1) the date of the applicant's incorporation and state of 
  7.4   incorporation; 
  7.5      (2) a certificate of good standing from the state in which 
  7.6   the applicant was incorporated; 
  7.7      (3) a description of the corporate structure of the 
  7.8   applicant, including the identity of any parent or subsidiary of 
  7.9   the applicant, and the disclosure of whether any parent or 
  7.10  subsidiary is publicly traded on any stock exchange; 
  7.11     (4) the name, business and residence address, and 
  7.12  employment history for the past five years of the applicant's 
  7.13  executive officers and the officers or managers who will be in 
  7.14  charge of the applicant's activities to be licensed under this 
  7.15  chapter; 
  7.16     (5) the name, business and residence address, and 
  7.17  employment history for the period five years prior to the date 
  7.18  of the application of any key shareholder of the applicant; 
  7.19     (6) the history of material litigation and criminal 
  7.20  convictions for the five-year period prior to the date of the 
  7.21  application of every executive officer or key shareholder of the 
  7.22  applicant; 
  7.23     (7) a copy of the applicant's most recent audited financial 
  7.24  statement, including balance sheet, statement of income or loss, 
  7.25  statement of changes in shareholder equity, and statement of 
  7.26  changes in financial position, and, if available, the 
  7.27  applicant's audited financial statements for the immediately 
  7.28  preceding two-year period.  However, if the applicant is a 
  7.29  wholly owned subsidiary of another corporation, the applicant 
  7.30  may submit either the parent corporation's consolidated audited 
  7.31  financial statements for the current year and for the 
  7.32  immediately preceding two-year period or the parent 
  7.33  corporation's Form 10K reports filed with the United States 
  7.34  Securities and Exchange Commission for the prior three years in 
  7.35  lieu of the applicant's financial statements.  If the applicant 
  7.36  is a wholly owned subsidiary of a corporation having its 
  8.1   principal place of business outside the United States, similar 
  8.2   documentation filed with the parent corporation's non-United 
  8.3   States regulator may be submitted to satisfy this provision; and 
  8.4      (8) copies of all filings, if any, made by the applicant 
  8.5   with the United States Securities and Exchange Commission, or 
  8.6   with a similar regulator in a country other than the United 
  8.7   States, within the year preceding the date of filing the 
  8.8   application. 
  8.9      Subd. 4.  [ADDITIONAL INFORMATION FROM NONCORPORATE 
  8.10  APPLICANTS.] If the applicant is not a corporation, the 
  8.11  applicant must also provide: 
  8.12     (1) the name, business and residence address, personal 
  8.13  financial statement, and employment history for the past five 
  8.14  years, of each principal of the applicant and the name, business 
  8.15  and residence address, and employment history for the past five 
  8.16  years of any other person or persons who will be in charge of 
  8.17  the applicant's activities to be licensed under this chapter; 
  8.18     (2) the place and date of the applicant's registration or 
  8.19  qualification to do business in this state; 
  8.20     (3) the history of material litigation and criminal 
  8.21  convictions for the five-year period prior to the date of the 
  8.22  application for each individual having any ownership interest in 
  8.23  the applicant and each individual who exercises supervisory 
  8.24  responsibility with respect to the applicant's activities; and 
  8.25     (4) copies of the applicant's audited financial statements, 
  8.26  including balance sheet, statement of income or loss, and 
  8.27  statement of changes in financial position, for the current year 
  8.28  and, if available, for the immediately preceding two-year period.
  8.29     Subd. 5.  [WAIVER.] The commissioner may, for good cause 
  8.30  shown, waive any requirement of this section with respect to any 
  8.31  license application or to permit a license applicant to submit 
  8.32  substituted information in its license application in lieu of 
  8.33  the information required by this subdivision. 
  8.34     Sec. 8.  [53B.08] [BOND OR OTHER SECURITY DEVICE.] 
  8.35     Subdivision 1.  [REQUIREMENT.] Each application must be 
  8.36  accompanied by a surety bond, irrevocable letter of credit, or 
  9.1   other similar security device acceptable to the commissioner in 
  9.2   the amount of $50,000.  If the applicant proposes to engage in 
  9.3   business under this chapter at more than one location, through 
  9.4   authorized delegates or otherwise, then the amount of the 
  9.5   security device must be increased by $10,000 per location, up to 
  9.6   a maximum of $250,000.  The security device must be in a form 
  9.7   satisfactory to the commissioner and must run to the state for 
  9.8   the benefit of any claimants against the licensee to secure the 
  9.9   faithful performance of the obligations of the licensee with 
  9.10  respect to the receipt, handling, transmission, and payment of 
  9.11  money in connection with the sale and issuance of payment 
  9.12  instruments or transmission of money.  In the case of a bond, 
  9.13  the aggregate liability of the surety in no event shall exceed 
  9.14  the principal sum of the bond.  Claimants against the licensee 
  9.15  may themselves bring suit directly on the security device or the 
  9.16  commissioner may bring suit on behalf of these claimants, either 
  9.17  in one action or in successive actions. 
  9.18     Subd. 2.  [ACCEPTABLE ALTERNATIVES.] In lieu of a security 
  9.19  device under subdivision 1 or of any portion of the principal of 
  9.20  the security device, as required by subdivision 1, the licensee 
  9.21  may deposit with the commissioner, or with banks in this state 
  9.22  that the licensee designates and the commissioner approves, 
  9.23  cash, interest-bearing stocks and bonds, notes, debentures, or 
  9.24  other obligations of the United States or any agency or 
  9.25  instrumentality of the United States, or guaranteed by the 
  9.26  United States, or of this state, or of a city, county, town, 
  9.27  village, school district, or instrumentality of this state, or 
  9.28  guaranteed by this state, to an aggregate amount, based upon 
  9.29  principal amount or market value, whichever is lower, of not 
  9.30  less than the amount of the security device or portion of the 
  9.31  security device.  The securities or cash must be deposited and 
  9.32  held to secure the same obligations as would the security 
  9.33  device.  The depositor shall receive all interest and 
  9.34  dividends.  The depositor may, with the approval of the 
  9.35  commissioner, substitute other securities for those deposited, 
  9.36  and is required to do so on written order of the commissioner 
 10.1   made for good cause shown. 
 10.2      Subd. 3.  [CANCELLATION.] The security device remains in 
 10.3   effect until cancellation, which may occur only after 30 days' 
 10.4   written notice to the commissioner.  Cancellation does not 
 10.5   affect any liability incurred or accrued during this period. 
 10.6      Subd. 4.  [DURATION.] The security device must remain in 
 10.7   place for no longer than five years after the licensee ceases 
 10.8   money transmission operations in the state.  However, 
 10.9   notwithstanding this provision, the commissioner may permit the 
 10.10  security device to be reduced or eliminated before that time to 
 10.11  the extent that the amount of the licensee's payment instruments 
 10.12  outstanding in this state are reduced.  The commissioner may 
 10.13  also permit a licensee to substitute a letter of credit or other 
 10.14  form of security device acceptable to the commissioner for the 
 10.15  security device in place at the time the licensee ceases money 
 10.16  transmission operations in the state. 
 10.17     Sec. 9.  [53B.09] [APPLICATION FEE.] 
 10.18     Each application must be accompanied by a nonrefundable 
 10.19  application fee in the amount of $1,000. 
 10.20     Sec. 10.  [53B.10] [ISSUANCE OF LICENSE.] 
 10.21     Subdivision 1.  [INVESTIGATION.] Upon the filing of a 
 10.22  complete application, the commissioner shall investigate the 
 10.23  financial condition and responsibility, financial and business 
 10.24  experience, character, and general fitness of the applicant.  
 10.25  The commissioner may conduct an onsite investigation of the 
 10.26  applicant, the reasonable cost of which must be borne by the 
 10.27  applicant.  If the commissioner finds that the applicant's 
 10.28  business will be conducted honestly, fairly, and in a manner 
 10.29  commanding the confidence and trust of the community and that 
 10.30  the applicant has fulfilled the requirements imposed by this 
 10.31  chapter and has paid the required license fee, the commissioner 
 10.32  shall issue a license to the applicant authorizing the applicant 
 10.33  to engage in the licensed activities in this state for a term of 
 10.34  one year.  If these requirements have not been met, the 
 10.35  commissioner shall deny the application in writing, setting 
 10.36  forth the reasons for the denial. 
 11.1      Subd. 2.  [APPROVAL OR DENIAL.] The commissioner shall 
 11.2   approve or deny every application for an original license within 
 11.3   120 days from the date a complete application is submitted.  
 11.4   This period may be extended by the written consent of the 
 11.5   applicant.  The commissioner shall notify the applicant of the 
 11.6   date when the application is considered complete.  In the 
 11.7   absence of approval or denial of the application, or consent to 
 11.8   the extension of the 120-day period, the application is 
 11.9   considered approved and the commissioner shall issue the license 
 11.10  effective the first day after the 120-day or extended period has 
 11.11  elapsed. 
 11.12     Subd. 3.  [DENIAL HEARING.] Any applicant aggrieved by a 
 11.13  denial issued by the commissioner under this section may at any 
 11.14  time within 30 days from the date of receipt of written notice 
 11.15  of the denial contest the denial by serving a response on the 
 11.16  commissioner.  The serving of a response on the commissioner 
 11.17  shall automatically stay the denial until a final ruling in the 
 11.18  hearing is announced.  The commissioner shall set a date for a 
 11.19  hearing not later than 60 days after service of the response, 
 11.20  unless a later date is set with the consent of the denied 
 11.21  applicant. 
 11.22     Sec. 11.  [53B.11] [RENEWAL OF LICENSE AND ANNUAL REPORT.] 
 11.23     Subdivision 1.  [FEE.] The annual fee for renewal of a 
 11.24  license under this chapter is $........ 
 11.25     Subd. 2.  [REPORT.] The renewal fee must be accompanied by 
 11.26  a report, in a form prescribed by rule by the commissioner.  The 
 11.27  form must be sent by the commissioner to each licensee no later 
 11.28  than three months immediately preceding the date established by 
 11.29  the commissioner, by rule, for license renewal.  The licensee 
 11.30  must include in this annual renewal report: 
 11.31     (1) a copy of its most recent audited consolidated annual 
 11.32  financial statement, including balance sheet, statement of 
 11.33  income or loss, statement of changes in shareholder's equity, 
 11.34  and statement of changes in financial position, or, in the case 
 11.35  of a licensee that is a wholly owned subsidiary of another 
 11.36  corporation, the consolidated audited annual financial statement 
 12.1   of the parent corporation may be filed in lieu of the licensee's 
 12.2   audited annual financial statement; 
 12.3      (2) for the most recent quarter for which data are 
 12.4   available prior to the date of the filing of the renewal 
 12.5   application, but in no event more than 120 days prior to the 
 12.6   renewal date, the licensee must provide the number of payment 
 12.7   instruments sold by the licensee in the state, the dollar amount 
 12.8   of those instruments, and the dollar amount of those instruments 
 12.9   currently outstanding; 
 12.10     (3) any material changes to any of the information 
 12.11  submitted by the licensee on its original application that have 
 12.12  not previously been reported to the commissioner on any other 
 12.13  report required to be filed under this chapter; 
 12.14     (4) a list of the licensee's permissible investments; and 
 12.15     (5) a list of the locations within this state at which 
 12.16  business regulated by this chapter is being conducted by either 
 12.17  the licensee or its authorized delegate. 
 12.18     Subd. 3.  [FAILURE TO RENEW.] A licensee that has not filed 
 12.19  a renewal report or paid its renewal fee by the renewal filing 
 12.20  deadline and has not been granted an extension by the 
 12.21  commissioner shall be notified by the commissioner, in writing, 
 12.22  that a hearing will be scheduled at which time the licensee will 
 12.23  be required to show cause why its license should not be 
 12.24  suspended pending compliance with these requirements. 
 12.25     Sec. 12.  [53B.12] [EXTRAORDINARY REPORTING REQUIREMENTS.] 
 12.26     Within 15 days of the occurrence of any one of the events 
 12.27  listed below, a licensee shall file a written report with the 
 12.28  commissioner describing the event and its expected impact on the 
 12.29  licensee's activities in the state: 
 12.30     (1) the filing for bankruptcy or reorganization by the 
 12.31  licensee; 
 12.32     (2) the institution of revocation or suspension proceedings 
 12.33  against the licensee by any state or governmental authority with 
 12.34  regard to the licensee's money transmission activities; 
 12.35     (3) any felony indictment of the licensee or any of its key 
 12.36  officers or directors related to money transmission activities; 
 13.1   or 
 13.2      (4) any felony conviction of the licensee or any of its key 
 13.3   officers or directors related to money transmission activities. 
 13.4      Sec. 13.  [53B.13] [CHANGES IN CONTROL OF A LICENSEE.] 
 13.5      Within 15 days of a change or acquisition of control of a 
 13.6   licensee, the licensee shall provide notice of the event to the 
 13.7   commissioner, in writing and in the form the commissioner 
 13.8   prescribes by rule, accompanied by information, data, and 
 13.9   records the commissioner requires by rule.  The commissioner may 
 13.10  waive this notification requirement if, in the commissioner's 
 13.11  discretion, the change in control does not pose any risk to the 
 13.12  interests of the public. 
 13.13     Sec. 14.  [53B.14] [EXAMINATIONS.] 
 13.14     Subdivision 1.  [ONSITE EXAMINATIONS.] The commissioner may 
 13.15  conduct an annual onsite examination of a licensee upon 45 days' 
 13.16  written notice to the licensee.  If the commissioner concludes 
 13.17  that an onsite examination of a licensee is necessary, the 
 13.18  licensee shall pay all reasonably incurred costs of the 
 13.19  examination.  If the commissioner determines, based on the 
 13.20  licensee's financial statements and past history of operations 
 13.21  in the state, that an onsite examination is unnecessary, the 
 13.22  onsite examination may be waived by the commissioner.  The 
 13.23  onsite examination may be conducted in conjunction with 
 13.24  examinations to be performed by representatives of agencies of 
 13.25  another state or states.  The commissioner, in lieu of an onsite 
 13.26  examination, may accept the examination report of an agency of 
 13.27  another state, or a report prepared by an independent accounting 
 13.28  firm.  Reports accepted by the commissioner are considered for 
 13.29  all purposes official reports of the commissioner.  The 
 13.30  commissioner may examine a licensee without prior notice if the 
 13.31  commissioner has a reasonable basis to believe that the licensee 
 13.32  is in noncompliance with this chapter. 
 13.33     Subd. 2.  [REQUEST FOR FINANCIAL DATA.] The commissioner 
 13.34  may request financial data from a licensee in addition to that 
 13.35  required under section 53B.11 or conduct an onsite examination 
 13.36  of any authorized delegate or location of a licensee within this 
 14.1   state without prior notice to the authorized delegate or 
 14.2   licensee only if the commissioner has a reasonable basis to 
 14.3   believe that the licensee or authorized delegate is in 
 14.4   noncompliance with this chapter.  When the commissioner examines 
 14.5   an authorized delegate's operations, the authorized delegate 
 14.6   shall pay all reasonably incurred costs of the examination.  
 14.7   When the commissioner examines a licensee's location within the 
 14.8   state, the licensee shall pay all reasonably incurred costs of 
 14.9   the examination. 
 14.10     Sec. 15.  [53B.15] [MAINTENANCE OF RECORDS.] 
 14.11     Subdivision 1.  [REQUIREMENT.] Each licensee shall make, 
 14.12  keep, and preserve the following books, accounts, and other 
 14.13  records for a period of three years: 
 14.14     (1) a record or records of each payment instrument sold; 
 14.15     (2) a general ledger containing all assets, liability, 
 14.16  capital, income, and expense accounts, which must be posted at 
 14.17  least monthly; 
 14.18     (3) bank statements and bank reconciliation records; 
 14.19     (4) records of outstanding payment instruments; 
 14.20     (5) records of each payment instrument paid within the 
 14.21  three-year period; and 
 14.22     (6) a list of the names and addresses of all of the 
 14.23  licensee's authorized delegates. 
 14.24     Subd. 2.  [COMPLIANCE.] Maintenance of the documents 
 14.25  required by this section in a photographic, electronic, or other 
 14.26  similar form constitutes compliance with this section. 
 14.27     Subd. 3.  [LOCATION.] Records may be maintained at a 
 14.28  location other than within this state if they are made 
 14.29  accessible to the commissioner on seven days' written notice. 
 14.30     Sec. 16.  [53B.16] [CONFIDENTIALITY OF DATA SUBMITTED TO 
 14.31  THE COMMISSIONER.] 
 14.32     Subdivision 1.  [GENERALLY.] (a) Notwithstanding any other 
 14.33  law to the contrary, all information or reports obtained by the 
 14.34  department from an applicant, licensee, or authorized delegate, 
 14.35  whether obtained through reports, applications, examinations, 
 14.36  audits, investigations, or otherwise, are confidential and may 
 15.1   not be disclosed or distributed outside the department by the 
 15.2   commissioner or any officer or employee of the department.  This 
 15.3   subdivision includes, but is not limited to, the following 
 15.4   information or reports:  
 15.5      (1) all information contained in or related to examination, 
 15.6   investigation, operating, or condition reports prepared by, on 
 15.7   behalf of, or for the use of the department; and 
 15.8      (2) financial statements, balance sheets, or authorized 
 15.9   delegate information. 
 15.10     (b) The commissioner, however, may provide for the release 
 15.11  of information to representatives of state or federal agencies 
 15.12  who state in writing under oath that they shall maintain the 
 15.13  confidentiality of the information if:  
 15.14     (1) the licensee provides consent before the release; or 
 15.15     (2) the commissioner finds that the release is reasonably 
 15.16  necessary for the protection of the public and in the interests 
 15.17  of justice, and the licensee has been given prior notice by the 
 15.18  commissioner of its intent to release the information. 
 15.19     Subd. 2.  [EXCEPTION.] Nothing in this subdivision 
 15.20  prohibits the commissioner from releasing to the public a list 
 15.21  of persons licensed under this chapter or aggregated financial 
 15.22  data on licensees. 
 15.23     Sec. 17.  [53B.17] [SUSPENSION OR REVOCATION OF LICENSES.] 
 15.24     After notice and hearing, the commissioner may suspend or 
 15.25  revoke a licensee's license if the commissioner finds that: 
 15.26     (1) any fact or condition exists that, if it had existed at 
 15.27  the time when the licensee applied for its license, would have 
 15.28  been grounds for denying the application; 
 15.29     (2) the licensee's net worth becomes inadequate and the 
 15.30  licensee, after ten days' written notice from the commissioner, 
 15.31  fails to take steps the commissioner considers necessary to 
 15.32  remedy the deficiency; 
 15.33     (3) the licensee knowingly violates any material provision 
 15.34  of this chapter or any rule or order validly adopted by the 
 15.35  commissioner under authority of this chapter; 
 15.36     (4) the licensee is conducting its business in an unsafe or 
 16.1   unsound manner; 
 16.2      (5) the licensee is insolvent; 
 16.3      (6) the licensee has suspended payment of its obligations, 
 16.4   has made an assignment for the benefit of its creditors, or has 
 16.5   admitted in writing its inability to pay its debts as they 
 16.6   become due; 
 16.7      (7) the licensee has applied for an adjudication of 
 16.8   bankruptcy, reorganization, arrangement, or other relief under 
 16.9   any bankruptcy; 
 16.10     (8) the licensee refuses to permit the commissioner to make 
 16.11  any examination authorized by this chapter; or 
 16.12     (9) the licensee willfully fails to make any report 
 16.13  required by this chapter. 
 16.14     Sec. 18.  [53B.18] [AUTHORIZED DELEGATE CONTRACTS.] 
 16.15     Licensees that conduct licensed activities through 
 16.16  authorized delegates shall authorize each delegate to operate 
 16.17  under an express written contract that, for contracts entered 
 16.18  into after the effective date of this chapter, provide the 
 16.19  following: 
 16.20     (1) that the licensee appoint the person as its delegate 
 16.21  with authority to engage in money transmission on behalf of the 
 16.22  licensee; 
 16.23     (2) that neither a licensee nor an authorized delegate 
 16.24  authorize subdelegates without the written consent of the 
 16.25  commissioner; and 
 16.26     (3) that licensees are subject to supervision and 
 16.27  regulation by the commissioner. 
 16.28     Sec. 19.  [53B.19] [AUTHORIZED DELEGATE CONDUCT.] 
 16.29     (a) An authorized delegate shall not make any fraudulent or 
 16.30  false statement or misrepresentation to a licensee or to the 
 16.31  commissioner. 
 16.32     (b) All money transmission or sale or issuance of payment 
 16.33  instrument activities conducted by authorized delegates must be 
 16.34  strictly in accordance with the licensee's written procedures 
 16.35  provided to the authorized delegate. 
 16.36     (c) An authorized delegate shall remit all money owed to 
 17.1   the licensee in accordance with the terms of the contract 
 17.2   between the licensee and the authorized delegate.  An authorized 
 17.3   delegate who fails to remit all money owed to a licensee within 
 17.4   the time required in the contract is liable to the licensee for 
 17.5   three times the licensee's actual damages.  The commissioner 
 17.6   may, by rule, set the maximum remittance time. 
 17.7      (d) An authorized delegate is considered to consent to the 
 17.8   commissioner's inspection, with or without prior notice to the 
 17.9   licensee or authorized delegate, of the books and records of the 
 17.10  authorized delegate when the commissioner has a reasonable basis 
 17.11  to believe that the licensee or authorized delegate is in 
 17.12  noncompliance with this chapter. 
 17.13     (e) An authorized delegate is under a duty to act only as 
 17.14  authorized under the contract with the licensee and any 
 17.15  authorized delegate who exceeds its authority is subject to 
 17.16  cancellation of its contract and further disciplinary action by 
 17.17  the commissioner. 
 17.18     (f) All funds, less fees, received by an authorized 
 17.19  delegate of a licensee from the sale or delivery of a payment 
 17.20  instrument issued by a licensee or received by an authorized 
 17.21  delegate for transmission, constitute trust funds owned by and 
 17.22  belonging to the licensee from the time the funds are received 
 17.23  by the authorized delegate until the time when the funds or an 
 17.24  equivalent amount are remitted by the authorized delegate to the 
 17.25  licensee.  If an authorized delegate commingles any funds with 
 17.26  other funds or property owned or controlled by the authorized 
 17.27  delegate, all commingled proceeds and other property must be 
 17.28  impressed with a trust in favor of the licensee in an amount 
 17.29  equal to the amount of the proceeds due the licensee. 
 17.30     (g) An authorized delegate must report to the licensee the 
 17.31  theft or loss of payment instruments within 24 hours from the 
 17.32  time it knew or should have known of the theft or loss. 
 17.33     Sec. 20.  [53B.20] [REVOCATION OR SUSPENSION OF AUTHORIZED 
 17.34  DELEGATES.] 
 17.35     Subdivision 1.  [GENERALLY.] If, after notice and a 
 17.36  hearing, the commissioner finds that any authorized delegate of 
 18.1   a licensee or any director, officer, employee, or controlling 
 18.2   person of the authorized delegate has:  (1) violated any 
 18.3   provision of this chapter or any rule or order issued under this 
 18.4   chapter; (2) engaged in or participated in any unsafe or unsound 
 18.5   act with respect to the business of selling or issuing payment 
 18.6   instruments of the licensee or the business of money 
 18.7   transmission; or (3) made or caused to be made in any 
 18.8   application or report filed with the commissioner or in any 
 18.9   proceeding before the commissioner any statement which was, at 
 18.10  the time and in the circumstances under which it was made, false 
 18.11  or misleading with respect to any material fact, or has omitted 
 18.12  in any application or report any material fact that is required 
 18.13  to be stated, the commissioner may issue an order suspending or 
 18.14  barring such authorized delegate from continuing to be or 
 18.15  becoming an authorized delegate of any licensee during the 
 18.16  period for which the order is in effect.  Upon issuance of the 
 18.17  order, the licensee shall terminate its relationship with the 
 18.18  authorized delegate according to the terms of the order. 
 18.19     Subd. 2.  [APPLICATION TO MODIFY OR RESCIND.] Any 
 18.20  authorized delegate to whom an order is issued under this 
 18.21  section may apply to the commissioner to modify or rescind the 
 18.22  order.  The commissioner shall not grant the application unless 
 18.23  the commissioner finds that it is in the public interest to do 
 18.24  so and that it is reasonable to believe that the person will, if 
 18.25  and when the person is permitted to resume being an authorized 
 18.26  delegate of a licensee, comply with all applicable provisions of 
 18.27  this chapter and of any rule or order issued under this chapter. 
 18.28     Subd. 3.  [JUDICIAL REVIEW.] The right of any authorized 
 18.29  delegate to whom an order is issued under this section to 
 18.30  petition for judicial review of the order is not affected by the 
 18.31  failure of the person to apply to the commissioner to modify or 
 18.32  rescind the order. 
 18.33     Sec. 21.  [53B.21] [LICENSEE LIABILITY.] 
 18.34     A licensee's responsibility to any person for a money 
 18.35  transmission conducted on that person's behalf by the licensee 
 18.36  or the licensee's authorized delegate is limited to the amount 
 19.1   of money transmitted or the face amount of the payment 
 19.2   instrument purchased. 
 19.3      Sec. 22.  [53B.22] [HEARINGS; PROCEDURES.] 
 19.4      The provisions of the Minnesota Administrative Procedure 
 19.5   Act, chapter 14, apply to any hearing under this chapter. 
 19.6      Sec. 23.  [53B.23] [CIVIL PENALTIES.] 
 19.7      (a) If, after notice and hearing, the commissioner finds 
 19.8   that a person has intentionally violated this chapter or a rule 
 19.9   adopted under this chapter, the commissioner may order the 
 19.10  person to pay to the commissioner a civil penalty in an amount 
 19.11  specified by the commissioner, not to exceed $1,000 for each 
 19.12  violation, or in the case of a continuing violation, $1,000 for 
 19.13  each day that the violation continues.  No proceeding may be 
 19.14  initiated and no penalty may be assessed under this section 
 19.15  until after the person has been notified in writing of the 
 19.16  nature of the violation and has been afforded a reasonable 
 19.17  period of time, as set forth in the notice, to correct the 
 19.18  violation and has failed to do so.  
 19.19     (b) The commissioner may compromise, settle, and collect 
 19.20  civil penalties for violations of any provision of this chapter 
 19.21  or any rule or order issued or adopted under this chapter. 
 19.22     Sec. 24.  [53B.24] [ENFORCEMENT.] 
 19.23     Subdivision 1.  [COMMISSIONER'S AUTHORITY.] If it appears 
 19.24  to the commissioner that any person has committed or is about to 
 19.25  commit a violation of any provision of this chapter or any rule 
 19.26  or order of the commissioner, the commissioner may apply to the 
 19.27  district court for an order enjoining the person from violating 
 19.28  or continuing to violate this chapter or any rule or order and 
 19.29  for injunctive or other relief as the nature of the case may 
 19.30  require. 
 19.31     Subd. 2.  [CONSENT ORDERS.] The commissioner may enter into 
 19.32  consent orders at any time with any person to resolve any matter 
 19.33  arising under this chapter.  A consent order must be signed by 
 19.34  the person to whom it is issued or a duly authorized 
 19.35  representative, and must indicate agreement to the terms 
 19.36  contained in it.  A consent order need not constitute an 
 20.1   admission by any person that any provision of this chapter or 
 20.2   any rule or order adopted or issued under this chapter has been 
 20.3   violated, nor need it constitute a finding by the commissioner 
 20.4   that such person has violated any provision of this chapter or 
 20.5   any rule or order adopted or issued under this chapter. 
 20.6      Subd. 3.  [PENALTIES.] Notwithstanding the issuance of a 
 20.7   consent order, the commissioner may seek civil or criminal 
 20.8   penalties or compromise civil penalties concerning matters 
 20.9   encompassed by the consent order, unless the consent order by 
 20.10  its terms expressly precludes the commissioner from so doing. 
 20.11     Sec. 25.  [53B.25] [RULE NOTICES.] 
 20.12     At the time the commissioner files a notice of proposed 
 20.13  adoption, amendment, or repeal of a rule adopted under this 
 20.14  chapter, a copy of the notice must be sent by regular United 
 20.15  States mail, postage prepaid, to all then-current licensees and 
 20.16  applicants for licenses under this chapter. 
 20.17     Sec. 26.  [53B.26] [APPOINTMENT OF COMMISSIONER AS AGENT 
 20.18  FOR SERVICE OF PROCESS.] 
 20.19     Subdivision 1.  [CONSENT AND APPOINTMENT.] Any licensee, 
 20.20  authorized delegate, or other person who knowingly engages in 
 20.21  business activities that are regulated under this chapter, with 
 20.22  or without filing an application, is considered to have done 
 20.23  both of the following: 
 20.24     (1) consented to the jurisdiction of the courts of this 
 20.25  state for all actions arising under this chapter; and 
 20.26     (2) appointed the commissioner as the lawful agent for the 
 20.27  purpose of accepting service of process in any action, suit, or 
 20.28  proceeding that may arise under this chapter. 
 20.29     Subd. 2.  [COMMISSIONER'S DUTY.] Within three business days 
 20.30  after service of process upon the commissioner, the commissioner 
 20.31  shall transmit by certified mail copies of all lawful process 
 20.32  accepted by the commissioner as an agent to that person at its 
 20.33  last known address.  Service of process is considered complete 
 20.34  three business days after the commissioner deposits copies of 
 20.35  the documents in the United States mail. 
 20.36     Sec. 27.  [53B.27] [MULTIPLE LICENSES.] 
 21.1      A person licensed under this chapter is not required to 
 21.2   obtain a separate license to engage in the cashing of checks or 
 21.3   the exchange of foreign currency in the state.