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; amending Minnesota Statutes 2000, 
  1.5             section 48.151; proposing coding for new law as 
  1.6             Minnesota Statutes, chapter 53B. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2000, section 48.151, is 
  1.9   amended to read: 
  1.10     48.151 [ADDITIONAL POWERS.] 
  1.11     Any bank, savings bank, or trust company organized under 
  1.12  the laws of this state, or any national banking association 
  1.13  doing business in this state, shall have the power to advertise 
  1.14  for sale and sell for a fee money orders, traveler's checks, 
  1.15  cashier's checks, drafts, registered checks, and certified 
  1.16  checks and no other person, firm, or corporation, either 
  1.17  directly or through agents, shall advertise for sale or shall 
  1.18  sell for a fee any evidence of indebtedness on which there 
  1.19  appears the words, "money order," "traveler's check," "cashier's 
  1.20  check," "draft," "registered check," "certified check," or other 
  1.21  words or symbols whether of the same or different character 
  1.22  which tend to lead the purchaser to believe that such evidence 
  1.23  of indebtedness is other than a personal check, unless such 
  1.24  evidence of indebtedness is issued by a person, firm or 
  1.25  corporation which is a savings association, or telegraph 
  1.26  company, or, in the case of cashier's checks, is issued by an 
  2.1   industrial loan and thrift company with deposit liabilities, 
  2.2   provided that these instruments are issued in conformity with 
  2.3   the Uniform Commercial Code, or is issued by a person, firm, or 
  2.4   corporation that has on file in the office of the secretary of 
  2.5   state a surety bond in the principal sum of $5,000 issued by a 
  2.6   bonding or insurance company authorized to do business in this 
  2.7   state, which surety bond shall run to the state of Minnesota and 
  2.8   shall be for the benefit of any creditor for any liability 
  2.9   insured on account of the sale or issuance by it or its agent of 
  2.10  any such evidence of indebtedness, or has deposited with the 
  2.11  secretary of state securities or cash of the value of $5,000; 
  2.12  provided, however, that the aggregate liability of the surety to 
  2.13  all such creditors shall, in no event, exceed the sum of such 
  2.14  bond or deposit licensed under chapter 53B.  Any person, firm or 
  2.15  corporation who shall violate any provision of this section 
  2.16  shall be guilty of a misdemeanor. 
  2.17     Sec. 2.  [53B.01] [CITATION.] 
  2.18     This chapter may be cited as the "Minnesota Money 
  2.19  Transmitters Act." 
  2.20     Sec. 3.  [53B.02] [LICENSE REQUIRED.] 
  2.21     On or after January 1, 2002, no person except those exempt 
  2.22  pursuant to section 53B.04 shall engage in the business of money 
  2.23  transmission without a license as provided in this chapter.  A 
  2.24  licensee may conduct business in this state at one or more 
  2.25  locations, directly or indirectly owned, or through one or more 
  2.26  authorized delegates, or both, under a single license granted to 
  2.27  the licensee. 
  2.28     Sec. 4.  [53B.03] [DEFINITIONS.] 
  2.29     Subdivision 1.  [SCOPE.] For purposes of this chapter, the 
  2.30  terms in subdivisions 2 to 18 apply unless the context requires 
  2.31  otherwise. 
  2.32     Subd. 2.  [APPLICANT.] "Applicant" means a person filing an 
  2.33  application for a license under this chapter. 
  2.34     Subd. 3.  [AUTHORIZED DELEGATE.] "Authorized delegate" 
  2.35  means an entity designated by the licensee under this chapter, 
  2.36  or by an exempt entity, to sell or issue payment instruments or 
  3.1   engage in the business of transmitting money on behalf of a 
  3.2   licensee. 
  3.3      Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
  3.4   commissioner of commerce. 
  3.5      Subd. 5.  [CONTROL.] "Control" means ownership of, or the 
  3.6   power to vote, ten percent or more of the outstanding voting 
  3.7   securities of a licensee or controlling person.  For purposes of 
  3.8   determining the percentage of a licensee controlled by any 
  3.9   person, the person's interest must be aggregated with the 
  3.10  interest of any other person controlled by the person or by any 
  3.11  spouse, parent, or child of the person. 
  3.12     Subd. 6.  [CONTROLLING PERSON.] "Controlling person" means 
  3.13  any person in control of a licensee. 
  3.14     Subd. 7.  [ELECTRONIC INSTRUMENT.] "Electronic instrument" 
  3.15  means a card or other tangible object for the transmission or 
  3.16  payment of money that contains a microprocessor chip, magnetic 
  3.17  stripe, or other means for the storage of information, that is 
  3.18  prefunded and for which the value is decreased upon each use.  
  3.19  The term does not include a card or other tangible object that 
  3.20  is redeemable by the issuer in the issuer's goods or services. 
  3.21     Subd. 8.  [EXECUTIVE OFFICER.] "Executive officer" means 
  3.22  the licensee's president, chair of the executive committee, 
  3.23  senior officer responsible for the licensee's business, chief 
  3.24  financial officer, and any other person who performs similar 
  3.25  functions. 
  3.26     Subd. 9.  [EXEMPT ENTITY.] "Exempt entity" means a person 
  3.27  to which this chapter does not apply under section 53B.04. 
  3.28     Subd. 10.  [KEY SHAREHOLDER.] "Key shareholder" means any 
  3.29  person, or group of persons acting in concert, who is the owner 
  3.30  of ten percent or more of any voting class of an applicant's 
  3.31  stock. 
  3.32     Subd. 11.  [LICENSEE.] "Licensee" means a person licensed 
  3.33  under this chapter. 
  3.34     Subd. 12.  [MATERIAL LITIGATION.] "Material litigation" 
  3.35  means any litigation in which an applicant or a licensee has 
  3.36  been a defendant or been named in a civil judgment involving 
  4.1   claims of fraud, misrepresentation, conversion, mismanagement of 
  4.2   funds, breach of fiduciary duty, or breach of contract. 
  4.3      Subd. 13.  [MONEY TRANSMISSION.] "Money transmission" means 
  4.4   selling or issuing payment instruments or engaging in the 
  4.5   business of receiving money for transmission or transmitting 
  4.6   money within the United States or to locations abroad by any and 
  4.7   all means, including but not limited to payment instrument, 
  4.8   wire, facsimile, or electronic transfer. 
  4.9      Subd. 14.  [OUTSTANDING PAYMENT INSTRUMENT.] "Outstanding 
  4.10  payment instrument" means any payment instrument issued by the 
  4.11  licensee that has been sold in the United States directly by the 
  4.12  licensee or any payment instrument issued by the licensee that 
  4.13  has been sold by an authorized delegate of the licensee in the 
  4.14  United States, and that has not yet been paid by or for the 
  4.15  licensee. 
  4.16     Subd. 15.  [PAYMENT INSTRUMENT.] "Payment instrument" means 
  4.17  any electronic or written check, draft, money order, travelers 
  4.18  check, or other electronic or written instrument or order for 
  4.19  the transmission or payment of money, sold or issued to one or 
  4.20  more persons, whether or not the instrument is negotiable.  The 
  4.21  term does not include any credit card voucher, letter of credit, 
  4.22  or instrument that is redeemable by the issuer in goods or 
  4.23  services. 
  4.24     Subd. 16.  [PERMISSIBLE INVESTMENTS.] "Permissible 
  4.25  investments" means: 
  4.26     (1) cash; 
  4.27     (2) certificates of deposit or other debt obligations of a 
  4.28  financial institution, either domestic or foreign; 
  4.29     (3) bills of exchange or time drafts drawn on and accepted 
  4.30  by a commercial bank, otherwise known as bankers' acceptances, 
  4.31  that are eligible for purchase by member banks of the Federal 
  4.32  Reserve system; 
  4.33     (4) any investment bearing a rating of one of the three 
  4.34  highest grades as defined by a nationally recognized 
  4.35  organization that rates these securities; 
  4.36     (5) investment securities that are obligations of the 
  5.1   United States, its agencies or instrumentalities, or obligations 
  5.2   that are guaranteed fully as to principal and interest of the 
  5.3   United States, or any obligations of any state, municipality, or 
  5.4   any political subdivision of a state or municipality; 
  5.5      (6) shares in a money market mutual fund, interest-bearing 
  5.6   bills or notes or bonds, debentures, or a fund composed of one 
  5.7   or more permissible investments; 
  5.8      (7) any demand borrowing agreement or agreements made to a 
  5.9   corporation or a subsidiary of a corporation whose capital stock 
  5.10  is listed on a national exchange; 
  5.11     (8) receivables that are due to a licensee from its 
  5.12  authorized delegates under a contract described in section 
  5.13  53B.20, that are not past due or doubtful of collection; or 
  5.14     (9) any other investments or security device approved by 
  5.15  the commissioner. 
  5.16     Subd. 17.  [PERSON.] "Person" means any individual, 
  5.17  corporation, limited liability company, business trust, general 
  5.18  or limited partnership, association, sole proprietorship, or 
  5.19  similar organization. 
  5.20     Subd. 18.  [REMIT.] "Remit" means either to make direct 
  5.21  payment of the funds to the licensee or its representatives 
  5.22  authorized to receive those funds or to deposit the funds in a 
  5.23  bank, credit union, or savings association or other similar 
  5.24  financial institution in an account specified by the licensee. 
  5.25     Sec. 5.  [53B.04] [EXEMPTIONS.] 
  5.26     Authorized delegates of a licensee or of an exempt entity 
  5.27  acting within the scope of authority conferred by a written 
  5.28  contract as described in section 53B.20 are not required to 
  5.29  obtain a license under this chapter.  This chapter does not 
  5.30  apply to: 
  5.31     (1) the United States or any department, agency, or 
  5.32  instrumentality of the United States; 
  5.33     (2) the United States Post Office; 
  5.34     (3) the state or any political subdivision of the state; 
  5.35     (4) banks, credit unions, savings associations, savings 
  5.36  banks, mutual banks organized under the laws of any state or the 
  6.1   United States, or bank holding companies which have a banking 
  6.2   subsidiary located in Minnesota and whose debt securities have 
  6.3   an investment grade rating by a national rating agency provided 
  6.4   that if they issue or sell payment instruments through 
  6.5   authorized delegates who are not banks, bank holding companies, 
  6.6   credit unions, savings associations, savings banks, or mutual 
  6.7   banks, those authorized delegates must comply with all 
  6.8   requirements imposed upon authorized delegates under this 
  6.9   chapter; and 
  6.10     (5) the provision of electronic transfer of government 
  6.11  benefits for any federal, state, or county governmental agency 
  6.12  as defined in Federal Reserve Board Regulation E, by a 
  6.13  contractor for and on behalf of the United States or any 
  6.14  department, agency, or instrumentality of the United States, or 
  6.15  any state or any political subdivision of the state. 
  6.16     Sec. 6.  [53B.05] [LICENSE QUALIFICATIONS.] 
  6.17     Subdivision 1. [NET WORTH.] Each licensee under this 
  6.18  chapter shall at all times have a net worth of not less than 
  6.19  $100,000, calculated in accordance with generally accepted 
  6.20  accounting principles.  Licensees engaging in money transmission 
  6.21  at more than one location or through authorized delegates shall 
  6.22  have an additional net worth of $50,000 per location or 
  6.23  authorized delegate located in the state, as applicable, to a 
  6.24  maximum of $500,000. 
  6.25     Subd. 2.  [CORPORATE APPLICANT; GOOD STANDING.] Every 
  6.26  corporate applicant, at the time of the filing of an application 
  6.27  for a license under this chapter and at all times after a 
  6.28  license is issued, must be in good standing in the state of its 
  6.29  incorporation.  All noncorporate applicants shall, at the time 
  6.30  of the filing of an application for a license under this chapter 
  6.31  and at all times after a license is issued, be registered or 
  6.32  qualified to do business in the state. 
  6.33     Sec. 7.  [53B.06] [PERMISSIBLE INVESTMENTS AND STATUTORY 
  6.34  TRUST.] 
  6.35     (a) Each licensee under this chapter must at all times 
  6.36  possess permissible investments having an aggregate market 
  7.1   value, calculated in accordance with generally accepted 
  7.2   accounting principles, of not less than the aggregate face 
  7.3   amount of all outstanding payment instruments sold by the 
  7.4   licensee or reported as sold by an authorized delegate in the 
  7.5   United States.  This requirement may be waived by the 
  7.6   commissioner if the dollar volume of a licensee's outstanding 
  7.7   payment instruments does not exceed the bond or other security 
  7.8   devices posted by the licensee under section 53B.08. 
  7.9      (b) Permissible investments, even if commingled with other 
  7.10  assets of the licensee, are considered to be held in trust for 
  7.11  the benefit of the purchasers and holders of the licensee's 
  7.12  outstanding payment instruments in the event of the bankruptcy 
  7.13  of the licensee. 
  7.14     Sec. 8.  [53B.07] [LICENSE APPLICATION.] 
  7.15     Subdivision 1.  [REQUIREMENTS.] An application for a 
  7.16  license under this chapter must be made in writing, under oath, 
  7.17  and in a form prescribed by the commissioner. 
  7.18     Subd. 2.  [GENERAL CONTENTS.] An application must contain: 
  7.19     (1) the exact name of the applicant, the applicant's 
  7.20  principal address, any fictitious or trade name used by the 
  7.21  applicant in the conduct of its business, and the location of 
  7.22  the applicant's business records; 
  7.23     (2) the history of the applicant's or any controlling 
  7.24  person's material litigation during the preceding ten years and 
  7.25  criminal convictions; 
  7.26     (3) a description of the activities conducted by the 
  7.27  applicant and a history of operations; 
  7.28     (4) a description of the business activities in which the 
  7.29  applicant seeks to be engaged in the state; 
  7.30     (5) a list identifying the applicant's proposed authorized 
  7.31  delegates in the state, if any, at the time of the filing of the 
  7.32  license application; 
  7.33     (6) a sample authorized delegate contract, if applicable; 
  7.34     (7) a sample form of payment instrument, if applicable; 
  7.35     (8) the location or locations at which the applicant and 
  7.36  its authorized delegates, if any, propose to conduct the 
  8.1   licensed activities in the state; and 
  8.2      (9) the name, address, and account numbers for the clearing 
  8.3   bank or banks on which the applicant's payment instruments will 
  8.4   be drawn or through which these payment instruments will be 
  8.5   payable. 
  8.6      Subd. 3.  [ADDITIONAL INFORMATION FROM CORPORATIONS.] If 
  8.7   the applicant is a corporation, the applicant must also provide: 
  8.8      (1) the date of the applicant's incorporation and state of 
  8.9   incorporation; 
  8.10     (2) a certificate of good standing from the state in which 
  8.11  the applicant was incorporated; 
  8.12     (3) a description of the corporate structure of the 
  8.13  applicant, including the identity of any parent or subsidiary of 
  8.14  the applicant, and the disclosure of whether any parent or 
  8.15  subsidiary is publicly traded on any stock exchange; 
  8.16     (4) the name, business and residence address, and 
  8.17  employment history for the past five years of the applicant's 
  8.18  executive officers and the officers or managers who will be in 
  8.19  charge of the applicant's activities to be licensed under this 
  8.20  chapter; 
  8.21     (5) the name, business and residence address, and 
  8.22  employment history for the period five years prior to the date 
  8.23  of the application of any key shareholder of the applicant; 
  8.24     (6) the history of material litigation during the preceding 
  8.25  ten years and criminal convictions of every executive officer or 
  8.26  key shareholder of the applicant; 
  8.27     (7) a copy of the applicant's most recent audited financial 
  8.28  statement, including balance sheet, statement of income or loss, 
  8.29  statement of changes in shareholder equity, and statement of 
  8.30  changes in financial position, and, if available, the 
  8.31  applicant's audited financial statements for the immediately 
  8.32  preceding two-year period.  However, if the applicant is a 
  8.33  wholly owned subsidiary of another corporation, the applicant 
  8.34  may submit either the parent corporation's consolidated audited 
  8.35  financial statements for the current year and for the 
  8.36  immediately preceding two-year period or the parent 
  9.1   corporation's Form 10K reports filed with the United States 
  9.2   Securities and Exchange Commission for the prior three years in 
  9.3   lieu of the applicant's financial statements.  If the applicant 
  9.4   is a wholly owned subsidiary of a corporation having its 
  9.5   principal place of business outside the United States, similar 
  9.6   documentation filed with the parent corporation's non-United 
  9.7   States regulator may be submitted to satisfy this provision; and 
  9.8      (8) copies of all filings, if any, made by the applicant 
  9.9   with the United States Securities and Exchange Commission, or 
  9.10  with a similar regulator in a country other than the United 
  9.11  States, within the year preceding the date of filing the 
  9.12  application. 
  9.13     Subd. 4.  [ADDITIONAL INFORMATION FROM NONCORPORATE 
  9.14  APPLICANTS.] If the applicant is not a corporation, the 
  9.15  applicant must also provide: 
  9.16     (1) the name, business and residence address, personal 
  9.17  financial statement, and employment history for the past five 
  9.18  years, of each principal of the applicant and the name, business 
  9.19  and residence address, and employment history for the past five 
  9.20  years of any other person or persons who will be in charge of 
  9.21  the applicant's activities to be licensed under this chapter; 
  9.22     (2) the place and date of the applicant's registration or 
  9.23  qualification to do business in this state; 
  9.24     (3) the history of material litigation during the preceding 
  9.25  ten years and criminal convictions for each individual having 
  9.26  any ownership interest in the applicant and each individual who 
  9.27  exercises supervisory responsibility with respect to the 
  9.28  applicant's activities; and 
  9.29     (4) copies of the applicant's audited financial statements, 
  9.30  including balance sheet, statement of income or loss, and 
  9.31  statement of changes in financial position, for the current year 
  9.32  and, if available, for the immediately preceding two-year period.
  9.33     Subd. 5.  [WAIVER.] The commissioner may, for good cause 
  9.34  shown, waive any requirement of this section with respect to any 
  9.35  license application or to permit a license applicant to submit 
  9.36  substituted information in its license application in lieu of 
 10.1   the information required by this subdivision. 
 10.2      Sec. 9.  [53B.08] [BOND OR OTHER SECURITY DEVICE.] 
 10.3      Subdivision 1.  [REQUIREMENT.] Each application must be 
 10.4   accompanied by a surety bond, irrevocable letter of credit, or 
 10.5   other similar security device acceptable to the commissioner in 
 10.6   the amount of $50,000.  If the applicant proposes to engage in 
 10.7   business under this chapter at more than one location, through 
 10.8   authorized delegates or otherwise, then the amount of the 
 10.9   security device must be increased by $10,000 per location, up to 
 10.10  a maximum of $250,000.  The security device must be in a form 
 10.11  satisfactory to the commissioner and must run to the state for 
 10.12  the benefit of any claimants against the licensee to secure the 
 10.13  faithful performance of the obligations of the licensee with 
 10.14  respect to the receipt, handling, transmission, and payment of 
 10.15  money in connection with the sale and issuance of payment 
 10.16  instruments or transmission of money.  In the case of a bond, 
 10.17  the aggregate liability of the surety in no event shall exceed 
 10.18  the principal sum of the bond.  Claimants against the licensee 
 10.19  may themselves bring suit directly on the security device or the 
 10.20  commissioner may bring suit on behalf of these claimants, either 
 10.21  in one action or in successive actions. 
 10.22     Subd. 2.  [ACCEPTABLE ALTERNATIVES.] In lieu of a security 
 10.23  device under subdivision 1 or of any portion of the principal of 
 10.24  the security device, as required by subdivision 1, the licensee 
 10.25  may deposit with the commissioner, or with banks in this state 
 10.26  that the licensee designates and the commissioner approves, 
 10.27  cash, interest-bearing stocks and bonds, notes, debentures, or 
 10.28  other obligations of the United States or any agency or 
 10.29  instrumentality of the United States, or guaranteed by the 
 10.30  United States, or of this state, or of a city, county, town, 
 10.31  village, school district, or instrumentality of this state, or 
 10.32  guaranteed by this state, to an aggregate amount, based upon 
 10.33  principal amount or market value, whichever is lower, of not 
 10.34  less than the amount of the security device or portion of the 
 10.35  security device.  The securities or cash must be deposited and 
 10.36  held to secure the same obligations as would the security 
 11.1   device.  The depositor shall receive all interest and 
 11.2   dividends.  The depositor may, with the approval of the 
 11.3   commissioner, substitute other securities for those deposited, 
 11.4   and is required to do so on written order of the commissioner 
 11.5   made for good cause shown. 
 11.6      Subd. 3.  [CANCELLATION.] The security device remains in 
 11.7   effect until cancellation, which may occur only after 30 days' 
 11.8   written notice to the commissioner.  Cancellation does not 
 11.9   affect the rights of any claimant for any liability incurred or 
 11.10  accrued during the period for which the bond was in force. 
 11.11     Subd. 4.  [DURATION.] The security device must remain in 
 11.12  place for no longer than five years after the licensee ceases 
 11.13  money transmission operations in the state.  However, 
 11.14  notwithstanding this provision, the commissioner may permit the 
 11.15  security device to be reduced or eliminated before that time to 
 11.16  the extent that the amount of the licensee's payment instruments 
 11.17  outstanding in this state are reduced.  The commissioner may 
 11.18  also permit a licensee to substitute a letter of credit or other 
 11.19  form of security device acceptable to the commissioner for the 
 11.20  security device in place at the time the licensee ceases money 
 11.21  transmission operations in the state. 
 11.22     Sec. 10.  [53B.09] [APPLICATION FEE.] 
 11.23     Each application must be accompanied by a nonrefundable 
 11.24  application fee in the amount of $4,000. 
 11.25     Sec. 11.  [53B.10] [ISSUANCE OF LICENSE.] 
 11.26     Subdivision 1.  [INVESTIGATION.] Upon the filing of a 
 11.27  complete application, the commissioner shall investigate the 
 11.28  financial condition and responsibility, financial and business 
 11.29  experience, character, and general fitness of the applicant.  
 11.30  The commissioner may conduct an onsite investigation of the 
 11.31  applicant, the reasonable cost of which must be borne by the 
 11.32  applicant.  If the commissioner finds that the requirements 
 11.33  imposed by this chapter have been met and the required license 
 11.34  fee has been paid, the commissioner shall issue a license to the 
 11.35  applicant authorizing the applicant to engage in the licensed 
 11.36  activities in this state for a term of one year.  If these 
 12.1   requirements have not been met, the commissioner shall deny the 
 12.2   application in writing, setting forth the reasons for the denial.
 12.3      Subd. 2.  [DENIAL HEARING.] Any applicant aggrieved by a 
 12.4   denial issued by the commissioner under this section may at any 
 12.5   time within 30 days from the date of receipt of written notice 
 12.6   of the denial contest the denial by serving a response on the 
 12.7   commissioner. The commissioner shall set a date for a hearing 
 12.8   not later than 60 days after service of the response, unless a 
 12.9   later date is set with the consent of the denied applicant. 
 12.10     Sec. 12.  [53B.11] [RENEWAL OF LICENSE AND ANNUAL REPORT.] 
 12.11     Subdivision 1.  [FEE.] The annual fee for renewal of a 
 12.12  license under this chapter is $2,500.  
 12.13     Subd. 2.  [REPORT.] The renewal fee must be accompanied by 
 12.14  a report, in a form prescribed by the commissioner.  The form 
 12.15  must be sent by the commissioner to each licensee no later than 
 12.16  three months immediately preceding the date established by the 
 12.17  commissioner for license renewal.  The licensee must include in 
 12.18  this annual renewal report: 
 12.19     (1) a copy of its most recent audited consolidated annual 
 12.20  financial statement, including balance sheet, statement of 
 12.21  income or loss, statement of changes in shareholder's equity, 
 12.22  and statement of changes in financial position, or, in the case 
 12.23  of a licensee that is a wholly owned subsidiary of another 
 12.24  corporation, the consolidated audited annual financial statement 
 12.25  of the parent corporation may be filed in lieu of the licensee's 
 12.26  audited annual financial statement; 
 12.27     (2) for the most recent quarter for which data are 
 12.28  available prior to the date of the filing of the renewal 
 12.29  application, but in no event more than 120 days prior to the 
 12.30  renewal date, the licensee must provide the number of payment 
 12.31  instruments sold by the licensee in the state, the dollar amount 
 12.32  of those instruments, and the dollar amount of those instruments 
 12.33  currently outstanding; 
 12.34     (3) any material changes to any of the information 
 12.35  submitted by the licensee on its original application that have 
 12.36  not previously been reported to the commissioner on any other 
 13.1   report required to be filed under this chapter; 
 13.2      (4) a list of the licensee's permissible investments; and 
 13.3      (5) a list of the locations within this state at which 
 13.4   business regulated by this chapter is being conducted by either 
 13.5   the licensee or its authorized delegate. 
 13.6      Subd. 3.  [LICENSE DISPLAY.] A copy of the license issued 
 13.7   by the commissioner to the licensee shall be prominently 
 13.8   displayed in each location where money transmission services are 
 13.9   offered. 
 13.10     Subd. 4.  [MONEY RECEIVED FOR TRANSMISSION.] All money 
 13.11  received for wire transmission must be transmitted in accordance 
 13.12  with the purchaser's instructions within five days. 
 13.13     Sec. 13.  [53B.12] [EXTRAORDINARY REPORTING REQUIREMENTS.] 
 13.14     Within 15 days of the occurrence of any one of the events 
 13.15  listed below, a licensee shall file a written report with the 
 13.16  commissioner describing the event and its expected impact on the 
 13.17  licensee's activities in the state: 
 13.18     (1) the filing for bankruptcy or reorganization by the 
 13.19  licensee; 
 13.20     (2) the institution of revocation or suspension proceedings 
 13.21  against the licensee by any state or governmental authority with 
 13.22  regard to the licensee's money transmission activities; 
 13.23     (3) any felony indictment of the licensee or any of its key 
 13.24  officers or directors related to money transmission activities; 
 13.25  or 
 13.26     (4) any felony conviction of the licensee or any of its key 
 13.27  officers or directors related to money transmission activities. 
 13.28     Sec. 14.  [53B.13] [CHANGES IN CONTROL OF A LICENSEE.] 
 13.29     Any purchaser of ten percent or more of an ownership 
 13.30  interest in a licensee must notify the commissioner at least 30 
 13.31  days in advance of the purchase and submit a completed license 
 13.32  application form.  The commissioner may revoke the license if 
 13.33  the new ownership would have resulted in a denial of the initial 
 13.34  license under this chapter. The commissioner may waive this 
 13.35  notification requirement if, in the commissioner's discretion, 
 13.36  the change in control does not pose any risk to the interests of 
 14.1   the public. 
 14.2      Sec. 15.  [53B.14] [EXAMINATIONS.] 
 14.3      The commissioner has under this chapter the same powers 
 14.4   with respect to financial examinations that the commissioner has 
 14.5   under section 46.04. 
 14.6      Sec. 16.  [53B.15] [MAINTENANCE OF RECORDS.] 
 14.7      Subdivision 1.  [REQUIREMENT.] Each licensee shall make, 
 14.8   keep, and preserve the following books, accounts, and other 
 14.9   records for a period of three years: 
 14.10     (1) a record or records of each payment instrument sold; 
 14.11     (2) a general ledger containing all assets, liability, 
 14.12  capital, income, and expense accounts, which must be posted at 
 14.13  least monthly; 
 14.14     (3) bank statements and bank reconciliation records; 
 14.15     (4) records of outstanding payment instruments; 
 14.16     (5) records of each payment instrument paid within the 
 14.17  three-year period; and 
 14.18     (6) a list of the names and addresses of all of the 
 14.19  licensee's authorized delegates. 
 14.20     Subd. 2.  [COMPLIANCE.] (a) Any licensee or authorized 
 14.21  delegate selling money orders shall maintain a record of the 
 14.22  date, amount, serial number, and the location of sale for each 
 14.23  money order sold in Minnesota. 
 14.24     (b) Any licensee or authorized delegate engaged in the 
 14.25  business of receiving money for transmission or transmitting 
 14.26  money shall maintain a record of the identity of the remitter, 
 14.27  identity of the recipient, amount of transmission, date of 
 14.28  transaction, date funds were transmitted, and location from 
 14.29  which the funds were remitted for each transaction initiated in 
 14.30  Minnesota. 
 14.31     (c) Maintenance of the documents required by this section 
 14.32  in a photographic, electronic, or other similar form constitutes 
 14.33  compliance with this section. 
 14.34     Subd. 3.  [LOCATION.] Records may be maintained at a 
 14.35  location other than within this state if they are made 
 14.36  accessible to the commissioner on seven days' written notice. 
 15.1      Sec. 17.  [53B.16] [CONFIDENTIALITY OF DATA SUBMITTED TO 
 15.2   THE COMMISSIONER.] 
 15.3      Data or other information obtained by the commissioner 
 15.4   under this chapter, whether as a result of the license 
 15.5   application or renewal process or examinations, is subject to 
 15.6   chapter 13. 
 15.7      Sec. 18.  [53B.17] [SOLVENCY REQUIRED.] 
 15.8      If the commissioner determines that a licensee is 
 15.9   insolvent, that its capital is impaired, or that its condition 
 15.10  is such as to render the continuance of its business hazardous 
 15.11  to the public or to those having funds in its custody, the 
 15.12  commissioner may apply to the district court for the county in 
 15.13  which the main office is located, or for Ramsey county if the 
 15.14  licensee does not have a main office in Minnesota, for 
 15.15  appointment of a receiver to receive the assets of the licensee 
 15.16  for the purpose of liquidating or rehabilitating its business 
 15.17  and for such other relief as the interest of the public may 
 15.18  require.  The reasonable and necessary expenses of the 
 15.19  receivership have priority over all other claims on the bond 
 15.20  required by this chapter. 
 15.21     Sec. 19.  [53B.18] [PROHIBITED PRACTICES.] 
 15.22     No licensee shall: 
 15.23     (1) fail to comply with chapter 345 as it relates to 
 15.24  unclaimed property requirements; or 
 15.25     (2) refuse to indemnify an instrument holder for any 
 15.26  misappropriation of money caused by any of its authorized 
 15.27  delegates in conducting activities on behalf of the licensee for 
 15.28  whom it acts as an authorized delegate. 
 15.29     Sec. 20.  [53B.19] [SUSPENSION OR REVOCATION OF LICENSES.] 
 15.30     After notice and hearing, the commissioner may suspend or 
 15.31  revoke a licensee's license if the commissioner finds that: 
 15.32     (1) any fact or condition exists that, if it had existed at 
 15.33  the time when the licensee applied for its license, would have 
 15.34  been grounds for denying the application; 
 15.35     (2) the licensee's net worth becomes inadequate and the 
 15.36  licensee, after ten days' written notice from the commissioner, 
 16.1   fails to take steps the commissioner considers necessary to 
 16.2   remedy the deficiency; 
 16.3      (3) the licensee violates any material provision of this 
 16.4   chapter or any rule or order validly adopted by the commissioner 
 16.5   under authority of this chapter; 
 16.6      (4) the licensee is conducting its business in an unsafe or 
 16.7   unsound manner; 
 16.8      (5) the licensee is insolvent; 
 16.9      (6) the licensee has suspended payment of its obligations, 
 16.10  has made an assignment for the benefit of its creditors, or has 
 16.11  admitted in writing its inability to pay its debts as they 
 16.12  become due; 
 16.13     (7) the licensee has applied for an adjudication of 
 16.14  bankruptcy, reorganization, arrangement, or other relief under 
 16.15  any bankruptcy; 
 16.16     (8) the licensee refuses to permit the commissioner to make 
 16.17  any examination authorized by this chapter; or 
 16.18     (9) the licensee fails to make any report required by this 
 16.19  chapter. 
 16.20     Sec. 21.  [53B.20] [AUTHORIZED DELEGATE CONTRACTS.] 
 16.21     Subdivision 1. [CONTENTS OF CONTRACT.] Licensees that 
 16.22  conduct licensed activities through authorized delegates shall 
 16.23  authorize each delegate to operate under an express written 
 16.24  contract that, for contracts entered into after the effective 
 16.25  date of this chapter, provide the following: 
 16.26     (1) that the licensee appoint the person as its delegate 
 16.27  with authority to engage in money transmission on behalf of the 
 16.28  licensee; 
 16.29     (2) that neither a licensee nor an authorized delegate 
 16.30  authorize subdelegates without the written consent of the 
 16.31  commissioner; and 
 16.32     (3) that licensees are subject to supervision and 
 16.33  regulation by the commissioner. 
 16.34     Subd. 2.  [TERMINATION OF AUTHORIZED DELEGATES.] Upon 
 16.35  termination of any authorized delegate contract, the licensee 
 16.36  must notify the commissioner within a reasonable amount of time 
 17.1   of the termination. 
 17.2      Subd. 3.  [EXEMPT ENTITIES.] For purposes of this section, 
 17.3   "licensee" includes exempt entities. 
 17.4      Sec. 22.  [53B.21] [AUTHORIZED DELEGATE CONDUCT.] 
 17.5      (a) An authorized delegate shall not make any fraudulent or 
 17.6   false statement or misrepresentation to a licensee or to the 
 17.7   commissioner. 
 17.8      (b) All money transmission or sale or issuance of payment 
 17.9   instrument activities conducted by authorized delegates must be 
 17.10  strictly in accordance with the licensee's written procedures 
 17.11  provided to the authorized delegate. 
 17.12     (c) An authorized delegate shall remit all money owed to 
 17.13  the licensee in accordance with the terms of the contract 
 17.14  between the licensee and the authorized delegate.  An authorized 
 17.15  delegate who fails to remit all money owed to a licensee within 
 17.16  the time required in the contract is liable to the licensee for 
 17.17  three times the licensee's actual damages. 
 17.18     (d) An authorized delegate is considered to consent to the 
 17.19  commissioner's inspection, with or without prior notice to the 
 17.20  licensee or authorized delegate, of the books and records of the 
 17.21  authorized delegate. 
 17.22     (e) An authorized delegate is under a duty to act only as 
 17.23  authorized under the contract with the licensee and any 
 17.24  authorized delegate who exceeds its authority is subject to 
 17.25  cancellation of its contract and further disciplinary action by 
 17.26  the commissioner. 
 17.27     (f) All funds, less fees, received by an authorized 
 17.28  delegate of a licensee from the sale or delivery of a payment 
 17.29  instrument issued by a licensee or received by an authorized 
 17.30  delegate for transmission, constitute trust funds owned by and 
 17.31  belonging to the licensee from the time the funds are received 
 17.32  by the authorized delegate until the time when the funds or an 
 17.33  equivalent amount are remitted by the authorized delegate to the 
 17.34  licensee.  If an authorized delegate commingles any funds with 
 17.35  other funds or property owned or controlled by the authorized 
 17.36  delegate, all commingled proceeds and other property must be 
 18.1   impressed with a trust in favor of the licensee in an amount 
 18.2   equal to the amount of the proceeds due the licensee. 
 18.3      (g) An authorized delegate must report to the licensee the 
 18.4   theft or loss of payment instruments within 24 hours from the 
 18.5   time it knew or should have known of the theft or loss. 
 18.6      (h) For purposes of this section, "licensee" includes 
 18.7   exempt entities. 
 18.8      Sec. 23.  [53B.22] [REVOCATION OR SUSPENSION OF AUTHORIZED 
 18.9   DELEGATES.] 
 18.10     Subdivision 1.  [GENERALLY.] If, after notice and a 
 18.11  hearing, the commissioner finds that any authorized delegate of 
 18.12  a licensee or any director, officer, employee, or controlling 
 18.13  person of the authorized delegate has:  (1) violated any 
 18.14  provision of this chapter or any rule or order issued under this 
 18.15  chapter; (2) engaged in or participated in any unsafe or unsound 
 18.16  act with respect to the business of selling or issuing payment 
 18.17  instruments of the licensee or the business of money 
 18.18  transmission; or (3) made or caused to be made in any 
 18.19  application or report filed with the commissioner or in any 
 18.20  proceeding before the commissioner any statement which was, at 
 18.21  the time and in the circumstances under which it was made, false 
 18.22  or misleading with respect to any material fact, or has omitted 
 18.23  in any application or report any material fact that is required 
 18.24  to be stated, the commissioner may issue an order suspending or 
 18.25  barring such authorized delegate from continuing to be or 
 18.26  becoming an authorized delegate of any licensee during the 
 18.27  period for which the order is in effect.  Upon issuance of the 
 18.28  order, the licensee shall terminate its relationship with the 
 18.29  authorized delegate according to the terms of the order. 
 18.30     Subd. 2.  [APPLICATION TO MODIFY OR RESCIND.] Any 
 18.31  authorized delegate to whom an order is issued under this 
 18.32  section may apply to the commissioner to modify or rescind the 
 18.33  order.  The commissioner shall not grant the application unless 
 18.34  the commissioner finds that it is in the public interest to do 
 18.35  so and that it is reasonable to believe that the person will, if 
 18.36  and when the person is permitted to resume being an authorized 
 19.1   delegate of a licensee, comply with all applicable provisions of 
 19.2   this chapter and of any rule or order issued under this chapter. 
 19.3      Subd. 3.  [JUDICIAL REVIEW.] The right of any authorized 
 19.4   delegate to whom an order is issued under this section to 
 19.5   petition for judicial review of the order is not affected by the 
 19.6   failure of the person to apply to the commissioner to modify or 
 19.7   rescind the order. 
 19.8      Subd. 4.  [EXEMPT ENTITIES.] For purposes of this section, 
 19.9   "licensee" includes exempt entities. 
 19.10     Sec. 24.  [53B.23] [LICENSEE LIABILITY.] 
 19.11     A licensee's responsibility to any person for a money 
 19.12  transmission conducted on that person's behalf by the licensee 
 19.13  or the licensee's authorized delegate is limited to the amount 
 19.14  of money tendered or the face amount of the payment instrument 
 19.15  purchased. 
 19.16     Sec. 25.  [53B.24] [HEARINGS; PROCEDURES.] 
 19.17     The provisions of the Minnesota Administrative Procedure 
 19.18  Act, chapter 14, apply to any hearing under this chapter. 
 19.19     Sec. 26.  [53B.26] [ENFORCEMENT.] 
 19.20     Section 45.027 applies to this chapter. 
 19.21     Sec. 27.  [53B.27] [RULE NOTICES.] 
 19.22     At the time the commissioner files a notice of proposed 
 19.23  adoption, amendment, or repeal of a rule adopted under this 
 19.24  chapter, a copy of the notice must be sent by regular United 
 19.25  States mail, postage prepaid, to all then-current licensees and 
 19.26  applicants for licenses under this chapter. 
 19.27     Sec. 28.  [53B.28] [APPOINTMENT OF COMMISSIONER AS AGENT 
 19.28  FOR SERVICE OF PROCESS.] 
 19.29     Subdivision 1.  [CONSENT AND APPOINTMENT.] Any licensee, 
 19.30  authorized delegate, or other person who knowingly engages in 
 19.31  business activities that are regulated under this chapter, with 
 19.32  or without filing an application, is considered to have done 
 19.33  both of the following: 
 19.34     (1) consented to the jurisdiction of the courts of this 
 19.35  state for all actions arising under this chapter; and 
 19.36     (2) appointed the commissioner as the lawful agent for the 
 20.1   purpose of accepting service of process in any action, suit, or 
 20.2   proceeding that may arise under this chapter. 
 20.3      Subd. 2.  [SERVICE OF PROCESS.] Service of process must be 
 20.4   made in accordance with section 45.028, subdivision 2.