3rd Engrossment - 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; 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 corporationthat has on file in the office of the secretary of2.5state a surety bond in the principal sum of $5,000 issued by a2.6bonding or insurance company authorized to do business in this2.7state, which surety bond shall run to the state of Minnesota and2.8shall be for the benefit of any creditor for any liability2.9insured on account of the sale or issuance by it or its agent of2.10any such evidence of indebtedness, or has deposited with the2.11secretary of state securities or cash of the value of $5,000;2.12provided, however, that the aggregate liability of the surety to2.13all such creditors shall, in no event, exceed the sum of such2.14bond or depositlicensed 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 definitions in this section 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 prepaid telephone card, electronic 3.20 benefits transfer card, or any other card or other tangible 3.21 object that is redeemable by the issuer in the issuer's goods or 3.22 services. 3.23 Subd. 8. [EXECUTIVE OFFICER.] "Executive officer" means 3.24 the licensee's president, chair of the executive committee, 3.25 senior officer responsible for the licensee's business, chief 3.26 financial officer, and any other person who performs similar 3.27 functions. 3.28 Subd. 9. [EXEMPT ENTITY.] "Exempt entity" means a person 3.29 to which this chapter does not apply under section 53B.04. 3.30 Subd. 10. [KEY SHAREHOLDER.] "Key shareholder" means any 3.31 person, or group of persons acting in concert, who is the owner 3.32 of ten percent or more of any voting class of an applicant's 3.33 stock. 3.34 Subd. 11. [LICENSEE.] "Licensee" means a person licensed 3.35 under this chapter. 3.36 Subd. 12. [MATERIAL LITIGATION.] "Material litigation" 4.1 means any litigation in which an applicant or a licensee has 4.2 been a defendant or been named in a civil judgment involving 4.3 claims of fraud, misrepresentation, conversion, mismanagement of 4.4 funds, breach of fiduciary duty, or breach of contract. 4.5 Subd. 13. [MONEY TRANSMISSION.] "Money transmission" means 4.6 selling or issuing payment instruments or engaging in the 4.7 business of receiving money for transmission or transmitting 4.8 money within the United States or to locations abroad by any and 4.9 all means, including but not limited to payment instrument, 4.10 wire, facsimile, or electronic transfer. 4.11 Subd. 14. [OUTSTANDING PAYMENT INSTRUMENT.] "Outstanding 4.12 payment instrument" means any payment instrument issued by the 4.13 licensee that has been sold in the United States directly by the 4.14 licensee or any payment instrument issued by the licensee that 4.15 has been sold by an authorized delegate of the licensee in the 4.16 United States, and that has not yet been paid by or for the 4.17 licensee. 4.18 Subd. 15. [PAYMENT INSTRUMENT.] "Payment instrument" means 4.19 any electronic or written check, draft, money order, travelers 4.20 check, or other electronic or written instrument or order for 4.21 the transmission or payment of money, sold or issued to one or 4.22 more persons, whether or not the instrument is negotiable. The 4.23 term does not include any credit card voucher, letter of credit, 4.24 or instrument that is redeemable by the issuer in goods or 4.25 services. 4.26 Subd. 16. [PERMISSIBLE INVESTMENTS.] "Permissible 4.27 investments" means: 4.28 (1) cash; 4.29 (2) certificates of deposit or other debt obligations of a 4.30 financial institution, either domestic or foreign; 4.31 (3) bills of exchange or time drafts drawn on and accepted 4.32 by a commercial bank, otherwise known as bankers' acceptances, 4.33 that are eligible for purchase by member banks of the Federal 4.34 Reserve system; 4.35 (4) any investment bearing a rating of one of the three 4.36 highest grades as defined by a nationally recognized 5.1 organization that rates these securities; 5.2 (5) investment securities that are obligations of the 5.3 United States, its agencies or instrumentalities, or obligations 5.4 that are guaranteed fully as to principal and interest of the 5.5 United States, or any obligations of any state, municipality, or 5.6 any political subdivision of a state or municipality; 5.7 (6) shares in a money market mutual fund, interest-bearing 5.8 bills or notes or bonds, debentures, or a fund composed of one 5.9 or more permissible investments; 5.10 (7) any demand borrowing agreement or agreements made to a 5.11 corporation or a subsidiary of a corporation whose capital stock 5.12 is listed on a national exchange; 5.13 (8) receivables that are due to a licensee from its 5.14 authorized delegates under a contract described in section 5.15 53B.20, that are not past due or doubtful of collection; or 5.16 (9) any other investments or security device approved by 5.17 the commissioner. 5.18 Subd. 17. [PERSON.] "Person" means any individual, 5.19 corporation, limited liability company, business trust, general 5.20 or limited partnership, association, sole proprietorship, or 5.21 similar organization. 5.22 Subd. 18. [REMIT.] "Remit" means either to make direct 5.23 payment of the funds to the licensee or its representatives 5.24 authorized to receive those funds or to deposit the funds in a 5.25 bank, credit union, savings association, or other similar 5.26 financial institution in an account specified by the licensee. 5.27 Sec. 5. [53B.04] [EXEMPTIONS.] 5.28 Authorized delegates of a licensee or of an exempt entity, 5.29 acting within the scope of authority conferred by a written 5.30 contract as described in section 53B.20, are not required to 5.31 obtain a license under this chapter. This chapter does not 5.32 apply to: 5.33 (1) the United States or any department, agency, or 5.34 instrumentality of the United States; 5.35 (2) the United States Postal Service; 5.36 (3) the state or any political subdivision of the state; 6.1 (4) banks, credit unions, savings associations, savings 6.2 banks, mutual banks organized under the laws of any state or the 6.3 United States, or bank holding companies which have a banking 6.4 subsidiary located in Minnesota and whose debt securities have 6.5 an investment grade rating by a national rating agency, provided 6.6 that if they issue or sell payment instruments through 6.7 authorized delegates who are not banks, bank holding companies, 6.8 credit unions, savings associations, savings banks, or mutual 6.9 banks, those authorized delegates must comply with all 6.10 requirements imposed upon authorized delegates under this 6.11 chapter; and 6.12 (5) the provision of electronic transfer of government 6.13 benefits for any federal, state, or county governmental agency 6.14 as defined in Federal Reserve Board Regulation E, by a 6.15 contractor for and on behalf of the United States or any 6.16 department, agency, or instrumentality of the United States, or 6.17 any state or any political subdivision of the state. 6.18 Sec. 6. [53B.05] [LICENSE QUALIFICATIONS.] 6.19 Subdivision 1. [NET WORTH.] Each licensee under this 6.20 chapter shall at all times have a net worth of not less than 6.21 $100,000, calculated in accordance with generally accepted 6.22 accounting principles. Licensees engaging in money transmission 6.23 at more than one location or through authorized delegates shall 6.24 have an additional net worth of $50,000 per location or 6.25 authorized delegate located in the state, as applicable, to a 6.26 maximum of $500,000. 6.27 Subd. 2. [CORPORATE APPLICANT; GOOD STANDING.] Every 6.28 corporate applicant, at the time of the filing of an application 6.29 for a license under this chapter and at all times after a 6.30 license is issued, must be in good standing in the state of its 6.31 incorporation. All noncorporate applicants shall, at the time 6.32 of the filing of an application for a license under this chapter 6.33 and at all times after a license is issued, be registered or 6.34 qualified to do business in the state. 6.35 Sec. 7. [53B.06] [PERMISSIBLE INVESTMENTS AND STATUTORY 6.36 TRUST.] 7.1 (a) Each licensee under this chapter must at all times 7.2 possess permissible investments having an aggregate market 7.3 value, calculated in accordance with generally accepted 7.4 accounting principles, of not less than the aggregate face 7.5 amount of all outstanding payment instruments sold by the 7.6 licensee or reported as sold by an authorized delegate in the 7.7 United States. This requirement may be waived by the 7.8 commissioner if the dollar volume of a licensee's outstanding 7.9 payment instruments does not exceed the bond or other security 7.10 devices posted by the licensee under section 53B.08. 7.11 (b) Permissible investments, even if commingled with other 7.12 assets of the licensee, are considered to be held in trust for 7.13 the benefit of the purchasers and holders of the licensee's 7.14 outstanding payment instruments in the event of the bankruptcy 7.15 of the licensee. 7.16 Sec. 8. [53B.07] [LICENSE APPLICATION.] 7.17 Subdivision 1. [REQUIREMENTS.] An application for a 7.18 license under this chapter must be made in writing, under oath, 7.19 and in a form prescribed by the commissioner. 7.20 Subd. 2. [GENERAL CONTENTS.] An application must contain: 7.21 (1) the exact name of the applicant, the applicant's 7.22 principal address, any fictitious or trade name used by the 7.23 applicant in the conduct of its business, and the location of 7.24 the applicant's business records; 7.25 (2) the history of the applicant's or any controlling 7.26 person's material litigation during the preceding ten years and 7.27 criminal convictions; 7.28 (3) a description of the activities conducted by the 7.29 applicant and a history of operations; 7.30 (4) a description of the business activities in which the 7.31 applicant seeks to be engaged in the state; 7.32 (5) a list identifying the applicant's proposed authorized 7.33 delegates in the state, if any, at the time of the filing of the 7.34 license application; 7.35 (6) a sample authorized delegate contract, if applicable; 7.36 (7) a sample form of payment instrument, if applicable; 8.1 (8) the location or locations at which the applicant and 8.2 its authorized delegates, if any, propose to conduct the 8.3 licensed activities in the state; and 8.4 (9) the name, address, and account numbers for the clearing 8.5 bank or banks on which the applicant's payment instruments will 8.6 be drawn or through which these payment instruments will be 8.7 payable. 8.8 Subd. 3. [ADDITIONAL INFORMATION FROM CORPORATIONS.] If 8.9 the applicant is a corporation, the applicant must also provide: 8.10 (1) the date of the applicant's incorporation and state of 8.11 incorporation; 8.12 (2) a certificate of good standing from the state in which 8.13 the applicant was incorporated; 8.14 (3) a description of the corporate structure of the 8.15 applicant, including the identity of any parent or subsidiary of 8.16 the applicant, and the disclosure of whether any parent or 8.17 subsidiary is publicly traded on any stock exchange; 8.18 (4) the name, business and residence address, and 8.19 employment history for the past five years of the applicant's 8.20 executive officers and the officers or managers who will be in 8.21 charge of the applicant's activities to be licensed under this 8.22 chapter; 8.23 (5) the name, business and residence address, and 8.24 employment history for the period five years prior to the date 8.25 of the application of any key shareholder of the applicant; 8.26 (6) the history of material litigation during the preceding 8.27 ten years and criminal convictions of every executive officer or 8.28 key shareholder of the applicant; 8.29 (7) a copy of the applicant's most recent audited financial 8.30 statement, including balance sheet, statement of income or loss, 8.31 statement of changes in shareholder equity, and statement of 8.32 changes in financial position, and, if available, the 8.33 applicant's audited financial statements for the immediately 8.34 preceding two-year period. However, if the applicant is a 8.35 wholly owned subsidiary of another corporation, the applicant 8.36 may submit either the parent corporation's consolidated audited 9.1 financial statements for the current year and for the 9.2 immediately preceding two-year period or the parent 9.3 corporation's Form 10K reports filed with the United States 9.4 Securities and Exchange Commission for the prior three years in 9.5 lieu of the applicant's financial statements. If the applicant 9.6 is a wholly owned subsidiary of a corporation having its 9.7 principal place of business outside the United States, similar 9.8 documentation filed with the parent corporation's non-United 9.9 States regulator may be submitted to satisfy this provision; and 9.10 (8) copies of all filings, if any, made by the applicant 9.11 with the United States Securities and Exchange Commission, or 9.12 with a similar regulator in a country other than the United 9.13 States, within the year preceding the date of filing the 9.14 application. 9.15 Subd. 4. [ADDITIONAL INFORMATION FROM NONCORPORATE 9.16 APPLICANTS.] If the applicant is not a corporation, the 9.17 applicant must also provide: 9.18 (1) the name, business and residence address, personal 9.19 financial statement, and employment history for the past five 9.20 years, of each principal of the applicant and the name, business 9.21 and residence address, and employment history for the past five 9.22 years of any other person or persons who will be in charge of 9.23 the applicant's activities to be licensed under this chapter; 9.24 (2) the place and date of the applicant's registration or 9.25 qualification to do business in this state; 9.26 (3) the history of material litigation during the preceding 9.27 ten years and criminal convictions for each individual having 9.28 any ownership interest in the applicant and each individual who 9.29 exercises supervisory responsibility with respect to the 9.30 applicant's activities; and 9.31 (4) copies of the applicant's audited financial statements, 9.32 including balance sheet, statement of income or loss, and 9.33 statement of changes in financial position, for the current year 9.34 and, if available, for the immediately preceding two-year period. 9.35 Subd. 5. [WAIVER.] The commissioner may, for good cause 9.36 shown, waive any requirement of this section with respect to any 10.1 license application or to permit a license applicant to submit 10.2 substituted information in its license application in lieu of 10.3 the information required by this section. 10.4 Sec. 9. [53B.08] [BOND OR OTHER SECURITY DEVICE.] 10.5 Subdivision 1. [REQUIREMENT.] Each application must be 10.6 accompanied by a surety bond, irrevocable letter of credit, or 10.7 other similar security device acceptable to the commissioner in 10.8 the amount of $50,000. If the applicant proposes to engage in 10.9 business under this chapter at more than one location, through 10.10 authorized delegates or otherwise, then the amount of the 10.11 security device must be increased by $10,000 per location, up to 10.12 a maximum of $250,000. The security device must be in a form 10.13 satisfactory to the commissioner and must run to the state for 10.14 the benefit of any claimants against the licensee to secure the 10.15 faithful performance of the obligations of the licensee with 10.16 respect to the receipt, handling, transmission, and payment of 10.17 money in connection with the sale and issuance of payment 10.18 instruments or transmission of money. In the case of a bond, 10.19 the aggregate liability of the surety in no event shall exceed 10.20 the principal sum of the bond. Claimants against the licensee 10.21 may themselves bring suit directly on the security device or the 10.22 commissioner may bring suit on behalf of these claimants, either 10.23 in one action or in successive actions. 10.24 Subd. 2. [ACCEPTABLE ALTERNATIVES.] In lieu of a security 10.25 device under subdivision 1 or of any portion of the principal of 10.26 the security device, as required by subdivision 1, the licensee 10.27 may deposit with the commissioner, or with banks in this state 10.28 that the licensee designates and the commissioner approves, 10.29 cash, interest-bearing stocks and bonds, notes, debentures, or 10.30 other obligations of the United States or any agency or 10.31 instrumentality of the United States, or guaranteed by the 10.32 United States, or of this state, or of a city, county, town, 10.33 village, school district, or instrumentality of this state, or 10.34 guaranteed by this state, to an aggregate amount, based upon 10.35 principal amount or market value, whichever is lower, of not 10.36 less than the amount of the security device or portion of the 11.1 security device. The securities or cash must be deposited and 11.2 held to secure the same obligations as would the security 11.3 device. The depositor shall receive all interest and 11.4 dividends. The depositor may, with the approval of the 11.5 commissioner, substitute other securities for those deposited, 11.6 and is required to do so on written order of the commissioner 11.7 made for good cause shown. 11.8 Subd. 3. [CANCELLATION.] The security device remains in 11.9 effect until cancellation, which may occur only after 30 days' 11.10 written notice to the commissioner. Cancellation does not 11.11 affect the rights of any claimant for any liability incurred or 11.12 accrued during the period for which the bond was in force. 11.13 Subd. 4. [DURATION.] The security device must remain in 11.14 place for no longer than five years after the licensee ceases 11.15 money transmission operations in the state. However, 11.16 notwithstanding this provision, the commissioner may permit the 11.17 security device to be reduced or eliminated before that time to 11.18 the extent that the amount of the licensee's payment instruments 11.19 outstanding in this state are reduced. The commissioner may 11.20 also permit a licensee to substitute a letter of credit or other 11.21 form of security device acceptable to the commissioner for the 11.22 security device in place at the time the licensee ceases money 11.23 transmission operations in the state. 11.24 Sec. 10. [53B.09] [APPLICATION FEE.] 11.25 Each application must be accompanied by a nonrefundable 11.26 application fee in the amount of $4,000. 11.27 Sec. 11. [53B.10] [ISSUANCE OF LICENSE.] 11.28 Subdivision 1. [INVESTIGATION.] Upon the filing of a 11.29 complete application, the commissioner shall investigate the 11.30 financial condition and responsibility, financial and business 11.31 experience, character, and general fitness of the applicant. 11.32 The commissioner may conduct an on-site investigation of the 11.33 applicant, the reasonable cost of which must be borne by the 11.34 applicant. If the commissioner finds that the requirements 11.35 imposed by this chapter have been met and that the required 11.36 license fee has been paid, the commissioner shall issue a 12.1 license to the applicant authorizing the applicant to engage in 12.2 the licensed activities in this state for a term of one year. 12.3 If these requirements have not been met, the commissioner shall 12.4 deny the application in writing, setting forth the reasons for 12.5 the denial. 12.6 Subd. 2. [DENIAL HEARING.] Any applicant aggrieved by a 12.7 denial issued by the commissioner under this section may at any 12.8 time within 30 days from the date of receipt of written notice 12.9 of the denial contest the denial by serving a response on the 12.10 commissioner. The commissioner shall set a date for a hearing 12.11 not later than 60 days after service of the response, unless a 12.12 later date is set with the consent of the denied applicant. 12.13 Sec. 12. [53B.11] [RENEWAL OF LICENSE AND ANNUAL REPORT.] 12.14 Subdivision 1. [FEE.] The annual fee for renewal of a 12.15 license under this chapter is $2,500. 12.16 Subd. 2. [REPORT.] The renewal fee must be accompanied by 12.17 a report, in a form prescribed by the commissioner. The form 12.18 must be sent by the commissioner to each licensee no later than 12.19 three months immediately preceding the date established by the 12.20 commissioner for license renewal. The licensee must include in 12.21 this annual renewal report: 12.22 (1) a copy of its most recent audited consolidated annual 12.23 financial statement, including balance sheet, statement of 12.24 income or loss, statement of changes in shareholder's equity, 12.25 and statement of changes in financial position, or, in the case 12.26 of a licensee that is a wholly owned subsidiary of another 12.27 corporation, the consolidated audited annual financial statement 12.28 of the parent corporation may be filed in lieu of the licensee's 12.29 audited annual financial statement; 12.30 (2) for the most recent quarter for which data are 12.31 available prior to the date of the filing of the renewal 12.32 application, but in no event more than 120 days prior to the 12.33 renewal date, the licensee must provide the number of payment 12.34 instruments sold by the licensee in the state, the dollar amount 12.35 of those instruments, and the dollar amount of those instruments 12.36 currently outstanding; 13.1 (3) any material changes to any of the information 13.2 submitted by the licensee on its original application that have 13.3 not previously been reported to the commissioner on any other 13.4 report required to be filed under this chapter; 13.5 (4) a list of the licensee's permissible investments; and 13.6 (5) a list of the locations within this state at which 13.7 business regulated by this chapter is being conducted by either 13.8 the licensee or its authorized delegate. 13.9 Subd. 3. [LICENSE DISPLAY.] A copy of the license issued 13.10 by the commissioner to the licensee shall be prominently 13.11 displayed in each location where money transmission services are 13.12 offered. 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 selling money 14.21 orders shall maintain a record of the date, amount, serial 14.22 number, and the location of the sale for each money order sold 14.23 in this state. 14.24 (b) Any licensee engaged in the business of receiving money 14.25 for transmission or transmitting money shall maintain a record 14.26 of the identity of the remitter, identity of the recipient, 14.27 amount of the transmission, date of the transaction, date funds 14.28 were transmitted, and the location from which the funds were 14.29 remitted for each transaction initiated in this state. 14.30 (c) Maintenance of the documents required by this section 14.31 in a photographic, electronic, or other similar form constitutes 14.32 compliance with this section. 14.33 Subd. 3. [LOCATION.] Records may be maintained at a 14.34 location other than within this state if they are made 14.35 accessible to the commissioner on seven days' written notice. 14.36 Sec. 17. [53B.16] [CONFIDENTIALITY OF DATA SUBMITTED TO 15.1 THE COMMISSIONER.] 15.2 Data or other information obtained by the commissioner 15.3 under this chapter, whether as a result of the license 15.4 application or renewal process or examinations, is subject to 15.5 chapter 13. 15.6 Sec. 18. [53B.17] [SOLVENCY REQUIRED.] 15.7 If the commissioner determines that a licensee is 15.8 insolvent, that its capital is impaired, or that its condition 15.9 is such as to render the continuance of its business hazardous 15.10 to the public or to those having funds in its custody, the 15.11 commissioner may apply to the district court for the county in 15.12 which the main office is located, or for Ramsey county if the 15.13 licensee does not have a main office in Minnesota, for 15.14 appointment of a receiver to receive the assets of the licensee 15.15 for the purpose of liquidating or rehabilitating its business 15.16 and for such other relief as the interest of the public may 15.17 require. The reasonable and necessary expenses of the 15.18 receivership have priority over all other claims on the bond 15.19 required by this chapter. 15.20 Sec. 19. [53B.18] [PROHIBITED PRACTICES.] 15.21 No licensee shall: 15.22 (1) fail to comply with chapter 345 as it relates to 15.23 unclaimed property requirements; 15.24 (2) refuse to indemnify an instrument holder for any 15.25 misappropriation of money caused by any of its authorized 15.26 delegates in conducting activities on behalf of the licensee for 15.27 whom it acts as an authorized delegate; or 15.28 (3) fail to transmit all money received for wire 15.29 transmission in accordance with the purchaser's instructions 15.30 within five days. 15.31 Sec. 20. [53B.19] [SUSPENSION OR REVOCATION OF LICENSES.] 15.32 After notice and hearing, the commissioner may suspend or 15.33 revoke a licensee's license if the commissioner finds that: 15.34 (1) any fact or condition exists that, if it had existed at 15.35 the time when the licensee applied for its license, would have 15.36 been grounds for denying the application; 16.1 (2) the licensee's net worth becomes inadequate and the 16.2 licensee, after ten days' written notice from the commissioner, 16.3 fails to take steps the commissioner considers necessary to 16.4 remedy the deficiency; 16.5 (3) the licensee violates any material provision of this 16.6 chapter or any rule or order validly adopted by the commissioner 16.7 under authority of this chapter; 16.8 (4) the licensee is conducting its business in an unsafe or 16.9 unsound manner; 16.10 (5) the licensee is insolvent; 16.11 (6) the licensee has suspended payment of its obligations, 16.12 has made an assignment for the benefit of its creditors, or has 16.13 admitted in writing its inability to pay its debts as they 16.14 become due; 16.15 (7) the licensee has applied for an adjudication of 16.16 bankruptcy, reorganization, arrangement, or other relief under 16.17 any bankruptcy; 16.18 (8) the licensee refuses to permit the commissioner to make 16.19 any examination authorized by this chapter; or 16.20 (9) the licensee fails to make any report required by this 16.21 chapter. 16.22 Sec. 21. [53B.20] [AUTHORIZED DELEGATE CONTRACTS.] 16.23 Subdivision 1. [CONTENTS OF CONTRACT.] Licensees that 16.24 conduct licensed activities through authorized delegates shall 16.25 authorize each delegate to operate under an express written 16.26 contract that, for contracts entered into after the effective 16.27 date of this chapter, provide the following: 16.28 (1) that the licensee appoint the person as its delegate 16.29 with authority to engage in money transmission on behalf of the 16.30 licensee; 16.31 (2) that neither a licensee nor an authorized delegate 16.32 authorize subdelegates without the written consent of the 16.33 commissioner; and 16.34 (3) that licensees are subject to supervision and 16.35 regulation by the commissioner and that as a part of that 16.36 supervision and regulation, the commissioner may require the 17.1 licensee to cancel an authorized delegate contract as a result 17.2 of a violation of section 53B.21. 17.3 Subd. 2. [TERMINATION OF AUTHORIZED DELEGATE 17.4 CONTRACT.] Upon termination of any authorized delegate contract, 17.5 the licensee must notify the commissioner within a reasonable 17.6 amount of time of the termination. 17.7 Subd. 3. [EXEMPT ENTITIES.] For purposes of this section, 17.8 "licensee" includes exempt entities. 17.9 Sec. 22. [53B.21] [AUTHORIZED DELEGATE CONDUCT.] 17.10 (a) An authorized delegate shall not make any fraudulent or 17.11 false statement or misrepresentation to a licensee or to the 17.12 commissioner. 17.13 (b) An authorized delegate shall conduct its money 17.14 transmission activities in a safe and sound manner. 17.15 (c) An authorized delegate shall cooperate with an 17.16 investigation conducted by the commissioner under this chapter 17.17 by providing any relevant information in its possession that the 17.18 commissioner cannot reasonably obtain from another source. 17.19 (d) An authorized delegate is under a duty to act only as 17.20 authorized under the contract with the licensee and any 17.21 authorized delegate who exceeds its authority is subject to 17.22 cancellation of its contract. 17.23 (e) All funds, less fees, received by an authorized 17.24 delegate of a licensee from the sale or delivery of a payment 17.25 instrument issued by a licensee or received by an authorized 17.26 delegate for transmission, constitute trust funds owned by and 17.27 belonging to the licensee from the time the funds are received 17.28 by the authorized delegate until the time when the funds or an 17.29 equivalent amount are remitted by the authorized delegate to the 17.30 licensee. If an authorized delegate commingles any funds with 17.31 other funds or property owned or controlled by the authorized 17.32 delegate, all commingled proceeds and other property must be 17.33 impressed with a trust in favor of the licensee in an amount 17.34 equal to the amount of the proceeds due the licensee. 17.35 (f) For purposes of this section, "licensee" includes 17.36 exempt entities. 18.1 Sec. 23. [53B.22] [LICENSEE LIABILITY.] 18.2 A licensee's responsibility to any person for a money 18.3 transmission conducted on that person's behalf by the licensee 18.4 or the licensee's authorized delegate is limited to the amount 18.5 of money tendered or the face amount of the payment instrument 18.6 purchased. 18.7 Sec. 24. [53B.23] [HEARINGS; PROCEDURES.] 18.8 The provisions of the Minnesota Administrative Procedure 18.9 Act, chapter 14, apply to any hearing under this chapter. 18.10 Sec. 25. [53B.24] [ENFORCEMENT.] 18.11 Section 45.027 applies to this chapter. 18.12 Sec. 26. [53B.25] [RULE NOTICES.] 18.13 At the time the commissioner files a notice of proposed 18.14 adoption, amendment, or repeal of a rule adopted under this 18.15 chapter, a copy of the notice must be sent by regular United 18.16 States mail, postage prepaid, to all then-current licensees and 18.17 applicants for licenses under this chapter. 18.18 Sec. 27. [53B.26] [APPOINTMENT OF COMMISSIONER AS AGENT 18.19 FOR SERVICE OF PROCESS.] 18.20 Subdivision 1. [CONSENT AND APPOINTMENT.] Any licensee, 18.21 authorized delegate, or other person who knowingly engages in 18.22 business activities that are regulated under this chapter, with 18.23 or without filing an application, is considered to have done 18.24 both of the following: 18.25 (1) consented to the jurisdiction of the courts of this 18.26 state for all actions arising under this chapter; and 18.27 (2) appointed the commissioner as the lawful agent for the 18.28 purpose of accepting service of process in any action, suit, or 18.29 proceeding that may arise under this chapter. 18.30 Subd. 2. [SERVICE OF PROCESS.] Service of process must be 18.31 made in accordance with section 45.028, subdivision 2.