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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

                            CHAPTER 148-S.F.No. 1485 
                  An act relating to commerce; providing for the 
                  licensing of money transmitters; prescribing the 
                  powers and duties of the commissioner; amending 
                  Minnesota Statutes 2000, section 48.151; proposing 
                  coding for new law as Minnesota Statutes, chapter 53B. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2000, section 48.151, is 
        amended to read: 
           48.151 [ADDITIONAL POWERS.] 
           Any bank, savings bank, or trust company organized under 
        the laws of this state, or any national banking association 
        doing business in this state, shall have the power to advertise 
        for sale and sell for a fee money orders, traveler's checks, 
        cashier's checks, drafts, registered checks, and certified 
        checks and no other person, firm, or corporation, either 
        directly or through agents, shall advertise for sale or shall 
        sell for a fee any evidence of indebtedness on which there 
        appears the words, "money order," "traveler's check," "cashier's 
        check," "draft," "registered check," "certified check," or other 
        words or symbols whether of the same or different character 
        which tend to lead the purchaser to believe that such evidence 
        of indebtedness is other than a personal check, unless such 
        evidence of indebtedness is issued by a person, firm or 
        corporation which is a savings association, or telegraph 
        company, or, in the case of cashier's checks, is issued by an 
        industrial loan and thrift company with deposit liabilities, 
        provided that these instruments are issued in conformity with 
        the Uniform Commercial Code, or is issued by a person, firm, or 
        corporation that has on file in the office of the secretary of 
        state a surety bond in the principal sum of $5,000 issued by a 
        bonding or insurance company authorized to do business in this 
        state, which surety bond shall run to the state of Minnesota and 
        shall be for the benefit of any creditor for any liability 
        insured on account of the sale or issuance by it or its agent of 
        any such evidence of indebtedness, or has deposited with the 
        secretary of state securities or cash of the value of $5,000; 
        provided, however, that the aggregate liability of the surety to 
        all such creditors shall, in no event, exceed the sum of such 
        bond or deposit licensed under chapter 53B.  Any person, firm or 
        corporation who shall violate any provision of this section 
        shall be guilty of a misdemeanor. 
           Sec. 2.  [53B.01] [CITATION.] 
           This chapter may be cited as the "Minnesota Money 
        Transmitters Act." 
           Sec. 3.  [53B.02] [LICENSE REQUIRED.] 
           On or after January 1, 2002, no person except those exempt 
        pursuant to section 53B.04 shall engage in the business of money 
        transmission without a license as provided in this chapter.  A 
        licensee may conduct business in this state at one or more 
        locations, directly or indirectly owned, or through one or more 
        authorized delegates, or both, under a single license granted to 
        the licensee. 
           Sec. 4.  [53B.03] [DEFINITIONS.] 
           Subdivision 1.  [SCOPE.] For purposes of this chapter, the 
        definitions in this section apply unless the context requires 
        otherwise. 
           Subd. 2.  [APPLICANT.] "Applicant" means a person filing an 
        application for a license under this chapter. 
           Subd. 3.  [AUTHORIZED DELEGATE.] "Authorized delegate" 
        means an entity designated by the licensee under this chapter, 
        or by an exempt entity, to sell or issue payment instruments or 
        engage in the business of transmitting money on behalf of a 
        licensee. 
           Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of commerce. 
           Subd. 5.  [CONTROL.] "Control" means ownership of, or the 
        power to vote, ten percent or more of the outstanding voting 
        securities of a licensee or controlling person.  For purposes of 
        determining the percentage of a licensee controlled by any 
        person, the person's interest must be aggregated with the 
        interest of any other person controlled by the person or by any 
        spouse, parent, or child of the person. 
           Subd. 6.  [CONTROLLING PERSON.] "Controlling person" means 
        any person in control of a licensee. 
           Subd. 7.  [ELECTRONIC INSTRUMENT.] "Electronic instrument" 
        means a card or other tangible object for the transmission or 
        payment of money that contains a microprocessor chip, magnetic 
        stripe, or other means for the storage of information, that is 
        prefunded and for which the value is decreased upon each use.  
        The term does not include a prepaid telephone card, electronic 
        benefits transfer card, or any other card or other tangible 
        object that is redeemable by the issuer in the issuer's goods or 
        services. 
           Subd. 8.  [EXECUTIVE OFFICER.] "Executive officer" means 
        the licensee's president, chair of the executive committee, 
        senior officer responsible for the licensee's business, chief 
        financial officer, and any other person who performs similar 
        functions. 
           Subd. 9.  [EXEMPT ENTITY.] "Exempt entity" means a person 
        to which this chapter does not apply under section 53B.04. 
           Subd. 10.  [KEY SHAREHOLDER.] "Key shareholder" means any 
        person, or group of persons acting in concert, who is the owner 
        of ten percent or more of any voting class of an applicant's 
        stock. 
           Subd. 11.  [LICENSEE.] "Licensee" means a person licensed 
        under this chapter. 
           Subd. 12.  [MATERIAL LITIGATION.] "Material litigation" 
        means any litigation in which an applicant or a licensee has 
        been a defendant or been named in a civil judgment involving 
        claims of fraud, misrepresentation, conversion, mismanagement of 
        funds, breach of fiduciary duty, or breach of contract. 
           Subd. 13.  [MONEY TRANSMISSION.] "Money transmission" means 
        selling or issuing payment instruments or engaging in the 
        business of receiving money for transmission or transmitting 
        money within the United States or to locations abroad by any and 
        all means, including but not limited to payment instrument, 
        wire, facsimile, or electronic transfer. 
           Subd. 14.  [OUTSTANDING PAYMENT INSTRUMENT.] "Outstanding 
        payment instrument" means any payment instrument issued by the 
        licensee that has been sold in the United States directly by the 
        licensee or any payment instrument issued by the licensee that 
        has been sold by an authorized delegate of the licensee in the 
        United States, and that has not yet been paid by or for the 
        licensee. 
           Subd. 15.  [PAYMENT INSTRUMENT.] "Payment instrument" means 
        any electronic or written check, draft, money order, travelers 
        check, or other electronic or written instrument or order for 
        the transmission or payment of money, sold or issued to one or 
        more persons, whether or not the instrument is negotiable.  The 
        term does not include any credit card voucher, letter of credit, 
        or instrument that is redeemable by the issuer in goods or 
        services. 
           Subd. 16.  [PERMISSIBLE INVESTMENTS.] "Permissible 
        investments" means: 
           (1) cash; 
           (2) certificates of deposit or other debt obligations of a 
        financial institution, either domestic or foreign; 
           (3) bills of exchange or time drafts drawn on and accepted 
        by a commercial bank, otherwise known as bankers' acceptances, 
        that are eligible for purchase by member banks of the Federal 
        Reserve system; 
           (4) any investment bearing a rating of one of the three 
        highest grades as defined by a nationally recognized 
        organization that rates these securities; 
           (5) investment securities that are obligations of the 
        United States, its agencies or instrumentalities, or obligations 
        that are guaranteed fully as to principal and interest of the 
        United States, or any obligations of any state, municipality, or 
        any political subdivision of a state or municipality; 
           (6) shares in a money market mutual fund, interest-bearing 
        bills or notes or bonds, debentures, or a fund composed of one 
        or more permissible investments; 
           (7) any demand borrowing agreement or agreements made to a 
        corporation or a subsidiary of a corporation whose capital stock 
        is listed on a national exchange; 
           (8) receivables that are due to a licensee from its 
        authorized delegates under a contract described in section 
        53B.20, that are not past due or doubtful of collection; or 
           (9) any other investments or security device approved by 
        the commissioner. 
           Subd. 17.  [PERSON.] "Person" means any individual, 
        corporation, limited liability company, business trust, general 
        or limited partnership, association, sole proprietorship, or 
        similar organization. 
           Subd. 18.  [REMIT.] "Remit" means either to make direct 
        payment of the funds to the licensee or its representatives 
        authorized to receive those funds or to deposit the funds in a 
        bank, credit union, savings association, or other similar 
        financial institution in an account specified by the licensee. 
           Sec. 5.  [53B.04] [EXEMPTIONS.] 
           Authorized delegates of a licensee or of an exempt entity, 
        acting within the scope of authority conferred by a written 
        contract as described in section 53B.20, are not required to 
        obtain a license under this chapter.  This chapter does not 
        apply to: 
           (1) the United States or any department, agency, or 
        instrumentality of the United States; 
           (2) the United States Postal Service; 
           (3) the state or any political subdivision of the state; 
           (4) banks, credit unions, savings associations, savings 
        banks, mutual banks organized under the laws of any state or the 
        United States, or bank holding companies which have a banking 
        subsidiary located in Minnesota and whose debt securities have 
        an investment grade rating by a national rating agency, provided 
        that if they issue or sell payment instruments through 
        authorized delegates who are not banks, bank holding companies, 
        credit unions, savings associations, savings banks, or mutual 
        banks, those authorized delegates must comply with all 
        requirements imposed upon authorized delegates under this 
        chapter; and 
           (5) the provision of electronic transfer of government 
        benefits for any federal, state, or county governmental agency 
        as defined in Federal Reserve Board Regulation E, by a 
        contractor for and on behalf of the United States or any 
        department, agency, or instrumentality of the United States, or 
        any state or any political subdivision of the state. 
           Sec. 6.  [53B.05] [LICENSE QUALIFICATIONS.] 
           Subdivision 1.  [NET WORTH.] Each licensee under this 
        chapter shall at all times have a net worth of not less than 
        $100,000, calculated in accordance with generally accepted 
        accounting principles.  Licensees engaging in money transmission 
        at more than one location or through authorized delegates shall 
        have an additional net worth of $50,000 per location or 
        authorized delegate located in the state, as applicable, to a 
        maximum of $500,000. 
           Subd. 2.  [CORPORATE APPLICANT; GOOD STANDING.] Every 
        corporate applicant, at the time of the filing of an application 
        for a license under this chapter and at all times after a 
        license is issued, must be in good standing in the state of its 
        incorporation.  All noncorporate applicants shall, at the time 
        of the filing of an application for a license under this chapter 
        and at all times after a license is issued, be registered or 
        qualified to do business in the state. 
           Sec. 7.  [53B.06] [PERMISSIBLE INVESTMENTS AND STATUTORY 
        TRUST.] 
           (a) Each licensee under this chapter must at all times 
        possess permissible investments having an aggregate market 
        value, calculated in accordance with generally accepted 
        accounting principles, of not less than the aggregate face 
        amount of all outstanding payment instruments sold by the 
        licensee or reported as sold by an authorized delegate in the 
        United States.  This requirement may be waived by the 
        commissioner if the dollar volume of a licensee's outstanding 
        payment instruments does not exceed the bond or other security 
        devices posted by the licensee under section 53B.08. 
           (b) Permissible investments, even if commingled with other 
        assets of the licensee, are considered to be held in trust for 
        the benefit of the purchasers and holders of the licensee's 
        outstanding payment instruments in the event of the bankruptcy 
        of the licensee. 
           Sec. 8.  [53B.07] [LICENSE APPLICATION.] 
           Subdivision 1.  [REQUIREMENTS.] An application for a 
        license under this chapter must be made in writing, under oath, 
        and in a form prescribed by the commissioner. 
           Subd. 2.  [GENERAL CONTENTS.] An application must contain: 
           (1) the exact name of the applicant, the applicant's 
        principal address, any fictitious or trade name used by the 
        applicant in the conduct of its business, and the location of 
        the applicant's business records; 
           (2) the history of the applicant's or any controlling 
        person's material litigation during the preceding ten years and 
        criminal convictions; 
           (3) a description of the activities conducted by the 
        applicant and a history of operations; 
           (4) a description of the business activities in which the 
        applicant seeks to be engaged in the state; 
           (5) a list identifying the applicant's proposed authorized 
        delegates in the state, if any, at the time of the filing of the 
        license application; 
           (6) a sample authorized delegate contract, if applicable; 
           (7) a sample form of payment instrument, if applicable; 
           (8) the location or locations at which the applicant and 
        its authorized delegates, if any, propose to conduct the 
        licensed activities in the state; and 
           (9) the name, address, and account numbers for the clearing 
        bank or banks on which the applicant's payment instruments will 
        be drawn or through which these payment instruments will be 
        payable. 
           Subd. 3.  [ADDITIONAL INFORMATION FROM CORPORATIONS.] If 
        the applicant is a corporation, the applicant must also provide: 
           (1) the date of the applicant's incorporation and state of 
        incorporation; 
           (2) a certificate of good standing from the state in which 
        the applicant was incorporated; 
           (3) a description of the corporate structure of the 
        applicant, including the identity of any parent or subsidiary of 
        the applicant, and the disclosure of whether any parent or 
        subsidiary is publicly traded on any stock exchange; 
           (4) the name, business and residence address, and 
        employment history for the past five years of the applicant's 
        executive officers and the officers or managers who will be in 
        charge of the applicant's activities to be licensed under this 
        chapter; 
           (5) the name, business and residence address, and 
        employment history for the period five years prior to the date 
        of the application of any key shareholder of the applicant; 
           (6) the history of material litigation during the preceding 
        ten years and criminal convictions of every executive officer or 
        key shareholder of the applicant; 
           (7) a copy of the applicant's most recent audited financial 
        statement, including balance sheet, statement of income or loss, 
        statement of changes in shareholder equity, and statement of 
        changes in financial position, and, if available, the 
        applicant's audited financial statements for the immediately 
        preceding two-year period.  However, if the applicant is a 
        wholly owned subsidiary of another corporation, the applicant 
        may submit either the parent corporation's consolidated audited 
        financial statements for the current year and for the 
        immediately preceding two-year period or the parent 
        corporation's Form 10K reports filed with the United States 
        Securities and Exchange Commission for the prior three years in 
        lieu of the applicant's financial statements.  If the applicant 
        is a wholly owned subsidiary of a corporation having its 
        principal place of business outside the United States, similar 
        documentation filed with the parent corporation's non-United 
        States regulator may be submitted to satisfy this provision; and 
           (8) copies of all filings, if any, made by the applicant 
        with the United States Securities and Exchange Commission, or 
        with a similar regulator in a country other than the United 
        States, within the year preceding the date of filing the 
        application. 
           Subd. 4.  [ADDITIONAL INFORMATION FROM NONCORPORATE 
        APPLICANTS.] If the applicant is not a corporation, the 
        applicant must also provide: 
           (1) the name, business and residence address, personal 
        financial statement, and employment history for the past five 
        years, of each principal of the applicant and the name, business 
        and residence address, and employment history for the past five 
        years of any other person or persons who will be in charge of 
        the applicant's activities to be licensed under this chapter; 
           (2) the place and date of the applicant's registration or 
        qualification to do business in this state; 
           (3) the history of material litigation during the preceding 
        ten years and criminal convictions for each individual having 
        any ownership interest in the applicant and each individual who 
        exercises supervisory responsibility with respect to the 
        applicant's activities; and 
           (4) copies of the applicant's audited financial statements, 
        including balance sheet, statement of income or loss, and 
        statement of changes in financial position, for the current year 
        and, if available, for the immediately preceding two-year period.
           Subd. 5.  [WAIVER.] The commissioner may, for good cause 
        shown, waive any requirement of this section with respect to any 
        license application or to permit a license applicant to submit 
        substituted information in its license application in lieu of 
        the information required by this section. 
           Sec. 9.  [53B.08] [BOND OR OTHER SECURITY DEVICE.] 
           Subdivision 1.  [REQUIREMENT.] Each application must be 
        accompanied by a surety bond, irrevocable letter of credit, or 
        other similar security device acceptable to the commissioner in 
        the amount of $50,000.  If the applicant proposes to engage in 
        business under this chapter at more than one location, through 
        authorized delegates or otherwise, then the amount of the 
        security device must be increased by $10,000 per location, up to 
        a maximum of $250,000.  The security device must be in a form 
        satisfactory to the commissioner and must run to the state for 
        the benefit of any claimants against the licensee to secure the 
        faithful performance of the obligations of the licensee with 
        respect to the receipt, handling, transmission, and payment of 
        money in connection with the sale and issuance of payment 
        instruments or transmission of money.  In the case of a bond, 
        the aggregate liability of the surety in no event shall exceed 
        the principal sum of the bond.  Claimants against the licensee 
        may themselves bring suit directly on the security device or the 
        commissioner may bring suit on behalf of these claimants, either 
        in one action or in successive actions. 
           Subd. 2.  [ACCEPTABLE ALTERNATIVES.] In lieu of a security 
        device under subdivision 1 or of any portion of the principal of 
        the security device, as required by subdivision 1, the licensee 
        may deposit with the commissioner, or with banks in this state 
        that the licensee designates and the commissioner approves, 
        cash, interest-bearing stocks and bonds, notes, debentures, or 
        other obligations of the United States or any agency or 
        instrumentality of the United States, or guaranteed by the 
        United States, or of this state, or of a city, county, town, 
        village, school district, or instrumentality of this state, or 
        guaranteed by this state, to an aggregate amount, based upon 
        principal amount or market value, whichever is lower, of not 
        less than the amount of the security device or portion of the 
        security device.  The securities or cash must be deposited and 
        held to secure the same obligations as would the security 
        device.  The depositor shall receive all interest and 
        dividends.  The depositor may, with the approval of the 
        commissioner, substitute other securities for those deposited, 
        and is required to do so on written order of the commissioner 
        made for good cause shown. 
           Subd. 3.  [CANCELLATION.] The security device remains in 
        effect until cancellation, which may occur only after 30 days' 
        written notice to the commissioner.  Cancellation does not 
        affect the rights of any claimant for any liability incurred or 
        accrued during the period for which the bond was in force. 
           Subd. 4.  [DURATION.] The security device must remain in 
        place for no longer than five years after the licensee ceases 
        money transmission operations in the state.  However, 
        notwithstanding this provision, the commissioner may permit the 
        security device to be reduced or eliminated before that time to 
        the extent that the amount of the licensee's payment instruments 
        outstanding in this state are reduced.  The commissioner may 
        also permit a licensee to substitute a letter of credit or other 
        form of security device acceptable to the commissioner for the 
        security device in place at the time the licensee ceases money 
        transmission operations in the state. 
           Sec. 10.  [53B.09] [APPLICATION FEE.] 
           Each application must be accompanied by a nonrefundable 
        application fee in the amount of $4,000. 
           Sec. 11.  [53B.10] [ISSUANCE OF LICENSE.] 
           Subdivision 1.  [INVESTIGATION.] Upon the filing of a 
        complete application, the commissioner shall investigate the 
        financial condition and responsibility, financial and business 
        experience, character, and general fitness of the applicant.  
        The commissioner may conduct an on-site investigation of the 
        applicant, the reasonable cost of which must be borne by the 
        applicant.  If the commissioner finds that the requirements 
        imposed by this chapter have been met and that the required 
        license fee has been paid, the commissioner shall issue a 
        license to the applicant authorizing the applicant to engage in 
        the licensed activities in this state for a term of one year.  
        If these requirements have not been met, the commissioner shall 
        deny the application in writing, setting forth the reasons for 
        the denial. 
           Subd. 2.  [DENIAL HEARING.] Any applicant aggrieved by a 
        denial issued by the commissioner under this section may at any 
        time within 30 days from the date of receipt of written notice 
        of the denial contest the denial by serving a response on the 
        commissioner.  The commissioner shall set a date for a hearing 
        not later than 60 days after service of the response, unless a 
        later date is set with the consent of the denied applicant. 
           Sec. 12.  [53B.11] [RENEWAL OF LICENSE AND ANNUAL REPORT.] 
           Subdivision 1.  [FEE.] The annual fee for renewal of a 
        license under this chapter is $2,500. 
           Subd. 2.  [REPORT.] The renewal fee must be accompanied by 
        a report, in a form prescribed by the commissioner.  The form 
        must be sent by the commissioner to each licensee no later than 
        three months immediately preceding the date established by the 
        commissioner for license renewal.  The licensee must include in 
        this annual renewal report: 
           (1) a copy of its most recent audited consolidated annual 
        financial statement, including balance sheet, statement of 
        income or loss, statement of changes in shareholder's equity, 
        and statement of changes in financial position, or, in the case 
        of a licensee that is a wholly owned subsidiary of another 
        corporation, the consolidated audited annual financial statement 
        of the parent corporation may be filed in lieu of the licensee's 
        audited annual financial statement; 
           (2) for the most recent quarter for which data are 
        available prior to the date of the filing of the renewal 
        application, but in no event more than 120 days prior to the 
        renewal date, the licensee must provide the number of payment 
        instruments sold by the licensee in the state, the dollar amount 
        of those instruments, and the dollar amount of those instruments 
        currently outstanding; 
           (3) any material changes to any of the information 
        submitted by the licensee on its original application that have 
        not previously been reported to the commissioner on any other 
        report required to be filed under this chapter; 
           (4) a list of the licensee's permissible investments; and 
           (5) a list of the locations within this state at which 
        business regulated by this chapter is being conducted by either 
        the licensee or its authorized delegate. 
           Subd. 3.  [LICENSE DISPLAY.] A copy of the license issued 
        by the commissioner to the licensee shall be prominently 
        displayed in each location where money transmission services are 
        offered. 
           Sec. 13.  [53B.12] [EXTRAORDINARY REPORTING REQUIREMENTS.] 
           Within 15 days of the occurrence of any one of the events 
        listed below, a licensee shall file a written report with the 
        commissioner describing the event and its expected impact on the 
        licensee's activities in the state: 
           (1) the filing for bankruptcy or reorganization by the 
        licensee; 
           (2) the institution of revocation or suspension proceedings 
        against the licensee by any state or governmental authority with 
        regard to the licensee's money transmission activities; 
           (3) any felony indictment of the licensee or any of its key 
        officers or directors related to money transmission activities; 
        or 
           (4) any felony conviction of the licensee or any of its key 
        officers or directors related to money transmission activities. 
           Sec. 14.  [53B.13] [CHANGES IN CONTROL OF A LICENSEE.] 
           Any purchaser of ten percent or more of an ownership 
        interest in a licensee must notify the commissioner at least 30 
        days in advance of the purchase and submit a completed license 
        application form.  The commissioner may revoke the license if 
        the new ownership would have resulted in a denial of the initial 
        license under this chapter.  The commissioner may waive this 
        notification requirement if, in the commissioner's discretion, 
        the change in control does not pose any risk to the interests of 
        the public. 
           Sec. 15.  [53B.14] [EXAMINATIONS.] 
           The commissioner has under this chapter the same powers 
        with respect to financial examinations that the commissioner has 
        under section 46.04. 
           Sec. 16.  [53B.15] [MAINTENANCE OF RECORDS.] 
           Subdivision 1.  [REQUIREMENT.] Each licensee shall make, 
        keep, and preserve the following books, accounts, and other 
        records for a period of three years: 
           (1) a record or records of each payment instrument sold; 
           (2) a general ledger containing all assets, liability, 
        capital, income, and expense accounts, which must be posted at 
        least monthly; 
           (3) bank statements and bank reconciliation records; 
           (4) records of outstanding payment instruments; 
           (5) records of each payment instrument paid within the 
        three-year period; and 
           (6) a list of the names and addresses of all of the 
        licensee's authorized delegates. 
           Subd. 2.  [COMPLIANCE.] (a) Any licensee selling money 
        orders shall maintain a record of the date, amount, serial 
        number, and the location of the sale for each money order sold 
        in this state.  
           (b) Any licensee engaged in the business of receiving money 
        for transmission or transmitting money shall maintain a record 
        of the identity of the remitter, identity of the recipient, 
        amount of the transmission, date of the transaction, date funds 
        were transmitted, and the location from which the funds were 
        remitted for each transaction initiated in this state. 
           (c) Maintenance of the documents required by this section 
        in a photographic, electronic, or other similar form constitutes 
        compliance with this section. 
           Subd. 3.  [LOCATION.] Records may be maintained at a 
        location other than within this state if they are made 
        accessible to the commissioner on seven days' written notice. 
           Sec. 17.  [53B.16] [CONFIDENTIALITY OF DATA SUBMITTED TO 
        THE COMMISSIONER.] 
           Data or other information obtained by the commissioner 
        under this chapter, whether as a result of the license 
        application or renewal process or examinations, is subject to 
        chapter 13. 
           Sec. 18.  [53B.17] [SOLVENCY REQUIRED.] 
           If the commissioner determines that a licensee is 
        insolvent, that its capital is impaired, or that its condition 
        is such as to render the continuance of its business hazardous 
        to the public or to those having funds in its custody, the 
        commissioner may apply to the district court for the county in 
        which the main office is located, or for Ramsey county if the 
        licensee does not have a main office in Minnesota, for 
        appointment of a receiver to receive the assets of the licensee 
        for the purpose of liquidating or rehabilitating its business 
        and for such other relief as the interest of the public may 
        require.  The reasonable and necessary expenses of the 
        receivership have priority over all other claims on the bond 
        required by this chapter. 
           Sec. 19.  [53B.18] [PROHIBITED PRACTICES.] 
           No licensee shall: 
           (1) fail to comply with chapter 345 as it relates to 
        unclaimed property requirements; 
           (2) refuse to indemnify an instrument holder for any 
        misappropriation of money caused by any of its authorized 
        delegates in conducting activities on behalf of the licensee for 
        whom it acts as an authorized delegate; or 
           (3) fail to transmit all money received for wire 
        transmission in accordance with the purchaser's instructions 
        within five days. 
           Sec. 20.  [53B.19] [SUSPENSION OR REVOCATION OF LICENSES.] 
           After notice and hearing, the commissioner may suspend or 
        revoke a licensee's license if the commissioner finds that: 
           (1) any fact or condition exists that, if it had existed at 
        the time when the licensee applied for its license, would have 
        been grounds for denying the application; 
           (2) the licensee's net worth becomes inadequate and the 
        licensee, after ten days' written notice from the commissioner, 
        fails to take steps the commissioner considers necessary to 
        remedy the deficiency; 
           (3) the licensee violates any material provision of this 
        chapter or any rule or order validly adopted by the commissioner 
        under authority of this chapter; 
           (4) the licensee is conducting its business in an unsafe or 
        unsound manner; 
           (5) the licensee is insolvent; 
           (6) the licensee has suspended payment of its obligations, 
        has made an assignment for the benefit of its creditors, or has 
        admitted in writing its inability to pay its debts as they 
        become due; 
           (7) the licensee has applied for an adjudication of 
        bankruptcy, reorganization, arrangement, or other relief under 
        any bankruptcy; 
           (8) the licensee refuses to permit the commissioner to make 
        any examination authorized by this chapter; or 
           (9) the licensee fails to make any report required by this 
        chapter. 
           Sec. 21.  [53B.20] [AUTHORIZED DELEGATE CONTRACTS.] 
           Subdivision 1.  [CONTENTS OF CONTRACT.] Licensees that 
        conduct licensed activities through authorized delegates shall 
        authorize each delegate to operate under an express written 
        contract that, for contracts entered into after the effective 
        date of this chapter, provide the following: 
           (1) that the licensee appoint the person as its delegate 
        with authority to engage in money transmission on behalf of the 
        licensee; 
           (2) that neither a licensee nor an authorized delegate 
        authorize subdelegates without the written consent of the 
        commissioner; and 
           (3) that licensees are subject to supervision and 
        regulation by the commissioner and that as a part of that 
        supervision and regulation, the commissioner may require the 
        licensee to cancel an authorized delegate contract as a result 
        of a violation of section 53B.21. 
           Subd. 2.  [TERMINATION OF AUTHORIZED DELEGATE 
        CONTRACT.] Upon termination of any authorized delegate contract, 
        the licensee must notify the commissioner within a reasonable 
        amount of time of the termination. 
           Subd. 3.  [EXEMPT ENTITIES.] For purposes of this section, 
        "licensee" includes exempt entities. 
           Sec. 22.  [53B.21] [AUTHORIZED DELEGATE CONDUCT.] 
           (a) An authorized delegate shall not make any fraudulent or 
        false statement or misrepresentation to a licensee or to the 
        commissioner. 
           (b) An authorized delegate shall conduct its money 
        transmission activities in a safe and sound manner. 
           (c) An authorized delegate shall cooperate with an 
        investigation conducted by the commissioner under this chapter 
        by providing any relevant information in its possession that the 
        commissioner cannot reasonably obtain from another source. 
           (d) An authorized delegate is under a duty to act only as 
        authorized under the contract with the licensee and any 
        authorized delegate who exceeds its authority is subject to 
        cancellation of its contract. 
           (e) All funds, less fees, received by an authorized 
        delegate of a licensee from the sale or delivery of a payment 
        instrument issued by a licensee or received by an authorized 
        delegate for transmission, constitute trust funds owned by and 
        belonging to the licensee from the time the funds are received 
        by the authorized delegate until the time when the funds or an 
        equivalent amount are remitted by the authorized delegate to the 
        licensee.  If an authorized delegate commingles any funds with 
        other funds or property owned or controlled by the authorized 
        delegate, all commingled proceeds and other property must be 
        impressed with a trust in favor of the licensee in an amount 
        equal to the amount of the proceeds due the licensee. 
           (f) For purposes of this section, "licensee" includes 
        exempt entities. 
           Sec. 23.  [53B.22] [LICENSEE LIABILITY.] 
           A licensee's responsibility to any person for a money 
        transmission conducted on that person's behalf by the licensee 
        or the licensee's authorized delegate is limited to the amount 
        of money tendered or the face amount of the payment instrument 
        purchased. 
           Sec. 24.  [53B.23] [HEARINGS; PROCEDURES.] 
           The provisions of the Minnesota Administrative Procedure 
        Act, chapter 14, apply to any hearing under this chapter. 
           Sec. 25.  [53B.24] [ENFORCEMENT.] 
           Section 45.027 applies to this chapter. 
           Sec. 26.  [53B.25] [RULE NOTICES.] 
           At the time the commissioner files a notice of proposed 
        adoption, amendment, or repeal of a rule adopted under this 
        chapter, a copy of the notice must be sent by regular United 
        States mail, postage prepaid, to all then-current licensees and 
        applicants for licenses under this chapter. 
           Sec. 27.  [53B.26] [APPOINTMENT OF COMMISSIONER AS AGENT 
        FOR SERVICE OF PROCESS.] 
           Subdivision 1.  [CONSENT AND APPOINTMENT.] Any licensee, 
        authorized delegate, or other person who knowingly engages in 
        business activities that are regulated under this chapter, with 
        or without filing an application, is considered to have done 
        both of the following: 
           (1) consented to the jurisdiction of the courts of this 
        state for all actions arising under this chapter; and 
           (2) appointed the commissioner as the lawful agent for the 
        purpose of accepting service of process in any action, suit, or 
        proceeding that may arise under this chapter. 
           Subd. 2.  [SERVICE OF PROCESS.] Service of process must be 
        made in accordance with section 45.028, subdivision 2. 
           Presented to the governor May 17, 2001 
           Signed by the governor May 21, 2001, 10:35 a.m.