SB 737 - This act repeals the Sale of Checks Law and creates in its stead the "Money Transmission Modernization Act of 2024". The act regulates money transmission, defined as any of the following: · Selling or issuing payment instruments to a person located in Missouri;
· Selling or issuing stored value to a person located in Missouri;
· Receiving money for transmission from a person located in Missouri; or
· Payroll processing services.
Money transmission does not include the provision solely of online or telecommunications services or network access.
The Director of the Division of Finance within the Department of Commerce and Insurance is responsible for administering this act.
LICENSURE OF MONEY TRANSMITTERS
The act prohibits any person from engaging in the business of money transmission or advertising, soliciting, or holding itself out as providing money transmission unless the person has been licensed pursuant to this act. Licenses last for no more than one calendar year and are not transferable or assignable. Applications must be on forms required by the Director and shall be accompanied by an application fee, as determined by the Director.
Additionally, certain individuals in control of a licensee, seeking to control a licensee, and any key individual, as that term is defined in the act, are required to furnish background materials to the Director, including fingerprints, criminal background checks, and employment history, among other things listed in the act.
The Director is permitted to implement the licensure process in such a way as to make it consistent with other states and nationwide protocols, to the extent consistent with this act. The Director is additionally permitted to collaborate with the Nationwide Multistate Licensing System and Registry developed by the Conference of State Bank Supervisors (NMLS) as provided in the act.
CONFIDENTIALITY OF INFORMATION
The act provides that all information provided to the Director is considered confidential except basic identifying information of the licensee as detailed in the act. Exceptions are included with respect to disclosures to certain government agencies.
ACQUISITION OF CONTROL
Any person, or group of persons acting in concert, seeking to acquire control of a licensee shall obtain the written approval of the Director prior to acquiring control. An application must be submitted in a form prescribed by the Director along with a fee, as determined by the Director.
REPORTING AND RECORDS
Each licensee is required to submit to the Director the following reports:
· A report of condition each calendar quarter;
· An audited financial statement prepared by an independent certified public accountant at the end of the fiscal year; and
· A report of authorized delegates at the end of each calendar quarter.
A licensee shall file a report with the Director within one business day if the licensee has reason to know of:
· The filing of a petition by or against the licensee under the federal United States Bankruptcy Code;
· The filing of a petition by or against the licensee for receivership, the commencement of any other judicial or administrative proceeding for its dissolution or reorganization, or the making of a general assignment for the benefit of its creditors; or
· The commencement of a proceeding to revoke or suspend its license in a state or country in which the licensee engages in business or is licensed.
A licensee shall file a report with the Director within three business days if the licensee has reason to know of:
· A conviction of the licensee or of a key individual or person in control of the licensee for a felony; or
· A conviction of an authorized delegate for a felony.
A licensee shall maintain the following records, for determining its compliance with this act for at least three years:
· A record of each outstanding money transmission obligation sold;
· A general ledger posted at least monthly containing all asset, liability, capital, income, and expense accounts;
· Bank statements and bank reconciliation records;
· Records of outstanding money transmission obligations;
· Records of each outstanding money transmission obligation paid within the three-year period;
· A list of the last known names and addresses of all of the licensee's authorized delegates; and
· Any other records the director reasonably requires by rule.
PRUDENTIAL STANDARDS
Licensees are required to maintain at all times a tangible net worth more than $100,000, or 3% of total assets for the first $100,000,000, 2% of additional assets between $100,000,000 and $1 billion, and 0.5% of additional assets over $1 billion. Additionally, licensees shall maintain security consisting of a surety bond in an amount based on the licensee's average daily money transmission liability and tangible net worth.
The act establishes requirements for permissible investments of a licensee.
ADMINISTRATIVE, CRIMINAL, AND CIVIL ENFORCEMENT MECHANISMS
The act allows the Director to suspend or revoke licenses and designations of authorized delegates under circumstances and using procedures as described in the act. The Director is also permitted to issue cease and desist orders and enter into consent decrees for the resolution of matters arising under this act.
The act creates the following criminal penalties associated with money transmission:
· A person that intentionally makes a false statement, misrepresentation, or false certification in a record filed or required to be maintained pursuant to this act or that intentionally makes a false entry or omits a material entry in such a record is guilty of a class E felony;
· A person that knowingly engages in an activity for which a license is required pursuant to this act without being licensed and who receives more than $500 in compensation within a 30-day period from this activity is guilty of a class E felony;
· A person that knowingly engages in an activity for which a license is required pursuant to this act without being licensed and who receives no more than $500 in compensation within a 30-day period from this activity is guilty of a Class A misdemeanor.
The Director is also permitted to assess civil penalties not to exceed $1,000 per day for each violation of this act.
This act is similar to provisions in the truly agreed to and finally passed HCS/SS/SB 1359 (2024), provisions in HCS/SB 736 (2024), provisions in HCS#2/SS/SCS/SB 835 (2024), provisions in HB 1478 (2024), provisions in HCS/HB 2087 (2024), provisions in HB 2780 (2024), SB 633 (2023), and HB 1340 (2023).
SCOTT SVAGERA