Money transmission.

Existing law provides for the regulation and licensure by the Commissioner of Financial Institutions of money transmitters, issuers of travelers checks, and sellers of payment instruments. This bill would repeal those provisions and enact the Money Transmission Act, which would provide for the regulation and licensure by the commissioner of persons in the business of money transmission, defined to mean the selling or issuing of payment instruments or stored value and the receiving of money for transmission. The bill would prohibit a person from engaging in the business of money transmission in California or advertising, soliciting, or holding itself out as providing money transmission unless licensed by the commissioner or exempt from licensure. The bill would provide that only a corporation or limited liability company may be licensed to engage in the business of money transmission. The bill would require specified information to be included in an application for a license. The bill would authorize the commissioner to conduct an examination of an applicant, at the applicant's expense, and would require the commissioner to approve an application for a license if the commissioner makes specified findings, including that the applicant has adequate tangible shareholders' equity, as defined, and is competent to engage in the business of money transmission. The bill would require licensees to file with the commissioner audit reports within 90 days after the end of each fiscal year and other specified reports each calendar quarter. The bill would impose various fees and would require the commissioner to levy assessments on licensees for the purposes of administering these provisions regulating money transmission. The bill would establish requirements in order for a licensee to appoint an agent to conduct money transmission on behalf of the licensee. The bill would require a licensee to maintain eligible securities, as defined, meeting specified requirements. The bill would authorize the commissioner to issue an order requiring the licensee to maintain and obtain specified securities if the commissioner finds that the financial condition of a licensee is unstable, as specified. The bill would require a licensee to provide specified notices and disclosures to customers, including a notice relative to a customer's right to a refund, disclosures relating to rates of exchange, a notice indicating that payment instruments are not insured, and a notice providing information on making complaints to the commissioner against a licensee. The bill would require licensees to maintain certain financial records for a 3-year period. The bill would authorize the commissioner to examine the business and office of a licensee and to suspend or revoke a license if the commissioner finds that a licensee or agent of a licensee has, among other things, violated the provisions of the act or engaged in fraud or unsound practices and would authorize the commissioner to assess specified civil penalties against a person that violates these provisions. The bill would also make it a crime for a person to engage in the business of money transmission without a license or an exemption from licensure or for a person to intentionally make a false statement, misrepresentation, or false certification in a record filed or required to be maintained under these provisions. By establishing new crimes, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.