Code Section Group

Financial Code - FIN

DIVISION 1.2. MONEY TRANSMISSION ACT [2000 - 2176]

  ( Division 1.2 added by Stats. 2011, Ch. 243, Sec. 4. )

CHAPTER 4. Agents [2060 - 2063]
  ( Chapter 4 added by Stats. 2011, Ch. 243, Sec. 4. )

2060.
  

(a) In this section, “remit” means to make direct payments of money to a licensee or its representative authorized to receive money or to deposit money in a bank in an account specified by the licensee.

(b) No licensee shall appoint or continue any person as agent, unless the licensee and the person have made a written contract. A written contract between a licensee and an agent shall require the agent to operate in full compliance with this division.

(c) The written contract shall contain each of the following provisions:

(1) That the licensee appoints the person as its agent with authority to conduct money transmission on behalf of the licensee.

(2) That the agent shall make and keep accounts, correspondence, memoranda, papers, books, and other records as the commissioner by regulation or order requires and preserve the records for the time specified by the regulation or order.

(3) That all money or monetary value, less fees due agents provided for and expressly set forth in the written agreement, received by the agent for money transmission on behalf of the licensee shall be trust funds owned by and belonging to the licensee until the time when the money or an equivalent amount are remitted by the agent to the licensee in accordance with this section.

(4) That the money must be remitted in accordance with the provisions of this division.

(5) Any other provisions that the commissioner may by regulation or order find to be necessary to carry out the provisions and purposes of this division.

(d) An agent shall remit all money owing to the licensee in accordance with the terms of the contract between the licensee and the agent.

(e) An agent of a licensee shall remit any money, less fees, received on behalf of the licensee for money transmission as follows:

(1) Within three business days of receipt.

(2) In case the aggregate face amount of the money, less fees, does not in any calendar week exceed ten thousand dollars ($10,000), within 10 business days of receipt.

(3) Within a period longer than three business days of receipt, if the agent has previously deposited with, and during such period maintains on deposit with, an office of an insured bank or of an insured savings and loan association located in the United States in an account that is in the sole and exclusive name of the licensee an amount that, for each day by which such period exceeds three business days, is not less than the aggregate face amount of money received on behalf of the licensee for money transmission that the agent usually sells per day.

(4) Within such shorter period as the licensee may provide.

(f) An agent may not provide money transmission outside the scope of activity permissible under the contract between the agent and the licensee. All money or monetary value, less fees, received by an agent of a licensee shall, from the time when the money is received by the agent until the time when the money or an equivalent amount is remitted by the agent to the licensee, constitute trust funds owned by and belonging to the licensee.

(g) An agent may not use a subagent to conduct money transmissions on behalf of a licensee.

(h) Each licensee shall exercise reasonable supervision over its agents to ensure compliance with applicable laws, rules, and regulations with respect to money transmission.

(i) No agent of a licensee shall, nor shall any licensee cause or knowingly permit any of its agents to, conduct money transmission on behalf of the licensee without concurrently receiving money, monetary value or its equivalent, credit card, or payment instrument, or a combination of same believed to be valid in an amount not less than the amount of the money transmission being provided. In the case of a sale of payment instruments or stored value to an insured bank, an insured savings and loan association, or an insured credit union, the licensee or agents of the licensee may receive such amounts the next business day after the sale.

(j) If any agent of a licensee shall commingle any money or monetary value, less fees, received on behalf of the licensee for money transmission with any other property owned or controlled by the agent, all such property shall be impressed with a trust in favor of the licensee in an amount equal to the aggregate amount of such money so commingled. No money or monetary value, less fees, received by any agent on behalf of the licensee for money transmission, while held by such agent, nor any property impressed with a trust pursuant to this subdivision, shall be subject to attachment, levy of execution, or sequestration by order of any court, except for the benefit of the licensee.

(k) Each licensee shall be liable as a principal for the money or monetary value from the time when the money or monetary value is received by the agent. Each licensee shall be liable as the maker or drawer on each payment instrument issued or sold by such licensee.

(Amended by Stats. 2012, Ch. 356, Sec. 16. Effective January 1, 2013.)

2061.
  

(a) No licensee shall appoint any person as an agent unless it has conducted a review of the proposed agent’s fitness to act as an agent and has determined that the proposed agent and any persons who control the proposed agent are of good character and sound financial standing.

(b) A licensee shall maintain records of this review for each agent while the agent is providing money transmission on behalf of the licensee, and for three years after the relationship with the agent has terminated.

(Added by Stats. 2011, Ch. 243, Sec. 4. Effective January 1, 2012.)

2062.
  

A person may not provide money transmissions on behalf of a person not licensed or not exempt from licensure under this division. A person that engages in that activity provides money transmissions services to the same extent as if the person was a licensee, and shall be jointly and severally liable with the unlicensed or nonexempt person.

(Amended by Stats. 2012, Ch. 356, Sec. 17. Effective January 1, 2013.)

2063.
  

(a) No agent of a licensee who has actual notice that the commissioner has suspended or revoked the license of the licensee or that the commissioner has issued an order taking possession of the property and business of the licensee shall conduct money transmission on behalf of the licensee.

(b) If any agent of a licensee, after first having actual notice that the commissioner has suspended or revoked the license of the licensee or that the commissioner has issued an order taking possession of the property and business of the licensee, conducts money transmission on behalf of the licensee, the agent shall be jointly and severally liable with the licensee for payment of the money transmission.

(Added by Stats. 2011, Ch. 243, Sec. 4. Effective January 1, 2012.)

FINFinancial Code - FIN