Today's Law As Amended


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AB-786 Money transmissions.(2013-2014)



As Amends the Law Today


SECTION 1.

 Section 2003 of the Financial Code is amended to read:

2003.
 For purposes of this division: division, the following definitions shall apply: 
(a) “Affiliate,” when used with respect to a specified person, means any person controlling, controlled by, or under common control with, that specified person, directly or indirectly through one or more intermediaries. For purposes of subdivisions (s) (q)  and (x), (v),  a specified person is affiliated with another person if that person controls, is controlled by, or under common control through the ownership directly or indirectly of shares or equity securities possessing more than 50 percent of the voting power of that specified person.
(b) “Agent” means a person that is not itself licensed as a money transmitter in California and provides money transmission in California on behalf of the licensee, provided that the licensee becomes liable for the money transmission from the time money or monetary value is received by that person. However, “agent” does not include any officer or employee of the licensee when acting as such at an office of a licensee.
(c) “Applicant” means a person that files an application for a license or for acquisition of control of a licensee under this division.
(d) “Average daily outstanding” means the amount of outstanding money transmission obligations in California at the end of each day in a given period of time, added together, and divided by the total number of days in that period of time.
(e)   “Branch office” means any office in this state of a licensee or agent at which the licensee receives money or monetary value to provide money transmission, either directly or through an agent.
(f) “Business day” means one of the following:
(1) When used with respect to any act to be performed in this state, any day other than Saturday, Sunday, or any other day that is provided for as a holiday in the Government Code.
(2) When used with respect to any act to be performed in any jurisdiction other than this state, any day other than a day that is a legal holiday under the laws of that jurisdiction.
(g) “Commissioner” means the Commissioner of Financial Protection and Innovation. Business Oversight. 
(h) “Control” has the meaning set forth in Section 1250.
(i) “Day” means calendar day.
(j) “E-commerce” means any transaction where the payment for goods or services is initiated via a mobile application or an internet website.
(k) (j)  (1)  “In California” or “in this state” means physically located in California, or with, to, or from persons located in  California.
(2) For a transaction requested electronically or by phone, the provider of money transmission may determine if the person requesting the transaction is in this state by relying on other information provided by the person regarding the location of the individual’s residential address or a business entity’s principal place of business or other physical address location and any records associated with the person that the provider of money transmission may have that indicate that location, including, but not limited to, an address associated with an account.
(l) (k)  “Issue” and “issuer” mean, with regard to a payment instrument, the entity that is the maker or drawer of the instrument in accordance with the California Commercial Code and is liable for payment. With regard to stored value, “issue” and “issuer” mean the entity that is liable to the holder of stored value and has undertaken or is obligated to pay the stored value. Only a licensee may issue stored value or payment instruments.
(m) “Key individual” means a natural person ultimately responsible for establishing or directing policies and procedures of the licensee, including an executive officer, manager, director, or trustee.
(n) (l)  “Licensee” means a corporation or limited liability company licensed under this division.
(o) “Material litigation” means litigation that according to United States generally accepted accounting principles is significant to an applicant’s or a licensee’s financial health and would be required to be disclosed in the applicant’s or licensee’s annual audited financial statements, report to shareholders, or similar records.
(p) (m)  “Monetary value” means a medium of exchange, whether or not redeemable in money.
(q) (n)  “Money” means a medium of exchange that is authorized or adopted by the United States or a foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more governments.
(r) (o)  “Money transmission” means any of the following:
(1) Selling or issuing payment instruments to a person located in this state. instruments. 
(2) Selling or issuing stored value to a person located in this state. value. 
(3) Receiving money for transmission from a person located in this state. transmission. 
(s) “Multistate licensing process” means an agreement entered into by and among state regulators relating to coordinated processing of applications for money transmission licenses, applications for the acquisition of control of a licensee, control determinations, or notice and information requirements for a change of key individuals.
(t) “NMLS” means the Nationwide Multistate Licensing System and Registry developed by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators and owned and operated by the State Regulatory Registry, LLC, or any successor or affiliated entity, for the licensing and registration of persons in financial services industries.
(u) (p)  “Outstanding,” with respect to payment instruments and stored value, means issued or sold by the licensee in the United States and not yet paid or refunded by the licensee, or issued or sold on behalf of the licensee in the United States by its agent and reported as sold, but not yet paid or refunded by the licensee. “Outstanding,” with respect to receiving money for transmission means all money or monetary value received in the United States for transmission by the licensee or its agents but not yet paid to the beneficiaries or refunded to the person from whom the money or monetary value was received. All outstanding money transmission of a licensee is and shall remain a liability of the licensee until it is no longer outstanding.
(v) (q)  (1)  “Payment instrument” means a check, draft, money order, traveler’s check, or other instrument for the transmission or payment of money or monetary value, whether or not negotiable. The term does not include a credit card voucher, letter of credit, or any instrument that is redeemable by the issuer for goods or services provided by the issuer or its affiliate. 
(2) “Payment instrument” does not include any of the following:
(A) A credit card voucher or letter of credit.
(B) An instrument that is redeemable by the issuer for goods or services provided by the issuer, an affiliate of the issuer, or a franchisee of the issuer.
(C) An instrument that is not sold to the public but issued and distributed as part of a loyalty, rewards, or promotional program.
(w) (r)  “Person” means an individual, corporation, business trust, estate, trust, partnership, proprietorship, syndicate, limited liability company, association, joint venture, government, governmental subdivision, agency or instrumentality, public corporation or joint stock company, or any other organization or legal or commercial entity, provided, however, that “person,” when used with respect to acquiring control of or controlling a specified person, includes any combination of two or more persons acting in concert.
(x) (s)  “Receiving money for transmission” or “money received for transmission” means receiving money or monetary value in the United States for transmission within or outside the United States by electronic or other means. The term does not include sale or issuance of payment instruments and stored value.
(y) (t)  “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
(z) (u)  “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.
(aa) (v)  (1)  “Stored value” means monetary value representing a claim against the issuer that is stored on an electronic or digital medium and evidenced by an electronic or digital record, and that is intended and accepted for use as a means of redemption for money or monetary value or payment for goods or services. The term does not include a credit card voucher, letter of credit, or any stored value that is only redeemable by the issuer for goods or services provided by the issuer or its affiliate, except to the extent required by applicable law to be redeemable in cash for its cash value. 
(2) “Stored value” does not include either of the following:
(A) A credit card voucher, letter of credit, or any stored value that is redeemable only by the issuer for goods or services provided by the issuer, an affiliate of the issuer, or a franchisee of the issuer, except to the extent required by applicable law to be redeemable for cash for its cash value.
(B) Stored value not sold to the public but issued and distributed as part of a loyalty, rewards, or promotional program.
(bb) (w)  “Traveler’s check” means an instrument that meets all of the following:
(1) Is designated on its face by the term “traveler’s check” or by any substantially similar term or is commonly known and marketed as a traveler’s check.
(2) Contains a provision for a specimen signature of the purchaser to be completed at the time of purchase.
(3) Contains a provision for a countersignature of the purchaser to be completed at the time of negotiation.

SEC. 2.

 Section 2010 of the Financial Code is amended to read:

2010.
 This division does not apply to any of  the following:
(a) The United States or a department, agency, or instrumentality thereof, including any federal reserve bank and any federal home loan bank.
(b) Money transmission by the United States Postal Service or by a contractor on behalf of the United States Postal Service.
(c) A state, county, city, or any other governmental agency or governmental subdivision of a state.
(d) A commercial bank or industrial bank, the deposits of which are insured by the Federal Deposit Insurance Corporation or its successor, or any foreign (other nation) bank that is licensed under Chapter 20 Article 3  (commencing with Section 1750)  1800) of Chapter 20  or that is authorized under federal law to maintain a federal agency or federal branch office in this state; a trust company licensed pursuant to Section 1042 or a national association authorized under federal law to engage in a trust banking business; an association or federal association, as defined in Section 5102, 5102  the deposits of which are insured by the Federal Deposit Insurance Corporation or its successor; and any federally or state chartered credit union, with an office in California,  union  the member accounts of which are insured or guaranteed as provided in Section 14858.
(e) Electronic funds transfer of governmental benefits for a federal, state, county, or local governmental agency by a contractor on behalf of the United States or a department, agency, or instrumentality thereof, or a state or governmental subdivision, agency, or instrumentality thereof.
(f) A board of trade designated as a contract market under the federal Commodity Exchange Act (7 U.S.C. Sec. 1 et seq.)  Secs. 1–25, incl.)  or a person that, in the ordinary course of business, provides clearance and settlement services for a board of trade to the extent of its operation as or for such a board.
(g) A person that provides clearance or settlement services pursuant to a registration as a clearing agency or an exemption from registration granted under the federal securities laws to the extent of its operation as such a provider.
(h) An operator of a payment system to the extent that it provides processing, clearing, or settlement services, between or among persons excluded by this section, in connection with wire transfers, credit card transactions, debit card transactions, stored value transactions, automated clearing house transfers, or similar funds transfers, to the extent of its operation as such a provider.
(i) A person registered as a securities broker-dealer under federal or state securities laws to the extent of its operation as such a broker-dealer.
(j) A person that delivers wages or salaries on behalf of employers to employees or facilitates the payment of payroll taxes to state and federal agencies, makes payments relating to employee benefit plans, makes distribution of other authorized deductions from employees’ wages or salaries, or transmits other funds on behalf of an employer in connection with transactions related to employees. Notwithstanding this subdivision, a person described herein that offers money transmission services or provides stored value cards directly to individual customers shall comply with this division to the extent of that such  activity.
(k) A person listed under subdivision (d) is exempted from all the provisions of this division, except Sections 2062 and 2063.
(l) A transaction in which the recipient of the money or other monetary value is an agent of the payee pursuant to a preexisting written contract and delivery of the money or other monetary value to the agent satisfies the payor’s obligation to the payee.
(1) For purposes of this subdivision, “agent” has the same meaning as that term is defined in Section 2295 of the Civil Code.
(2) For purposes of this subdivision, “payee” means the provider of goods or services, who is owed payment of money or other monetary value from the payor for the goods or services.
(3) For purposes of this subdivision, “payor” means the recipient of goods or services, who owes payment of money or monetary value to the payee for the goods or services.
(m) A person that acts as an intermediary by processing money transmission between an entity that has directly incurred an outstanding money transmission obligation to a sender and the sender’s designated recipient, if the entity meets all of the following criteria:
(1) The entity is properly licensed or exempt from licensing requirements under this act.
(2) The entity provides a receipt, electronic record, or other written confirmation to the sender identifying the entity as the provider of money transmission in the transaction.
(3) The entity bears sole responsibility to satisfy the outstanding money transmission obligation to the sender, including the obligation to make the sender whole in connection with any failure to transmit the funds to the sender’s designated recipient.
(n) A registered futures commission merchant under the federal commodities laws to the extent of its operation as such a merchant.

SEC. 3.

 Section 2011 of the Financial Code is amended to read:

2011.
 (a) The commissioner may, by regulation or order, either unconditionally or upon specified terms and conditions or for specified periods, exempt from all or part of this division any person or transaction or class of persons or transactions, if the commissioner finds such action to be in the public interest and that the regulation of such persons or transactions is not necessary for the purposes of this division. The commissioner shall post on the commissioner’s Internet Web site a list of all persons, transactions, or classes of person or transactions exempt pursuant to this section, and the part or parts of this division from which they are exempt.
(b) The commissioner shall adopt regulations to carry out and implement this section.

SEC. 4.

 Section 2040 of the Financial Code is amended to read:

2040.
 (a) Subject to subdivision (b),  An applicant shall possess, and  a licensee shall maintain at all times a tangible net worth of the greater of one hundred thousand dollars ($100,000) or 3 percent of total assets for the first one hundred million dollars ($100,000,000), 2 percent of additional assets for one hundred million dollars ($100,000,000) to one billion dollars ($1,000,000,000), and one-half of 1 percent of additional assets for over one billion dollars ($1,000,000,000). times, tangible shareholder’s equity of two hundred fifty thousand dollars ($250,000) to five hundred thousand dollars ($500,000), depending on estimated or actual transaction volume, as determined by the commissioner based on the factors described in subdivision (c). 
(b) (1)  The commissioner shall, pursuant to paragraph (2), have the authority to exempt, in part or in whole,  may increase the amount of net worth required of  an applicant or licensee from the requirements of this section. if the commissioner determines, with respect to the applicant or licensee, that a higher net worth is necessary to achieve the purposes of this division based on the factors described in subdivision (c). 
(2) (c)  The commissioner, in determining whether to exempt, in part or in whole, an applicant or licensee from the requirements of this section, shall consider all of  When making a determination pursuant to subdivision (a) or (b), the commissioner shall consider  the following factors:
(A) Whether the applicant or licensee is licensed to engage in money transmission in other states and whether the applicant or licensee has been subject to any disciplinary actions, including license revocations or suspensions.
(B) Whether the applicant or licensee is licensed to engage in money transmission in other states and the tangible net worth requirements in those other states, if applicable.
(C) (1)  The nature and magnitude of short-term fluctuations in the total assets and money transmitter liabilities of the applicant or licensee, the risks associated with those fluctuations, and how those fluctuations affect the net worth requirements of this section. volume of the projected or established business. 
(D) (2)  Any factors that suggest that the money transmission activities of the applicant or licensee function in such a manner that a waived or modified tangible net worth requirement would not compromise the interest of persons in this state who use money transmission services, including, but not limited to, both of the following: The number of locations at or through which money transmission is or will be conducted. 
(3) The amount, nature, quality, and liquidity of its assets.
(4) The amount and nature of its liabilities.
(i) (5)  The manner in which the applicant or licensee holds actual possession of funds from persons in this state who use money transmission services. history of its operations and prospects for earning and retaining income. 
(6) The quality of its operations.
(7) The quality of its management.
(8) The nature and quality of its principals.
(ii) (9)  Whether the applicant or licensee transmits funds described in clause (i) to the intended recipient as soon as practicable following receipt. The nature and quality of the persons in control. 
(E) (10)  Any other factors as the commissioner deems appropriate. The history of its compliance with applicable state and federal law. 
(11) Any other factor the commissioner considers relevant.
(c) (d)  If a licensee is subject to an order issued under Section 580 or 581, the commissioner  The commissioner at any time  may require a licensee to maintain tangible net worth greater than the amount required by subdivision (a) of this section. write down any asset held by it to a valuation that will represent its then fair market value. Any receivable or debt due to a licensee that is past due and unpaid for the period of one year shall be charged off, unless it is well secured or is in process of collection. 
(e) The aggregate value of a licensee’s accounts receivable, excluding money transmission receivables, loans or extensions of credit to any one person, or that person’s affiliates, cannot exceed 50 percent of the licensee’s tangible shareholders’ equity without the advanced written approval of the commissioner. Whenever such amount equals or exceeds 20 percent of the licensee’s tangible shareholders’ equity, the licensee shall maintain records evidencing such amount and any security or other source of payment for the amount owed, and such other records as the commissioner may require by order or regulation.
(f) The commissioner shall adopt regulations to carry out and implement the factors described in subdivision (c).

SEC. 5.

 Section 2082 of the Financial Code is amended to read:

2082.
 (a) “Eligible security” means any United States currency eligible security or foreign currency eligible security.
(b) For the purposes of this division, the following are United States currency eligible securities:
(1) Cash, cash in transit via armored car, cash in smart safes, and cash in licensee-owned locations. Cash. 
(2) Any deposit in an insured bank,  bank or  an insured savings and loan association, association  or an insured credit union, including any deposit in an insured bank, an insured savings and loan association, or an insured credit union that is in an account held for the benefit of the licensee’s customers that is titled “(name of licensee) FBO Its (licensee’s customers or specific group of licensee’s customers).” insured credit union. 
(3) Any bond, note, or other obligation that is issued or is guaranteed by the United States or any agency of the United States.
(4) Any bond, note, or other obligation that is issued or guaranteed by any state of the United States or by any governmental agency of or within any state of the United States and that is assigned an eligible rating by an eligible securities rating service.
(5) Any bankers acceptance that is eligible for discount by a federal reserve bank.
(6) Any commercial paper that is assigned an eligible rating by an eligible rating securities service.
(7) Any bond, note, or other obligation that is assigned an eligible rating by an eligible securities rating service.
(8) Any share of an investment company that is an open-end management company, that is registered under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.), that holds itself out to investors as a money market fund, and that operates in accordance with all provisions of the Investment Company Act of 1940, and the regulations of the Securities and Exchange Commission applicable to money market funds, including Section 270.2a-7 of the regulations of the Securities and Exchange Commission (17 C.F.R. 270.2a-7).
For purposes of this paragraph and paragraph (9), “investment company,” “management company,” and “open-end” have the meanings set forth in Sections 3, 4, and 5, respectively, of the Investment Company Act of 1940 (15 U.S.C. Secs. 80a-4 and 80a-5, respectively).
(9) Any share of an investment company that is an open-end management company, that is registered under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.), and that invests exclusively in securities that constitute eligible securities that comply with the  valuation requirements of this division.
(10) Any account due to any licensee from any agent in the United States on account of the receipt of money on behalf of the licensee for money transmission by the agent, if the account is current and not past due or otherwise doubtful of collection.
(11) Any other security or class of securities that the commissioner has by regulation or order declared to be eligible securities.
(12) Any receivable owed by a bank and resulting from a debit card- or credit card-funded transmission, automated clearinghouse items in transit to the licensee, and automated clearinghouse items or international wires in transit to a payee. an automated clearinghouse or credit-funded transmission. 
(13) The full drawable amount of an irrevocable standby letter of credit for which the stated beneficiary is the commissioner that stipulates that the beneficiary need only draw a sight draft under the letter of credit and present it to obtain funds up to the letter of credit amount within seven days of presentation of the items required by subparagraph (B).
(A) The letter of credit described by this paragraph shall meet all of the following criteria:
(i) The letter of credit is issued by an insured depository financial institution, a foreign bank that is authorized under federal law to maintain a federal agency or federal branch office in any state, or a foreign bank that is authorized under state law to maintain a branch in a state that bears an eligible rating or whose parent company bears an eligible rating and that is regulated, supervised, and examined by United States federal or state authorities having regulatory authority over banks, credit unions, and trust companies.
(ii) The letter of credit is irrevocable, unconditional, and indicates that it is not subject to any condition or qualifications outside of the letter of credit.
(iii) The letter of credit does not contain reference to any other agreements, documents, or entities, or otherwise provide for any security interest in the licensee.
(iv) (I) The letter of credit contains an issue date and expiration date and expressly provides for automatic extension, without a written amendment, for an additional period of one year from the present or each future expiration date, unless the issuer of the letter of credit notifies the commissioner in writing by certified or registered mail or courier mail or other receipted means, at least 60 days before any expiration date, that the irrevocable letter of credit will not be extended.
(II) If the issuer notifies, pursuant to subclause (I), the commissioner that a letter of credit will not be extended, the licensee shall demonstrate to the satisfaction of the commissioner at least 15 days before expiration that the licensee maintains, and will maintain, permissible investments in accordance with Section 2081 upon the expiration of the letter of credit. If the licensee is not able to do so, the commissioner may draw on the letter of credit in an amount up to the amount necessary to meet the licensee’s requirements to maintain permissible investments in accordance with Section 2081. Any such draw shall be offset against the licensee’s outstanding money transmission obligations. The drawn funds shall be held in trust by the commissioner or the commissioner’s designated agent, to the extent authorized by law, as agent for the benefit of the purchasers and holders of the licensee’s outstanding money transmission obligations.
(B) The letter of credit shall provide that the issuer of the letter of credit will honor, at sight, a presentation made, on or before the expiration date of the letter of credit, by the beneficiary to the issuer of both of the following documents:
(i) The original letter of credit, including any amendments.
(ii) A written statement from the beneficiary stating that any of the following events have occurred:
(I) The filing of a petition by or against the licensee under Sections 101 to 110, inclusive, of Title 11 of the United States Code, as amended or recodified from time to time, for bankruptcy or reorganization.
(II) The filing of a petition by or against the licensee for receivership or the commencement of any other judicial or administrative proceeding for its dissolution or reorganization.
(III) The seizure of assets of a licensee by a commissioner pursuant to an emergency order issued in accordance with applicable law on the basis of an action, violation, or condition that has caused, or is likely to cause, the insolvency of the licensee.
(IV) The beneficiary has received notice of expiration or non-extension of a letter of credit, and the licensee failed to demonstrate to the satisfaction of the beneficiary that the licensee will maintain permissible investments in accordance with Section 2081 upon the expiration or non-extension of the letter of credit.
(C) (i) The letter of credit shall authorize the commissioner to designate an agent to serve on the commissioner’s behalf as beneficiary to a letter of credit if the agent and letter of credit meet requirements established by the commissioner.
(ii) An agent designated pursuant to this subparagraph may serve as agent for multiple licensing authorities for a single irrevocable letter of credit if the proceeds of the drawable amount for the purposes of this section are assigned to the commissioner.
(c) “Foreign currency eligible security” means any of the following that is denominated in a foreign currency:
(1) Cash.
(2) Any deposit, made with the prior approval of the commissioner,  deposit  in an office of a bank acceptable to the commissioner  that is located in a foreign country, if the licensee has received a satisfactory rating in its most recent examination, and the foreign depository institution meets all of the following criteria: country. 
(A) The foreign depository institution has an eligible rating.
(B) The foreign depository institution is registered under the federal Foreign Account Tax Compliance Act.
(C) The foreign depository institution is not located in a country subject to sanctions from the federal Office of Foreign Asset Control.
(D) The foreign depository institution is not located in a high-risk or non-cooperative jurisdiction as designated by the Financial Action Task Force.
(3) Any other security or class of securities that the commissioner has by regulation or order declared to be eligible securities pursuant to Section 2086.
(d) For the purposes of this division, “value” means the following:
(1) When used with respect to an eligible security owned by a licensee of the type described in paragraph (10) of subdivision (b), net carrying value as determined in conformity with United States generally accepted accounting principles. However, in computing the value of the account, any amount that consists of money that has not been remitted to the licensee or refunded within 45 business days of receipt by the agent shall be excluded from the value of the account and shall be excluded from the calculation of eligible securities.
(2) Market value when used with respect to any other eligible security owned by a licensee.

SEC. 6.

 Section 2084 of the Financial Code is amended to read:

2084.
 (a) A licensee shall be deemed to own an eligible security only if the following apply:
(1) (A)  The licensee owns the eligible security solely and exclusively in its own right, both of record and beneficially.
(B) Notwithstanding subparagraph (A), a licensee shall be deemed to own accounts held for the benefit of the licensee’s customers that otherwise meet the requirements of paragraph (2) of subdivision (b) of Section 2082.
(2) The eligible security is not subject to any pledge, lien, or security interest.
(3) The licensee can freely negotiate, assign, or otherwise transfer the eligible security.
(b) Notwithstanding subdivision (a), a no  licensee shall not  be deemed not to own an eligible security solely on account of either any  of the following facts, provided that, but for that fact, the licensee would be deemed to own the eligible security under the provisions of subdivision (a):
(1) The fact that the eligible security is owned of record by a documented nominee of the licensee or by a securities depository.
(2) The fact that the licensee has pledged the eligible security with the United States or any state of the United States to secure payment by the licensee of transmission money.
(3) The fact that the licensee holds the eligible security in a custodial capacity as an agent of its customers in a pooled account titled in the name of the licensee for the benefit of its customers.
(c) The commissioner shall make a determination of the application of paragraph (3) of subdivision (b) based on the following:
(1) The amount, nature, quality, and liquidity of the licensee’s assets.
(2) The amount and nature of the licensee’s liabilities.
(3) The history of the licensee’s compliance with applicable state and federal law.

SEC. 7.

 Section 2101 of the Financial Code is amended to read:

2101.
 Every licensee or its agent shall forward all money received for transmission or give instructions committing equivalent money to the person designated by the customer. Unless the transmission is for the payment of goods or services or unless otherwise ordered by his or her customer, this requirement shall be satisfied within 10 days after receiving that money.

SEC. 8.

 Section 2102 of the Financial Code is amended to read:

2102.
 (a) Every licensee or its agent shall refund to the customer within 10 days of receipt of the customer’s written request for a refund any and all money received for transmission unless any of the following occurs:
(1) The money has been forwarded within 10 days of the date of receipt.
(2) Instructions have been given committing an equivalent amount of money to the person designated by the customer within 10 days of the date of the receipt of the money from the customer.
(3) The customer instructs the licensee to transmit the money at a time beyond 10 days. If the customer gives instructions as to when the money shall be forwarded or transmitted and the moneys have not yet been forwarded or transmitted, the licensee or its agent shall refund the customer’s money within 10 days of receipt of the customer’s written request for a refund.
(4) The refund  Refund  would violate law.
(b) In the case of money received for transmission, a receipt shall be provided by a licensee or its agent to all customers which shall be made available to the customer in English and in the language principally used by that licensee or that agent to advertise, solicit, or negotiate, either orally or in writing, at that branch office if other than English. Except when money is received for transmission for the payment of goods or services, the receipt shall either include or have attached a conspicuous statement in English and in the language principally used by the licensee or that agent to advertise, solicit, or negotiate, either orally or in writing at that branch office if other than English in a size equal to at least 10 point bold type, as follows:
RIGHT TO REFUND
“You, the customer, are entitled to a refund of the money to be transmitted as the result of this agreement if _____ (name of licensee) does not forward the money received from you within 10 days of the date of its receipt, or does not give instructions committing an equivalent amount of money to the person designated by you within 10 days of the date of the receipt of the funds from you unless otherwise instructed by you.
If your instructions as to when the moneys shall be forwarded or transmitted are not complied with and the money has not yet been forwarded or transmitted, you have a right to a refund of your money.
If you want a refund, you must mail or deliver your written request to _____ (name of licensee) at _____ (mailing address of licensee). If you do not receive your refund, you may be entitled to your money back plus a penalty of up to $1,000 and attorney’s fees pursuant to Section 2102 of the California Financial Code.”
(b) (c)  If a customer’s instructions as to when the money shall be forwarded or transmitted are not complied with and the money has not yet been forwarded or transmitted, the customer has a right to a refund of his or her money.  A cause of action under this section may be brought in small claims court if it does not exceed the jurisdiction of that court, or in any other appropriate court. The customer shall be entitled to recover each of the following:
(1) Any and all money received for transmission, plus any fees and charges paid by the customer.
(2) A penalty in an amount not to exceed one thousand dollars ($1,000). The court shall award the prevailing party costs and attorney’s fees.

SEC. 9.

 Section 2174 is added to the Financial Code, to read:

2174.
 (a) The commissioner may prepare written decisions, opinion letters, and other formal written guidance to be issued to persons seeking clarification regarding the requirements of this division.
(b) The commissioner shall make public on the commissioner’s Internet Web site all written decisions, opinion letters, and other formal written guidance issued to persons seeking clarification regarding the requirements of this division. The commissioner may, at his or her discretion or upon request by an applicant or licensee, redact proprietary or other confidential information regarding an applicant or licensee from any decision, letter, or other written guidance issued in connection with an applicant or licensee.

SEC. 10.

 Section 2175 is added to the Financial Code, to read:

2175.
 The commissioner may offer guidance to any prospective applicant for a license under this division, regarding the conditions of licensure that may be applied to that person. The commissioner shall inform any applicant that requests that guidance of the minimum net worth that will be required of that applicant and the factors used to make that determination as described in Section 2040.