HB 227: "An Act relating to the Uniform Money Services Act, to money transmission services, and to currency exchange services; and providing for an effective date."
00 HOUSE BILL NO. 227 01 "An Act relating to the Uniform Money Services Act, to money transmission services, 02 and to currency exchange services; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 06 is amended by adding a new chapter to read: 05 Chapter 55. Alaska Uniform Money Services Act. 06 Article 1. Money Transmission Licenses. 07 Sec. 06.55.101. License required. (a) A person may not engage in the 08 business of money transmission or advertise, solicit, or hold the person out as 09 providing money transmission unless the person 10 (1) is licensed under AS 06.55.101 - 06.55.107 or approved to engage 11 in money transmission under AS 06.55.103; 12 (2) is an authorized delegate of a person licensed under AS 06.55.101 - 13 06.55.107; or 14 (3) is an authorized delegate of a person approved to engage in money
01 transmission under AS 06.55.103. 02 (b) A license under AS 06.55.101 - 06.55.107 is not transferable or assignable. 03 Sec. 06.55.102. Application for license. (a) A person applying for a license 04 under AS 06.55.101 - 06.55.107 shall apply in a form and in a medium prescribed by 05 the department. The application must state or contain 06 (1) the legal name and residential and business addresses of the 07 applicant and any fictitious or trade name used by the applicant in conducting the 08 applicant's business; 09 (2) a list of any criminal convictions of the applicant and any material 10 litigation in which the applicant has been involved in the 10-year period next 11 preceding the submission of the application; 12 (3) a description of any money services previously provided by the 13 applicant and the money services that the applicant seeks to provide in this state; 14 (4) a list of the applicant's proposed authorized delegates and the 15 locations in this state where the applicant and its authorized delegates propose to 16 engage in money transmission or provide other money services; 17 (5) a list of other states in which the applicant is licensed to engage in 18 money transmission or provide other money services and any license revocations, 19 suspensions, or other disciplinary action taken against the applicant in another state; 20 (6) information concerning any bankruptcy or receivership 21 proceedings affecting the licensee; 22 (7) a sample form of contract for authorized delegates, if applicable, 23 and a sample form of payment instrument or instrument on which stored value is 24 recorded, if applicable; 25 (8) the name and address of any bank through which the applicant's 26 payment instruments and stored value will be paid; 27 (9) a description of the source of money and credit to be used by the 28 applicant to provide money services; and 29 (10) any other information the department reasonably requires with 30 respect to the applicant. 31 (b) If an applicant is a corporation, a limited liability company, a partnership,
01 or another entity, the applicant shall also provide 02 (1) the date of the applicant's incorporation or formation and state or 03 country of incorporation or formation; 04 (2) if applicable, a certificate of good standing from the state or 05 country in which the applicant is incorporated or formed; 06 (3) a brief description of the structure or organization of the applicant, 07 including any parent or subsidiary of the applicant, and whether any parent or 08 subsidiary is publicly traded; 09 (4) the legal name, any fictitious or trade name, all business and 10 residential addresses, and the employment, in the 10-year period next preceding the 11 submission of the application of each executive officer, manager, director, or person 12 who has control of the applicant; 13 (5) a list of any criminal convictions and material litigation in which 14 any executive officer, manager, director, or person in control of the applicant has been 15 involved in the 10-year period next preceding the submission of the application; 16 (6) a copy of the applicant's audited financial statements for the most 17 recent fiscal year and, if available, for the two-year period next preceding the 18 submission of the application; 19 (7) a copy of the applicant's unconsolidated financial statements for the 20 current fiscal year, whether audited or not, and, if available, for the two-year period 21 next preceding the submission of the application; 22 (8) if the applicant is publicly traded, a copy of the most recent report 23 filed with the United States Securities and Exchange Commission under 15 U.S.C. 24 78m (Securities Exchange Act of 1934); 25 (9) if the applicant is a wholly owned subsidiary of 26 (A) a corporation publicly traded in the United States, a copy of 27 audited financial statements for the parent corporation for the most recent 28 fiscal year or a copy of the parent corporation's most recent report filed under 29 15 U.S.C. 78m (Securities Exchange Act of 1934); or 30 (B) a corporation publicly traded outside the United States, a 31 copy of documentation that is similar to the documentation required by (A) of
01 this paragraph and that is filed with the regulator of the parent corporation's 02 domicile outside the United States; 03 (10) if the applicant has a registered agent in this state, the name and 04 address of the applicant's registered agent in this state; and 05 (11) any other information the department reasonably requires with 06 respect to the applicant. 07 (c) A nonrefundable application fee and a license fee must accompany an 08 application for a license under AS 06.55.101 - 06.55.107. The license fee shall be 09 refunded if the application is denied. 10 (d) The department may waive a requirement of (a) and (b) of this section or 11 permit an applicant to submit other information instead of the required information. 12 (e) In this section, "material litigation" means litigation that, according to 13 generally accepted accounting principles, is significant to an applicant's or a licensee's 14 financial health and would be required to be disclosed in the applicant's or licensee's 15 annual audited financial statements, report to shareholders, or similar records. 16 Sec. 06.55.103. Approval to engage in money transmission when licensed 17 in another state. (a) A person who is licensed to engage in money transmission in at 18 least one other state, with the approval of the department and under this section, may 19 engage in money transmission, currency exchange, or both money transmission and 20 currency exchange in this state without being licensed under AS 06.55.102 if 21 (1) the state in which the person is licensed has enacted the Uniform 22 Money Services Act or the department determines that the money transmission laws of 23 the state in which the person is licensed are substantially similar to those imposed by 24 this chapter; 25 (2) the person submits to, and in the form required by, the department 26 (A) in a record, an application for approval to engage in money 27 transmission, currency exchange, or both money transmission and currency 28 exchange in this state without being licensed under AS 06.55.102; 29 (B) a nonrefundable fee; and 30 (C) a certification of license history in the other state. 31 (b) Before granting a person approval under this section to engage in money
01 transmission, currency exchange, or both money transmission and currency exchange 02 in this state, the department shall make findings and conclusions as required by 03 regulation. 04 (c) When an application for approval under this section is complete, the 05 department shall promptly notify the applicant, in a record, of the date on which the 06 request was determined to be complete, and 07 (1) the department shall approve or deny the request within 120 days 08 after that date; or 09 (2) if the request is not approved or denied within 120 days after that 10 date, 11 (A) the request is approved; and 12 (B) the approval takes effect as of the first business day after 13 expiration of the 120-day period. 14 (d) A person who engages in money transmission, currency exchange, or both 15 money transmission and currency exchange in this state under this section shall 16 comply with the requirements of, and is subject to the sanctions under, AS 06.55.401 - 17 06.55.607 as if the person were licensed under AS 06.55.102. 18 Sec. 06.55.104. Security. (a) Except as otherwise provided in (b) of this 19 section, a surety bond, a letter of credit, or another similar security acceptable to the 20 department in the amount of $25,000 plus $5,000 for each location, not exceeding a 21 total addition of $125,000, must accompany an application for a license. 22 (b) Security must be in a form satisfactory to the department and payable to 23 the state for the benefit of a claimant against the licensee to secure the faithful 24 performance of the obligations of the licensee with respect to money transmission. 25 (c) The aggregate liability on a surety bond may not exceed the principal sum 26 of the bond. A claimant against a licensee may maintain an action on the bond, or the 27 department may maintain an action on behalf of the claimant. 28 (d) A surety bond must cover claims for as long as the department specifies, 29 but for at least five years after the licensee ceases to provide money services in this 30 state. However, the department may permit the amount of security to be reduced or 31 eliminated before the expiration of that time to the extent the amount of the licensee's
01 payment instruments or stored-value obligations outstanding in this state is reduced. 02 The department may permit a licensee to substitute another form of security 03 acceptable to the department for the security effective at the time the licensee ceases to 04 provide money services in this state. 05 (e) Instead of the security prescribed in this section, an applicant for a license 06 or a licensee may provide security in a form prescribed by the department. 07 (f) The department may increase the amount of security required to a 08 maximum of $500,000 if the financial condition of a licensee requires the increase, as 09 evidenced by reduction of net worth, financial losses, or other relevant criteria. 10 Sec. 06.55.105. Issuance of license. (a) When an application is filed under 11 AS 06.55.101 - 06.55.107, the department shall investigate the applicant's financial 12 condition and responsibility, financial and business experience, character, and general 13 fitness. The department may conduct an on-site investigation of the applicant, the 14 reasonable cost of which the applicant shall pay. The department shall issue a license 15 to an applicant under AS 06.55.101 - 06.55.107 if the department finds that all of the 16 following conditions have been fulfilled: 17 (1) the applicant has complied with AS 06.55.102, 06.55.104, and 18 06.55.107; and 19 (2) the financial condition and responsibility, financial and business 20 experience, character, and general fitness of the applicant, and the competence, 21 experience, character, and general fitness of the executive officers, managers, 22 directors, and persons in control of the applicant indicate that it is in the interest of the 23 public to permit the applicant to engage in money transmission; 24 (b) When an application for an original license under AS 06.55.101 - 25 06.55.107 is complete, the department shall promptly notify the applicant in a record 26 of the date on which the application was determined to be complete, and 27 (1) the department shall approve or deny the application within 120 28 days after that date; or 29 (2) if the application is not approved or denied within 120 days after 30 that date, 31 (A) the application is approved; and
01 (B) the license takes effect as of the first business day after 02 expiration of the 120-day period. 03 (c) The department may for good cause extend the application period. 04 (d) An applicant whose application is denied by the department under 05 AS 06.55.101 - 06.55.107 may appeal, within 30 days after receipt of the notice of the 06 denial, from the denial and request a hearing. 07 Sec. 06.55.106. Renewal of license. (a) A licensee under AS 06.55.101 - 08 06.55.107 shall pay an annual renewal fee not later than 30 days before the 09 anniversary of the issuance of the license or, if the last day is not a business day, on the 10 next business day. 11 (b) A licensee under AS 06.55.101 - 06.55.107 shall submit a renewal report 12 with the renewal fee, in a form and in a medium prescribed by the department. The 13 renewal report must state or contain 14 (1) a copy of the licensee's most recent audited annual financial 15 statement or, if the licensee is a wholly owned subsidiary of another corporation, the 16 most recent audited consolidated annual financial statement of the parent corporation 17 or the licensee's most recent audited consolidated annual financial statement; 18 (2) the number and monetary amount of payment instruments and 19 stored value sold by the licensee in this state that have not been included in a renewal 20 report, and the monetary amount of payment instruments and stored value currently 21 outstanding; 22 (3) a description of each material change in information submitted by 23 the licensee in its original license application that has not been reported to the 24 department on any required report; 25 (4) a list of the licensee's permissible investments and a certification 26 that the licensee continues to maintain permissible investments according to the 27 requirements set out in AS 06.55.501 and 06.55.502; 28 (5) proof that the licensee continues to maintain adequate security as 29 required by AS 06.55.104; and 30 (6) a list of the locations in this state where the licensee or an 31 authorized delegate of the licensee engages in money transmission or provides other
01 money services. 02 (c) If a licensee does not file a renewal report or pay its renewal fee by the 03 renewal date or any extension of time granted by the department, the department shall 04 send the licensee a notice of suspension. Unless the licensee files the report and pays 05 the renewal fee before expiration of 10 days after the notice is sent, the licensee's 06 license is suspended 10 days after the department sends the notice of suspension. The 07 suspension shall be lifted if, within 20 days after its license is suspended, the licensee 08 (1) files the report and pays the renewal fee; and 09 (2) pays a late fee for each day after suspension that the department did 10 not receive the renewal report and the renewal fee. 11 (d) The department for good cause may grant an extension of the renewal date. 12 Sec. 06.55.107. Net worth. A licensee under AS 06.55.101 - 06.55.107 shall 13 maintain a net worth of at least $25,000 determined under generally accepted 14 accounting principles. 15 Article 2. Currency Exchange Licenses. 16 Sec. 06.55.201. License required. (a) A person may not engage in currency 17 exchange or advertise, solicit, or hold the person out as providing currency exchange 18 for which the person receives revenues equal or greater than five percent of total 19 revenues unless the person 20 (1) is licensed under AS 06.55.201 - 06.55.204; 21 (2) is licensed for money transmission under AS 06.55.101 - 06.55.107 22 or approved to engage in money transmission under AS 06.55.103; 23 (3) is an authorized delegate of a person licensed under AS 06.55.101 - 24 06.55.107; or 25 (4) is an authorized delegate of a person approved to engage in money 26 transmission under AS 06.55.103. 27 (b) A license under AS 06.55.201 - 06.55.204 is not transferable or assignable. 28 Sec. 06.55.202. Application for license. (a) A person applying for a license 29 under AS 06.55.201 - 06.55.204 shall apply in a form and in a medium prescribed by 30 the department. The application must state or contain 31 (1) the legal name and residential and business addresses of the
01 applicant if the applicant is an individual or, if the applicant is not an individual, the 02 name of each partner, executive officer, manager, and director; 03 (2) the location of the principal office of the applicant; 04 (3) the complete addresses of other locations in this state where the 05 applicant proposes to engage in currency exchange, including all mobile locations; 06 (4) a description of the source of money and credit to be used by the 07 applicant to engage in currency exchange; and 08 (5) other information the department reasonably requires with respect 09 to the applicant, but not more than the department may require under AS 06.55.101 - 10 06.55.107. 11 (b) A nonrefundable application fee and a license fee must accompany an 12 application for a license under AS 06.55.201 - 06.55.204. The license fee shall be 13 refunded if the application is denied. 14 Sec. 06.55.203. Issuance of license. (a) When an application is filed under 15 AS 06.55.201 - 06.55.204, the department shall investigate the applicant's financial 16 condition and responsibility, financial and business experience, character, and general 17 fitness. The department may conduct an on-site investigation of the applicant, the 18 reasonable cost of which the applicant shall pay. The department shall issue a license 19 to an applicant under AS 06.55.201 - 06.55.204 if the department finds that all of the 20 following conditions have been fulfilled: 21 (1) the applicant has complied with AS 06.55.202; and 22 (2) the financial condition and responsibility, financial and business 23 experience, character, and general fitness of the applicant, and the competence, 24 experience, character, and general fitness of the executive officers, managers, 25 directors, and persons in control of the applicant indicate that it is in the interest of the 26 public to permit the applicant to engage in currency exchange. 27 (b) When an application for an original license under AS 06.55.201 - 28 06.55.204 is complete, the department shall promptly notify the applicant in a record 29 of the date on which the application was determined to be complete, and 30 (1) the department shall approve or deny the application within 120 31 days after that date; or
01 (2) if the application is not approved or denied within 120 days after 02 that date, 03 (A) the application is approved; and 04 (B) the department shall issue the license under AS 06.55.201 - 05 06.55.204, to take effect as of the first business day after expiration of the 06 period. 07 (c) The department may for good cause extend the application period. 08 (d) An applicant whose application is denied by the department under 09 AS 06.55.201 - 06.55.204 may appeal, within 30 days after receipt of the notice of the 10 denial, from the denial and request a hearing. 11 Sec. 06.55.204. Renewal of license. (a) A licensee under AS 06.55.201 - 12 06.55.204 shall pay a biennial renewal fee not later than 30 days before each biennial 13 anniversary of the issuance of the license or, if the last day is not a business day, on the 14 next business day. 15 (b) A licensee under AS 06.55.201 - 06.55.204 shall submit a renewal report 16 with the renewal fee, in a form and in a medium prescribed by the department. The 17 renewal report must state or contain 18 (1) a description of each material change in information submitted by 19 the licensee in its original license application that has not been reported to the 20 department on any required report; and 21 (2) a list of the locations in this state where the licensee or an 22 authorized delegate of the licensee engages in currency exchange, including mobile 23 locations. 24 (c) If a licensee does not file a renewal report and pay its renewal fee by the 25 renewal date or any extension of time granted by the department, the department shall 26 send the licensee a notice of suspension. Unless the licensee files the report and pays 27 the renewal fee before expiration of 10 days after the notice is sent, the licensee's 28 license is suspended 10 days after the department sends the notice of suspension. 29 (d) The department for good cause may grant an extension of the renewal date. 30 Article 3. Authorized Delegates. 31 Sec. 06.55.301. Relationship between licensee and authorized delegate. (a)
01 A contract between a licensee and an authorized delegate must require the authorized 02 delegate to operate in full compliance with this chapter. The licensee shall furnish in a 03 record to each authorized delegate policies and procedures sufficient for compliance 04 with this chapter. 05 (b) An authorized delegate shall remit all money owing to the licensee under 06 the terms of the contract between the licensee and the authorized delegate. In this 07 subsection, "remit" means to make direct payments of money to a licensee or its 08 representative authorized to receive money or to deposit money in a bank in an 09 account specified by the licensee. 10 (c) If a license is suspended or revoked or a licensee does not renew its 11 license, the department shall notify all authorized delegates of the licensee whose 12 names are in a record filed with the department of the suspension, revocation, or 13 nonrenewal. After notice is sent or publication is made, an authorized delegate shall 14 immediately cease to provide money services as an authorized delegate of the licensee. 15 (d) An authorized delegate may not provide money services outside the scope 16 of activity permissible under the contract between the authorized delegate and the 17 licensee, except activity in which the authorized delegate is authorized to engage 18 under AS 06.55.101 - 06.55.204. An authorized delegate of a licensee holds in trust for 19 the benefit of the licensee all money net of fees received from money transmission. 20 (e) An authorized delegate may not use a subdelegate to conduct money 21 services on behalf of a licensee. 22 Sec. 06.55.302. Unauthorized activities. A person may not act as an 23 authorized delegate for, or otherwise provide money services on behalf of, a person 24 not licensed under this chapter. 25 Article 4. Examinations, Reports, Records. 26 Sec. 06.55.401. Authority to conduct examinations. (a) The department may 27 conduct an annual examination of a licensee or of any of its authorized delegates upon 28 45 days' notice in a record to the licensee. 29 (b) The department may examine a licensee or its authorized delegate, at any 30 time, without notice, if the department has reason to believe that the licensee or 31 authorized delegate is engaging in an unsafe or unsound practice or has violated or is
01 violating this chapter or a regulation adopted or an order issued under this chapter. 02 (c) If the department concludes that an on-site examination is necessary under 03 (a) of this section, the licensee shall pay the reasonable cost of the examination. 04 (d) Information obtained during an examination under this chapter may be 05 disclosed only as provided in AS 06.55.407. 06 Sec. 06.55.402. Cooperation. The department may consult and cooperate with 07 other state money services regulators in enforcing and administering this chapter. The 08 department and other state money service regulators may jointly pursue examinations 09 and take other official action that they are otherwise empowered to take. 10 Sec. 06.55.403. Reports. (a) A licensee shall file with the department within 15 11 business days any material changes in information provided in a licensee's application 12 as prescribed by the department. 13 (b) A licensee shall file with the department within 45 days after the end of 14 each fiscal quarter a current list of all authorized delegates and locations in this state 15 where the licensee or an authorized delegate of the licensee provides money services, 16 including mobile locations. The licensee shall state the name and street address of 17 each location and authorized delegate. 18 (c) A licensee shall file a report with the department within one business day 19 after the licensee has reason to know of the occurrence of any of the following events: 20 (1) the filing of a petition by or against the licensee under 11 U.S.C. 21 101 - 110 (Bankruptcy Code) for bankruptcy or reorganization; 22 (2) the filing of a petition by or against the licensee for receivership, 23 the commencement of any other judicial or administrative proceeding for its 24 dissolution or reorganization, or the making of a general assignment for the benefit of 25 its creditors; 26 (3) the commencement of a proceeding to revoke or suspend its license 27 in a state or country in which the licensee engages in business or is licensed; 28 (4) the cancellation or other impairment of the licensee's bond or other 29 security; 30 (5) a charge against or conviction of the licensee or of an executive 31 officer, manager, director, or person in control of the licensee for a felony; or
01 (6) a charge against or conviction of an authorized delegate for a 02 felony. 03 Sec. 06.55.404. Change of control. (a) A licensee shall 04 (1) give the department notice in a record of a proposed change of 05 control within 15 days after learning of the proposed change of control; 06 (2) request approval of the acquisition; and 07 (3) submit a nonrefundable fee with the notice. 08 (b) After review of a request for approval under (a) of this section, the 09 department may require the licensee to provide additional information concerning the 10 proposed persons in control of the licensee. The additional information must be 11 limited to the same types required of the licensee or persons in control of the licensee 12 as part of its original license or renewal application. 13 (c) The department shall approve a request for change of control under (a) of 14 this section if, after investigation, the department determines that the person or group 15 of persons requesting approval has the competence, experience, character, and general 16 fitness to operate the licensee or person in control of the licensee in a lawful and 17 proper manner and that the public interest will not be jeopardized by the change of 18 control. 19 (d) When an application for a change of control under AS 06.55.401 - 20 06.55.407 is complete, the department shall notify the licensee in a record of the date 21 on which the request was determined to be complete, and 22 (1) the department shall approve or deny the request within 120 days 23 after that date; or 24 (2) if the request is not approved or denied within 120 days after that 25 date, 26 (A) the request is approved; and 27 (B) the department shall permit the change of control under this 28 section, to take effect as of the first business day after expiration of the period. 29 (e) The department, by regulation or order, may exempt a person from any of 30 the requirements of (a)(2) and (3) of this section if it is in the public interest to exempt 31 the person.
01 (f) The provisions of (a) of this section do not apply to a public offering of 02 securities. 03 (g) Before filing a request for approval to acquire control of a licensee or 04 person in control of a licensee, a person may request in a record a determination from 05 the department as to whether the person would be considered a person in control of a 06 licensee upon consummation of a proposed transaction. If the department determines 07 that the person would not be a person in control of a licensee, the department shall 08 enter an order to that effect, and the proposed person and transaction are not subject to 09 the requirements of (a) - (c) of this section. 10 Sec. 06.55.405. Records. (a) A licensee shall maintain the following records 11 for determining its compliance with this chapter for at least three years: 12 (1) a record of each payment instrument or stored-value obligation 13 sold; 14 (2) a general ledger posted at least monthly containing all asset, 15 liability, capital, income, and expense accounts; 16 (3) bank statements and bank reconciliation records; 17 (4) records of outstanding payment instruments and stored-value 18 obligations; 19 (5) records of each payment instrument and stored-value obligation 20 paid within the three-year period; 21 (6) a list of the last known names and addresses of all of the licensee's 22 authorized delegates; and 23 (7) any other records the department reasonably requires by regulation. 24 (b) The items specified in (a) of this section may be maintained in any form of 25 record. 26 (c) Records may be maintained outside this state if they are made accessible to 27 the department on seven business days' notice that is sent in a record. 28 (d) All records maintained by the licensee as required in (a) - (c) of this 29 section are open to inspection by the department under AS 06.55.401. 30 Sec. 06.55.406. Money laundering reports. (a) A licensee and an authorized 31 delegate shall file with the attorney general all reports required by federal currency
01 reporting, record keeping, and suspicious transaction reporting requirements as set out 02 in 31 U.S.C. 5311, 31 C.F.R. 103, and other federal and state laws pertaining to money 03 laundering. 04 (b) The timely filing of a complete and accurate report required under (a) of 05 this section with the appropriate federal agency is compliance with the requirements of 06 (a) of this section, unless the department notifies the licensee that the attorney general 07 has notified the department that reports of this type are not being regularly and 08 comprehensively transmitted by the federal agency to the attorney general. 09 Sec. 06.55.407. Confidentiality. (a) Except as otherwise provided in (b) of this 10 section, all information or reports obtained by the department from an applicant, a 11 licensee, or an authorized delegate are confidential and not subject to disclosure under 12 AS 40.25.100 - 40.25.220, including 13 (1) all information contained in or related to examination, 14 investigation, operating, or condition reports prepared by, on behalf of, or for the use 15 of the department; and 16 (2) financial statements, balance sheets, and authorized delegate 17 information. 18 (b) The department may disclose information that is not otherwise subject to 19 disclosure under (a) of this section to representatives of state or federal agencies who 20 promise in a record that they will maintain the confidentiality of the information or if 21 the department finds that the release is reasonably necessary for the protection of the 22 public and in the interests of justice, and the licensee has been given previous notice 23 by the department of its intent to release the information. 24 (c) This section does not prohibit the department from disclosing to the public 25 a list of persons licensed under this chapter or the aggregated financial data concerning 26 those licensees. 27 Article 5. Permissible Investments. 28 Sec. 06.55.501. Maintenance of permissible investments. (a) A licensee shall 29 maintain at all times permissible investments that have a market value computed under 30 generally accepted accounting principles of not less than the aggregate amount of all 31 of its outstanding payment instruments and stored value obligations issued or sold in
01 all states and money transmitted from all states by the licensee. 02 (b) The department, with respect to any licensees, may limit the extent to 03 which a type of investment within a class of permissible investments may be 04 considered a permissible investment, except for money and certificates of deposit 05 issued by a bank. The department by regulation may prescribe or by order allow other 06 types of investments that the department determines to have a safety substantially 07 equivalent to other permissible investments. 08 (c) Permissible investments, even if commingled with other assets of the 09 licensee, are held in trust for the benefit of the purchasers and holders of the licensee's 10 outstanding payment instruments and stored value obligations in the event of 11 bankruptcy or receivership of the licensee. 12 Sec. 06.55.502. Types of permissible investments. (a) Except to the extent 13 otherwise limited by the department under AS 06.55.501, the following investments 14 are permissible under AS 06.55.501: 15 (1) cash, a certificate of deposit, or a senior debt obligation of an 16 insured depository institution; in this paragraph, "insured depository institution" has 17 the meaning given in 12 U.S.C. 1813 (Federal Deposit Insurance Act); 18 (2) banker's acceptance or bill of exchange that is eligible for purchase 19 on endorsement by a member bank of the Federal Reserve System and is eligible for 20 purchase by a Federal Reserve Bank; 21 (3) an investment bearing a rating of one of the three highest grades as 22 defined by a nationally recognized organization that rates securities; 23 (4) an investment security that is an obligation of the United States or a 24 department, agency, or instrumentality of the United States, an investment in an 25 obligation that is guaranteed fully as to principal and interest by the United States, or 26 an investment in an obligation of a state or a governmental subdivision, agency, or 27 instrumentality of a state; 28 (5) receivables that are payable to a licensee from its authorized 29 delegates, in the ordinary course of business, under contracts that are not past due or 30 doubtful of collection if the aggregate amount of receivables under this paragraph does 31 not exceed 20 percent of the total permissible investments of a licensee and the
01 licensee does not hold at one time receivables under this paragraph in any one person 02 aggregating more than 10 percent of the licensee's total permissible investments; and 03 (6) a share or a certificate issued by an open-end management 04 investment company that is registered with the United States Securities and Exchange 05 Commission under 15 U.S.C. 80a-1 - 80a-64 (Investment Company Act of 1940), and 06 whose portfolio is restricted by the management company's investment policy to 07 investments specified in (1) - (4) of this subsection. 08 (b) The following investments are permissible under AS 06.55.501, but only 09 to the extent specified: 10 (1) an interest-bearing bill, note, bond, or debenture of a person whose 11 equity shares are traded on a national securities exchange or on a national over-the- 12 counter market, if the aggregate of investments under this paragraph does not exceed 13 20 percent of the total permissible investments of a licensee and the licensee does not 14 at one time hold investments under this paragraph in any one person aggregating more 15 than 10 percent of the licensee's total permissible investments; 16 (2) a share of a person traded on a national securities exchange or a 17 national over-the-counter market or a share or a certificate issued by an open-end 18 management investment company that is registered with the United States Securities 19 and Exchange Commission under 15 U.S.C. 80a-1 - 80a-64 (Investment Company Act 20 of 1940), and whose portfolio is restricted by the management company's investment 21 policy to shares of a person traded on a national securities exchange or a national over- 22 the-counter market, if the aggregate of investments under this paragraph does not 23 exceed 20 percent of the total permissible investments of a licensee and the licensee 24 does not at one time hold investments in any one person aggregating more than 10 25 percent of the licensee's total permissible investments; 26 (3) a demand-borrowing agreement made to a corporation or a 27 subsidiary of a corporation whose securities are traded on a national securities 28 exchange, if the aggregate of the amount of principal and interest outstanding under 29 demand-borrowing agreements under this paragraph does not exceed 20 percent of the 30 total permissible investments of a licensee and the licensee does not at one time hold 31 principal and interest outstanding under demand-borrowing agreements under this
01 paragraph with any one person aggregating more than 10 percent of the licensee's total 02 permissible investments; and 03 (4) any other investment the department designates, to the extent 04 specified by the department. 05 (c) The aggregate of investments under (b) of this section may not exceed 50 06 percent of the total permissible investments of a licensee calculated under 07 AS 06.55.501. 08 Article 6. Enforcement. 09 Sec. 06.55.601. Suspension and revocation; receivership. (a) The 10 department may suspend or revoke a license, place a licensee in receivership, or order 11 a licensee to revoke the designation of an authorized delegate if 12 (1) the licensee violates this chapter or a regulation adopted or an order 13 issued under this chapter; 14 (2) the licensee does not cooperate with an examination or 15 investigation by the department; 16 (3) the licensee engages in fraud, intentional misrepresentation, or 17 gross negligence; 18 (4) an authorized delegate is convicted of a violation of a state or 19 federal anti-money laundering statute, or violates a regulation adopted or an order 20 issued under this chapter, as a result of the licensee's wilful misconduct or wilful 21 blindness; 22 (5) the competence, experience, character, or general fitness of the 23 licensee, authorized delegate, person in control of a licensee, or responsible person of 24 the licensee or authorized delegate indicates that it is not in the public interest to 25 permit the person to provide money services; 26 (6) the licensee engages in an unsafe or unsound practice; 27 (7) the licensee is insolvent, suspends payment of its obligations, or 28 makes a general assignment for the benefit of its creditors; or 29 (8) the licensee does not remove an authorized delegate after the 30 department issues and serves upon the licensee a final order including a finding that 31 the authorized delegate has violated this chapter.
01 (b) In determining whether a licensee is engaging in an unsafe or unsound 02 practice, the department may consider the size and condition of the licensee's money 03 transmission, the magnitude of the loss, the gravity of the violation of this chapter, and 04 the previous conduct of the person involved. 05 Sec. 06.55.602. Suspension and revocation of authorized delegates. (a) The 06 department may issue an order suspending or revoking the designation of an 07 authorized delegate if the department finds that 08 (1) the authorized delegate violated this chapter or a regulation adopted 09 or an order issued under this chapter; 10 (2) the authorized delegate did not cooperate with an examination or 11 investigation by the department; 12 (3) the authorized delegate engaged in fraud, intentional 13 misrepresentation, or gross negligence; 14 (4) the authorized delegate is convicted of a violation of a state or 15 federal anti-money laundering statute; 16 (5) the competence, experience, character, or general fitness of the 17 authorized delegate or a person in control of the authorized delegate indicates that it is 18 not in the public interest to permit the authorized delegate to provide money services; 19 or 20 (6) the authorized delegate is engaging in an unsafe or unsound 21 practice. 22 (b) In determining whether an authorized delegate is engaging in an unsafe or 23 unsound practice, the department may consider the size and condition of the 24 authorized delegate's provision of money services, the magnitude of the loss, the 25 gravity of the violation of this chapter or a regulation adopted or order issued under 26 this chapter, and the previous conduct of the authorized delegate. 27 Sec. 06.55.603. Orders to cease and desist. (a) If the department determines 28 that a violation of this chapter or of a regulation adopted or an order issued under this 29 chapter by a licensee or authorized delegate is likely to cause immediate and 30 irreparable harm to the licensee, its customers, or the public as a result of the violation, 31 or cause insolvency or significant dissipation of assets of the licensee, the department
01 may issue an order requiring the licensee or authorized delegate to cease and desist 02 from the violation. The order becomes effective on service of it on the licensee or 03 authorized delegate. 04 (b) The department may issue an order against a licensee to cease and desist 05 from providing money services through an authorized delegate who is the subject of a 06 separate order by the department. 07 (c) An order to cease and desist remains effective and enforceable pending the 08 completion of an administrative proceeding under AS 06.55.601 or 06.55.602. 09 (d) A licensee or an authorized delegate who is served with an order to cease 10 and desist may petition the superior court for a judicial order setting aside, limiting, or 11 suspending the enforcement, operation, or effectiveness of the order pending the 12 completion of an administrative proceeding under AS 06.55.601 or 06.55.602. 13 (e) An order to cease and desist expires unless the department commences an 14 administrative proceeding under AS 06.55.601 or 06.55.602 within 10 days after it is 15 issued. 16 Sec. 06.55.604. Consent orders. The department may enter into a consent 17 order at any time with a person to resolve a matter arising under this chapter or a 18 regulation adopted or order issued under this chapter. A consent order shall be signed 19 by the person to whom it is issued or by the person's authorized representative and 20 must indicate agreement with the terms contained in the order. A consent order may 21 provide that it does not constitute an admission by a person that this chapter or a 22 regulation adopted or an order issued under this chapter has been violated. 23 Sec. 06.55.605. Civil penalties. The department may assess a civil penalty 24 against a person who violates this chapter or a regulation adopted or an order issued 25 under this chapter in an amount not to exceed $1,000 each day for each day the 26 violation is outstanding. 27 Sec. 06.55.606. Criminal penalties. (a) A person who intentionally makes a 28 false statement, misrepresentation, or false certification in a record filed or required to 29 be maintained under this chapter or who intentionally makes a false entry or omits a 30 material entry in a record filed or required to be maintained under this chapter is guilty 31 of a class C felony.
01 (b) A person who knowingly engages in an activity for which a license is 02 required under this chapter without being licensed under this chapter and who receives 03 more than $500 in compensation within a 30-day period from this activity is guilty of 04 a class C felony. 05 (c) A person who knowingly engages in an activity for which a license is 06 required under this chapter without being licensed under this chapter and who receives 07 no more than $500 in compensation within a 30-day period from this activity is guilty 08 of a class A misdemeanor. 09 Sec. 06.55.607. Unlicensed persons. (a) If the department has reason to 10 believe that a person has violated or is violating AS 06.55.101 or 06.55.201, the 11 department may issue an order to show cause why an order to cease and desist should 12 not issue requiring that the person cease and desist from the violation of AS 06.55.101 13 or 06.55.201. 14 (b) In an emergency, the department may petition the superior court for the 15 issuance of a temporary restraining order. 16 (c) An order to cease and desist becomes effective upon service of it upon the 17 person. 18 (d) An order to cease and desist remains effective and enforceable pending the 19 completion of an administrative proceeding under AS 06.55.701 and 06.55.702. 20 (e) A person who is served with an order to cease and desist for violating 21 AS 06.55.101 or 06.55.201 may petition the superior court for a judicial order setting 22 aside, limiting, or suspending the enforcement, operation, or effectiveness of the order 23 pending the completion of an administrative proceeding under AS 06.55.701 and 24 06.55.702. 25 (f) An order to cease and desist expires unless the department commences an 26 administrative proceeding within 10 days after it is issued. 27 Article 7. Administrative Procedures. 28 Sec. 06.55.701. Administrative proceedings. All administrative proceedings 29 under this chapter shall be conducted under AS 44.62 (Administrative Procedure Act), 30 except that hearings shall be conducted by the office of administrative hearings 31 (AS 44.64.010).
01 Sec. 06.55.702. Hearings. (a) Except as otherwise provided in AS 06.55.603 02 and 06.55.607 and in (b) of this section, the department may not suspend or revoke a 03 license, place a licensee in receivership, issue an order to cease and desist, suspend or 04 revoke the designation of an authorized delegate, or assess a civil penalty without 05 notice and an opportunity to be heard. The department shall also hold a hearing when 06 requested to hold a hearing by an applicant whose application for a license is denied. 07 (b) Under AS 06.55.106(c) and 06.55.204(c), the department may suspend a 08 license without a hearing unless the licensee requests a hearing. 09 Sec. 06.55.703. Investigative powers. (a) In its investigations under this 10 chapter, the department may administer oaths or affirmations and, on its own motion 11 or on the request of a party to a proceeding, may subpoena witnesses, compel the 12 attendance of witnesses, take evidence, and require the production of material that is 13 relevant to the investigation, including the existence, description, nature, custody, 14 condition, and location of books, documents, and other tangible items, and the identity 15 and location of persons having knowledge of relevant facts or other material 16 reasonably calculated to lead to the discovery of admissible evidence. 17 (c) If a person fails without a lawful excuse to obey a subpoena, and after 18 reasonable notice to all persons affected by the failure, the department may apply to 19 the superior court for an order compelling the person to obey the subpoena. 20 Article 8. Miscellaneous Provisions. 21 Sec. 06.55.801. Uniformity of application and construction. In applying and 22 construing this chapter, consideration shall be given to the need to promote uniformity 23 of the law with respect to its subject matter among states that enact it. 24 Sec. 06.55.802. Exclusions. This chapter does not apply to 25 (1) the United States or a department, an agency, or an instrumentality 26 of the United States; 27 (2) money transmission by the United States Postal Service or by a 28 contractor on behalf of the United States Postal Service; 29 (3) a state, a municipality, a county, or another governmental agency 30 or governmental subdivision of a state; 31 (4) a bank, a bank holding company, an office of an international
01 banking corporation, a branch of a foreign bank, a corporation organized under 12 02 U.S.C. 1861 - 1867 (Bank Service Company Act), or a corporation organized under 12 03 U.S.C. 611 - 633 (Edge Act) under the laws of a state or the United States, if it does 04 not issue, sell, or provide payment instruments or stored value through an authorized 05 delegate who is not a bank, a bank holding company, an office of an international 06 banking corporation, a branch of a foreign bank, a corporation organized under 12 07 U.S.C. 1861 - 1867 (Bank Service Company Act), or a corporation organized under 12 08 U.S.C. 611 - 633 (Edge Act) under the laws of a state or the United States; 09 (5) electronic funds transfer of governmental benefits for a federal, 10 state, or municipal agency or a state political subdivision by a contractor on behalf of 11 (A) the United States or a department, an agency, or an 12 instrumentality of the United States; or 13 (B) a state, or a department, an agency, or an instrumentality of 14 a state; 15 (6) a board of trade or a person who, in the ordinary course of 16 business, provides clearance and settlement services for a board of trade, to the extent 17 of the operation of the person for a board of trade; in this paragraph, "board of trade" 18 means a board of trade designated as a contract market under 7 U.S.C. 1 - 27f 19 (Commodity Exchange Act); 20 (7) a registered futures commission merchant under the federal 21 commodities laws, to the extent of the merchant's operation as a registered futures 22 commission merchant under the federal commodities laws; 23 (8) a person who provides clearance or settlement services under a 24 registration as a clearing agency or an exemption from the registration granted under 25 the federal securities laws, to the extent of the person's operation as a provider of 26 clearance or settlement services under a registration as a clearing agency or an 27 exemption from the registration granted under the federal securities laws; 28 (9) an operator of a payment system to the extent that the operator 29 provides processing, clearing, or settlement services, between or among persons 30 excluded by this section, in connection with wire transfers, credit card transactions, 31 debit card transactions, stored-value transactions, automated clearing house transfers,
01 or similar funds transfers; or 02 (10) a person registered as a securities broker-dealer under federal or 03 state securities laws, to the extent of the person's operation as a securities broker- 04 dealer under federal or state securities laws. 05 Sec. 06.55.810. Disclosures required. Before a licensee provides money 06 services to a person under this chapter, the licensee shall provide to the person a 07 clearly written statement that 08 (1) explains all fees and commissions to be charged by the licensee for 09 providing the money services; 10 (2) explains, for money transmissions that will be redeemed in a 11 currency other than the currency that the person uses to purchase the money 12 transmission service, whether the exchange rate will be applied when the person 13 purchases the money transmission service or when the recipient redeems the payment 14 instrument or stored value; 15 (3) gives the department's address and telephone number for receiving 16 calls regarding complaints and concerns about licensees and the money services 17 provided by licensees; and 18 (4) includes other information reasonably required by the department 19 to inform and protect persons to whom licensees provide money services. 20 Sec. 06.55.820. Establishment of fees and other charges. (a) The department 21 shall adopt regulations that establish the amount and manner of payment of fees 22 required under this chapter. 23 (b) The department shall establish fee levels under (a) of this section so that 24 the total amount of fees collected for both money transmission licensing and currency 25 exchange licensing under this chapter approximately equals the department's actual 26 total regulatory costs for both money transmission licensing and currency exchange 27 licensing. The department shall set the fee levels so that the fee levels for both money 28 transmission licensing and currency exchange licensing are the same. 29 (c) The department shall annually review each fee level to determine whether 30 the regulatory costs are approximately equal to fee collections. If the review indicates 31 that fee collections and regulatory costs are not approximately equal, the department
01 shall calculate fee adjustments and adopt regulations under (a) of this section to 02 implement the adjustments. 03 (d) In January of each year, the department shall report to the office of 04 management and budget all fee levels and revisions made for the previous year under 05 this section. 06 (e) In this section, 07 (1) "fee" means an application fee, a license fee, a renewal fee, the 08 daily late fee for not submitting a renewal report and paying the renewal fee under 09 AS 06.55.106, investigation costs under AS 06.55.105 and 06.55.203, an examination 10 cost under AS 06.55.401, and a fee for approving a change of control under 11 AS 06.55.404; 12 (2) "regulatory costs" means the costs of the department that are 13 attributable to regulation of money services licensing under this chapter. 14 Article 9. General Provisions. 15 Sec. 06.55.990. Definitions. In this chapter, 16 (1) "applicant" means a person who files an application for a license 17 under this chapter; 18 (2) "authorized delegate" means a person whom a licensee designates 19 to provide money services on behalf of the licensee; 20 (3) "bank" means an institution organized under federal or state law 21 that accepts demand deposits or deposits that the depositor may use for payment to 22 third parties and engages in the business of making commercial loans; 23 (4) "control" means 24 (A) the ownership of, or the power to vote, directly or 25 indirectly, at least 25 percent of a class of voting securities or voting interests 26 of a licensee or person in control of a licensee; 27 (B) the power to elect a majority of executive officers, 28 managers, directors, trustees, or other persons exercising managerial authority 29 of a licensee or person in control of a licensee; or 30 (C) the power to exercise directly or indirectly, a controlling 31 influence over the management or policies of a licensee or person in control of
01 a licensee; 02 (5) "currency exchange" means receipt of revenues from the exchange 03 of money of one government for money of another government; 04 (6) "department" means the Department of Commerce, Community, 05 and Economic Development; 06 (7) "executive officer" means a president, a chair of the executive 07 committee, a chief financial officer, a responsible individual, or another individual 08 who performs similar functions; in this paragraph, "responsible individual" means an 09 individual who is employed by a licensee and has principal managerial authority over 10 the provision of money services by the licensee in this state; 11 (8) "licensee" means a person licensed under this chapter; 12 (9) "mobile location" means a vehicle or a movable facility where 13 currency exchange occurs; 14 (10) "monetary value" means a medium of exchange, whether or not 15 redeemable in money; 16 (11) "money" means a medium of exchange that is authorized or 17 adopted by the United States or a foreign government, including a monetary unit of 18 account established by an intergovernmental organization or by agreement between 19 two or more governments; 20 (12) "money services" means money transmission or currency 21 exchange; 22 (13) "money transmission" means selling or issuing payment 23 instruments or stored value, or receiving money or monetary value for transmission, 24 but does not include the provision solely of delivery, online services, 25 telecommunications services, or network access; 26 (14) "outstanding" with respect to a payment instrument, means issued 27 or sold by or for the licensee and reported as sold but not yet paid by or for the 28 licensee; 29 (15) "payment instrument" means a check, a draft, a money order, a 30 traveler's check, or another instrument for the transmission or payment of money or 31 monetary value, whether or not negotiable, but does not include a credit card voucher,
01 a letter of credit, or an instrument that is redeemable by the issuer in goods or services; 02 (16) "person" means an individual, a corporation, a business trust, an 03 estate, a trust, a partnership, a limited liability company, an association, a joint 04 venture, a government, a governmental subdivision, an agency, or an instrumentality, a 05 public corporation, or any other legal or commercial entity; 06 (17) "record" means information that is inscribed on a tangible 07 medium or that is stored in an electronic or other medium and is retrievable in 08 perceivable form; 09 (18) "state" means a state of the United States, the District of 10 Columbia, Puerto Rico, the United States Virgin Islands, or a territory or insular 11 possession subject to the jurisdiction of the United States; 12 (19) "stored value" means monetary value that is evidenced by an 13 electronic record; 14 (20) "unsafe or unsound practice" means a practice or conduct by a 15 person licensed to engage in money transmission or an authorized delegate of the 16 person if the practice creates the likelihood of material loss, insolvency, or dissipation 17 of the licensee's assets, or otherwise materially prejudices the interests of the licensee's 18 customers. 19 Sec. 06.55.995. Short title. This chapter may be cited as the Alaska Uniform 20 Money Services Act. 21 * Sec. 2. The uncodified law of the State of Alaska is amended by adding a new section to 22 read: 23 APPLICABILITY. This Act applies to the provision of money services on or after 24 July 1, 2008. 25 * Sec. 3. The uncodified law of the State of Alaska is amended by adding a new section to 26 read: 27 TRANSITION: REGULATIONS. The Department of Commerce, Community, and 28 Economic Development may proceed to adopt regulations necessary to implement the 29 changes made by this Act. The regulations take effect under AS 44.62 (Administrative 30 Procedure Act), but not before July 1, 2008. 31 * Sec. 4. Section 3 of this Act takes effect immediately under AS 01.10.070(c).
01 * Sec. 5. Except as provided in sec. 4 of this Act, this Act takes effect July 1, 2008.