Legislature(2017 - 2018)BARNES 124
01/26/2018 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB180 | |
| HB274 | |
| HB273 | |
| HB275 | |
| HB240 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 240 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 180 | TELECONFERENCED | |
| += | HB 273 | TELECONFERENCED | |
| += | HB 274 | TELECONFERENCED | |
| += | HB 275 | TELECONFERENCED | |
HB 180-MONEY SERVICES BUSINESS: REQS; LICENSING;
3:17:20 PM
CHAIR KITO announced that the first order of business would be
HOUSE BILL NO. 180, "An Act relating to money transmission and
currency exchange businesses; relating to transmitting value
that substitutes for money; relating to licensing requirements
and registration through the Nationwide Multistate Licensing
System and Registry; relating to surety bonding requirements;
authorizing certain licensees to contract to use subdelegates
for reloading funds on certain stored-value cards; relating to
record retention, reporting requirements, and enforcement
provisions; relating to exemptions; relating to money services
Internet activities; relating to transmitting value and
currency; and providing for an effective date."
3:17:50 PM
MARY SCHLOSSER, Staff, Representative Zach Fansler, Alaska State
Legislature, presented HB 180 on behalf of Representative
Fansler, prime sponsor. She stated that HB 180 would update the
Alaska Money Services Act, passed in 2007. Due to technological
advances over the previous eleven years, current statutes were
outdated. The Act provided a legal framework for currency
exchange and money transmission functions. It would update
licensing and record keeping as well as deter illegal behavior.
Additionally, it would support Alaska businesses by removing the
50 percent outside firm discount and encourage small businesses
by replacing the $25 thousand net worth requirement with a
surety bond. It would broaden the definition of money services
to include virtual currency such as Bitcoin. The Act would
update enforcement provisions and require background checks for
all control persons, as well as increase records retention from
three to five years for greater transparency. Finally, the Act
would require the use of the Nationwide Multistate Licensing
System (NMLS) currently used by over 90 percent of money
services businesses in other states.
3:22:04 PM
FRED PARADY, Deputy Commissioner, Department of Commerce,
Community, and Economic Development, described the proposed
legislation. He began that the primary thing HB 180 would do is
modernize the statute, adopted in 2007 and which technology has
rendered obsolete. This has left the industry and consumers
without clearly defined regulatory requirements, and the
department without the mechanisms it needs to protect Alaska
consumers.
MR. PARADY continued that the proposed legislation would seek to
encompass current technology; changes in terminology; the use of
alternative payment systems to conduct business; and allow some
room within the statute for the evolution of money services
transactions. Of interest to rural Alaska, HB 180 would allow
the limited use of a subdelegate to load a prepaid card and the
locations available for consumers to receive that service would
be increased across rural Alaska.
MR. PARADY added that HB 180 would conform to the Nationwide
Multistate Licensing System [NMLS] and registry, currently used
by over 90 percent of the licensees transacting business in
other states. The NMLS standardizes annual reporting dates and
the 5-year reporting term.
MR. PARADY underlined that the proposed bill would remove an
unfair financial and licensing advantage to out-of-state
entities which had been allowed to come in with a 50 percent
discount on their licensing fee which has proven to be unfair.
However, the proposed bill would remove the $25,000 net worth
requirement for a business to maintain. It would also increase
the surety bond requirement from [a] half million dollars to a
million dollars. A surety bond required would range from
$25,000 to $1 million, and the criteria defining that
requirement would be set in regulation. HB 180 would increase
that surety bond maximum amount and would also establish a bond
requirement for currency exchange licensees.
MR. PARADY stated that HB 180 would add a background check
component for all control persons and would expand the number of
people who have to submit to that background check to ensure
compliance with federal registries regarding terrorism and money
laundering. It would add a requirement for an annual assessment
for each licensee.
MR. PARADY offered that the department could provide consumers a
list of money services businesses, their authorized delegates,
and consumer contact information for consumer complaints.
Additionally, HB 180 would allow for suspension orders and other
orders that fall short of cease and desist orders.
Additionally, the proposed bill would expand a list of
exemptions, namely attorneys and insurance companies for whom
money transmission is ancillary to their core business activity.
3:28:22 PM
CHAIR KITO opened public testimony on HB 180. After
ascertaining that no one wished to testify, he closed public
testimony.
3:28:35 PM
REPRESENTATIVE WOOL moved to report HB 180 out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, HB 180 was reported from the House
Labor and Commerce Standing Committee.