SB209 (2006) Detail

Relative to licensing of money transmitters and check cashers.


SB 209-FN – AS AMENDED BY THE SENATE

03/24/05 0637s

2005 SESSION

05-0958

06/03

SENATE BILL 209-FN

AN ACT relative to licensing of money transmitters and check cashers.

SPONSORS: Sen. Larsen, Dist 15; Sen. Gottesman, Dist 12; Sen. Foster, Dist 13; Sen. Fuller Clark, Dist 24; Sen. Odell, Dist 8; Sen. Flanders, Dist 7; Sen. Clegg, Dist 14

COMMITTEE: Banks and Insurance

ANALYSIS

This bill establishes licensing under the bank commissioner for money transmitters and check cashers.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/24/05 0637s

05-0958

06/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Five

AN ACT relative to licensing of money transmitters and check cashers.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 New Chapter; Licensing of Money Transmitters and Check Cashers. Amend RSA by inserting after chapter 399-F the following new chapter:

CHAPTER 399-G

LICENSING OF MONEY TRANSMITTERS AND CHECK CASHERS

399-G:1 Definitions. In this chapter:

I. “Branch office” means:

(a) A business location within this state of a person required to be licensed under this chapter that is identified by any means to the public as a location at which a money transmitter or check casher conducts business and an entity designated by the money transmitter licensee to engage in the business of money transmission on behalf of the money transmitter licensee.

(b) Branch office does not include:

(1) A person’s principal office location; or

(2) A location identified solely in a telephone directory line listing, a business card, or letterhead if:

(A) The listing, card, or letterhead also contains the address and telephone number of a New Hampshire office of the money transmitter or check casher which directly supervises individuals conducting money transmission or check cashing business at the location; and

(B) No more than one employee or other representative transacts business on behalf of the money transmitter or check casher from the location, or

(C) The commissioner by rule so determines.

II. “Commissioner” means the bank commissioner.

III. “Check cashing” means receiving compensation for accepting payment instruments, other than traveler’s checks, in exchange for money or monetary value delivered to the presenter of the instrument at the time and place of presentation without any agreement specifying when the payment instrument will be submitted for collection.

IV. “Department” means the banking department.

V. “Licensee” means a person, whether a money transmitter or check casher, licensed by the commissioner under this chapter.

VI. “Monetary value” means a medium of exchange, whether or not redeemable in money.

VII. “Money transmission” means engaging in the business of selling or issuing payment instruments or stored value, or receiving money or monetary value for transmission to another location.

VIII. “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 instrument that is redeemable by the issuer in goods or services.

IX. “Person” means an individual, corporation, business trust, estate, trust, partnership, association, 2 or more persons having a joint or common interest, or any other legal or commercial entity however organized.

X. “Principal” of the applicant or licensee means an owner with 10 percent or more interest in the applicant or licensee, a corporate officer, director, member, general and limited liability partner, limited partner with 10 percent or more ownership interest, trustee, beneficiary of 10 percent or more of the trust that owns the applicant or licensee, senior manager, New Hampshire branch manager of the applicant or licensee, and any person occupying similar status or performing similar functions.

XI. “Principal office” means the main office location of a person required to be licensed under this chapter.

XII. “Stored value” means monetary value that is evidenced by an electronic record.

399-G:2 Application of Chapter.

I. This chapter shall provide for the banking department’s regulation of persons that engage in the business of money transmission or check cashing.

II. Any money transmitted or check cashed under the provisions of this chapter shall be further governed by any other applicable laws of the state of New Hampshire.

III. Persons subject to or licensed under this chapter shall abide by applicable federal laws and regulations, the laws and rules of this state, and the orders of the commissioner. Any violation of such law, regulation, or rule is a violation of this chapter.

IV. Licensing in the state of New Hampshire under this chapter does not constitute a finding that the commissioner has passed in any way upon the merits or qualifications of such person or that the commissioner has recommended or given approval to any person. It is unlawful to make, or cause to be made, to any prospective purchaser, customer, or client any representation inconsistent with the provisions of this paragraph.

V. Any license or registration fee required by this chapter shall be paid before a license or registration may become effective.

399-G:3 License Required. Any person not exempt under RSA 399-G:4 that, in its own name or on behalf of other persons, engages in the business of money transmission or check cashing shall obtain a license from the banking department.

399-G:4 Exemptions. The provisions of this chapter shall not apply to:

I. Any bank, trust company, savings and loan association, profit sharing and pension trust, credit union, thrift company, insurance company, or receivership, which may be chartered by this state or any other state or by any agency of the United States.

II. The United States or any department, instrumentality, or agency thereof.

III. A state, county, city, or any other governmental agency or governmental subdivision of a state.

IV. Electronic funds transfer of governmental benefits for a federal, state, county, or 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.

V. Retailers issuing stored value credits or gift cards.

VI. Other persons not within the intent of this chapter as the commissioner may designate by rule or order.

399-G:5 License Application; Requirements; Investigation.

I. To be considered for licensing, each person shall complete and file with the department one verified application prescribed by the commissioner. At a minimum, the application shall state the primary business address of the applicant, the address of its principal office and all branch offices located or to be located within the state, and a list of the principals of the applicant. The applicant shall submit any other information that the commissioner may require.

II.(a) The license issued for the licensee’s principal place of business shall be referred to as a “principal office license.” Each additional authorization to conduct business issued for money transmission or check cashing activity occurring in a location in this state that is separate from the licensee’s principal place of business shall be referred to as a “branch office registration.” If the applicant desires to transmit money or cash checks in more than one location, the commissioner, upon favorable action on the applicant’s principal office license, shall issue a branch office registration for each location where the business of money transmission or check cashing is to be conducted.

(b) Each license application shall be accompanied by a nonrefundable application fee of $500 for each principal office and $25 for each branch office registration, up to a maximum annual fee of $4,000. Sums collected under this chapter shall be payable to the state treasurer as restricted revenue and credited to the appropriation for the commissioner, consumer credit administration division.

(c) Each applicant shall submit detailed financial information sufficient for the commissioner to determine the applicant’s ability to conduct the business of a money transmitter or a check casher with financial integrity. The application shall include a statement of net worth in all cases and an applicant shall demonstrate and maintain a positive net worth computed in accordance with generally accepted accounting principles. Net worth statements provided in connection with a license application under this section shall be subject to review and verification during the course of any examination or investigation conducted under the authority of RSA 399-G:13. Each money transmitter applicant shall post a continuous surety bond in the amount of $100,000. Surety bonds shall include a provision requiring the surety to give written notice to the commissioner 20 days in advance of the cancellation or termination of the bond. Every bond shall provide that no recovery may be made against the bond unless the state makes a claim for recovery or the person brings suit naming the principal within 6 years after the act upon which the recovery or suit is based. The obligations of the surety shall survive the bankruptcy, insolvency, liquidation, or reorganization of the licensee, including, without limitation, any bankruptcy, insolvency, liquidation, or reorganization commenced by or against the licensee under any applicable state or federal law, including the United States Bankruptcy Code.

III. Every applicant for licensing under this chapter shall file with the commissioner, in such form as the commissioner prescribes by rule, irrevocable consent appointing the commissioner to receive service of any lawful process in any non-criminal suit, action, or proceeding against the applicant or the applicant’s successor, executor, or administrator which arises under this chapter or any rule or order under this chapter after the consent has been filed, with the same force and validity as if served personally on the person filing the consent. A person who has filed such a consent in connection with a previous application need not file another. Any other person who engages in conduct regulated by this chapter shall be deemed to have appointed the commissioner as its agent. Service may be made by leaving a copy of the process in the office of the commissioner along with $5, but is not effective unless:

(a) The plaintiff, who may be the attorney general in a suit, action, or proceeding instituted by him or her, forthwith sends a notice of the service and a copy of the process by registered mail to the defendant or respondent at such person’s last address on file with the commissioner; and

(b) The plaintiff’s affidavit of compliance with this paragraph is filed in the case on or before the return day of the process, if any, or within such further time as the court allows.

IV. Upon the applicant’s filing of the complete application and payment of the required fee, the commissioner shall have up to 120 days to investigate and determine whether the applicant’s financial resources, experience, personnel, and record of past or proposed conduct warrant the public’s confidence and the issuance of a license.

399-G:6 License and Registration Grant.

I. If the commissioner determines that the applicant meets the requirements of this chapter, then the commissioner shall issue a license or licenses permitting the applicant to engage in the business of money transmission or check cashing in accordance with the laws of this state. Licensees shall be responsible for the supervision of their employees and agent. Principal office licensees shall be responsible for supervision of their branch offices.

II. Each license issued under the provisions of this chapter shall state the name and address of the principal office of the licensee. Each registration issued under the provisions of this chapter shall state the name and address of the branch office location for which that registration is issued.

III. If a licensee is a person other than a natural person, the license issued to it shall entitle all officers, directors, members, partners, trustees, and employees of the licensee to engage in the business of money transmission or check cashing; provided that one officer, director, member, partner, employee, or trustee of such person shall be designated in the license as the individual to be contacted for purposes of this chapter.

IV. If the licensee is a natural person, the license shall entitle all employees of the licensee to engage in the business of money transmission or check cashing.

V. A license or registration issued under this chapter shall not be transferable or assignable between persons without obtaining the approval of the commissioner before the assignment or transfer.

399-G:7 License Denial; Appeal.

I. If the commissioner determines that the applicant fails to meet the requirements of this chapter, the commissioner shall immediately notify the applicant of that determination.

II. Applicants may appeal a license denial in accordance with RSA 541-A and rules of the commissioner adopted thereunder.

III. Applicants may petition the department for a rehearing in accordance with RSA 541 if the decision in an appeal conducted pursuant to paragraph II affirms a denial of a license application.

399-G:8 License or Registration Term; Renewal.

I. Each license or registration shall remain in force until it has been surrendered, revoked, or suspended, or expires in accordance with the provisions of this chapter. Each license or registration shall expire on December 31 of each calendar year.

II. If a person holds a valid license or registration under this section and is in compliance with this chapter and the rules thereunder, such licensee may renew the license or registration by paying the required fee to the banking department on or before December 1 for the ensuing year that begins on January 1. Failure to renew the license or registration shall result in the license or registration terminating on December 31.

III. A renewal fee of $500 for the principal office license and $25 for each branch office registration, up to a maximum annual fee of $4,000, shall be submitted with the application for license renewal.

IV. No application for renewal shall be denied without reasonable cause and the right of appeal pursuant to RSA 541-A and RSA 541.

399-G:9 License Posting. It shall be unlawful to engage in the business of money transmission or check cashing without a conspicuously posted license in the licensee’s principal place of business within this state or a conspicuously posted registration in each of the licensee’s branch offices within this state.

399-G:10 Change in Name; Ownership; Location.

I. No licensee shall conduct the business of a money transmitter or a check casher under a trade or other name that is different from the name stated in its principal office license without immediately notifying the commissioner, who shall then amend the license and any registrations accordingly.

II. A licensee shall submit written notification to the department of the name and address of each new principal of the licensee no later than 30 days after such change.

III. Licensees shall provide written notice to the department of any proposed change in location or proposed closing of any office no later than 10 business days prior to the effective date of such change of location or closing. In the case of an emergency, as determined by the commissioner, a licensee may close a registered branch office and provide notice of the closure to the department within 2 business days. Failure to comply with the provisions of this paragraph shall be sufficient cause for license revocation or denial of license renewal applications.

IV. Persons licensed under this chapter are under a continuing obligation to update information on file with the commissioner. If any information filed with the commissioner becomes materially inaccurate, the licensee shall promptly submit to the commissioner an amendment to its application that will correct the information on file with the commissioner. An amendment shall be considered filed promptly if the amendment is filed within 30 days after the event that requires the filing of the amendment.

399-G:11 License Surrender.

I.(a) A licensee who ceases to engage in the business of a money transmitter or check casher at any time during a license year for any cause, including but not limited to bankruptcy, license revocation, or voluntary dissolution, shall surrender such license and office registrations, if any, in person or by registered or certified mail to the commissioner within 15 calendar days of such cessation of business, and shall cause to be published in a newspaper of general circulation in the licensee’s market area a notice to such effect. The commissioner shall adopt rules, in accordance with RSA 541-A, relative to such notice.

(b) Withdrawal of the surrendered license and office registrations, if any, shall become effective 30 days after receipt by the commissioner or within such shorter period of time as the commissioner may determine, unless a revocation or suspension proceeding is pending when the license is surrendered or a proceeding to revoke or suspend or to impose conditions upon the withdrawal is instituted within 30 days after the license is surrendered. If a proceeding is pending or instituted, withdrawal becomes effective at such time and upon such conditions as the commissioner by order determines. The commissioner may nevertheless institute a revocation or suspension proceeding under RSA 399-G:19 within one year after withdrawal became effective and may enter a revocation or suspension order as of the last date on which the license was effective.

II. Failure to comply with the provisions of this section and rules adopted under this section shall be cause for denial of future license applications and the imposition of penalties under RSA 399-G:22.

399-G:12 Record Keeping.

I. The licensee shall maintain such records as will enable the department to determine whether the licensee’s business is in compliance with the provisions of this chapter and the rules adopted pursuant to it. Such records shall be maintained and made available for examination at the licensee’s principal office or its branch office location or the office of its New Hampshire agent for a period of at least 3 years or longer if the commissioner prescribes a period by rule. Licensees may maintain photocopies, microfilm, or microfiche copies of original documents.

II. Those licensees that maintain their files in another state are required to return the files to their principal New Hampshire office or the office of their New Hampshire agent for examination no later than 21 calendar days after being requested to do so by the department. Failure to provide files and documents shall subject a licensee to a fine of $50 per day for each day after 21 days the files and documents are not produced. Failure to provide files and documents within 60 days after being requested to do so by the department shall be sufficient cause for license revocation, suspension, or denial.

399-G:13 Examinations.

I. The department may examine the business affairs and records of any licensee or any other person, whether licensed or not, as it deems necessary to determine compliance with this chapter and the rules adopted pursuant to it. In determining compliance, the department may examine the books, accounts, records, files, and other documents or matters of any licensee or person. The department shall have the power to subpoena witnesses and administer oaths in any adjudicative proceedings, and to compel, by subpoena duces tecum, the production of all books, records, files, and other documents and materials relevant to its investigation.

II. Any agent of the department may make a thorough examination into the business affairs of each licensee and shall report any violations of law, rule, or standard business practice to the department.

III. The expense of examination shall be chargeable to and paid by the licensee. The procedure for such payment shall be the same as for payments by institutions for cost of examinations under RSA 383:11.

IV. If, after investigation, the commissioner finds a person violated this chapter, or a rule or order under this chapter, or the person charged with the violation is found in default, the commissioner shall be entitled to recover the cost of the investigation, in addition to any other penalty provided for under this chapter.

V. Every person being examined, and all of the officers, directors, employees, agents, and representatives of such person shall make freely available to the commissioner or his or her examiners, the accounts, records, documents, files, information, assets, and matters in their possession or control relating to the subject of the examination and shall facilitate the examination.

VI. Upon receipt of a written report of examination, the licensee shall have 30 days or such additional period as the commissioner for good cause may allow, to review the report, recommend any changes, and set forth in writing the remedial course of action the licensee will pursue to correct any reported deficiencies outlined in the report.

VII. If requested by the person examined, within the period allowed in paragraph VI, or if deemed advisable by the commissioner without such request, the commissioner shall hold a closed hearing relative to the report and shall not file the report in the department until after such closed hearing and issuance of his or her order thereon. If no such closed hearing has been requested or held, the examination report, with such modifications as the commissioner deems proper, shall be accepted by the commissioner and filed upon expiration of the review period provided for in paragraph VI.

VIII. All reports pursuant to this section shall be privileged and exempt from the requirements of RSA 91-A. The comments and recommendations of the examiner shall also be exempt.

399-G:14 Activities of Check Cashers.

I. A licensee, at every licensed business location, shall conspicuously post and at all times display a notice stating all fees charged. A licensee shall file with the commissioner a statement of the fees charged for services at every licensed location.

II. Before a licensee shall deposit with any financial institution a payment instrument that is cashed by a licensee, each instrument shall be endorsed with the actual name under which the licensee is doing business. The words “Licensed Check Cashing Business” must be written legibly or stamped immediately after or below the name of the endorser.

III. A licensee shall comply with all applicable federal statutes governing currency transaction reporting.

IV. A licensee shall not alter or delete any information on any payment instrument cashed.

V. A licensee shall issue a receipt for each check cashing transaction upon request. The receipt shall include at a minimum the amount of the payment instrument and the total fee charged.

VI. A licensee shall not impose any fee or other charge for bad checks.

VII. Within 10 business days after being advised by the payor financial institution that a payment instrument has been altered, forged, stolen, obtained through fraudulent or illegal means, negotiated without proper legal authority, or represents the proceeds of illegal activity, the licensee shall notify the police department in the city or town where the payment instrument was cashed. If a payment instrument is returned to the licensee for any of the aforementioned reasons, the licensee may not release or destroy the payment instrument without the consent of the city or town police department, or other investigative law enforcement authority.

VIII. No licensee shall issue coupons, gift certificates, or tokens to be used in lieu of money when cashing a payment instrument.

IX. No licensee shall require the customer to receive payment by a method which causes the customer to pay additional fees and charges to the licensee or other person, and no licensee shall charge or receive any other charges or fees in addition to the fees listed in this chapter.

X. A licensee shall pay to every customer tendering a payment instrument to be cashed the entire face amount of such instrument in cash, less any charges permitted by this section, on the same date upon which such instrument is presented to the licensee.

XI. A licensee shall not require that a customer cash 2 or more separate checks in a manner to avoid the limitations on the fees as set forth in this section.

XII. No check casher shall:

(a) Charge check cashing fees, except as otherwise provided in this chapter, in excess of 5 percent of the face amount of the payment instrument or $5, whichever is greater.

(b) Charge check cashing fees in excess of 3 percent of the face amount of the payment instrument, or $2, whichever is greater, if such payment instrument is the payment of any kind of state public assistance or federal Social Security benefit, if the customer cashing the payment instrument is the named payee of such payment instrument.

(c) Charge check cashing fees for personal checks or money orders in excess of 10 percent of the face amount of the personal check or money order or $5, whichever is less.

(d) Charge a fee for a returned payment instrument of more than $25 plus all protest and fees imposed by the payor financial institution, in addition to the face amount of the payment instrument. Fees and charges for a returned payment instrument shall be due from the person who presented the instrument to the check cashier.

XIII. No licensee shall agree to hold a payment instrument for later deposit. No licensee shall cash or advance any money on a postdated payment instrument.

XIV. Licensees may charge a customer with a one-time membership fee not to exceed $10.

399-G:15 Annual Report.

I. Each licensee shall file, under oath, an annual report with the banking department on or before February 1 each year concerning operations for the preceding year or license period ending December 31 upon the form prescribed by the department.

II. A person who surrenders, withdraws, or does not renew a license shall file the annual report as required in paragraph I, notwithstanding the fact that he or she is not licensed on the date that the report is due.

III. Each licensee shall also file, under oath, its financial statement with the commissioner within 90 days from the date of its fiscal year end. The financial statement shall be prepared in accordance with generally accepted accounting principles with appropriate note disclosures. A money transmitter’s financial statement shall include a balance sheet, income statement, statement of changes in owners’ equity, a cash flow statement, and a statement of net worth. A check casher’s financial statement shall include a balance sheet or statement of net worth. If the financial statement filed under this section is not audited, a certification statement shall be attached and signed by an authorized officer of the licensee. The certification statement shall state that the financial statement is true and accurate to the best of the officer’s belief and knowledge.

IV. The department shall publish its analysis of the information required in the licensee’s annual report as a part of the commissioner’s annual report.

V. Any money transmitter or check casher failing to file either the annual report or the financial statement required by this section within the time prescribed may be required to pay to the banking department a penalty of $25 for each calendar day the annual report or financial statement is overdue up to a maximum penalty of $2,500 per report or statement.

VI. In addition to the annual report and financial statement, the banking department may require such additional regular or special reports as it may deem necessary to the proper supervision of licensees under this chapter.

399-G:16 Money Laundering Reports.

I. Licensees shall file with the commissioner copies of all reports required by federal currency reporting, record keeping, and suspicious transaction reporting requirements as set forth in 31 U.S.C. section 5313, 31 C.F.R. part 103, and other federal and state laws pertaining to money laundering.

II. The timely filing of a complete and accurate report required by paragraph I with the appropriate federal agency is compliance with the requirements of this section, unless the commissioner notifies the licensee that reports of this type are not being regularly and comprehensively transmitted by the federal agency to the commissioner.

399-G:17 Advertising. No licensee or other person shall advertise, print, display, publish, distribute, or broadcast or permit to be advertised, printed, displayed, published, distributed, or broadcast in any manner whatsoever any statement or representation with regard to the rates, terms, or conditions for check cashing or money transmission under the provisions of this chapter which is false, misleading, or deceptive.

399-G:18 Consumer Inquiries.

I. Consumer complaints naming licensees under this chapter, which are filed in writing with the office of the commissioner, shall be forwarded via certified or registered mail to the licensee for response within 10 days of receipt by the department. Licensees shall have 30 days after receipt of such complaint to send written acknowledgment thereof to the consumer and the department. Not later than 60 days following receipt of such complaint, the licensee shall conduct an investigation of the complaint and either:

(a) Make appropriate corrections in the account of the consumer and give the consumer and the department written notification of such corrections, including documentary evidence thereof; or

(b) Provide a written explanation or clarification to the consumer and the department which sets forth the reasons why the licensee believes its actions are correct, including copies of documentary evidence thereof.

II. A licensee who fails to respond to consumer complaints as required by this section within the time prescribed shall pay to the commissioner the sum of $50 for each day such response is overdue. For purposes of this section, the date of response shall be the date the department receives the response.

III.(a) Licensees which, because of extenuating circumstances beyond the control of the licensee, are unable to comply with the time limits prescribed in this section, may request the commissioner in writing for a waiver of such time limits. Waivers shall not be granted or considered unless the request for the waiver:

(1) Is received by the banking department within 50 days following the licensee’s receipt of the complaint;

(2) Specifies the reason for the request; and

(3) Specifies a date certain by which the licensee shall comply with the provisions of this section.

(b) Requests for waivers shall be either granted or denied within 5 days of receipt by the banking department.

399-G:19 License Revocation; Suspension.

I. The commissioner may issue an order requiring the person to whom any license has been granted to show cause why the license should not be revoked. The order shall give reasonable notice of the opportunity for a hearing and shall state the reasons for the issuance of the order. The commissioner may by order summarily suspend any license pending final determination of any order to show cause, or of any other proceeding under this section, provided the commissioner finds that the public interest would be irreparably harmed by delay in issuing such order. Upon the entry of the order, the commissioner shall promptly notify the licensee that the order has been entered, the reasons for the order, and that within 10 days after receipt of a written request the matter will be scheduled for hearing. Delivery of the order shall be by hand or registered mail at the principal office of the licensee. Delivery of the order to an officer, director, 5 percent or more owner, member, partner, or legal representative of the licensee shall be deemed a valid delivery of the order. If the person to whom an order to show cause is issued fails to request a hearing within 30 days of receipt of the order, such person shall be deemed in default, and the order shall, on the thirty-first day, become permanent, and shall remain in full force and effect until modified or vacated by the commissioner, for good cause shown. A hearing shall be held not later than 10 days after the request for such hearing is received by the commissioner. Within 20 days of the date of the hearing the commissioner shall enter an order making such disposition of the matter as the facts require. If the person to whom the license was granted fails to appear at a hearing after being duly notified, such person shall be deemed in default and the proceeding may be decided against him or her upon the order to show cause, the allegations of which may be deemed to be true. The commissioner may by order, after notice and opportunity for hearing, assess penalties or deny, suspend, or revoke a license if it is in the public interest and the licensee, any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the licensee:

(a) Has violated any provision of this chapter or rules thereunder.

(b) Has not met the standards established in this chapter.

(c) Has filed an application for licensing which as of its effective date, or as of any date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained any statement which was, in light of the circumstances under which it was made, false or misleading with respect to any material fact.

(d) Has made a false or misleading statement to the commissioner or in any reports to the commissioner.

(e) Has made fraudulent misrepresentations, or has circumvented or concealed any of the material particulars required to be stated or furnished to a customer under the provisions of this chapter.

(f) Has failed to supervise its agents, managers, or employees.

(g) Is the subject of an order entered within the past 5 years by this state, any other state, or a federal regulator denying, suspending, or revoking a money transmission or check cashing license or registration.

(h) Is permanently, preliminarily, or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of money transmitting or check cashing.

(i) Is not qualified on the basis of such factors as experience, knowledge, and financial integrity.

(j) Has engaged in dishonest or unethical practices in the conduct of money transmission or check cashing.

(k) Has violated applicable federal laws or rules.

II. The department may, upon notice and opportunity for a hearing, suspend any license for a period not exceeding 30 days, pending investigation by the department.

III. Any license revocation, license suspension, or unfavorable action by the banking department on a license shall further comply with the provisions of RSA 541-A:30.

IV. The banking department may take action for immediate suspension of a license, pursuant to RSA 541-A:30, III.

V. If a licensee is a partnership, association, corporation, or entity however organized, it shall be sufficient cause for the suspension or revocation of a license that any officer, director, or trustee of a licensed association or corporation or any member of a licensed partnership has so acted or failed to act in behalf of said licensee as would be cause for suspending or revoking a license to such party as an individual. Each licensee shall be responsible for supervision of its branch offices and for the acts of any or all of its employees while acting as its agent if such licensee, after actual knowledge of said acts, retained the benefits, proceeds, profits, or advantages accruing from said acts or otherwise ratified said acts.

VI. If the commissioner finds that any licensee is no longer in existence or has ceased to do business as a money transmitter or check casher, or cannot be located after a reasonable search, the commissioner may by order revoke the license or deny the application for renewal. The commissioner may deem abandoned and withdraw any application for licensure made pursuant to this chapter, if any applicant fails to respond in writing within 180 days to a written request from the commissioner requesting a response. Such request shall be sent via certified mail to the last known address of the applicant that is on file with the commissioner.

399-G:20 Violations.

I. The department may issue and serve upon any licensee or person over whom it has jurisdiction a complaint setting forth charges whenever the department is of the opinion that the licensee or person is violating or has violated any provision of this chapter or any rule or order under this chapter.

II. The department may issue a cease and desist order against any person who it has reasonable cause to believe is in violation of the provisions of this chapter or any rule or order under this chapter. Delivery of such order shall be by hand or registered mail at the principal office of the person. The order shall be calculated to give reasonable notice of the rights of the person to request a hearing on the order and shall state the reasons for the entry of the order. A hearing shall be held not later than 10 days after the request for such hearing is received by the commissioner. Within 20 days of the date of the hearing the commissioner shall issue a further order vacating the cease and desist order or making it permanent. All hearings shall comply with RSA 541-A. If the person to whom a cease and desist order is issued fails to appear at the hearing after being duly notified, such person shall be deemed in default, and the proceeding may be determined against him or her upon consideration of the cease and desist order, the allegations of which may be deemed to be true. If the person to whom a cease and desist order is issued fails to request a hearing within 30 calendar days of receipt of such order, then such person shall likewise be deemed in default, and the order shall, on the thirty-first day, become permanent, and shall remain in full force and effect until and unless later modified or vacated by the commissioner, for good cause shown.

399-G:21 Administration by Commissioner; Rulemaking.

I. The commissioner shall administer and enforce the provisions of this chapter.

II. Pursuant to RSA 541-A, the commissioner may adopt such rules as he or she deems necessary to the administration and enforcement of this chapter. Such rules shall be consistent with the provisions of this chapter, and may include, but shall not be limited to, the following:

(a) Criteria for determining that other locations identified by a telephone directory listing, business card, or letterhead are not branch offices under RSA 399-G:1, I(b)(2)(c).

(b) Persons who may be designated as not within the intent of this chapter under RSA 399-G:4, VI.

(c) The application form for licenses and registrations required under RSA 399-G:5. (d) The form for designating the commissioner as agent for service of process under RSA 399-G:5, III.

(e) Requirement for personal disclosure statements under RSA 399-G:5.

(f) The form of license and registration issued under RSA 399-G:6. (g) Requirements for notice of cessation of business and surrender of license under RSA 399-G:11, I(a).

(h) The length of time for keeping records under RSA 399-G:12.

(i) Requirements for annual reports required by RSA 399-G:15.

III. The commissioner may prepare, alter, or withdraw such forms as are necessary to comply with the provisions of this title.

IV. The commissioner may issue, amend, or rescind such orders as are reasonably necessary to carry out the provisions of this chapter.

V. The commissioner may, for good cause shown, abate all or a portion of delinquency penalties assessed under this chapter.

VI. All actions taken by the commissioner pursuant to this chapter shall be taken only when the commissioner finds such action necessary or appropriate to the public interest or for the protection of consumers and consistent with the provisions of this chapter.

399-G:22 Penalty.

I. Any person who violates any provision of this chapter shall be guilty of a misdemeanor for each violation if a natural person, or guilty of a felony for each violation if any other person.

II. Any person who knowingly violates any rule or order of the commissioner may, upon notice and opportunity for hearing, except where another penalty is expressly provided, be subject to license suspension or revocation, or imposition of an administrative fine not to exceed $2,500 for each violation in lieu of or in addition to suspension or revocation.

III. Any person who negligently violates any rule or order of the commissioner may, upon notice and opportunity for hearing, except where another penalty is expressly provided, be subject to license suspension, revocation, or denial, including the forfeiture of any application fee, or the imposition of an administrative fine not to exceed $1,500 for each violation, in lieu of or in addition to suspension or revocation.

IV. Any person who, either knowingly or negligently, violates any provision of this chapter may, upon notice and opportunity for hearing, and in addition to any such other penalty provided for by law, be subject to license suspension, revocation or denial, including forfeiture of any application fee, or an administrative fine not to exceed $2,500, or both. An administrative action or fine may be imposed in addition to any criminal or civil penalties imposed.

V. Every person who directly or indirectly controls a person liable under this section, every partner, principal executive officer, or director of such person, every person occupying a similar status or performing a similar function, every employee of such person who materially aids in the act constituting the violation, and every licensee or person acting as a common law agent who materially aids in the acts constituting the violation, either knowingly or negligently, may, upon notice and opportunity for hearing, and in addition to any other penalty provided for by law, be subject to license suspension, revocation, or denial, including the forfeiture of any application fee, or the imposition of an administrative fine not to exceed $2,500, or both. An administrative action or fine may be imposed in addition to any criminal or civil penalties imposed. No person shall be liable under this paragraph who shall sustain the burden of proof that such person did not know, and in the exercise of reasonable care could not have known, of the existence of facts by reason of which the liability is alleged to exist.

399-G:23 Records and Filings.

I. A document is filed when it is received by the commissioner. If any filing deadline date falls on a weekend or on a New Hampshire state or federal legal holiday, the due date shall be automatically extended to the next business day following such weekend or holiday.

II. Electronic filings, when received by the commissioner, are deemed filed, are prima facie evidence that a filing has been duly authorized and made by the signatory on the application or document, are admissible in any civil or administrative proceeding under this chapter, and are admissible in evidence in accordance with the rules of superior court in any action brought by the attorney general under this chapter.

III. A licensee may maintain its records in electronic format if, upon request, the licensee provides the commissioner with:

(a) A full explanation of the programming of any data storage or communications systems in use; and

(b) Information from any books, records, electronic data processing systems, computers, or any other information storage system in the form requested by the commissioner.

399-G:24 Applicability. Prior law exclusively governs all suits, actions, prosecutions or proceedings which are pending or may be initiated on the basis of facts or circumstances occurring before January 1, 2006, except that no civil suit or action may be maintained to enforce any liability under prior law unless brought within any period of limitation which applied when the cause of action accrued and in any event within 3 years after January 1, 2006.

2 Banking Department; Positions Established. The following classified positions are hereby established in the banking department:

I. Classification: Bank Examiner Trainee

Labor Grade: 21

Number of positions: 2 positions of this classification.

II. Classification: Program Specialist I

Labor Grade: 19

Number of positions: one position of this classification.

3 Effective Date. This act shall take effect January 1, 2006.

LBAO

05-0958

1/27/05

SB 209-FN - FISCAL NOTE

AN ACT relative to licensing of money transmitters and check cashers.

FISCAL IMPACT:

The Office of Legislative Budget Assistant is unable to complete a fiscal note for this bill as it is awaiting information from the Banking Department. When completed, the fiscal note will be forwarded to the Senate Clerk's Office.