ORS Chapter 717 - Oregon Statutes

Chapter 717 — MoneyTransmission

 

2009 EDITION

 

 

MONEYTRANSMISSION

 

FINANCIALINSTITUTIONS

 

717.200     Definitions

 

717.205     Licenserequired to conduct money transmission business; relationship to banking

 

717.210     Exemptions;waiver; rules

 

717.215     Requirementsfor licensees; net worth; permissible investments

 

717.220     Licenseapplication; rules

 

717.225     Securitydevices

 

717.230     Applicationfee

 

717.235     Licenseissuance; grounds for disapproval of application; appeals

 

717.240     Licenserenewal; annual fee; renewal report; license suspension

 

717.245     Eventsrequiring filing of report with director

 

717.250     Noticeof change or acquisition of control of licensee; waiver; rules

 

717.255     Examinationof licensee; notice; costs

 

717.260     Retentionof records

 

717.265     Suspensionor revocation of license; appeals

 

717.270     Conductof money transmission business through authorized delegates; contracts

 

717.275     Requirementsfor authorized delegates

 

717.280     Ordersuspending or barring authorized delegate; grounds; appeals

 

717.285     Limiton responsibility of licensee; costs and attorney fees

 

717.290     Ceaseand desist order; appeals

 

717.295     Injunctions;consent orders

 

717.300     Subpoenaauthority

 

717.305     Consentto jurisdiction of courts; director as agent for service of process

 

717.310     Rules

 

717.315     Depositof moneys in Consumer and Business Services Fund

 

717.320     Shorttitle

 

717.900     Civilpenalties

 

717.905     Criminalpenalties

 

                        717.010 [1965 c.503 §2;1973 c.797 §403; 1985 c.762 §51; 1987 c.373 §55; 1993 c.744 §23; repealed by1999 c.571 §30]

 

      717.020 [1965 c.503 §1;repealed by 1999 c.571 §30]

 

      717.030 [1965 c.503 §3;1973 c.797 §404; repealed by 1999 c.571 §30]

 

      717.040 [1965 c.503 §4;1973 c.797 §405; repealed by 1999 c.571 §30]

 

      717.050 [1965 c.503 §5;1973 c.797 §406; repealed by 1999 c.571 §30]

 

      717.060 [1965 c.503 §6;1973 c.797 §407; repealed by 1999 c.571 §30]

 

      717.070 [1965 c.503 §7(1);1973 c.797 §408; 1977 c.135 §40; repealed by 1999 c.571 §30]

 

      717.075 [1973 c.797 §409;repealed by 1999 c.571 §30]

 

      717.080 [1965 c.503 §7(2),(3); 1973 c.797 §410; 1991 c.331 §118; 1997 c.631 §527; repealed by 1999 c.571 §30]

 

      717.084 [1973 c.797 §411;repealed by 1999 c.571 §30]

 

      717.086 [1973 c.797 §412;1991 c.331 §119; repealed by 1999 c.571 §30]

 

      717.090 [1965 c.503 §8;1973 c.797 §413; 1991 c.331 §120; repealed by 1999 c.571 §30]

 

      717.095 [1977 c.135 §39;1985 c.762 §52; repealed by 1999 c.571 §30]

 

      717.100 [1965 c.503 §9;1973 c.797 §414; repealed by 1999 c.571 §30]

 

      717.110 [1965 c.503 §10;1973 c.797 §415; repealed by 1999 c.571 §30]

 

      717.120 [1965 c.503 §11;1973 c.797 §416; repealed by 1999 c.571 §30]

 

      717.130 [1965 c.503 §12;1973 c.797 §417; repealed by 1999 c.571 §30]

 

      717.140 [1965 c.503 §13;repealed by 1999 c.571 §30]

 

      717.150 [1965 c.503 §14;1973 c.797 §418; repealed by 1999 c.571 §30]

 

      717.160 [1955 c.503 §15;1971 c.734 §173; 1973 c.797 §419; repealed by 1999 c.571 §30]

 

      717.200Definitions.As used in ORS 717.200 to 717.320, 717.900 and 717.905, unless the contextrequires otherwise:

      (1)“Applicant” means a person filing an application for a license under ORS717.200 to 717.320, 717.900 and 717.905.

      (2)“Authorized delegate” means a person designated by the licensee under theprovisions of ORS 717.200 to 717.320, 717.900 and 717.905 to sell or issuepayment instruments or engage in the business of transmitting money on behalfof a licensee.

      (3)“Control” means the possession, directly or indirectly, of the power to director cause the direction of the management and policies of a person, whetherthrough ownership of voting securities, by contract or otherwise.

      (4)“Controlling person” means any person in control of a licensee or applicant fora license.

      (5)“Controlling shareholder” means any person, or group of persons acting inconcert, that owns 25 percent or more of any voting class of an applicant’sstock.

      (6)“Director” means the Director of the Department of Consumer and BusinessServices.

      (7)“Electronic instrument” means a card or other tangible object for thetransmission or payment of money that contains a microprocessor chip, magneticstripe or other means for the storage of information, that is prefunded and forwhich the value is decremented upon each use. “Electronic instrument” does notinclude a card or other tangible object that is redeemable by the issuer in theissuer’s goods or services.

      (8)“Executive officer” means the licensee’s president, chairperson of theexecutive committee, senior officer responsible for the licensee’s business,chief financial officer and any other person who performs similar functions.

      (9)“Licensee” means a person licensed under ORS 717.200 to 717.320, 717.900 and717.905.

      (10)“Material litigation” means any litigation that, according to generallyaccepted accounting principles, is deemed significant to an applicant’s orlicensee’s financial health and would be required to be referenced in theapplicant’s or licensee’s annual audited financial statements, report toshareholders or similar documents.

      (11)“Money transmission” means the sale or issuance of payment instruments orengaging in the business of receiving money for transmission or transmittingmoney within the United States or to locations abroad by any and all means,including but not limited to payment instrument, wire, facsimile or electronictransfer.

      (12)“Payment instrument” means any electronic or written check, draft, money order,traveler’s check or other electronic or written instrument or order for thetransmission or payment of money, sold or issued to one or more persons,whether or not the instrument is negotiable. “Payment instrument” does notinclude any credit card voucher, any letter of credit or any instrument that isredeemable by the issuer in goods or services.

      (13)“Outstanding payment instrument” means any payment instrument issued by alicensee that has been sold in the United States directly by the licensee orany payment instrument issued by a licensee that has been sold in the UnitedStates by an authorized delegate of the licensee, that has been reported to thelicensee as having been sold and that has not yet been paid by or for thelicensee.

      (14)“Permissible investments” means:

      (a)Cash;

      (b)Certificates of deposit or other debt obligations of a financial institution,either domestic or foreign;

      (c)Bills of exchange or time drafts drawn on and accepted by a commercial bank,otherwise known as bankers’ acceptances, that are eligible for purchase bymember banks of the Federal Reserve System;

      (d)Any investment security bearing a rating of one of the three highest grades asdefined by a nationally recognized organization that rates such securities;

      (e)Investment securities that are obligations of the United States Government, itsagencies or instrumentalities, or obligations that are guaranteed fully as toprincipal and interest by the United States, or any obligations of any state,municipality or any political subdivision thereof;

      (f)Shares in a money market mutual fund, interest-bearing bills, notes or bonds,debentures or stock traded on any national securities exchange or nationalmarket system, mutual funds primarily composed of such securities or a fundcomposed of one or more permissible investments as set forth herein;

      (g)Any demand borrowing agreement or agreements made to a corporation or asubsidiary of a corporation whose capital stock is listed on a nationalsecurities exchange;

      (h)Receivables that are due to a licensee from the licensee’s authorized delegatesunder a contract described in ORS 717.270 and that are not past due or doubtfulof collection; or

      (i)Any other investments or security device approved by the Director of theDepartment of Consumer and Business Services.

      (15)“Person” means any individual, partnership, association, joint stockassociation, limited liability company, trust or corporation.

      (16)“Remit” means either to make direct payment of the funds to a licensee orrepresentatives of a licensee authorized to receive those funds, or to depositthe funds in a bank, credit union or savings and loan association or othersimilar financial institution in an account specified by the licensee.

      (17)“Security device” means a surety bond, irrevocable letter of credit issued byan insured institution as defined in ORS 706.008 or other similar securityacceptable to the Director of the Department of Consumer and Business Services.[1999 c.571 §2; 2001 c.104 §283]

 

      717.205License required to conduct money transmission business; relationship tobanking.(1) A person, other than a person that is exempt under ORS 717.210, may notconduct a money transmission business without a license as provided in ORS717.200 to 717.320, 717.900 and 717.905.

      (2)A licensee may conduct business in this state at one or more locations that aredirectly or indirectly owned by the licensee, or through one or more authorizeddelegates, or both. A licensee is required to obtain only one license under ORS717.200 to 717.320, 717.900 and 717.905.

      (3)The conduct of a money transmission business by itself does not constitutebanking or branch banking for the purposes of the Bank Act.

      (4)The Director of the Department of Consumer and Business Services hasjurisdiction over a person conducting a money transmission business whether ornot the person is a licensee or authorized delegate. [1999 c.571 §3]

 

      717.210Exemptions; waiver; rules. (1) ORS 717.200 to 717.320, 717.900 and 717.905 donot apply to:

      (a)Any company that accepts deposits in this state and that is insured under theFederal Deposit Insurance Act, 12 U.S.C. 1811 et seq., as amended.

      (b)Credit unions or trust companies.

      (c)The United States Government or any department, agency or instrumentalitythereof.

      (d)The United States Postal Service.

      (e)Any state or political subdivision of a state.

      (f)The provision or electronic transfer of government benefits for any federal,state or county government or other agency as defined in the Federal ReserveBoard Regulation E (12 C.F.R. part 205), by a contractor for and on behalf ofthe United States Government or any department, agency or instrumentality ofthe United States, or any state or any political subdivision of a state.

      (g)The provision or handling of electronic or other transfer of escrowed moneys byan escrow agent licensed under ORS 696.511.

      (h)Authorized delegates of a licensee, acting within the scope of authorityconferred by a written contract as described in ORS 717.270.

      (i)Any bank holding company as defined in the federal Bank Holding Company Act of1956, 12 U.S.C. 1841 et seq., as amended, or any financial holding company asdefined in ORS 706.008.

      (j)Any savings and loan holding company as defined in 12 U.S.C. 1467a (a)(1)(D),as amended.

      (2)The Director of the Department of Consumer and Business Services by rule ororder may modify or waive the application of ORS 717.200 to 717.320, 717.900and 717.905 to any person or group of persons if the director determines thatadequate regulation of the person or group of persons is provided by law or byanother agency of this state.

      (3)The director by rule or order may temporarily suspend the application of ORS717.200 to 717.320, 717.900 and 717.905 to any person or group of persons whilethe director considers whether an exemption should be granted and during thependency of any rulemaking proceeding proposing to create an exemption. [1999c.571 §4; 2001 c.377 §50]

 

      717.215Requirements for licensees; net worth; permissible investments. (1) Eachlicensee shall at all times have a net worth of not less than $100,000,calculated in accordance with generally accepted accounting principles.Licensees engaging in money transmission at more than one location or throughauthorized delegates shall have an additional net worth of $25,000 per locationin this state, not to exceed a maximum of $500,000.

      (2)Every applicant, at the time of filing of an application for a license underORS 717.200 to 717.320, 717.900 and 717.905 and at all times after a license isissued, shall be in good standing in the state of its incorporation ororganization.

      (3)Each licensee shall at all times possess permissible investments having anaggregate market value, calculated in accordance with generally acceptedaccounting principles, of not less than the aggregate face amount of alloutstanding payment instruments issued or sold by the licensee in the UnitedStates. This requirement may be waived by the Director of the Department ofConsumer and Business Services if the dollar volume of a licensee’s outstandingpayment instruments does not exceed the amount of any security device posted bythe licensee under ORS 717.225.

      (4)In the event of the bankruptcy of the licensee, permissible investments, evenif commingled with other assets of the licensee, are considered by operation oflaw to be held in trust for the benefit of the purchasers and holders of thelicensee’s outstanding payment instruments. [1999 c.571 §5]

 

      717.220License application; rules. (1) Each application for a license under ORS717.200 to 717.320, 717.900 and 717.905 shall be made in writing in a formprescribed by rule by the Director of the Department of Consumer and BusinessServices.

      (2)For all applicants, the application shall contain:

      (a)The exact name of the applicant, the applicant’s principal address, anyfictitious name, assumed business name or trade name used by the applicant inthe conduct of its business and the location of the applicant’s businessrecords;

      (b)The history of the applicant’s material litigation and criminal convictions forthe five-year period prior to the date of the application;

      (c)A history of operations and a description of the business activities in whichthe applicant seeks to be engaged in this state;

      (d)A list identifying the applicant’s proposed authorized delegates in the state,if any, at the time of the filing of the license application;

      (e)A sample authorized delegate contract, if applicable;

      (f)A sample form of payment instrument, if applicable;

      (g)The address of each location at which the applicant and its authorizeddelegates, if any, propose to conduct a money transmission business in thisstate;

      (h)The name and address of the clearing bank or banks on which the applicant’spayment instruments will be drawn or through which such payment instrumentswill be payable; and

      (i)A business plan.

      (3)If the applicant is a corporation, the application shall contain:

      (a)The date of the applicant’s incorporation and state of incorporation;

      (b)A certificate of good standing from the state in which the applicant wasincorporated;

      (c)A description of the corporate structure of the applicant, including theidentity of any parent or subsidiary of the applicant, and the disclosure ofwhether any parent or subsidiary is publicly traded on any stock exchange;

      (d)The name, business and residence address, and employment history for the pastfive years of the applicant’s executive officers and the officers or managerswho will be in charge of the applicant’s money transmission business;

      (e)The name, business and residence address, and employment history for thefive-year period prior to the date of the application of any controllingshareholder of the applicant;

      (f)The history of material litigation and criminal convictions for the five-yearperiod prior to the date of the application of every executive officer orcontrolling shareholder of the applicant;

      (g)A copy of the applicant’s most recent audited financial statement, includingbalance sheet, statement of income or loss, statement of changes in shareholderequity and statement of changes in financial position and, if available, a copyof the applicant’s audited financial statements for the immediately precedingtwo-year period. If the applicant is a wholly owned subsidiary of anothercorporation, the applicant may submit either the parent corporation’sconsolidated audited financial statements for the current year and for theimmediately preceding two-year period, or the parent corporation’s Form 10Kreports filed with the United States Securities and Exchange Commission for theprior three years, in lieu of the applicant’s financial statements. If theapplicant is a wholly owned subsidiary of a corporation having its principalplace of business outside the United States, similar documentation filed withthe parent corporation’s foreign regulator may be submitted to satisfy the requirementsof this paragraph; and

      (h)Copies of all filings, if any, made by the applicant with the United StatesSecurities and Exchange Commission, or with a similar regulator in a countryother than the United States, within the year preceding the date of theapplication.

      (4)If the applicant is not a corporation, the application shall contain:

      (a)The name, business and residence address, personal financial statement andemployment history for the past five years of each principal of the applicant andthe name, business and residence address, and employment history for the pastfive years of any other person or persons that will be in charge of theapplicant’s money transmission business;

      (b)The history of material litigation and criminal convictions for the five-yearperiod prior to the date of the application for each individual having anyownership interest in the applicant and each individual who exercisessupervisory responsibility with respect to the applicant’s activities; and

      (c)Copies of the applicant’s audited financial statements, including balancesheet, statement of income or loss, and statement of changes in financialposition, for the current year and, if available, a copy of the applicant’saudited financial statements for the immediately preceding two-year period.

      (5)The director, for good cause shown, may waive any requirement of this sectionwith respect to any license application or may allow an applicant to submitsubstituted information in a license application in lieu of the informationrequired under subsection (2) of this section. [1999 c.571 §6; 2005 c.21 §12]

 

      717.225Security devices.