CHAPTER 205 - Regulation - Financial Regulation

(205 ILCS 657/1)
Sec. 1. Short title. This Act may be cited as the Transmitters of Money Act.
(Source: P.A. 88-643, eff. 1-1-95.)

    (205 ILCS 657/5)
    Sec. 5. Definitions. As used in this Act, unless the context otherwise requires, the words and phrases defined in this Section have the meanings set forth in this Section.
    "Authorized seller" means a person not an employee of a licensee who engages in the business regulated by this Act on behalf of a licensee under a contract between that person and the licensee.
    "Bill payment service" means the business of transmitting money on behalf of an Illinois resident for the purpose of paying the resident's bills.
    "Controlling person" means a person owning or holding the power to vote 25% or more of the outstanding voting securities of a licensee or the power to vote the securities of another controlling person of the licensee. For purposes of determining the percentage of a licensee controlled by a controlling person, the person's interest shall be combined with the interest of any other person controlled, directly or indirectly, by that person or by a spouse, parent, or child of that person.
    "Department" means the Department of Financial Institutions.
    "Director" means the Director of Financial Institutions.
    "Licensee" means a person licensed under this Act.
    "Location" means a place of business at which activity regulated by this Act occurs.
    "Material litigation" means any litigation that, according to generally accepted accounting principles, is deemed significant to a licensee's financial health and would be required to be referenced in a licensee's annual audited financial statements, reports to shareholders, or similar documents.
    "Money" means a medium of exchange that is authorized or adopted by a domestic or foreign government as a part of its currency and that is customarily used and accepted as a medium of exchange in the country of issuance.
    "Money transmitter" means a person who is located in or doing business in this State and who directly or through authorized sellers does any of the following in this State:
        (1) Sells or issues payment instruments.
        (2) Engages in the business of receiving money for

transmission or transmitting money.

(3) Engages in the business of exchanging, for

compensation, money of the United States Government or a foreign government to or from money of another government.

    "Outstanding payment instrument" means, unless otherwise treated by or accounted for under generally accepted accounting principles on the books of the licensee, a payment instrument issued by the licensee that has been sold in the United States directly by the licensee or has been sold in the United States by an authorized seller of the licensee and reported to the licensee as having been sold, but has not been paid by or for the licensee.
    "Payment instrument" means a check, draft, money order, traveler's check, stored value card, or other instrument or memorandum, written order or written receipt for the transmission or payment of money sold or issued to one or more persons whether or not that instrument or order is negotiable. Payment instrument does not include an instrument that is redeemable by the issuer in merchandise or service, a credit card voucher, or a letter of credit. A written order for the transmission or payment of money that results in the issuance of a check, draft, money order, traveler's check, or other instrument or memorandum is not a payment instrument.
    "Person" means an individual, partnership, association, joint stock association, corporation, or any other form of business organization.
    "Stored value card" means any magnetic stripe card or other electronic payment instrument given in exchange for money and other similar consideration, including but not limited to checks, debit payments, money orders, drafts, credit payments, and traveler's checks, where the card or other electronic payment instrument represents a dollar value that the consumer can either use or give to another individual.
    "Transmitting money" means the transmission of money by any means, including transmissions to or from locations within the United States or to and from locations outside of the United States by payment instrument, facsimile or electronic transfer, or otherwise, and includes bill payment services.
(Source: P.A. 92-400, eff. 1-1-02; 93-535, eff. 1-1-04.)

(205 ILCS 657/10)
Sec. 10. License required. No person may engage in this State in the business of selling or issuing payment instruments, transmitting money, or exchanging, for compensation, payment instruments or money of the United States government or a foreign government to or from money of another government without first obtaining a license under this Act. Separate licenses shall not be required, however, for persons acting as authorized sellers of licensees under this Act.
(Source: P.A. 88-643, eff. 1-1-95.)

    (205 ILCS 657/15)
    Sec. 15. Exemptions. The following are exempt from the licensing requirements of this Act:
    (1) The United States and any department or agency of the United States.
    (2) This State and any political subdivision of this State.
    (3) Banks, trust companies, building and loan associations, savings and loan associations, savings banks, or credit unions, licensed or organized under the laws of any state or of the United States and any foreign bank maintaining a branch or agency licensed or organized under the laws of any state or of the United States.
    (4) Currency exchanges licensed under the Currency Exchange Act are exempt from licensing only for the issuance of money orders.
    (5) Corporations and associations exempt under item (3) or (4) from the licensing requirements of this Act are not exempt from approval by the Director as authorized sellers. Nothing in this Act shall be deemed to enlarge the powers of those corporations and associations.
(Source: P.A. 88-643, eff. 1-1-95; 89-601, eff. 8-2-96.)

    (205 ILCS 657/20)
    Sec. 20. Qualifications for a license.
    (a) In order to obtain a license under this Act, an applicant must prove to the satisfaction of the Director all of the following:
        (1) That the applicant has and maintains the net

worth specified in Column A, computed according to generally accepted accounting principles, corresponding to the number of locations in this State at which the applicant is conducting business or proposes to conduct business by itself and by any authorized sellers specified in Column B:

Column A	Column B
$35,000	1
50,000	2-3
100,000	4-5
150,000	6-9
200,000	10-14
300,000	15-19
400,000	20-24
500,000	25 or more

(2) That the applicant is in good standing and in

statutory compliance in the state or country of incorporation or when the applicant is an entity other than a corporation, is properly registered under the laws of this State or another state or country, and if required, the corporation or entity is authorized to do business in the State of Illinois.

(3) That the applicant has not been convicted within

the 10 years preceding the application of a felony under the laws of this State, another state, the United States, or a foreign jurisdiction.

(4) That no officer, director, controlling person,

or principal of the applicant has been convicted within the 10 years preceding the application of a felony under the laws of this State, another state, the United States, or a foreign jurisdiction.

(5) That the financial responsibility, financial

condition, business experience, character, and general fitness of the applicant and its management are such as to justify the confidence of the public and that the applicant is fit, willing, and able to carry on the proposed business in a lawful and fair manner.

(b) The Director may, for good cause shown, waive the requirement of items (3) and (4) of subsection (a) of this Section.
(Source: P.A. 92-400, eff. 1-1-02.)

    (205 ILCS 657/25)
    Sec. 25. Application for license.
    (a) An application for a license must be in writing, under oath, and in the form the Director prescribes. The application must contain or be accompanied by all of the following:
        (1) The name of the applicant and the address of the

principal place of business of the applicant and the address of all locations and proposed locations of the applicant in this State.

(2) The form of business organization of the

applicant, including:

(A) a copy of its articles of incorporation and

amendments thereto and a copy of its bylaws, certified by its secretary, if the applicant is a corporation;

(B) a copy of its partnership agreement,

certified by a partner, if the applicant is a partnership; or

organizational structure, certified by a managing official, if the applicant is organized in some other form.

(3) The name, business and home address, and a

chronological summary of the business experience, material litigation history, and felony convictions over the preceding 10 years of:

(A) the proprietor, if the applicant is an

individual;

(B) every partner, if the applicant is a

partnership;

person, if the applicant is a corporation; and

(D) each person in a position to exercise

control over, or direction of, the business of the applicant, regardless of the form of organization of the applicant.

(4) Financial statements, not more than one year

old, prepared in accordance with generally accepted accounting principles and audited by a licensed public accountant or certified public accountant showing the financial condition of the applicant and an unaudited balance sheet and statement of operation as of the most recent quarterly report before the date of the application, certified by the applicant or an officer or partner thereof. If the applicant is a wholly owned subsidiary or is eligible to file consolidated federal income tax returns with its parent, however, unaudited financial statements for the preceding year along with the unaudited financial statements for the most recent quarter may be submitted if accompanied by the audited financial statements of the parent company for the preceding year along with the unaudited financial statement for the most recent quarter.

(5) Filings of the applicant with the Securities and

Exchange Commission or similar foreign governmental entity (English translation), if any.

(6) A list of all other states in which the

applicant is licensed as a money transmitter and whether the license of the applicant for those purposes has ever been withdrawn, refused, canceled, or suspended in any other state, with full details.

(7) A list of all money transmitter locations and

proposed locations in this State.

(8) A sample of the contract for authorized sellers.
(9) A sample form of the proposed payment

instruments to be used in this State.

(10) The name and business address of the clearing

banks through which the applicant intends to conduct any business regulated under this Act.

(11) A surety bond as required by Section 30 of this

Act.

(12) The applicable fees as required by Section 45

of this Act.

(13) A written consent to service of process as

provided by Section 100 of this Act.

(14) A written statement that the applicant is in

full compliance with and agrees to continue to fully comply with all state and federal statutes and regulations relating to money laundering.

(15) All additional information the Director

considers necessary in order to determine whether or not to issue the applicant a license under this Act.

(b) The Director may, for good cause shown, waive, in part, any of the requirements of this Section.
(Source: P.A. 92-400, eff. 1-1-02.)

    (205 ILCS 657/30)
    Sec. 30. Surety bond.
    (a) An applicant for a license shall post and a licensee must maintain with the Director a bond or bonds issued by corporations qualified to do business as surety companies in this State.
    (b) The applicant or licensee shall post a bond in the amount of the greater of $100,000 or an amount equal to the daily average of outstanding payment instruments for the preceding 12 months or operational history, whichever is shorter, up to a maximum amount of $2,000,000. When the amount of the required bond exceeds $1,000,000, the applicant or licensee may, in the alternative, post a bond in the amount of $1,000,000 plus a dollar for dollar increase in the net worth of the applicant or licensee over and above the amount required in Section 20, up to a total amount of $2,000,000.
    (c) The bond must be in a form satisfactory to the Director and shall run to the State of Illinois for the benefit of any claimant against the applicant or licensee with respect to the receipt, handling, transmission, and payment of money by the licensee or authorized seller in connection with the licensed operations. A claimant damaged by a breach of the conditions of a bond shall have a right to action upon the bond for damages suffered thereby and may bring suit directly on the bond, or the Director may bring suit on behalf of the claimant.
    (d) (Blank).
    (e) (Blank).
    (f) After receiving a license, the licensee must maintain the required bond plus net worth (if applicable) until 5 years after it ceases to do business in this State unless all outstanding payment instruments are eliminated or the provisions under the Uniform Disposition of Unclaimed Property Act have become operative and are adhered to by the licensee. Notwithstanding this provision, however, the amount required to be maintained may be reduced to the extent that the amount of the licensee's payment instruments outstanding in this State are reduced.
    (g) If the Director at any time reasonably determines that the required bond is insecure, deficient in amount, or exhausted in whole or in part, he may in writing require the filing of a new or supplemental bond in order to secure compliance with this Act and may demand compliance with the requirement within 30 days following service on the licensee.
(Source: P.A. 92-400, eff. 1-1-02.)

    (205 ILCS 657/35)
    Sec. 35. Issuance of license.
    (a) On the filing of a complete application, the Director shall investigate the financial condition and responsibility, financial and business experience, and character and general fitness of the applicant. In his discretion, the Director may conduct an on-site investigation of the applicant, the reasonable cost of which shall be borne by the applicant. The Director shall issue a license to an applicant if he finds that all of the following conditions are met:
        (1) The applicant has complied with Sections 20, 25,

and 30 of this Act.

(2) The competence, experience, and integrity of the

officers, directors, controlling persons, and proposed management personnel, if the applicant is a corporation, or the competence, experience, and integrity of the owners, partners, and proposed management personnel, if the applicant is a partnership or other entity however organized, indicate that it is in the interest of the public to permit the applicant to be licensed under this Act.

        (3) The applicant has paid the required license fee.
    (b) The license shall expire on December 31 of each year unless renewed in accordance with this Act.
    (c) If the Director finds that the applicant, for any reason, fails to meet the requisite standards, he shall formally deny the applicant a license and inform the applicant of its opportunity for a hearing.
(Source: P.A. 88-643, eff. 1-1-95.)