Administrative Code

Virginia Administrative Code
Title 10. Finance and Financial Institutions
Agency 5. State Corporation Commission
2/20/2019

Chapter 120. Money Order Sellers and Money Transmitters

10VAC5-120-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Authorized delegate," "licensee," "monetary value," "money order," and "outstanding" shall have the meanings ascribed to them in § 6.2-1900 of the Code of Virginia.

"Bureau," "commission," and "commissioner" shall have the meanings ascribed to them in § 6.2-100 of the Code of Virginia.

"Chapter 19" means Chapter 19 (§ 6.2-1900 et seq.) of Title 6.2 of the Code of Virginia.

"Generally accepted accounting principles" for purposes of Chapter 19 and this chapter means standard accounting guidelines as established and administered by the American Institute of Certified Public Accountants (AICPA) and the United States Financial Accounting Standards Board (FASB).

"Merchant or service provider" means a person engaged in the business of selling goods or services, but excluding a person licensed or required to be licensed under Chapter 19.

"Money transmission" for purposes of Chapter 19 and this chapter shall have the meaning ascribed to it in § 6.2-1900 of the Code of Virginia. However, the term shall not include the actions of an agent who collects funds on behalf of a merchant or service provider, provided that (i) the agent has been explicitly designated in a written agreement as an agent of the merchant or service provider; (ii) any funds collected by the agent shall be deemed for all purposes to be received by the merchant or service provider, regardless of whether the agent actually remits such funds to the merchant or service provider; (iii) the agent provides the Virginia resident with a dated receipt indicating that payment to the agent constitutes payment to the merchant or service provider; and (iv) there is no risk of loss to the Virginia resident if the agent fails to remit such resident's funds to the merchant or service provider. This definition shall not be construed to prohibit the merchant or service provider from seeking indemnification from its agent for any direct losses incurred due to the agent's failure to remit funds in accordance with its agreement.

"Reporting period" means a calendar quarter, the first six months of a calendar year, or the last six months of a calendar year, as the case may be.

"Senior officer" for purposes of Chapter 19 means an individual who has significant management responsibility within an organization or otherwise has the authority to influence or control the conduct of the organization's affairs, including but not limited to its compliance with applicable laws and regulations.

Statutory Authority

§§ 6.2-1913 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 12, Issue 8, eff. January 1, 1996; amended, Virginia Register Volume 28, Issue 20, eff. June 1, 2012; Volume 31, Issue 12, eff. February 15, 2015.

10VAC5-120-20. Surety bond standards.

A. Every licensee shall be bonded in a principal amount determined by the Commissioner of Financial Institutions. The bond amount shall be equal to the licensee's Virginia average monthly money order sales during the preceding two reporting periods, or its Virginia average monthly money transmission volume during such periods, or both, as applicable, rounded to the next highest multiple of $10,000, but not exceeding $500,000. The commissioner, however, may increase the amount of bond required to a maximum of $1 million upon the basis of the impaired financial condition of a licensee, as evidenced by net worth reduction, financial losses, or other relevant criteria.

B. The amount of bond required of a new licensee shall be based upon the applicant's financial condition, capitalization, projected Virginia monthly money order sales and money transmission volume, experience, and other factors deemed pertinent.

C. The minimum bond required shall be $25,000.

D. The form of the bond will be prescribed and provided by the commissioner. The required bond shall be submitted prior to the issuance of a license, and shall be maintained continuously thereafter as long as the licensee or former licensee has money orders outstanding or unfulfilled money transmission agreements.

Statutory Authority

§ 6.2-1913 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 12, Issue 8, eff. January 1, 1996; amended, Virginia Register Volume 12, Issue 22, eff. July 1, 1996.

10VAC5-120-30. Alternative to surety bond.

A. As an alternative to the surety bond required under 10VAC5-120-20, in whole or in part, a licensee may be permitted to substitute the deposit of certain property with a bank, trust company or savings institution authorized to conduct business in Virginia. Such deposited property, other than cash, shall be valued at the lower of face or market value for the purposes of this regulation.

B. The deposited property may consist only of cash, or securities issued or guaranteed by the United States or any agency or instrumentality thereof, or securities issued by the Commonwealth of Virginia or any political subdivision thereof. The commissioner shall determine the amount of property deposit to be required of a licensee in accordance with the factors and limitations set forth in 10VAC5-120-20.

C. The property deposit shall be made upon the commissioner's authorization, and pursuant to a written agreement using a form prescribed by the commissioner. The agreement shall provide, among other things, that the commissioner shall have the authority to permit or require the substitution or liquidation of property held under the agreement, and that interest and dividends attributable to the property will be paid to the licensee making the deposit.

D. If a licensee ceases money order sales and money transmission in the Commonwealth of Virginia and surrenders its license, the commissioner shall have authority to permit reduction or elimination of the property deposit to the extent that the former licensee's obligations arising from its licensed business are reduced or eliminated, and shall have authority to permit the substitution of other means of security for the property deposit.

Statutory Authority

§ 6.2-1913 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 12, Issue 22, eff. July 1, 1996.

10VAC5-120-40. Reporting requirements.

A. 1. Licensees licensed for less than three years shall file reports with the commissioner within 45 days after the end of each calendar quarter.

2. Licensees licensed for three years or longer shall file reports with the commissioner within 45 days after the end of each semiannual reporting period.

3. Licensees affiliated by common ownership with another licensee licensed for three years or longer, and licensees that acquire all or part of the money order sales business or money transmission business of another licensee licensed for three years or longer, shall file reports with the commissioner within 45 days after the end of each semiannual reporting period.

B. Licensees shall file a report of outstandings and permissible investments with the commissioner within 45 days after the end of each calendar quarter.

C. Within one business day after a licensee becomes aware of the occurrence of any of the following events, the licensee shall file a written report with the commissioner describing the event:

1. Bankruptcy, reorganization, or receivership proceedings are filed by or against the licensee.

2. Any local, state, or federal governmental authority institutes revocation, suspension, or other formal administrative, regulatory, or enforcement proceedings against the licensee.

3. Any local, state, or federal governmental authority (i) revokes or suspends the licensee's money order seller license, money transmitter license, or other license for a similar business; (ii) takes formal administrative, regulatory, or enforcement action against the licensee relating to its money order sales, money transmission, or similar business; or (iii) takes any other action against the licensee relating to its money order sales, money transmission, or similar business where the total amount of restitution or other payment from the licensee exceeds $20,000. A licensee shall not be required to provide the commissioner with information about such event to the extent that such disclosure is prohibited by the laws of another state.

4. Based on allegations by any local, state, or federal governmental authority that the licensee violated any law or regulation applicable to the conduct of its licensed money order sales, money transmission, or similar business, the licensee enters into, or otherwise agrees to the entry of, a settlement or consent order, decree, or agreement with or by such governmental authority.

5. The licensee surrenders its money order seller license, money transmitter license, or other license for a similar business in another state in lieu of threatened or pending license revocation; license suspension; or other administrative, regulatory, or enforcement action.

6. The licensee is denied a money order seller license, money transmitter license, or other license for a similar business in another state.

7. The licensee or any of its members, partners, directors, officers, principals, employees, or authorized delegates is indicted or convicted of a felony.

D. The reports required by this section shall contain such information as the commissioner may require. The commissioner may require such additional reports as he deems necessary.

Statutory Authority

§§ 6.2-1913 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 12, Issue 22, eff. July 1, 1996; amended Virginia Register Volume 31, Issue 12, eff. February 15, 2015.

10VAC5-120-50. Assessment schedule for the examination and supervision of money order sellers and money transmitters.

Pursuant to subsection B of § 6.2-1905 of the Code of Virginia, the commission sets the following schedule for the annual assessment to be paid by persons licensed under Chapter 19. The assessment defrays the costs of the examination and supervision of licensees by the bureau.

The annual assessment shall be $0.000047 per dollar of money orders sold and money transmitted by a licensee pursuant to Chapter 19. The assessment shall be based on the dollar volume of business conducted by a licensee, either directly or through its authorized delegates, during the calendar year preceding the year of the assessment.

The amount calculated using the above schedule shall be rounded down to the nearest whole dollar.

Fees shall be assessed on or before August 1 for the current calendar year. The assessment shall be paid by licensees on or before September 1.

The annual report, due April 15 each year, of each licensee provides the basis for its assessment. In cases where a license has been granted between January 1 and April 15 of the year of the assessment, the licensee's initial annual assessment shall be $0.

Fees prescribed and assessed pursuant to this schedule are apart from, and do not include, the following: (i) the annual license renewal fee of $750 authorized by subsection A of § 6.2-1905 of the Code of Virginia and (ii) the reimbursement for expenses authorized by subsection C of § 6.2-1905 of the Code of Virginia.

Statutory Authority

§§ 6.2-1913 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 26, Issue 25, eff. July 27, 2010; amended, Volume 28, Issue 20, eff. June 1, 2012; Volume 31, Issue 12, eff. February 15, 2015.

10VAC5-120-60. Responding to requests from the Bureau of Financial Institutions; providing false, misleading, or deceptive information.

A. When the bureau requests a written response, books, records, documentation, or other information from a licensee or its authorized delegate in connection with the bureau's investigation, enforcement, or examination of compliance with applicable laws and regulations, the licensee or authorized delegate shall deliver a written response as well as any requested books, records, documentation, or information within the time period specified in the bureau's request. If no time period is specified, a written response as well as any requested books, records, documentation, or information shall be delivered by the licensee or its authorized delegate to the bureau not later than 30 days from the date of such request. In determining the specified time period for responding to the bureau and when considering a request for an extension of time to respond, the bureau shall take into consideration the volume and complexity of the requested written response, books, records, documentation, or information, and such other factors as the bureau determines to be relevant under the circumstances. Requests made by the bureau pursuant to this subsection are deemed to be in furtherance of the bureau's investigation and examination authority provided for in § 6.2-1910 of the Code of Virginia.

B. A licensee shall not provide any false, misleading, or deceptive information to the bureau.

Statutory Authority

§§ 6.2-1913 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 31, Issue 12, eff. February 15, 2015.

10VAC5-120-70. Acquisitions; additional business requirements and restrictions; operating rules.

A. Any person submitting an application to acquire, directly or indirectly, 25% or more of the voting shares of a corporation or 25% or more of the ownership of any other person licensed to conduct business under Chapter 19 shall pay a nonrefundable application fee of $500.

B. A licensee shall not permit an authorized delegate to designate or appoint a subdelegate to sell money orders or engage in money transmission business.

C. The audited financial statements filed by a licensee pursuant to § 6.2-1905 D of the Code of Virginia shall cover the prior 12-month fiscal period and be prepared in accordance with generally accepted accounting principles.

D. Quarterly financial statements filed by a licensee pursuant to § 6.2-1917 B of the Code of Virginia shall be consolidated and prepared in accordance with generally accepted accounting principles.

E. A licensee shall comply with Chapter 19, this chapter, and all other state and federal laws and regulations applicable to the conduct of its business. For purposes of Chapter 19 and this chapter, the acts and omissions of a licensee's authorized delegates shall be deemed acts and omissions of such licensee.

F. In addition to the records specified in § 6.2-1916 B of the Code of Virginia, a licensee shall maintain in its principal place of business such other books, accounts, and records as the commissioner may reasonably require in order to determine whether such licensee is complying with the provisions of Chapter 19, this chapter, and other laws and regulations applicable to the conduct of its business.

G. If a licensee, authorized delegate, or former licensee disposes of records containing a consumer's personal financial information or copies of a consumer's identification documents, such records and copies shall be shredded, incinerated, or otherwise disposed of in a secure manner. A licensee, authorized delegate, or former licensee may arrange for service from a business record destruction vendor.

H. A licensee or former licensee shall provide the following information to the bureau within 10 days after such person's license is surrendered or revoked or the licensed business is otherwise closed: (i) the names, addresses, telephone numbers, fax numbers, and email addresses of a designated contact person and the person who consumers may contact regarding outstanding money orders or money transmission transactions; (ii) the location of the licensee's or former licensee's money order and money transmission records; and (iii) any additional information that the bureau may reasonably require. A licensee or former licensee shall maintain current information with the bureau until the licensee or former licensee has no outstanding money orders and money transmission transactions.

I. A person shall remain subject to the provisions of Chapter 19 and this chapter applicable to licensees in connection with all money orders sold and money or monetary value received for transmission while licensed under Chapter 19 notwithstanding the occurrence of any of the following events:

1. The person's license is surrendered or revoked; or

2. The person ceases selling money orders or transmitting money or monetary value.

J. A licensee shall not provide any information to a Virginia resident that is false, misleading, or deceptive.

K. A licensee shall not engage in any activity that directly or indirectly results in an evasion of the provisions of Chapter 19 or this chapter.

L. A licensee shall continuously maintain the requirements and standards for licensure prescribed in § 6.2-1906 of the Code of Virginia.

Statutory Authority

§§ 6.2-1913 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 31, Issue 12, eff. February 15, 2015.

10VAC5-120-80. Permissible investments.

A. Permissible investments maintained by a licensee pursuant to § 6.2-1918 of the Code of Virginia shall be unencumbered and held solely in the name of the licensee.

B. In addition to the investments specified in § 6.2-1919 of the Code of Virginia, the following investments shall be considered permissible under § 6.2-1918 of the Code of Virginia: any receivables that are (i) payable to a licensee from any bank, savings institution, or credit union that is chartered under the laws of the United States or any state thereof; (ii) comprised of funds that have been tendered by residents of the United States for money transmission transactions; and (iii) no more than seven days old.

C. The receivables specified in § 6.2-1919 A 5 of the Code of Virginia shall be limited to funds that have been collected by a licensee's authorized delegates directly from residents of the United States for money transmission transactions.

Statutory Authority

§§ 6.2-1913 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 31, Issue 12, eff. February 15, 2015.

10VAC5-120-90. Enforcement.

A. Failure to comply with any provision of Chapter 19 or this chapter may result in civil penalties, license revocation, the entry of a cease and desist order, or other appropriate enforcement action.

B. Pursuant to § 6.2-1920 of the Code of Virginia, a person required to be licensed under Chapter 19 shall be subject to a civil penalty of up to $2,500 for every violation of Chapter 19, this chapter, or other law or regulation applicable to the conduct of the person's business. Furthermore, if a person violates any provision of Chapter 19, this chapter, or other law or regulation applicable to the conduct of the person's business in connection with multiple money order sales or money transmission transactions, the person shall be subject to a separate civil penalty for each money order sale or money transmission transaction. For example, if a person sells five money orders and the person violates two provisions of this chapter in connection with each of the five money order sales, there would be a total of 10 violations and the person would be subject to a maximum civil penalty of $25,000.

Statutory Authority

§§ 6.2-1913 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 31, Issue 12, eff. February 15, 2015.

10VAC5-120-100. Commission authority.

The commission may, at its discretion, waive or grant exceptions to any provision of this chapter for good cause shown.

Statutory Authority

§§ 6.2-1913 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 31, Issue 12, eff. February 15, 2015.



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