Bill Text: FL S1536 | 2022 | Regular Session | Comm Sub
Bill Title: Money Services Businesses
Spectrum: Slight Partisan Bill (? 2-1)
Status: (Introduced - Dead) 2022-03-04 - Laid on Table, refer to CS/CS/HB 389 [S1536 Detail]
Download: Florida-2022-S1536-Comm_Sub.html
Florida Senate - 2022 CS for CS for SB 1536
By the Committees on Commerce and Tourism; and Banking and
Insurance; and Senator Boyd
577-02517-22 20221536c2
1 A bill to be entitled
2 An act relating to money services businesses; amending
3 s. 560.103, F.S.; defining the terms “control person”
4 and “publicly traded”; revising and deleting
5 definitions; amending s. 560.118, F.S.; providing that
6 a rule may require certain reports to the Office of
7 Financial Regulation to contain declarations by
8 control persons, rather than officers or other
9 responsible persons; amending s. 560.123, F.S.;
10 providing that control persons, rather than officers,
11 are not liable for loss or damages under certain
12 circumstances; amending s. 560.126, F.S.; requiring
13 licensees to report changes in control persons, rather
14 than certain other entities or persons; deleting a
15 requirement for certain persons to submit a licensure
16 application under certain circumstances; deleting the
17 definition of the term “controlling interest”;
18 providing that the addition of a control person,
19 rather than certain other entities or persons, is
20 subject to certain requirements; deleting a
21 requirement for the Financial Services Commission to
22 adopt rules; repealing s. 560.127, F.S., relating to
23 control of a money services business; amending s.
24 560.141, F.S.; revising requirements for applications
25 for licensure as a money services business; deleting
26 the definition of the term “publicly traded”; deleting
27 obsolete language; amending s. 560.143, F.S.; removing
28 a limitation on specified license application fees
29 under certain circumstances; reenacting s.
30 559.952(4)(a), F.S., relating to the Financial
31 Technology Sandbox, to incorporate the amendments made
32 to ss. 560.118 and 560.141, F.S., in references
33 thereto; reenacting s. 560.114(2)(c), F.S., relating
34 to disciplinary actions and penalties, to incorporate
35 the amendment made to s. 560.141, F.S., in a reference
36 thereto; providing an effective date.
37
38 Be It Enacted by the Legislature of the State of Florida:
39
40 Section 1. Section 560.103, Florida Statutes, is amended to
41 read:
42 560.103 Definitions.—As used in this chapter, the term:
43 (1) “Affiliated party” means a control director, officer,
44 responsible person, employee, or foreign affiliate of a money
45 services business, or a person who has a controlling interest in
46 a money services business as provided in s. 560.127.
47 (2) “Appropriate regulator” means a state, federal, or
48 foreign agency that has been granted authority to enforce state,
49 federal, or foreign laws related to a money services business or
50 deferred presentment provider.
51 (3) “Authorized vendor” means a person designated by a
52 money services business licensed under part II of this chapter
53 to act on behalf of the licensee at locations in this state
54 pursuant to a written contract with the licensee.
55 (4) “Branch office” means the physical location, other than
56 the principal place of business, of a money services business
57 operated by a licensee under this chapter.
58 (5) “Cashing” means providing currency for payment
59 instruments except for travelers checks.
60 (6) “Check casher” means a person who sells currency in
61 exchange for payment instruments received, except travelers
62 checks.
63 (7) “Commission” means the Financial Services Commission.
64 (8) “Compliance officer” means the individual in charge of
65 overseeing, managing, and ensuring that a money services
66 business is in compliance with all state and federal laws and
67 rules relating to money services businesses, as applicable,
68 including all money laundering laws and rules.
69 (9) “Conductor” means a natural person who presents himself
70 or herself to a licensee for purposes of cashing a payment
71 instrument.
72 (10) “Control person” means:
73 (a) A person who possesses the power, directly or
74 indirectly, to direct the management or policies of a money
75 services business, whether through ownership of securities, by
76 contract, or through other means, and regardless of whether such
77 person has an official title or receives a salary or other
78 compensation. The following persons are each presumed to be a
79 control person:
80 1. The president, chief executive officer, chief financial
81 officer, chief operations officer, chief legal officer, and
82 compliance officer.
83 2. A person holding any of the officer positions named in
84 the money services business’s governing documents.
85 3. A person holding any position named by the money
86 services business’s liability insurance coverage for directors
87 and officers, if the business has such coverage.
88 4. A director of the money services business’s board of
89 directors.
90 (b) For a corporation that is not publicly traded, all
91 shareholders that, directly or indirectly, own 25 percent or
92 more or that have the power to vote 25 percent or more of a
93 class of voting securities.
94 (c) For a partnership, all general partners and those
95 limited or special partners that have contributed 25 percent or
96 more or that have the right to receive upon dissolution 25
97 percent or more of the partnership’s capital.
98 (d) For a trust, all trustees.
99 (e) For a limited liability company, all managers and those
100 members that have contributed 25 percent or more or that have
101 the right to receive upon dissolution 25 percent or more of the
102 limited liability company’s capital.
103 (11)(10) “Corporate payment instrument” means a payment
104 instrument on which the payee named on the instrument’s face is
105 other than a natural person.
106 (12)(11) “Currency” means the coin and paper money of the
107 United States or of any other country which is designated as
108 legal tender and which circulates and is customarily used and
109 accepted as a medium of exchange in the country of issuance.
110 Currency includes United States silver certificates, United
111 States notes, and Federal Reserve notes. Currency also includes
112 official foreign bank notes that are customarily used and
113 accepted as a medium of exchange in a foreign country.
114 (13)(12) “Deferred presentment provider” means a person who
115 is licensed under part II or part III of this chapter and has
116 filed a declaration of intent with the office to engage in
117 deferred presentment transactions as provided under part IV of
118 this chapter.
119 (14)(13) “Department” means the Department of Financial
120 Services.
121 (15)(14) “Electronic instrument” means a card, tangible
122 object, or other form of electronic payment for the transmission
123 or payment of money or the exchange of monetary value, including
124 a stored value card or device that contains a microprocessor
125 chip, magnetic stripe, or other means for storing information;
126 that is prefunded; and for which the value is decremented upon
127 each use.
128 (16)(15) “Financial audit report” means a report prepared
129 in connection with a financial audit that is conducted in
130 accordance with generally accepted auditing standards prescribed
131 by the American Institute of Certified Public Accountants by a
132 certified public accountant licensed to do business in the
133 United States, and which must include:
134 (a) Financial statements, including notes related to the
135 financial statements and required supplementary information,
136 prepared in conformity with accounting principles generally
137 accepted in the United States. The notes must, at a minimum,
138 include detailed disclosures regarding receivables that are
139 greater than 90 days, if the total amount of such receivables
140 represents more than 2 percent of the licensee’s total assets.
141 (b) An expression of opinion regarding whether the
142 financial statements are presented in conformity with accounting
143 principles generally accepted in the United States, or an
144 assertion to the effect that such an opinion cannot be expressed
145 and the reasons.
146 (17)(16) “Foreign affiliate” means a person located outside
147 this state who has been designated by a licensee to make
148 payments on behalf of the licensee to persons who reside outside
149 this state. The term also includes a person located outside of
150 this state for whom the licensee has been designated to make
151 payments in this state.
152 (18)(17) “Foreign currency exchanger” means a person who
153 exchanges, for compensation, currency of the United States or a
154 foreign government to currency of another government.
155 (19)(18) “Fraudulent identification paraphernalia” means
156 all equipment, products, or materials of any kind that are used,
157 intended for use, or designed for use in the misrepresentation
158 of a customer’s identity. The term includes, but is not limited
159 to:
160 (a) A signature stamp, thumbprint stamp, or other tool or
161 device used to forge a customer’s personal identification
162 information.
163 (b) An original of any type of personal identification
164 listed in s. 560.310(2)(b) which is blank, stolen, or unlawfully
165 issued.
166 (c) A blank, forged, fictitious, or counterfeit instrument
167 in the similitude of any type of personal identification listed
168 in s. 560.310(2)(b) which would in context lead a reasonably
169 prudent person to believe that such instrument is an authentic
170 original of such personal identification.
171 (d) Counterfeit, fictitious, or fabricated information in
172 the similitude of a customer’s personal identification
173 information that, although not authentic, would in context lead
174 a reasonably prudent person to credit its authenticity.
175 (20)(19) “Licensee” means a person licensed under this
176 chapter.
177 (21)(20) “Location” means a branch office, mobile location,
178 or location of an authorized vendor whose business activity is
179 regulated under this chapter.
180 (22)(21) “Monetary value” means a medium of exchange,
181 whether or not redeemable in currency.
182 (23)(22) “Money services business” means any person located
183 in or doing business in this state, from this state, or into
184 this state from locations outside this state or country who acts
185 as a payment instrument seller, foreign currency exchanger,
186 check casher, or money transmitter.
187 (24)(23) “Money transmitter” means a corporation, limited
188 liability company, limited liability partnership, or foreign
189 entity qualified to do business in this state which receives
190 currency, monetary value, or payment instruments for the purpose
191 of transmitting the same by any means, including transmission by
192 wire, facsimile, electronic transfer, courier, the Internet, or
193 through bill payment services or other businesses that
194 facilitate such transfer within this country, or to or from this
195 country.
196 (25)(24) “Net worth” means assets minus liabilities,
197 determined in accordance with United States generally accepted
198 accounting principles.
199 (26)(25) “Office” means the Office of Financial Regulation
200 of the commission.
201 (26) “Officer” means an individual, other than a director,
202 who participates in, or has authority to participate in, the
203 major policymaking functions of a money services business,
204 regardless of whether the individual has an official title or
205 receives a salary or other compensation.
206 (27) “Outstanding money transmission” means a money
207 transmission to a designated recipient or a refund to a sender
208 that has not been completed.
209 (28) “Outstanding payment instrument” means an unpaid
210 payment instrument whose sale has been reported to a licensee.
211 (29) “Payment instrument” means a check, draft, warrant,
212 money order, travelers check, electronic instrument, or other
213 instrument, payment of money, or monetary value whether or not
214 negotiable. The term does not include an instrument that is
215 redeemable by the issuer in merchandise or service, a credit
216 card voucher, or a letter of credit.
217 (30) “Payment instrument seller” means a corporation,
218 limited liability company, limited liability partnership, or
219 foreign entity qualified to do business in this state which
220 sells a payment instrument.
221 (31) “Person” means an individual, partnership,
222 association, trust, corporation, limited liability company, or
223 other group, however organized, but does not include a public
224 agency or instrumentality thereof.
225 (32) “Personal identification information” means a
226 customer’s name that, alone or together with any of the
227 following information, may be used to identify that specific
228 customer:
229 (a) Customer’s signature.
230 (b) Photograph, digital image, or other likeness of the
231 customer.
232 (c) Unique biometric data, such as the customer’s
233 thumbprint or fingerprint, voice print, retina or iris image, or
234 other unique physical representation of the customer.
235 (33) “Publicly traded” means a stock is currently traded on
236 a national securities exchange registered with the Securities
237 and Exchange Commission, or traded on an exchange in a country
238 other than the United States regulated by a regulator equivalent
239 to the Securities and Exchange Commission and the disclosure and
240 reporting requirements of such regulator are substantially
241 similar to those of the Securities and Exchange Commission
242 “Responsible person” means an individual who is employed by or
243 affiliated with a money services business and who has principal
244 active management authority over the business decisions,
245 actions, and activities of the money services business in this
246 state.
247 (34) “Sells” means to sell, issue, provide, or deliver.
248 (35) “Stored value” means funds or monetary value
249 represented in digital electronic format, whether or not
250 specially encrypted, and stored or capable of storage on
251 electronic media in such a way as to be retrievable and
252 transferred electronically.
253 Section 2. Subsection (2) of section 560.118, Florida
254 Statutes, is amended to read:
255 560.118 Reports.—
256 (2) Each licensee must submit quarterly reports to the
257 office in a format and include information as specified by rule.
258 The rule may require the report to contain a declaration by a
259 control an officer, or any other responsible person authorized
260 to make such declaration, that the report is true and correct to
261 the best of her or his knowledge and belief.
262 Section 3. Paragraph (d) of subsection (3) of section
263 560.123, Florida Statutes, is amended to read:
264 560.123 Florida Control of Money Laundering in Money
265 Services Business Act.—
266 (3) A money services business shall keep a record of each
267 financial transaction occurring in this state which it knows to
268 involve currency or other payment instrument, as prescribed by
269 the commission, having a value greater than $10,000; to involve
270 the proceeds of specified unlawful activity; or to be designed
271 to evade the reporting requirements of this section or chapter
272 896. The money services business must maintain appropriate
273 procedures to ensure compliance with this section and chapter
274 896.
275 (d) A money services business, or control person officer,
276 employee, or agent thereof, that files a report in good faith
277 pursuant to this section is not liable to any person for loss or
278 damage caused in whole or in part by the making, filing, or
279 governmental use of the report, or any information contained
280 therein.
281 Section 4. Subsection (3) of section 560.126, Florida
282 Statutes, is amended to read:
283 560.126 Required notice by licensee.—
284 (3) Each licensee must report any change in the control
285 partners, officers, members, joint venturers, directors,
286 controlling shareholders, or responsible persons of the licensee
287 or changes in the form of business organization by written
288 amendment in such form and at such time as specified by rule.
289 (a) If any person, directly or indirectly or acting by or
290 through one or more persons, proposes to purchase or acquire a
291 controlling interest in a licensee, such person or group must
292 submit an application for licensure as a money services business
293 or deferred presentment provider before such purchase or
294 acquisition at such time and in such form as prescribed by rule.
295 As used in this subsection, the term “controlling interest”
296 means the same as described in s. 560.127.
297 (b) The addition of a control person partner, officer,
298 member, joint venturer, director, controlling shareholder, or
299 responsible person of the applicant who does not have a
300 controlling interest and who has not previously complied with
301 the applicable provisions of ss. 560.1401 and 560.141 is subject
302 to such provisions. If the office determines that the licensee
303 does not continue to meet the licensure requirements, the office
304 may bring an administrative action in accordance with s. 560.114
305 to enforce the provisions of this chapter.
306 (c) The commission shall adopt rules providing for the
307 waiver of the license application required by this subsection if
308 the person or group of persons proposing to purchase or acquire
309 a controlling interest in a licensee has previously complied
310 with the applicable provisions of ss. 560.1401 and 560.141 under
311 the same legal entity or is currently licensed under this
312 chapter.
313 Section 5. Section 560.127, Florida Statutes, is repealed.
314 Section 6. Paragraphs (a) and (c) of subsection (1) of
315 section 560.141, Florida Statutes, are amended to read:
316 560.141 License application.—
317 (1) To apply for a license as a money services business
318 under this chapter, the applicant must submit:
319 (a) An application to the office on forms prescribed by
320 rule which includes the following information:
321 1. The legal name and address of the applicant, including
322 any fictitious or trade names used by the applicant in the
323 conduct of its business.
324 2. The date of the applicant’s formation and the state in
325 which the applicant was formed, if applicable.
326 3. The name, social security number, alien identification
327 or taxpayer identification number, business and residence
328 addresses, and employment history for the past 5 years for each
329 control person officer, director, responsible person, the
330 compliance officer, each controlling shareholder, and any other
331 person who has a controlling interest in the money services
332 business as provided in s. 560.127.
333 4. A description of the organizational structure of the
334 applicant, including the identity of any parent or subsidiary of
335 the applicant, and the disclosure of whether any parent or
336 subsidiary is publicly traded.
337 5. The applicant’s history of operations in other states if
338 applicable and a description of the money services business or
339 deferred presentment provider activities proposed to be
340 conducted by the applicant in this state.
341 6. If the applicant or its parent is a publicly traded
342 company, copies of all filings made by the applicant with the
343 United States Securities and Exchange Commission, or with a
344 similar regulator in a country other than the United States,
345 within the preceding year.
346 7. The location at which the applicant proposes to
347 establish its principal place of business and any other
348 location, including branch offices and authorized vendors
349 operating in this state. For each branch office and each
350 location of an authorized vendor, the applicant shall include
351 the nonrefundable fee required by s. 560.143.
352 8. The name and address of the clearing financial
353 institution or financial institutions through which the
354 applicant’s payment instruments are drawn or through which the
355 payment instruments are payable.
356 9. The history of the applicant’s material litigation,
357 criminal convictions, pleas of nolo contendere, and cases of
358 adjudication withheld.
359 10. The history of material litigation, arrests, criminal
360 convictions, pleas of nolo contendere, and cases of adjudication
361 withheld for each control executive officer, director,
362 controlling shareholder, and responsible person.
363 11. The name of the registered agent in this state for
364 service of process unless the applicant is a sole proprietor.
365 12. Any other information specified in this chapter or by
366 rule.
367 (c) Fingerprints for each person listed in subparagraph
368 (a)3. for live-scan processing in accordance with rules adopted
369 by the commission.
370 1. The fingerprints may be submitted through a third-party
371 vendor authorized by the Department of Law Enforcement to
372 provide live-scan fingerprinting.
373 2. The Department of Law Enforcement must conduct the state
374 criminal history background check, and a federal criminal
375 history background check must be conducted through the Federal
376 Bureau of Investigation.
377 3. All fingerprints submitted to the Department of Law
378 Enforcement must be submitted electronically and entered into
379 the statewide automated fingerprint identification system
380 established in s. 943.05(2)(b) and available for use in
381 accordance with s. 943.05(2)(g) and (h). The office shall pay an
382 annual fee to the Department of Law Enforcement to participate
383 in the system and shall inform the Department of Law Enforcement
384 of any person whose fingerprints no longer must be retained.
385 4. The costs of fingerprint processing, including the cost
386 of retaining the fingerprints, shall be borne by the person
387 subject to the background check.
388 5. The office shall review the results of the state and
389 federal criminal history background checks and determine whether
390 the applicant meets licensure requirements.
391 6. For purposes of this paragraph, fingerprints are not
392 required to be submitted if the applicant is a publicly traded
393 corporation or is exempted from this chapter under s.
394 560.104(1). The term “publicly traded” means a stock is
395 currently traded on a national securities exchange registered
396 with the federal Securities and Exchange Commission or traded on
397 an exchange in a country other than the United States regulated
398 by a regulator equivalent to the Securities and Exchange
399 Commission and the disclosure and reporting requirements of such
400 regulator are substantially similar to those of the commission.
401 7. Licensees initially approved before October 1, 2013, who
402 are seeking renewal must submit fingerprints for each person
403 listed in subparagraph (a)3. for live-scan processing pursuant
404 to this paragraph. Such fingerprints must be submitted before
405 renewing a license that is scheduled to expire between April 30,
406 2014, and December 31, 2015.
407 Section 7. Subsection (1) of section 560.143, Florida
408 Statutes, is amended to read:
409 560.143 Fees.—
410 (1) LICENSE APPLICATION FEES.—The applicable non-refundable
411 fees must accompany an application for licensure:
412 (a) Part II.........................................$375.
413 (b) Part III........................................$188.
414 (c) Per branch office................................$38.
415 (d) For each location of an authorized
416 vendor......................................................$38.
417 (e) Declaration as a deferred presentment
418 provider.................................................$1,000.
419 (f) Fingerprint retention fees as prescribed by rule.
420 (g) License application fees for branch offices and
421 authorized vendors are limited to $20,000 when such fees are
422 assessed as a result of a change in controlling interest as
423 defined in s. 560.127.
424 Section 8. For the purpose of incorporating the amendments
425 made by this act to sections 560.118 and 560.141, Florida
426 Statutes, in references thereto, paragraph (a) of subsection (4)
427 of section 559.952, Florida Statutes, is reenacted to read:
428 559.952 Financial Technology Sandbox.—
429 (4) EXCEPTIONS TO GENERAL LAW AND WAIVERS OF RULE
430 REQUIREMENTS.—
431 (a) Notwithstanding any other law, upon approval of a
432 Financial Technology Sandbox application, the following
433 provisions and corresponding rule requirements are not
434 applicable to the licensee during the sandbox period:
435 1. Section 516.03(1), except for the application fee, the
436 investigation fee, the requirement to provide the social
437 security numbers of control persons, evidence of liquid assets
438 of at least $25,000, and the office’s authority to investigate
439 the applicant’s background. The office may prorate the license
440 renewal fee for an extension granted under subsection (7).
441 2. Section 516.05(1) and (2), except that the office shall
442 investigate the applicant’s background.
443 3. Section 560.109, only to the extent that the section
444 requires the office to examine a licensee at least once every 5
445 years.
446 4. Section 560.118(2).
447 5. Section 560.125(1), only to the extent that the
448 subsection would prohibit a licensee from engaging in the
449 business of a money transmitter or payment instrument seller
450 during the sandbox period.
451 6. Section 560.125(2), only to the extent that the
452 subsection would prohibit a licensee from appointing an
453 authorized vendor during the sandbox period. Any authorized
454 vendor of such a licensee during the sandbox period remains
455 liable to the holder or remitter.
456 7. Section 560.128.
457 8. Section 560.141, except for s. 560.141(1)(a)1., 3., 7.
458 10. and (b), (c), and (d).
459 9. Section 560.142(1) and (2), except that the office may
460 prorate, but may not entirely eliminate, the license renewal
461 fees in s. 560.143 for an extension granted under subsection
462 (7).
463 10. Section 560.143(2), only to the extent necessary for
464 proration of the renewal fee under subparagraph 9.
465 11. Section 560.204(1), only to the extent that the
466 subsection would prohibit a licensee from engaging in, or
467 advertising that it engages in, the selling or issuing of
468 payment instruments or in the activity of a money transmitter
469 during the sandbox period.
470 12. Section 560.205(2).
471 13. Section 560.208(2).
472 14. Section 560.209, only to the extent that the office may
473 modify, but may not entirely eliminate, the net worth, corporate
474 surety bond, and collateral deposit amounts required under that
475 section. The modified amounts must be in such lower amounts that
476 the office determines to be commensurate with the factors under
477 paragraph (5)(c) and the maximum number of consumers authorized
478 to receive the financial product or service under this section.
479 Section 9. For the purpose of incorporating the amendment
480 made by this act to section 560.141, Florida Statutes, in a
481 reference thereto, paragraph (c) of subsection (2) of section
482 560.114, Florida Statutes, is reenacted to read:
483 560.114 Disciplinary actions; penalties.—
484 (2) Pursuant to s. 120.60(6), the office may summarily
485 suspend the license of a money services business if the office
486 finds that a licensee poses an immediate, serious danger to the
487 public health, safety, and welfare. A proceeding in which the
488 office seeks the issuance of a final order for the summary
489 suspension of a licensee shall be conducted by the commissioner
490 of the office, or his or her designee, who shall issue such
491 order. The following acts are deemed to constitute an immediate
492 and serious danger to the public health, safety, and welfare,
493 and the office may immediately suspend the license of a money
494 services business if:
495 (c) A natural person required to be listed on the license
496 application for a money services business pursuant to s.
497 560.141(1)(a)3. is criminally charged with, or arrested for, a
498 crime described in paragraph (1)(o), paragraph (1)(p), or
499 paragraph(1)(q).
500 Section 10. This act shall take effect October 1, 2022.
