SB-0729, As Passed House, December 20, 2018

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 729

     A bill to amend 2006 PA 250, entitled

"Money transmission services act,"

by amending sections 2, 3, and 4 (MCL 487.1002, 487.1003, and

487.1004).

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 2. As used in this act:

     (a) "Agency" means the office of financial and insurance

services in the department of labor and economic growth.or

"department" means the department of insurance and financial

services.

     (b) "Agent of a payee" means a person appointed by a payee to

collect and process payments as the bona fide agent of the payee.

(c) (b) "Applicant" means a person that files an application

for a license under this act.

(d) (c) "Authorized delegate" means a person that a licensee

designates to provide money transmission services in this state on

behalf of the licensee.

     (e) "Closed-loop prepaid access" means access to funds or the

value of funds that is paid in advance, may be retrieved or

transferred at some time in the future through a device or vehicle,

and may be used only to acquire goods or services in transactions

that involve 1 or more specific merchants or 1 or more specific

locations.

(f) (d) "Commissioner" means the commissioner of the office of

financial and insurance services.or "director" means the director

of the department or his or her designee.

(g) (e) "Control" means any of the following:

     (i) Ownership of, or the power to vote, directly or

indirectly, at least 25% of a class of voting securities or voting

interests of a licensee or person in control of a licensee.

     (ii) Power to elect a majority of executive officers,

managers, directors, trustees, or other persons exercising

managerial authority of a licensee or person in control of a

licensee.

     (iii) The power to exercise directly or indirectly a

controlling influence over the management or policies of a licensee

or person in control of a licensee.

(h) (f) "Control person" means a director, manager, or

executive officer of a licensee or applicant or a natural person an

individual who has the authority to participate in the direction,

directly or indirectly through 1 or more other natural persons,

individuals, of the management or policies of a licensee or

applicant.

(i) (g) "Depository financial institution" means a bank,

national bank, savings and loan association, savings bank, or

credit union organized under the laws of this state, another state,

the District of Columbia, the United States, or a territory or

protectorate of the United States whose deposits are insured by an

agency of the federal government.

     (j) "Device or vehicle" means an object or information used to

provide closed-loop prepaid access or prepaid access, such as a

card, code, electronic serial number, mobile identification number,

or personal identification number. A device or vehicle may be in

either tangible or electronic form.

(k) (h) "Executive officer" means an officer, member, or

partner of a licensee, including, but not limited to, a chief

executive officer, president, vice president, chief financial

officer, controller, compliance officer, or any other similar

position.

(l) (i) "Financial licensing act" means any of the financial

licensing acts, as that term is defined in section 2 of the

consumer financial services act, 1988 PA 161, MCL 487.2052.

(m) (j) "Licensee" means a person that is licensed or required

to be licensed under this act.

(n) (k) "Location" means a place of business at which

activities regulated by this act occur.

     Sec. 3. As used in this act:

     (a) "Material litigation" means litigation that, according to

generally accepted accounting principles, is significant to an

applicant's or a licensee's financial health and must be disclosed

in the applicant's or licensee's audited financial statements,

report to shareholders, or similar records.

     (b) "Money" means a medium of exchange authorized or adopted

by the United States or a foreign government as a part of its

currency that is customarily used and accepted as a medium of

exchange in the country of issuance. The term includes a monetary

unit of account established by an intergovernmental organization or

by agreement between 2 or more governments.

     (c) "Money transmission services" means selling or issuing

payment instruments or stored value devices closed-loop prepaid

access or prepaid access devices or vehicles or receiving money or

monetary value for transmission. The term does not include the

provision solely of delivery, online, or telecommunications

services or network access.

     (d) "Outstanding payment instrument" means any check, draft,

money order, travelers check, other written instrument, electronic

or wire transfer, stored value device, closed-loop prepaid access

or prepaid access device or vehicle, or facsimile issued by a

licensee that has been sold in the United States directly by the

licensee or any payment instrument issued by the licensee that has

been sold by the licensee or an authorized delegate in the United

States, that has been reported to the licensee as having been sold,

and that has not yet been paid by or for the licensee.

     (e) "Payee" means the provider of goods or services, not

including money transmission services, that is owed payment of

money or other monetary value from the person that is paying for

the goods or services.

(f) (e) "Payment instrument" means any electronic or written

check, draft, money order, travelers check, or other wire,

electronic, or written instrument or order for the transmission or

payment of money, sold or issued to 1 or more persons, whether or

not the instrument is negotiable. The term includes any stored

value device or facsimile. closed-loop prepaid access or prepaid

access device or vehicle. The term does not include any credit card

voucher, letter of credit, or tangible object redeemable by the

issuer in goods or services.

(g) (f) "Person" means an individual, partnership,

association, corporation, limited liability company, trust, estate,

joint venture, government, governmental subdivision, agency or

instrumentality, public corporation, or any other legal entity.

     (h) "Prepaid access" means access to funds or the value of

funds that have been paid in advance and can be retrieved or

transferred at some point in the future through a device or

vehicle. The term does not include closed-loop prepaid access.

(i) (g) "Record" means information that is inscribed on a

tangible medium or that is stored in an electronic or other medium

and is retrievable in perceivable form.

(j) (h) "State" means a state of the United States, the

District of Columbia, Puerto Rico, the United States Virgin

Islands, or any territory or protectorate of the United States.

     (i) "Stored value device" means a card or other tangible

object used for the transmission or payment of money that contains

a microprocessor chip, magnetic stripe, or other means for the

storage of information; that is prefunded; and the value of which

is reduced after each use. The term does not include a tangible

object the value of which is redeemable in the issuer's goods and

services.

(k) (j) "Travelers check" means an instrument for the payment

of money or a foreign currency instrument in any denomination that

provides for both of the following:

     (i) A specimen signature of the purchaser to be completed at

the time of purchase of the instrument.

     (ii) A countersignature of the purchaser to be completed when

the instrument is negotiated.

     Sec. 4. This act does not apply to any of the following:

     (a) The United States or a department, agency, or

instrumentality of the United States.

     (b) Money transmission services provided by the The United

States postal service Postal Service or by a contractor to the

extent that it provides money transmission services on behalf of

the United States postal service.Postal Service.

     (c) A state, county, city, or any other governmental

subdivision of a state.

     (d) A depository financial institution, office of an

international banking corporation, or branch of a foreign bank; a

bank holding company or subsidiary, as those terms are defined in

section 2(a)(1) and 2(d) of the bank holding company act of 1956,

12 USC 1841; a bank service company organized under the bank

service company act, 12 USC 1861 to 1867; a subsidiary or affiliate

of a depository financial institution, or a subsidiary or affiliate

of a holding company of a depository financial institution, if the

depository financial institution maintains its main office or a

branch office in this state; a credit union service organization,

as that term is defined in section 102 of the credit union act,

2003 PA 215, MCL 490.102; or a corporation organized under the Edge

act, 12 USC 611 to 633.

     (e) A person, to the extent that it provides money

transmission services as an agent for an entity described in

subdivision (d), if both of the following are met:

     (i) The agency relationship between the person that is

providing the money transmission services and the entity described

in subdivision (d) is established through written agreement.

     (ii) The entity described in subdivision (d) remains

responsible for providing the money transmission services to its

customers.

     (f) A person to the extent that it issues, sells, or

distributes a closed-loop prepaid access device or vehicle, if the

funds associated with that device or vehicle do not exceed

$2,000.00 maximum value on any day.

     (g) A person to the extent that it is acting as an agent of a

payee, if the person demonstrates to the director that all of the

following are met:

     (i) There exists a written agreement between the payee and

agent directing the agent to collect and process payments on the

payee's behalf.

     (ii) The payee holds the agent out to the public as accepting

payments on the payee's behalf.

     (iii) Payment is treated as received by the payee at the time

it is received by the agent.

(h) (e) Electronic An 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 of the United States or a

state or governmental subdivision, agency, or instrumentality of a

state.

(i) (f) A board of trade that is designated as a contract

market under the commodity exchange act, 7 USC 1 to 27f, or a

person that in the ordinary course of business provides clearance

and settlement services for a board of trade, to the extent of its

operation as or for that board.

(j) (g) A registered futures commission merchant under the

federal commodities laws, to the extent of its operation as a

merchant.

(k) (h) A person that provides clearance or settlement

services under a registration as a clearing agency or an exemption

from registration granted under the federal securities laws, to the

extent of its operation as a provider under this subdivision.

(l) (i) An operator of a payment system, to the extent that it

provides processing, clearing, settlement, or other similar

services between or among persons excluded by under this section in

connection with wire transfers, credit card transactions, debit

card transactions, stored value prepaid access transactions,

closed-loop prepaid access transactions, automated clearinghouse

transfers, or other similar funds transfers or transactions.

(m) (j) A person that is registered as a securities broker-

dealer under federal or state securities laws, to the extent of its

operation as a registered broker-dealer.

     Enacting section 1. This amendatory act takes effect 90 days

after the date it is enacted into law.