103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3670

 

Introduced 2/9/2024, by Sen. Laura Ellman

 

SYNOPSIS AS INTRODUCED:
 
New Act
205 ILCS 657/Act rep.

    Creates the Uniform Money Transmission Modernization Act. Provides that the provisions supersede the Transmitters of Money Act. Sets forth provisions concerning money transmission licenses; acquisition of control; reporting and records; authorized delegates; timely transmission, refunds, and disclosures; prudential standards; and enforcement. Repeals the Transmitters of Money Act. Makes other changes. Effective January 1, 2026.


LRB103 39026 RTM 69163 b

 

 

A BILL FOR

 

SB3670LRB103 39026 RTM 69163 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4
ARTICLE I. Title & Purpose

 
5    Section 1-1. Short title. This Act may be cited as the
6Uniform Money Transmission Modernization Act.
 
7    Section 1-2. Purpose.
8    (a) This Act is designed to replace existing State money
9transmission laws currently codified under the Transmitters of
10Money Act. It is the intent of the General Assembly that the
11provisions of this Act accomplish the following:
12        (1) ensure states can coordinate in all areas of
13    regulation, licensing, and supervision to eliminate
14    unnecessary regulatory burden and more effectively utilize
15    regulator resources;
16        (2) protect the public from financial crime;
17        (3) standardize the types of activities that are
18    subject to licensing or otherwise exempt from licensing;
19    and
20        (4) modernize safety and soundness requirements to
21    ensure customer funds are protected in an environment that
22    supports innovative and competitive business practices.

 

 

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1    (b) The provisions of this Act shall be liberally
2construed to effectuate its purposes.
 
3
ARTICLE II. Definitions

 
4    Section 2-1. Definitions. As used in this Act:
5    "Acting in concert" means persons knowingly acting
6together with a common goal of jointly acquiring control of a
7licensee whether or not pursuant to an express agreement.
8    "Authorized delegate" means a person delegated by a
9licensee to engage in money transmission on behalf of the
10licensee.
11    "Average daily money transmission liability" means the
12amount of the licensee's outstanding money transmission
13obligations in this State at the end of each day in a given
14period of time, added together, and divided by the total
15number of days in the given period of time. For purposes of
16calculating average daily money transmission liability under
17this Act for any licensee required to do so, the given period
18of time shall be the quarters ending March 31, June 30,
19September 30, and December 31.
20    "Bank Secrecy Act" means the Bank Secrecy Act, 31 U.S.C.
215311, et seq. and its implementing rules and regulations, as
22amended and recodified from time to time.
23    "Bill payment service" means the business of transmitting
24money on behalf of an Illinois person for the purposes of

 

 

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1paying the person's bills.
2    "Closed loop stored value" means stored value that is
3redeemable by the issuer only for goods or services provided
4by the issuer or its affiliate or franchisees of the issuer or
5its affiliate, except to the extent required by applicable law
6to be redeemable in cash for its cash value.
7    "Control" means, when in reference to a person:
8        (1)(A) the power to vote, directly or indirectly, at
9    least 25% of the outstanding voting shares or voting
10    interests of a licensee or person in control of a
11    licensee;
12            (B) the power to elect or appoint a majority of key
13        individuals or executive officers, managers,
14        directors, trustees, or other persons exercising
15        managerial authority of a person in control of a
16        licensee; or
17            (C) the power to exercise, directly or indirectly,
18        a controlling influence over the management or
19        policies of a licensee or person in control of a
20        licensee.
21        (2) Rebuttable presumption of control.
22            (A) A person is presumed to exercise a controlling
23        influence when the person holds the power to vote,
24        directly or indirectly, at least 10% of the
25        outstanding voting shares or voting interests of a
26        licensee or person in control of a licensee.

 

 

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1            (B) A person presumed to exercise a controlling
2        influence as defined by this Section can rebut the
3        presumption of control if the person is a passive
4        investor.
5        (3) For purposes of determining the percentage of a
6    person controlled by any other person, the person's
7    interest shall be aggregated with the interest of any
8    other immediate family member, including the person's
9    spouse, parents, children, siblings, mothers-in-law and
10    fathers-in-law, sons-in-law and daughters-in-law,
11    brothers-in-law and sisters-in-law, and any other person
12    who shares such person's home.
13    "Department" means the Department of Financial and
14Professional Regulation.
15    "Eligible rating" means a credit rating of any of the 3
16highest rating categories provided by an eligible rating
17service, whereby each category may include rating category
18modifiers such as "plus" or "minus" for S&P, or the equivalent
19for any other eligible rating service. For purposes of this
20definition, long-term credit ratings are deemed eligible if
21the rating is equal to "A-" or higher by S&P, or the equivalent
22from any other eligible rating service; short-term credit
23ratings are deemed eligible if the rating is equal to or higher
24than "A-2" or "SP-2" by S&P, or the equivalent from any other
25eligible rating service; if ratings differ among eligible
26rating services, the highest rating shall apply when

 

 

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1determining whether a security bears an eligible rating.
2    "Eligible rating service" means any nationally recognized
3statistical rating organization as defined by the U.S.
4Securities and Exchange Commission, and any other organization
5designated by the Secretary by rule or order.
6    "Federally insured depository financial institution" means
7a bank, credit union, savings and loan association, trust
8company, savings association, savings bank, industrial bank,
9or industrial loan company organized under the laws of the
10United States or any state of the United States, if the bank,
11credit union, savings and loan association, trust company,
12savings association, savings bank, industrial bank, or
13industrial loan company has federally insured deposits.
14    "In this State" means at a physical location within this
15State for a transaction requested in person. For a transaction
16requested electronically or by phone, the provider of money
17transmission may determine if the person requesting the
18transaction is in this State by relying on other information
19provided by the person regarding the location of the
20individual's residential address or a business entity's
21principal place of business or other physical address
22location, and any records associated with the person that the
23provider of money transmission may have that indicate such
24location, including, but not limited to, an address associated
25with an account.
26    "Individual" means a natural person.

 

 

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1    "Key individual" means any individual ultimately
2responsible for establishing or directing policies and
3procedures of the licensee, such as an executive officer,
4manager, director, or trustee.
5    "Licensee" means a person licensed under this Act.
6    "Material litigation" means litigation, that according to
7United States generally accepted accounting principles, is
8significant to a person's financial health and would be
9required to be disclosed in the person's annual audited
10financial statements, report to shareholders, or similar
11records.
12    "Money" means a medium of exchange that is authorized or
13adopted by the United States or a foreign government as part of
14its currency and that is customarily used and accepted as a
15medium of exchange in the country of issuance. "Money"
16includes a monetary unit of account established by an
17intergovernmental organization or by agreement between 2 or
18more governments.
19    "Monetary value" means a medium of exchange, whether or
20not redeemable in money.
21    "Money transmission" means any of the following:
22        (1) Selling or issuing payment instruments to a person
23    located in this State.
24        (2) Selling or issuing stored value to a person
25    located in this State.
26        (3) Receiving money for transmission from a person

 

 

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1    located in this State or transmitting money in this State.
2    "Money transmission" includes bill payment services and
3payroll processing services. "Money transmission" does not
4include the provision solely of online or telecommunications
5services or network access.
6    "MSB accredited state agency" means a state agency that is
7accredited by the Conference of State Bank Supervisors and
8Money Transmitter Regulators Association for money
9transmission licensing and supervision.
10    "Multistate licensing process" means any agreement entered
11into by and among state regulators relating to coordinated
12processing of applications for money transmission licenses,
13applications for the acquisition of control of a licensee,
14control determinations, or notice and information requirements
15for a change of key individuals.
16    "NMLS" means the Nationwide Multistate Licensing System
17and Registry developed by the Conference of State Bank
18Supervisors and the American Association of Residential
19Mortgage Regulators and owned and operated by the State
20Regulatory Registry, LLC, or any successor or affiliated
21entity, for the licensing and registration of persons in
22financial services industries.
23    "Outstanding money transmission obligations" means any of
24the following:
25        (1) Any payment instrument or stored value issued or
26    sold by the licensee to a person located in the United

 

 

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1    States or reported as sold by an authorized delegate of
2    the licensee to a person that is located in the United
3    States that has not yet been paid or refunded by or for the
4    licensee or escheated in accordance with applicable
5    abandoned property laws; or
6        (2) Any money received for transmission by the
7    licensee or an authorized delegate in the United States
8    from a person located in the United States that has not
9    been received by the payee, refunded to the sender, or
10    escheated in accordance with applicable abandoned property
11    laws.
12    For purposes of this definition, "in the United States"
13includes, to the extent applicable, a person in any state,
14territory, or possession of the United States; the District of
15Columbia; the Commonwealth of Puerto Rico; or a U.S. military
16installation that is located in a foreign country.
17    "Passive investor" means a person that:
18        (1) does not have the power to elect a majority of key
19    individuals or executive officers, managers, directors,
20    trustees, or other persons exercising managerial authority
21    of a person in control of a licensee;
22        (2) is not employed by and does not have any
23    managerial duties of the licensee or person in control of
24    a licensee;
25        (3) does not have the power to exercise, directly or
26    indirectly, a controlling influence over the management or

 

 

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1    policies of a licensee or person in control of a licensee;
2    and
3        (4) either:
4            (A) attests to items (1), (2), and (3), in a form
5        and in a medium prescribed by the Secretary; or
6            (B)commits to the passivity characteristics of
7        items (1), (2), and (3), in a written document.
8    "Payment instrument" means a written or electronic check,
9draft, money order, traveler's check, or other written or
10electronic instrument for the transmission or payment of money
11or monetary value, whether or not negotiable. "Payment
12instrument" does not include stored value or any instrument
13that (1) is redeemable by the issuer only for goods or services
14provided by the issuer or its affiliate or franchisees of the
15issuer or its affiliate, except to the extent required by
16applicable law to be redeemable in cash for its cash value; or
17(2) not sold to the public but issued and distributed as part
18of a loyalty, rewards, or promotional program.
19    "Payroll processing services" means receiving money for
20transmission pursuant to a contract with a person to deliver
21wages or salaries, make payment of payroll taxes to State and
22federal agencies, make payments relating to employee benefit
23plans, or make distributions of other authorized deductions
24from wages or salaries. "Payroll processing services" does not
25include an employer performing payroll processing services on
26its own behalf or on behalf of its affiliate.

 

 

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1    "Person" means any individual, general partnership,
2limited partnership, limited liability company, corporation,
3trust, association, joint stock corporation, or other
4corporate entity identified by the Secretary.
5    "Receiving money for transmission" or "money received for
6transmission" means receiving money or monetary value in the
7United States for transmission within or outside the United
8States by electronic or other means.
9    "Secretary" means the Secretary of Financial and
10Professional Regulation, the acting Secretary, or a person
11authorized by the Secretary.
12    "Stored value" means monetary value representing a claim
13against the issuer evidenced by an electronic or digital
14record, and that is intended and accepted for use as a means of
15redemption for money or monetary value, or payment for goods
16or services. "Stored value" includes, but is not limited to,
17"prepaid access" as defined by 31 CFR Section 1010.100, as
18amended or recodified from time to time. Notwithstanding the
19foregoing, "stored value" does not include a payment
20instrument or closed loop stored value, or stored value not
21sold to the public but issued and distributed as part of a
22loyalty, rewards, or promotional program.
23    "Tangible net worth" means the aggregate assets of a
24licensee excluding all intangible assets, less liabilities, as
25determined in accordance with United States generally accepted
26accounting principles.
 

 

 

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1
ARTICLE III. Exemptions

 
2    Section 3-1. Exemptions. This Act does not apply to:
3    (1) An operator of a payment system to the extent that it
4provides processing, clearing, or settlement services, between
5or among persons exempted by this Section or licensees, in
6connection with wire transfers, credit card transactions,
7debit card transactions, stored value transactions, automated
8clearinghouse transfers, or similar funds transfers.
9    (2) A person appointed as an agent of a payee to collect
10and process a payment from a payor to the payee for goods or
11services, other than money transmission itself, provided to
12the payor by the payee, if:
13        (A) there exists a written agreement between the payee
14    and the agent directing the agent to collect and process
15    payments from payors on the payee's behalf;
16        (B) the payee holds the agent out to the public as
17    accepting payments for goods or services on the payee's
18    behalf; and
19        (C) payment for the goods and services is treated as
20    received by the payee upon receipt by the agent so that the
21    payor's obligation is extinguished and there is no risk of
22    loss to the payor if the agent fails to remit the funds to
23    the payee.
24    (3) A person that acts as an intermediary by processing

 

 

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1payments between an entity that has directly incurred an
2outstanding money transmission obligation to a sender, and the
3sender's designated recipient, if the entity:
4        (A) is properly licensed or exempt from licensing
5    requirements under this Act;
6        (B) provides a receipt, electronic record, or other
7    written confirmation to the sender identifying the entity
8    as the provider of money transmission in the transaction;
9    and
10        (C) bears sole responsibility to satisfy the
11    outstanding money transmission obligation to the sender,
12    including the obligation to make the sender whole in
13    connection with any failure to transmit the funds to the
14    sender's designated recipient.
15    (4) The United States or a department, agency, or
16instrumentality thereof, or its agent.
17    (5) Money transmission by the United States Postal Service
18or by an agent of the United States Postal Service.
19    (6) A State, county, city, or any other governmental
20agency or governmental subdivision or instrumentality of a
21State, or its agent.
22    (7) A federally insured depository financial institution,
23bank holding company, office of an international banking
24corporation, foreign bank that establishes a federal branch
25pursuant to the International Bank Act, 12 U.S.C. 3102, as
26amended or recodified from time to time, corporation organized

 

 

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1pursuant to the Bank Service Corporation Act, 12 U.S.C.
2Sections 1861 through 1867, as amended or recodified from time
3to time, or corporation organized under the Edge Act, 12
4U.S.C. Sections 611 through 633, as amended or recodified from
5time to time, under the laws of a state or the United States.
6    (8) Electronic funds transfer of governmental benefits for
7a federal, State, county, or governmental agency by a
8contractor on behalf of the United States or a department,
9agency, or instrumentality thereof, or on behalf of a State or
10governmental subdivision, agency, or instrumentality thereof.
11    (9) A board of trade designated as a contract market under
12the federal Commodity Exchange Act, 7 U.S.C. Section 1 et
13seq., as amended or recodified from time to time, or a person
14that, in the ordinary course of business, provides clearance
15and settlement services for a board of trade to the extent of
16its operation as or for such a board.
17    (10) A registered futures commission merchant under the
18federal commodities laws to the extent of its operation as
19such a merchant.
20    (11) A person registered as a securities broker-dealer
21under federal or State securities laws to the extent of its
22operation as such a broker-dealer.
23    (12) An individual employed by a licensee, authorized
24delegate, or any person exempted from the licensing
25requirements of the Act when acting within the scope of
26employment and under the supervision of the licensee,

 

 

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1authorized delegate, or exempted person as an employee and not
2as an independent contractor.
3    (13) A person expressly appointed as a third-party service
4provider to or agent of an entity exempt under paragraph (7) or
5(16), solely to the extent that:
6        (A) such service provider or agent is engaging in
7    money transmission on behalf of and pursuant to a written
8    agreement with the exempt entity that sets forth the
9    specific functions that the service provider or agent is
10    to perform; and
11        (B) the exempt entity assumes all risk of loss and all
12    legal responsibility for satisfying the outstanding money
13    transmission obligations owed to purchasers and holders of
14    the outstanding money transmission obligations upon
15    receipt of the purchaser's or holder's money or monetary
16    value by the service provider or agent.
17    (14) Any other person, transaction, or class of persons or
18transactions exempted by rule or any other person or
19transaction exempted by the Secretary's order on a finding
20that the licensing of the person is not necessary to achieve
21the purposes of this Act.
22    (15) Currency exchanges licensed under the Currency
23Exchange Act to the extent of its operation as such a currency
24exchange.
25    (16) A credit union organized under the laws of the United
26States or any state of the United States with member share

 

 

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1accounts insured by an insurer approved by the credit union's
2primary financial regulatory agency. An out-of-state-credit
3union may not conduct any activity in this State that is not
4authorized for a credit union chartered under the law of this
5State.
 
6    Section 3-2. Authority to require demonstration of
7exemption. The Secretary may require that any person or entity
8claiming to be exempt from licensing pursuant to Section 3-1
9provide information and documentation to the Secretary
10demonstrating that it qualifies for any claimed exemption. The
11burden of proving the applicability of an exemption is upon
12the person claiming the exclusion or exception.
 
13
ARTICLE IV. Implementation, Confidentiality, Supervision &
14
Relationship to Federal Law

 
15    Section 4-1. Implementation.
16    (a) In order to carry out the purposes of this Act, the
17Secretary may, subject to the provisions of subsections (a)
18and (b) of Section 4-2:
19        (1) enter into agreements or relationships with other
20    government officials or federal and State regulatory
21    agencies and regulatory associations in order to improve
22    efficiencies and reduce regulatory burden by standardizing
23    methods or procedures, and sharing resources, records or

 

 

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1    related information obtained under this Act;
2        (2) use, hire, contract, or employ analytical systems,
3    methods, or software to examine or investigate any person
4    subject to this Act.
5        (3) accept, from other state or federal government
6    agencies or officials, licensing, examination, or
7    investigation reports made by such other state or federal
8    government agencies or officials; and
9        (4) accept audit reports made by an independent
10    certified public accountant or other qualified third-party
11    auditor for an applicant or licensee and incorporate the
12    audit report in any report of examination or
13    investigation.
14    (b) The Department shall have the broad administrative
15authority to administer, interpret and enforce this Act, and
16adopt rules or regulations implementing this Act and to
17recover the cost of administering and enforcing this Act by
18imposing and collecting proportionate and equitable fees and
19costs associated with applications, examinations,
20investigations, and other actions required to achieve the
21purpose of this Act. The Department's rulemaking authority
22shall include, but not be limited to:
23        (1) such rules and regulations in connection with the
24    activities of licensees as may be necessary and
25    appropriate for the protection of consumers in this State;
26        (2) such rules and regulations as may be necessary and

 

 

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1    appropriate to define improper or fraudulent business
2    practices in connection with the activities of licensees;
3        (3) such rules and regulations as may define the terms
4    used in this Act and as may be necessary and appropriate to
5    interpret and implement the provisions of this Act;
6        (4) such rules and regulations as may be necessary for
7    the implementation or enforcement of this Act; and
8        (5) such rules and regulations establishing fees the
9    Secretary deems necessary to cover the cost of
10    administration of this Act.
 
11    Section 4-2. Confidentiality.
12    (a) Except as otherwise provided in this Section, all
13information or reports obtained by the Secretary from an
14applicant, licensee, or authorized delegate, and all
15information contained in or related to an examination,
16investigation, operating report, or condition report prepared
17by, on behalf of, or for the use of the Secretary, or financial
18statements, balance sheets, or authorized delegate
19information, are confidential and are not subject to
20disclosure under the Freedom of Information Act.
21    (b) The Secretary may disclose information not otherwise
22subject to disclosure under subsection (a) to representatives
23of State or federal agencies who promise in a record that they
24will maintain the confidentiality of the information or where
25the Secretary finds that the release is reasonably necessary

 

 

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1for the protection and interest of the public.
2    (c) This Section does not prohibit the Secretary from
3disclosing to the public a list of all licensees or the
4aggregated financial or transactional data concerning those
5licensees.
6    (d) Information contained in the records of the Department
7that is not confidential and may be made available to the
8public either on the Department's website, upon receipt by the
9Department of a written request, or in NMLS shall include:
10        (1) the name, business address, telephone number, and
11    unique identifier of a licensee;
12        (2) the business address of a licensee's registered
13    agent for service;
14        (3) the name, business address, and telephone number
15    of all authorized delegates;
16        (4) the terms of or a copy of any bond filed by a
17    licensee, if confidential information, including, but not
18    limited to, prices and fees, for such bond is redacted;
19        (5) copies of any final orders of the Department
20    relating to any violation of this Act or regulations
21    implementing this Act; and
22    (e) Imposition of an administrative action under this Act
23is not confidential.
24    (f) The Secretary, in his or her sole discretion, may
25disclose otherwise confidential information when he or she
26determines disclosure is in the public interest.
 

 

 

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1    Section 4-3. Supervision.
2    (a) The Secretary may conduct an examination or
3investigation of a licensee or authorized delegate or
4otherwise take independent action authorized by this Act or by
5a rule adopted or order issued under this Act as reasonably
6necessary or appropriate to administer and enforce this Act,
7rules and regulations implementing this Act, and other
8applicable law, including the Bank Secrecy Act and the USA
9PATRIOT ACT. The Secretary may:
10        (1) conduct an examination either on-site or off-site
11    as the Secretary may reasonably require;
12        (2) conduct an examination in conjunction with an
13    examination conducted by representatives of other state
14    agencies or agencies of another state or of the federal
15    government;
16        (3) accept the examination report of another state
17    agency or an agency of another state or of the federal
18    government, or a report prepared by an independent
19    accounting firm, which on being accepted is considered for
20    all purposes as an official report of the Secretary; and
21        (4) summon and examine under oath a key individual or
22    employee of a licensee or authorized delegate and require
23    the person to produce records regarding any matter related
24    to the condition and business of the licensee or
25    authorized delegate.

 

 

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1    (b) A licensee or authorized delegate shall provide, and
2the Secretary shall have full and complete access to, all
3records the Secretary may reasonably require to conduct a
4complete examination. The records must be provided at the
5location and in the format specified by the Secretary,
6however, the Secretary may utilize multistate record
7production standards and examination procedures when such
8standards will reasonably achieve the requirements of this
9subsection.
10    (c) Unless otherwise directed by the Secretary, a licensee
11shall pay all costs reasonably incurred in connection with an
12examination of the licensee or the licensee's authorized
13delegates.
 
14    Section 4-4. Networked supervision.
15    (a) To efficiently and effectively administer and enforce
16this Act and to minimize regulatory burden, the Secretary is
17authorized and encouraged to participate in multistate
18supervisory processes established between states and
19coordinated through the Conference of State Bank Supervisors,
20Money Transmitter Regulators Association, and affiliates and
21successors thereof for all licensees that hold licenses in
22this State and other states. As a participant in multistate
23supervision, the Secretary may:
24        (1) cooperate, coordinate, and share information with
25    other state and federal regulators in accordance with

 

 

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1    Section 4-2;
2        (2) enter into written cooperation, coordination, or
3    information-sharing contracts or agreements with
4    organizations the membership of which is made up of state
5    or federal governmental agencies; and
6        (3) cooperate, coordinate, and share information with
7    organizations the membership of which is made up of state
8    or federal governmental agencies, if the organizations
9    agree in writing to maintain the confidentiality and
10    security of the shared information in accordance with
11    Section 4-2.
12    (b) The Secretary may not waive, and nothing in this
13Section constitutes a waiver of, the Secretary's authority to
14conduct an examination or investigation or otherwise take
15independent action authorized by this Act or a rule adopted or
16order issued under this Act to enforce compliance with
17applicable State or federal law.
18    (c) A joint examination or investigation, or acceptance of
19an examination or investigation report, does not waive an
20examination assessment provided for in this Act.
 
21    Section 4-5. Relationship to federal law.
22    (a) If State money transmission jurisdiction is
23conditioned on a federal law, any inconsistencies between a
24provision of this Act and the federal law governing money
25transmission shall be governed by the applicable federal law

 

 

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1to the extent of the inconsistency.
2    (b) In the event of any inconsistencies between this Act
3and a federal law that governs pursuant to subsection (a), the
4Secretary may provide interpretive rule or guidance that:
5        (1) identifies the inconsistency; and
6        (2) identifies the appropriate means of compliance
7    with federal law.
 
8
ARTICLE V. Money Transmission Licenses

 
9    Section 5-1. License required.
10    (a) A person may not engage in the business of money
11transmission or advertise, solicit, or hold oneself out as
12providing money transmission unless the person is licensed
13under this Act.
14    (b) Subsection (a) does not apply to:
15        (1) A person who is an authorized delegate of a person
16    licensed under this Act acting within the scope of
17    authority conferred by a written contract with the
18    licensee; or
19        (2) A person who is exempt pursuant to Section 3-1 and
20    does not engage in money transmission outside the scope of
21    such exemption.
22    (c) A license issued under Section 5-5 is not transferable
23or assignable.
 

 

 

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1    Section 5-2. Consistent State licensing.
2    (a) To establish consistent licensing between this State
3and other states, the Secretary is authorized and encouraged
4to:
5        (1) implement all licensing provisions of this Act in
6    a manner that is consistent with other states that have
7    adopted this Act or multistate licensing processes; and
8        (2) participate in nationwide protocols for licensing
9    cooperation and coordination among state regulators
10    provided that such protocols are consistent with this Act.
11    (b) In order to fulfill the purposes of this Act, the
12Secretary is authorized and encouraged to establish
13relationships or contracts with NMLS or other entities
14designated by NMLS to enable the Secretary to:
15        (1) collect and maintain records;
16        (2) coordinate multistate licensing processes and
17    supervision processes;
18        (3) process fees; and
19        (4) facilitate communication between this State and
20    licensees or other persons subject to this Act.
21    (c) The Secretary is authorized and encouraged to utilize
22NMLS for all aspects of licensing in accordance with this Act,
23including, but not limited to, license applications,
24applications for acquisitions of control, surety bonds,
25reporting, criminal history background checks, credit checks,
26fee processing, and examinations.

 

 

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1    (d) The Secretary is authorized and encouraged to utilize
2NMLS forms, processes, and functionalities in accordance with
3this Act. If NMLS does not provide functionality, forms, or
4processes for a provision of this Act, the Secretary is
5authorized and encouraged to strive to implement the
6requirements in a manner that facilitates uniformity with
7respect to licensing, supervision, reporting, and regulation
8of licensees which are licensed in multiple jurisdictions.
9    (e) For the purpose of participating in NMLS, the
10Secretary is authorized to waive or modify, in whole or in
11part, by rule, regulation or order, any or all of the
12requirements and to establish new requirements as reasonably
13necessary to participate in NMLS.
 
14    Section 5-3. Application for license.
15    (a) Applicants for a license shall apply in a form and in a
16medium as prescribed by the Secretary. Each such form shall
17contain content as set forth by rule, regulation, instruction
18or procedure of the Secretary and may be changed or updated by
19the Secretary in accordance with applicable law in order to
20carry out the purposes of this Act and maintain consistency
21with NMLS licensing standards and practices. The application
22must state or contain, as applicable:
23        (1) the legal name and residential and business
24    addresses of the applicant and any fictitious or trade
25    name used by the applicant in conducting its business;

 

 

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1        (2) a list of any criminal convictions of the
2    applicant and any material litigation in which the
3    applicant has been involved in the 10-year period
4    preceding the submission of the application;
5        (3) a description of any money transmission previously
6    provided by the applicant and the money transmission that
7    the applicant seeks to provide in this State;
8        (4) a list of the applicant's proposed authorized
9    delegates and the locations in this State where the
10    applicant and its authorized delegates propose to engage
11    in money transmission;
12        (5) a list of other states in which the applicant is
13    licensed to engage in money transmission and any license
14    revocations, suspensions, or other disciplinary action
15    taken against the applicant in another state;
16        (6) information concerning any bankruptcy or
17    receivership proceedings affecting the licensee or a
18    person in control of a licensee;
19        (7) a sample form of contract for authorized
20    delegates, if applicable;
21        (8) a sample form of payment instrument or stored
22    value, as applicable;
23        (9) the name and address of any federally insured
24    depository financial institution through which the
25    applicant plans to conduct money transmission; and
26        (10) any other information the Secretary or NMLS

 

 

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1    reasonably requires with respect to the applicant.
2    (b) If an applicant is a corporation, limited liability
3company, partnership, or other legal entity, the applicant
4shall also provide:
5        (1) the date of the applicant's incorporation or
6    formation and State or country of incorporation or
7    formation;
8        (2) if applicable, a certificate of good standing from
9    the State or country in which the applicant is
10    incorporated or formed;
11        (3) a brief description of the structure or
12    organization of the applicant, including any parents or
13    subsidiaries of the applicant, and whether any parents or
14    subsidiaries are publicly traded;
15        (4) the legal name, any fictitious or trade name, all
16    business and residential addresses, and the employment, as
17    applicable, in the 10-year period preceding the submission
18    of the application of each key individual and person in
19    control of the applicant;
20        (5) a list of any criminal convictions and material
21    litigation in which a person in control of the applicant
22    that is not an individual has been involved in the 10-year
23    period preceding the submission of the application;
24        (6) a copy of audited financial statements of the
25    applicant for the most recent fiscal year and for the
26    2-year period preceding the submission of the application;

 

 

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1        (7) a certified copy of unaudited financial statements
2    of the applicant for the most recent fiscal quarter;
3        (8) if the applicant is a publicly traded corporation,
4    a copy of the most recent report filed with the United
5    States Securities and Exchange Commission under Section 13
6    of the federal Securities Exchange Act of 1934, 15 U.S.C.
7    78m, as amended or recodified from time to time;
8        (9) if the applicant is a wholly owned subsidiary of:
9            (A) a corporation publicly traded in the United
10        States, a copy of audited financial statements for the
11        parent corporation for the most recent fiscal year or
12        a copy of the parent corporation's most recent report
13        filed under Section 13 of the federal Securities
14        Exchange Act of 1934, 15 U.S.C. 78m, as amended or
15        recodified from time to time; or
16            (B) a corporation publicly traded outside the
17        United States, a copy of similar documentation filed
18        with the regulator of the parent corporation's
19        domicile outside the United States;
20        (10) the name and address of the applicant's
21    registered agent in this State; and
22        (11) any other information the Secretary reasonably
23    requires with respect to the applicant.
24    A nonrefundable application fee must accompany an
25application for a license under this Section in accordance
26with 38 Ill. Adm. Code 205.35, as amended or recodified from

 

 

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1time to time.
2    (c) The Secretary may waive one or more requirements of
3subsections (a) and (b) or permit an applicant to submit other
4information instead of the required information.
 
5    Section 5-4. Information requirements for certain
6individuals.
7    (a) Any individual in control of a licensee or applicant,
8any individual that seeks to acquire control of a licensee,
9and each key individual shall furnish to the Secretary through
10NMLS the following items:
11        (1) The individual's fingerprints for submission to
12    the Federal Bureau of Investigation and the Secretary for
13    purposes of a national criminal history background check
14    unless the person currently resides outside of the United
15    States and has resided outside of the United States for
16    the last 10 years.
17        (2) Personal history and experience in a form and in a
18    medium prescribed by the Secretary, to obtain the
19    following:
20            (A) an independent credit report from a consumer
21        reporting agency unless the individual does not have a
22        social security number, in which case, this
23        requirement shall be waived;
24            (B) information related to any criminal
25        convictions or pending charges; and

 

 

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1            (C) information related to any regulatory or
2        administrative action and any civil litigation
3        involving claims of fraud, misrepresentation,
4        conversion, mismanagement of funds, breach of
5        fiduciary duty, or breach of contract.
6    (b) If the individual has resided outside of the United
7States at any time in the last 10 years, the individual shall
8also provide an investigative background report prepared by an
9independent search firm that meets the following requirements:
10        (1) At a minimum, the search firm shall:
11            (A) demonstrate that it has sufficient knowledge,
12        resources, and employs accepted and reasonable
13        methodologies to conduct the research of the
14        background report; and
15            (B) not be affiliated with or have an interest
16        with the individual it is researching.
17        (2) At a minimum, the investigative background report
18    shall be written in the English language and shall contain
19    the following:
20            (A) if available in the individual's current
21        jurisdiction of residency, a comprehensive credit
22        report, or any equivalent information obtained or
23        generated by the independent search firm to accomplish
24        such report, including a search of the court data in
25        the countries, provinces, states, cities, towns, and
26        contiguous areas where the individual resided and

 

 

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1        worked;
2            (B) criminal records information for the past 10
3        years, including, but not limited to, felonies,
4        misdemeanors, or similar convictions for violations of
5        law in the countries, provinces, states, cities,
6        towns, and contiguous areas where the individual
7        resided and worked;
8            (C) employment history;
9            (D) media history, including an electronic search
10        of national and local publications, wire services, and
11        business applications; and
12            (E) financial services-related regulatory history,
13        including, but not limited to, money transmission,
14        securities, banking, insurance, and mortgage related
15        industries.
 
16    Section 5-5. Issuance of license.
17    (a) When an application for an original license under this
18Act appears to include all the items and addresses of all of
19the matters that are required, the application is complete and
20the Secretary shall promptly notify the applicant in a record
21of the date on which the application is determined to be
22complete, and:
23        (1) unless extended by the Secretary pursuant to the
24    Secretary's discretion, the Secretary shall approve or
25    deny the application within 120 days after the completion

 

 

SB3670- 31 -LRB103 39026 RTM 69163 b

1    date; or
2        (2) if the application is not approved or denied
3    within 120 days after the completion date or any extension
4    thereof:
5            (A) the application is approved; and
6            (B) the license takes effect as of the first
7        business day after expiration of the 120-day period.
8    (b) A determination by the Secretary that an application
9is complete and is accepted for processing means only that the
10application, on its face, appears to include all of the items,
11including the Criminal Background Check response from the
12Federal Bureau of Investigation, and address all of the
13matters that are required, and is not an assessment of the
14substance of the application or of the sufficiency of the
15information provided.
16    (c) When an application is filed and considered complete
17under this Section, the Secretary shall investigate the
18applicant's financial condition and responsibility, financial
19and business experience, character, and general fitness. The
20Secretary may conduct an on-site investigation of the
21applicant, the reasonable cost of which the applicant must
22pay. The Secretary shall issue a license to an applicant under
23this Section if the Secretary finds that all of the following
24conditions have been fulfilled:
25        (1) the applicant has complied with Sections 5-3 and
26    5-4; and

 

 

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1        (2) the financial condition and responsibility,
2    financial and business experience, competence, character,
3    and general fitness of the applicant and the competence,
4    experience, character, and general fitness of the key
5    individuals and persons in control of the applicant
6    indicate that it is in the interest of the public to permit
7    the applicant to engage in money transmission.
8    (d) If an applicant avails itself or is otherwise subject
9to a multistate licensing process:
10        (1) the Secretary is authorized and encouraged to
11    accept the investigation results of a lead investigative
12    state for the purpose of subsection (c) if the lead
13    investigative state has sufficient staffing, expertise,
14    and minimum standards; or
15        (2) if the Department is a lead investigative state,
16    the Secretary is authorized and encouraged to investigate
17    the applicant pursuant to subsection (c) and the
18    timeframes established by agreement through the multistate
19    licensing process, however, in no case shall such
20    timeframe be noncompliant with the application period in
21    paragraph (1) of subsection (a).
22    (e) The Secretary shall issue a formal written notice of
23the denial of a license application within 30 days after the
24decision to deny the application. The Secretary shall set
25forth the specific reasons for the denial of the application
26in the notice of denial and serve the applicant, either

 

 

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1personally or by certified mail. Service by certified mail
2shall be deemed completed when the notice is deposited into
3the U.S. Mail. An applicant whose application is denied by the
4Secretary under this Section may submit a written request for
5a hearing that shall include the particular reasons why the
6applicant believes that the decision to deny the application
7was incorrect, within 10 days after service of the notice of
8the denial. If an applicant submits a timely request for a
9hearing, the Secretary shall schedule a hearing after the
10request for a hearing unless otherwise agreed to by the
11parties. The Secretary shall conduct hearings pursuant to this
12Section and in accordance with 38 Ill. Adm. Code 100, as
13amended or recodified from time to time.
14    (f) The initial license term shall begin on the day that
15the application is approved. The license shall expire on
16December 31 of the year in which the license term began, unless
17the initial license date is between November 1 and December
1831, in which instance the initial license term shall run
19through December 31 of the following year.
 
20    Section 5-6. Renewal of license.
21    (a) A license under this Act shall be renewed annually.
22    (b) An annual renewal fee in accordance with 38 Ill. Adm.
23Code 205.35, as amended or recodified from time to time, shall
24be paid to the Department. The renewal term shall be for a
25period of one year and shall begin on January 1 of each year

 

 

SB3670- 34 -LRB103 39026 RTM 69163 b

1after the initial license term and shall expire on December 31
2of the year the renewal term begins.
3    (c) A licensee shall submit a renewal report, in a form and
4in a medium prescribed by the Secretary by December 1 of each
5year. The form requires any information deemed necessary by
6the Secretary to review a renewal application. At a minimum,
7the renewal report must state or contain a description of each
8material change in information submitted by the licensee in
9its original license application which has not been reported
10to the Secretary and a statement of the dollar amount and
11number of money transmissions and payment instruments sold,
12issued, exchanged, or transmitted in this State by the
13licensee and its authorized delegate for the past 4 completed
14calendar quarters.
15    (d) The Secretary, in his or her discretion, may grant an
16extension of the renewal date.
17    (e) The Secretary is authorized and encouraged to utilize
18NMLS to process license renewals if such functionality is
19consistent with this Section.
20    (f) The Secretary shall issue a formal written notice of
21the denial of renewal within 30 days after the decision to deny
22the renewal. The Secretary shall set forth the specific
23reasons for denying the renewal in the notice of denial and
24serve the licensee, either personally or by certified mail.
25Service by certified mail shall be deemed completed when the
26notice is deposited into the U.S. Mail. A licensee whose

 

 

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1renewal is denied by the Secretary under this Section may
2submit a written request for a hearing that shall include the
3particular reasons why the licensee believes that the decision
4to deny the renewal was incorrect within 10 days after service
5of the notice of the denial. If a licensee submits a timely
6request for a hearing, the Secretary shall schedule a hearing
7unless otherwise agreed to by the parties. The Secretary shall
8conduct hearings pursuant to this Section and in accordance
9with 38 Ill. Adm. Code 100, as amended or recodified from time
10to time. The expiring license shall be deemed to continue in
11force until 10 days after the service of the notice of denial
12or, if a timely hearing is requested during that period, until
13a final order is entered pursuant to a hearing.
 
14    Section 5-7. Maintenance of license.
15    (a) If a licensee does not continue to meet the
16qualifications or satisfy the requirements that apply to an
17applicant for a new money transmission license, the Secretary
18may suspend or revoke the licensee's license in accordance
19with the procedures established by this Act or other
20applicable State law for such suspension or revocation.
21    (b) An applicant for a money transmission license must
22demonstrate that it meets or will meet, and a money
23transmission licensee must at all times meet, the requirements
24in Article X of this Act.
 

 

 

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1    Section 5-8. Fees.
2    The expenses of administering this Act, including
3investigations and examinations provided for in this Act,
4shall be borne by and assessed against entities regulated by
5this Act. The Department may establish fees by rule, including
6in the following categories:
7        (1) investigation of licensees and license applicant
8    fees;
9        (2) examination fees;
10        (3) contingent fees; and
11        (4) such other categories as may be required to
12    administer this Act.
13    (b) The Secretary shall charge and collect fees, which
14shall be nonrefundable unless otherwise indicated, in
15accordance with 38 Ill. Adm. Code 205, as amended or
16recodified from time to time.
17    (c) All fees currently assessed in accordance with 38 Ill.
18Adm. Code 205, as amended or recodified from time to time,
19shall remain in effect until amended by rule in accordance
20with this Act. Except for money required to be deposited into
21the TOMA Consumer Protection Fund pursuant to this Act, all
22moneys received by the Department shall be deposited into the
23Financial Institution Fund. Failure to pay any required fee by
24the due date shall subject the licensee to a penalty fee of $25
25per day and disciplinary action.
 

 

 

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1    Section 5-9. Liability of licensees. A licensee is liable
2for the payment of all moneys covered by payment instruments
3that it sells or issues in any form in this State through its
4authorized delegate and all moneys it receives itself or
5through its authorized delegate for transmission by any means
6whether or not any instrument is a negotiable instrument under
7the laws of this State.
 
8
ARTICLE VI. Acquisition of Control and Change of Key
9
Individual

 
10    Section 6-1. Acquisition of control.
11    (a) Any person, or group of persons acting in concert,
12seeking to acquire control of a licensee shall obtain the
13written approval of the Secretary before acquiring control. An
14individual is not deemed to acquire control of a licensee and
15is not subject to this Section when that individual becomes a
16key individual in the ordinary course of business.
17    (b) A person, or group of persons acting in concert,
18seeking to acquire control of a licensee shall, in cooperation
19with the licensee:
20        (1) submit an application in a form and in a medium
21    prescribed by the Secretary; and
22        (2) submit a nonrefundable fee of $1,000 with the
23    request for approval.
24    (c) Upon request, the Secretary may permit a licensee or

 

 

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1the person, or group of persons acting in concert, to submit
2some or all information required by the Secretary pursuant to
3subsection (b) without using NMLS.
4    (d) The application required by subsection (b) shall
5include information required by Section 5-4 for any new key
6individuals that have not previously completed the
7requirements of Section 5-4 for a licensee.
8    (e) When an application for acquisition of control under
9this Section appears to include all the items and address all
10of the matters that are required, the application shall be
11considered complete and:
12        (1) unless extended by the Secretary pursuant to the
13    Secretary's discretion, the Secretary shall approve or
14    deny the application within 60 days after the completion
15    date; or
16        (2) if the application is not approved or denied
17    within 60 days after the completion date or any extension
18    thereof:
19            (A) the application is approved; and
20            (B) the person, or group of persons acting in
21        concert, are not prohibited from acquiring control.
22    (f) A determination by the Secretary that an application
23is complete and is accepted for processing means only that the
24application, on its face, appears to include all of the items
25and address all of the matters that are required, and is not an
26assessment of the substance of the application or of the

 

 

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1sufficiency of the information provided.
2    (g) When an application is filed and considered complete
3under subsection (e), the Secretary shall investigate the
4financial condition and responsibility, financial and business
5experience, character, and general fitness of the person, or
6group of persons acting in concert, seeking to acquire
7control. The Secretary shall approve an acquisition of control
8pursuant to this Section if the Secretary finds that all of the
9following conditions have been fulfilled:
10        (1) The requirements of subsections (b) and (d) have
11    been met, as applicable; and
12        (2) the financial condition and responsibility,
13    financial and business experience, competence, character,
14    and general fitness of the person, or group of persons
15    acting in concert, seeking to acquire control; and the
16    competence, experience, character, and general fitness of
17    the key individuals and persons that would be in control
18    of the licensee after the acquisition of control indicate
19    that it is in the interest of the public to permit the
20    person, or group of persons acting in concert, to control
21    the licensee.
22    (h) If an applicant avails itself or is otherwise subject
23to a multistate licensing process:
24        (1) the Secretary is authorized and encouraged to
25    accept the investigation results of a lead investigative
26    state for the purpose of subsection (g) if the lead

 

 

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1    investigative state has sufficient staffing, expertise,
2    and minimum standards; or
3        (2) if the Department is a lead investigative state,
4    the Secretary is authorized and encouraged to investigate
5    the applicant pursuant to subsection (g) and the
6    timeframes established by agreement through the multistate
7    licensing process.
8    (i) The Secretary shall issue a formal written notice of
9the denial of an application to acquire control within 30 days
10after the decision to deny the application. The Secretary
11shall set forth the specific reasons for the denial of the
12application in the notice of denial and serve the applicant,
13either personally or by certified mail. Service by certified
14mail shall be deemed completed when the notice is deposited
15into the U.S. mail. An applicant whose application is denied
16by the Secretary under this subsection (i) may submit a
17written request for hearing which shall include the particular
18reasons why the applicant believes that the decision to deny
19the application was incorrect, within 10 days after service of
20the notice of denial. If an applicant submits a timely request
21for a hearing, the Secretary shall schedule a hearing unless
22otherwise agreed to by the parties. The Secretary shall
23conduct hearings pursuant to this Section and in accordance
24with 38 Ill. Adm. Code 100, as amended or recodified from time
25to time.
26    (j) The requirements of subsections (a) and (b) do not

 

 

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1apply to any of the following:
2        (1) a person that acts as a proxy for the sole purpose
3    of voting at a designated meeting of the shareholders or
4    holders of voting shares or voting interests of a licensee
5    or a person in control of a licensee;
6        (2) a person that acquires control of a licensee by
7    devise or descent;
8        (3) a person that acquires control of a licensee as a
9    personal representative, custodian, guardian,
10    conservator, or trustee, or as an officer appointed by a
11    court of competent jurisdiction or by operation of law;
12        (4) a person that is exempt under paragraphs (7) or
13    (16) of Section 3-1;
14        (5) A person that the Secretary determines is not
15    subject to subsection (a) based on the public interest;
16        (6) A public offering of securities of a licensee or a
17    person in control of a licensee; or
18        (7) An internal reorganization of a person in control
19    of the licensee where the ultimate person in control of
20    the licensee remains the same.
21    (k) Persons in paragraphs (2), (3), (4), (6), and (7) of
22subsection (j) in cooperation with the licensee shall notify
23the Secretary within 15 days after the acquisition of control.
24    (l) Streamlined acquisition of control.
25        (1) The requirements of subsections (a) and (b) do not
26    apply to a person that has complied with and received

 

 

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1    approval to engage in money transmission under this Act or
2    was identified as a person in control in a prior
3    application filed with and approved by the Secretary or by
4    an MSB accredited state agency pursuant to a multistate
5    licensing process, if:
6            (A) the person has not had a license revoked or
7        suspended or controlled a licensee that has had a
8        license revoked or suspended while the person was in
9        control of the licensee in the previous 5 years;
10            (B) if the person is a licensee, the person is well
11        managed and has received at least a satisfactory
12        rating for compliance at its most recent examination
13        by an MSB accredited state agency if such rating was
14        given;
15            (C) the licensee to be acquired is projected to
16        meet the requirements of Article X of this Act after
17        the acquisition of control is completed, and if the
18        person acquiring control is a licensee, that licensee
19        is also projected to meet the requirements of Article
20        X of this Act after the acquisition of control is
21        completed;
22            (D) the licensee to be acquired will not implement
23        any material changes to its business plan as a result
24        of the acquisition of control, and if the person
25        acquiring control is a licensee, that licensee also
26        will not implement any material changes to its

 

 

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1        business plan as a result of the acquisition of
2        control; and
3            (E) the person provides notice of the acquisition
4        in cooperation with the licensee and attests to this
5        subsection in a form and in a medium prescribed by the
6        Secretary.
7        (2) If the notice is not denied within 30 days after
8    the date on which the notice was determined to be
9    complete, the notice is deemed approved.
10    (m) Before filing an application for approval to acquire
11control of a licensee a person may request in writing a
12determination from the Secretary as to whether the person
13would be considered a person in control of a licensee upon
14consummation of a proposed transaction. If the Secretary
15determines that the person would not be a person in control of
16a licensee, the proposed person and transaction is not subject
17to the requirements of subsections (a) and (b).
18    (n) If a multistate licensing process includes a
19determination pursuant to subsection (m) and an applicant
20avails itself or is otherwise subject to the multistate
21licensing process:
22        (1) The Secretary is authorized and encouraged to
23    accept the control determination of a lead investigative
24    state with sufficient staffing, expertise, and minimum
25    standards for the purpose of subsection (m); or
26        (2) If the Department is a lead investigative state,

 

 

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1    the Secretary is authorized and encouraged to investigate
2    the applicant pursuant to subsection (m) and the
3    timeframes established by agreement through the multistate
4    licensing process.
 
5    Section 6-2. Notice and information requirements for a
6change of key individuals.
7    (a) A licensee adding or replacing any key individual
8shall:
9        (1) provide notice in a manner prescribed by the
10    Secretary within 15 days after the effective date of the
11    key individual's appointment; and
12        (2) provide information as required by Section 5-4
13    within 45 days after the effective date.
14    (b) The Secretary may issue a formal written notice of
15denial of key individual within 90 days after the date on which
16the notice provided pursuant to subsection (a) was determined
17to be complete if the competence, experience, character, or
18integrity of the individual would not be in the best interests
19of the public or the customers of the licensee to permit the
20individual to be a key individual of such licensee.
21    (c) The Secretary shall set forth the specific reasons for
22the denial in the notice of denial and serve the licensee and
23the denied individual, either personally, or by certified
24mail. Service by certified mail shall be deemed completed when
25the notice is deposited into the U.S. Mail. A licensee who has

 

 

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1been denied by the Secretary under this subsection (c) may
2submit a written request for hearing which shall include the
3particular reasons why the licensee believes that the decision
4to deny was incorrect, within 10 days after service of the
5notice of the denial. If a licensee submits a timely request
6for a hearing, the Secretary shall schedule a hearing after
7the request for a hearing unless otherwise agreed to by the
8parties. The Secretary shall conduct hearings pursuant to this
9Section and in accordance with 38 Ill. Adm. Code 100.
10    (d) If the notice provided pursuant to subsection (a) is
11not denied within 90 days after the date on which the notice
12was determined to be complete, or any extension thereof, the
13key individual is deemed approved.
14    (e) If a multistate licensing process includes a key
15individual notice review and denial process pursuant to this
16Section and the licensee avails itself or is otherwise subject
17to the multistate licensing process:
18        (1) the Secretary is authorized and encouraged to
19    accept the determination of another state;
20        (2) if the investigating state has sufficient
21    staffing, expertise, and minimum standards for the purpose
22    of this Section; or
23        (3) if the Department is a lead investigative state,
24    the Secretary is authorized and encouraged to investigate
25    the applicant pursuant to subsection (b) and the
26    timeframes established by agreement through the multistate

 

 

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1    licensing process.
 
2
ARTICLE VII. Reporting and Records

 
3    Section 7-1. Report of condition.
4    (a) Each licensee, under penalty of perjury, shall submit
5a report of condition within 45 days of the end of the calendar
6quarter, or within any extended time as the Secretary may
7prescribe.
8    (b) The report of condition shall include:
9        (1) financial information at the licensee level;
10        (2) nationwide and state-specific money transmission
11    transaction information in every jurisdiction in the
12    United States where the licensee is licensed to engage in
13    money transmission;
14        (3) permissible investments report;
15        (4) transaction destination country reporting for
16    money received for transmission, if applicable; and
17        (5) any other information the Secretary reasonably
18    requires with respect to the licensee. The Secretary is
19    authorized and encouraged to utilize NMLS for the
20    submission of the report required by subsection (a) and is
21    authorized to change or update as necessary the
22    requirements of this Section to carry out the purposes of
23    this Act and maintain consistency with NMLS reporting.
24    (c) The information required by paragraph (4) of

 

 

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1subsection (b) shall only be included in a report of condition
2submitted within 45 days of the end of the fourth calendar
3quarter.
 
4    Section 7-2. Audited financial statements.
5    (a) Each licensee shall, within 90 days after the end of
6each fiscal year, or within any extended time as the Secretary
7may prescribe, file with the Secretary:
8        (1) an audited financial statement of the licensee for
9    the fiscal year prepared in accordance with United States
10    generally accepted accounting principles; and
11        (2) any other information as the Secretary may
12    reasonably require.
13    (b) The audited financial statements shall be prepared by
14an independent certified public accountant or independent
15public accountant who is satisfactory to the Secretary;
16    (c) The audited financial statements shall include or be
17accompanied by a certificate of opinion of the independent
18certified public accountant or independent public accountant
19that is satisfactory in form and content to the Secretary. If
20the opinion or certificate is qualified, the licensee must
21make a separate report to the Secretary notifying them of the
22qualified opinion or certification. If the certificate or
23opinion is qualified, the Secretary may order the licensee to
24take any action as the Secretary may find necessary to enable
25the certified public accountant or independent public

 

 

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1accountant to remove the qualification.
 
2    Section 7-3. Authorized delegate reporting.
3    (a) Each licensee shall submit a report of authorized
4delegates within 45 days of the end of the calendar quarter.
5The Secretary is authorized and encouraged to utilize NMLS for
6the submission of the report required by this Section provided
7that such functionality is consistent with the requirements of
8this Section.
9    (b) The authorized delegate report shall include, at a
10minimum, each authorized delegate's:
11        (1) company legal name;
12        (2) taxpayer employer identification number;
13        (3) principal provider identifier;
14        (4) physical address;
15        (5) mailing address;
16        (6) any business conducted in other states;
17        (7) any fictitious or trade name;
18        (8) contact person name, phone number, and email;
19        (9) start date as licensee's authorized delegate;
20        (10) end date acting as licensee's authorized
21    delegate, if applicable;
22        (11) court orders pursuant to Section 8-3; and
23        (12) Any other information the Secretary reasonably
24    requires with respect to the authorized delegate.
 

 

 

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1    Section 7-4. Reports of certain events.
2    (a) A licensee shall file a report with the Secretary
3within one business day after the licensee has reason to know
4of the occurrence of any of the following events:
5        (1) the filing of a petition by or against the
6    licensee under the United States Bankruptcy Code, 11
7    U.S.C. Sections 101 through 110, as amended or recodified
8    from time to time, for bankruptcy or reorganization;
9        (2) the filing of a petition by or against the
10    licensee for receivership, the commencement of any other
11    judicial or administrative proceeding for its dissolution
12    or reorganization, or the making of a general assignment
13    for the benefit of its creditors; or
14        (3) the commencement of a proceeding to revoke or
15    suspend its license in a state or country in which the
16    licensee engages in business or is licensed.
17    (b) A licensee shall file a report with the Secretary
18within 3 business days after the licensee has reason to know of
19the occurrence of any of the following events:
20        (1) a charge or conviction of the licensee or of a key
21    individual or person in control of the licensee for a
22    felony; or
23        (2) a charge or conviction of an authorized delegate
24    for a felony.
 
25    Section 7-5. Bank Secrecy Act reports. A licensee and an

 

 

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1authorized delegate shall file all reports required by federal
2currency reporting, recordkeeping, and suspicious activity
3reporting requirements as set forth in the Bank Secrecy Act
4and other federal and State laws pertaining to money
5laundering. The timely filing of a complete and accurate
6report required under this Section with the appropriate
7federal agency is deemed compliant with the requirements of
8this Section.
 
9    Section 7-6. Records.
10    (a) Licensee shall maintain the following records, for
11determining its compliance with this Act, for at least 3
12years:
13        (1) a record of each outstanding money transmission
14    obligation sold;
15        (2) a general ledger posted at least monthly
16    containing all asset, liability, capital, income, and
17    expense accounts;
18        (3) bank statements and bank reconciliation records;
19        (4) records of outstanding money transmission
20    obligations;
21        (5) records of each outstanding money transmission
22    obligation paid within the 3-year period;
23        (6) a list of the last known names and addresses of all
24    of the licensee's authorized delegates; and
25        (7) any other records the Secretary reasonably

 

 

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1    requires by rule.
2    (b) The records specified in subsection (a) may be
3maintained in electronic or other retrievable form of record.
4    (c) The records specified in subsection (a) shall be
5maintained at the licensee's principal place of business or,
6with notice to the Secretary, at another location designated
7by the licensee. If the records are maintained outside this
8State, the licensee shall make them accessible to the
9Secretary on 7 business-days' notice.
10    (d) All records maintained by the licensee as required in
11subsections (a) through (c) are open to inspection by the
12Secretary pursuant to subsection (a) of Section 4-3.
13    (e) A licensee shall require and its authorized delegates
14must preserve for at least 3 years all documents relating to
15money transmission activities, unless the data embodied in
16those documents has been transmitted for recordation by the
17licensee.
 
18
ARTICLE VIII. Authorized Delegates

 
19    Section 8-1. Relationship between licensee and authorized
20delegate.
21    (a) As used in this Section, "remit" means to make direct
22payments of money to a licensee or its representative
23authorized to receive money or to deposit money in a bank in an
24account specified by the licensee.

 

 

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1    (b) Before a licensee is authorized to conduct business
2through an authorized delegate or allows a person to act as the
3licensee's authorized delegate, the licensee must:
4        (1) adopt, and update as necessary, written policies
5    and procedures reasonably designed to ensure that the
6    licensee's authorized delegates comply with applicable
7    State and federal law;
8        (2) enter into a written contract that complies with
9    subsection (d); and
10        (3) conduct a reasonable risk-based background
11    investigation sufficient for the licensee to determine
12    whether the authorized delegate has complied and will
13    likely comply with applicable State and federal law.
14    (c) An authorized delegate must operate in full compliance
15with this Act.
16    (d) The written contract required by subsection (b) must
17be signed by the licensee and the authorized delegate and, at a
18minimum, must:
19        (1) expressly appoint the person signing the contract
20    as the licensee's authorized delegate with the authority
21    to conduct money transmission on behalf of the licensee;
22        (2) set forth the nature and scope of the relationship
23    between the licensee and the authorized delegate and the
24    respective rights and responsibilities of the parties;
25        (3) require the authorized delegate to agree to fully
26    comply with all applicable State and federal laws, rules,

 

 

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1    and regulations pertaining to money transmission,
2    including this Act and regulations implementing this Act,
3    relevant provisions of the Bank Secrecy Act, and the USA
4    PATRIOT ACT;
5        (4) require the authorized delegate to remit and
6    handle money and monetary value in accordance with the
7    terms of the contract between the licensee and the
8    authorized delegate;
9        (5) impose a trust on money and monetary value net of
10    fees received for money transmission for the benefit of
11    the licensee;
12        (6) require the authorized delegate to prepare and
13    maintain records as required by this Act or regulations
14    implementing this Act, or as reasonably requested by the
15    Secretary;
16        (7) acknowledge that the authorized delegate consents
17    to examination or investigation by the Secretary;
18        (8) state that the licensee is subject to regulation
19    by the Secretary and that, as part of that regulation, the
20    Secretary may suspend or revoke an authorized delegate
21    designation or require the licensee to terminate an
22    authorized delegate designation; and
23        (9) acknowledge receipt of the written policies and
24    procedures required under paragraph (1) of subsection (b).
25    (e) If the licensee's license is suspended, revoked,
26surrendered, or expired, the licensee must, within 5 business

 

 

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1days, provide documentation to the Secretary that the licensee
2has notified all applicable authorized delegates of the
3licensee whose names are in a record filed with the Secretary
4of the suspension, revocation, surrender, or expiration of a
5license. Upon suspension, revocation, surrender, or expiration
6of a license, applicable authorized delegates shall
7immediately cease to provide money transmission as an
8authorized delegate of the licensee.
9    (f) An authorized delegate of a licensee holds in trust
10for the benefit of the licensee all money net of fees received
11from money transmission. If any authorized delegate commingles
12any funds received from money transmission with any other
13funds or property owned or controlled by the authorized
14delegate, all commingled funds and other property shall be
15considered held in trust in favor of the licensee in an amount
16equal to the amount of money net of fees received from money
17transmission.
18    (g) An authorized delegate may not use a subdelegate to
19conduct money transmission on behalf of a licensee.
 
20    Section 8-2. Unauthorized activities. A person shall not
21engage in the business of money transmission on behalf of a
22person not licensed under this Act or not exempt pursuant to
23Article III of this Act. A person that engages in such activity
24provides money transmission to the same extent as if the
25person were a licensee, and shall be jointly and severally

 

 

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1liable with the unlicensed or nonexempt person.
 
2    Section 8-3. Prohibited authorized delegates.
3    (a) The circuit court in an action brought by a licensee
4shall have jurisdiction to grant appropriate equitable or
5legal relief, including, without limitation, prohibiting the
6authorized delegate from directly or indirectly acting as an
7authorized delegate for any licensee in this State and the
8payment of restitution, damages or other monetary relief, if
9the circuit court finds that an authorized delegate failed to
10remit money in accordance with the written contract required
11by subsection (b) of Section 8-1 or as otherwise directed by
12the licensee or required by law.
13    (b) If the circuit court issues an order prohibiting a
14person from acting as an authorized delegate for any licensee
15pursuant to subsection (a), the licensee that brought the
16action shall report the order to the Secretary within 30 days
17and shall report the order through NMLS within 90 days.
18    (c) An authorized delegate who holds money in trust for
19the benefit of a licensee and knowingly fails to remit more
20than $1,000 of such money is guilty of a Class 3 felony.
21    (d) An authorized delegate who holds money in trust for
22the benefit of a licensee and knowingly fails to remit no more
23than $999 of such money is guilty of a Class A misdemeanor.
 
24
ARTICLE IX. Timely Transmission, Refunds, and Disclosures

 

 

 

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1    Section 9-1. Timely transmission.
2    (a) Every licensee shall forward all money received for
3transmission in accordance with the terms of the agreement
4between the licensee and the sender, which shall be no more
5than 3 business days after the receipt of the money to be
6transmitted, unless the licensee has a reasonable belief or a
7reasonable basis to believe that the sender may be a victim of
8fraud or that a crime or violation of law, rule, or regulation
9has occurred, is occurring, or may occur.
10    (b) If a licensee fails to forward money received for
11transmission in accordance with this Section, the licensee
12must respond to inquiries by the sender with the reason for the
13failure unless providing a response would violate a State or
14federal law, rule, or regulation.
 
15    Section 9-2. Refunds.
16    (a) This Section does not apply to:
17        (1) money received for transmission subject to the
18    federal Remittance Rule, 12 CFR Part 1005, Subpart B, as
19    amended or recodified from time to time; or
20        (2) money received for transmission pursuant to a
21    written agreement between the licensee and payee to
22    process payments for goods or services provided by the
23    payee.
24    (b) Every licensee shall refund to the sender within 10

 

 

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1days after receipt of the sender's written request for a
2refund of any and all money received for transmission unless
3any of the following occurs:
4        (1) the money has been forwarded within 10 days after
5    the date on which the money was received for transmission;
6        (2) instructions have been given committing an
7    equivalent amount of money to the person designated by the
8    sender within 10 days of the date on which the money was
9    received for transmission;
10        (3) the agreement between the licensee and the sender
11    instructs the licensee to forward the money at a time that
12    is beyond 10 days after the date on which the money was
13    received for transmission; if funds have not yet been
14    forwarded in accordance with the terms of the agreement
15    between the licensee and the sender, the licensee shall
16    issue a refund in accordance with the other provisions of
17    this Section; or
18        (4) the refund is requested for a transaction that the
19    licensee has not completed based on a reasonable belief or
20    a reasonable basis to believe that a crime or violation of
21    law, rule, or regulation has occurred, is occurring, or
22    may occur.
23        (5) the refund request does not enable the licensee
24    to:
25            (A) identify the sender's name and address or
26        telephone number; or

 

 

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1            (B) identify the particular transaction to be
2        refunded if the sender has multiple transactions
3        outstanding.
 
4    Section 9-3. Receipts.
5    (a) As used in this Section, "receipt" means a paper
6receipt, electronic record, or other written confirmation. For
7a transaction conducted in person, the receipt may be provided
8electronically if the sender requests or agrees to receive an
9electronic receipt. For a transaction conducted electronically
10or by phone, a receipt may be provided electronically. All
11electronic receipts shall be provided in a retainable form.
12    (b) Every licensee or its authorized delegate shall
13provide the sender a receipt for money received for
14transmission.
15        (1) The receipt shall contain the following
16    information, as applicable:
17            (A) the name of the sender;
18            (B) the name of the designated recipient;
19            (C) the date of the transaction;
20            (D) the unique transaction or identification
21        number;
22            (E) the name of the licensee, NMLS Unique ID, the
23        licensee's business address, and the licensee's
24        customer service telephone number;
25            (F) the amount of the transaction in United States

 

 

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1        dollars;
2            (G) any fee charged by the licensee to the sender
3        for the transaction; and
4            (H) any taxes collected by the licensee from the
5        sender for the transaction.
6        (2) The receipt required by this Section shall be in
7    English and in the language principally used by the
8    licensee or authorized delegate to advertise, solicit, or
9    negotiate, either orally or in writing, for a transaction
10    conducted in person, electronically or by phone, if other
11    than English.
12    (c) This Section does not apply to:
13        (1) money received for transmission subject to the
14    federal Remittance Rule, 12 CFR Part 1005, Subpart B, as
15    amended or recodified from time to time;
16        (2) money received for transmission pursuant to a
17    written agreement between the licensee and payee to
18    process payments for goods or services provided by the
19    payee;
20        (3) payroll processing services; or
21        (4) as authorized in the Secretary's sole discretion.
 
22    Section 9-4. Notice. Every licensee or authorized delegate
23shall include on a receipt or disclose on the licensee's
24website or mobile application the name and phone number of the
25Department and a statement that the licensee's customers can

 

 

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1contact the Department with questions or complaints about the
2licensee's money transmission services.
 
3    Section 9-5. Disclosures for payroll processing services.
4    (a) A licensee that provides payroll processing services
5shall:
6        (1) issue reports to clients detailing client payroll
7    obligations in advance of the payroll funds being deducted
8    from an account; and
9        (2) make worker paystubs or an equivalent statement
10    available to workers.
11    (b) Subsection (a) does not apply to a licensee providing
12payroll processing services where the licensee's client
13designates the intended recipients to the licensee and is
14responsible for providing the disclosures required by
15paragraph (2) of subsection (a).
 
16
ARTICLE X. Prudential Standards

 
17    Section 10-1. Net worth.
18    (a) A licensee under this Act shall maintain at all times a
19tangible net worth of the greater of $100,000 or 3% of total
20assets for the first $100,000,000, 2% of additional assets for
21$100,000,000 to $1,000,000,000, and 0.5% of additional assets
22for over $1,000,000,000.
23    (b) Tangible net worth must be demonstrated at initial

 

 

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1application by the applicant's most recent financial
2statements pursuant to paragraph (6) of subsection (b) of
3Section 5-3.
4    (c) Notwithstanding the provisions of this Section, the
5Secretary shall have discretionary authority to exempt, in
6part or in whole, from the requirements of this Section any
7applicant or licensee.
 
8    Section 10-2. Surety bond.
9    (a) An applicant for a money transmission license must
10provide, and a licensee at all times must maintain, security
11consisting of a surety bond in a form satisfactory to the
12Secretary. The bond shall run to the State of Illinois for the
13benefit of any claimant against the applicant or licensee with
14respect to the receipt, handling, transmission, and payment of
15money by the licensee or authorized delegate in connection
16with the licensed operations. A claimant damaged by a breach
17of the conditions of a bond shall have a right to action upon
18the bond for damages suffered thereby and may bring suit
19directly on the bond, or the Secretary may bring suit on behalf
20of the claimant.
21    (b) The amount of the required security shall be the
22greater of $1,000,000 or an amount equal to 100% of the
23licensee's average daily money transmission liability in this
24State calculated for the most recently completed quarter, up
25to a maximum of $2,000,000;

 

 

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1    (c) A licensee that maintains a bond in the maximum amount
2provided for in subsection (b) is not required to calculate
3its average daily money transmission liability in this State
4for purposes of this Section.
5    (d) A licensee may exceed the maximum required bond amount
6pursuant to paragraph (5) of subsection (a) of Section 10-4.
7    (e) After receiving a license, the licensee must maintain
8the required bond plus net worth until 3 years after it ceases
9to do business in this State unless all outstanding payment
10instruments are eliminated or the provisions under the Revised
11Uniform Unclaimed Property Act have become operative and are
12adhered to by the licensee. Notwithstanding this provision,
13however, the amount required to be maintained may be reduced
14to the extent that the amount of the licensee's payment
15instruments outstanding in this State are reduced.
16    (f) Instead of a paper surety bond, each licensee and
17applicant shall file and maintain an electronic surety bond in
18NMLS or in a manner otherwise authorized by the Secretary.
 
19    Section 10-3. Maintenance of permissible investments.
20    (a) A licensee shall maintain at all times permissible
21investments that have a market value computed in accordance
22with United States generally accepted accounting principles of
23not less than the aggregate amount of all of its outstanding
24money transmission obligations.
25    (b) Except for permissible investments enumerated in

 

 

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1subsection (a) of Section 10-4, the Secretary, with respect to
2any licensee, may by rule or order limit the extent to which a
3specific investment maintained by a licensee within a class of
4permissible investments may be considered a permissible
5investment, if the specific investment represents undue risk
6to customers, not reflected in the market value of
7investments.
8    (c) Permissible investments, even if commingled with other
9assets of the licensee, are held in trust for the benefit of
10the purchasers and holders of the licensee's outstanding money
11transmission obligations in the event of insolvency, the
12filing of a petition by or against the licensee under the
13United States Bankruptcy Code, 11 U.S.C. Sections 101 through
14110, as amended or recodified from time to time, for
15bankruptcy or reorganization, the filing of a petition by or
16against the licensee for receivership, the commencement of any
17other judicial or administrative proceeding for its
18dissolution or reorganization, or in the event of an action by
19a creditor against the licensee who is not a beneficiary of
20this statutory trust. No permissible investments impressed
21with a trust pursuant to this subsection shall be subject to
22attachment, levy of execution, or sequestration by order of
23any court, except for a beneficiary of this statutory trust.
24    (d) Upon the establishment of a statutory trust in
25accordance with subsection (c) or when any funds are drawn on a
26letter of credit pursuant to paragraph (4) of subsection (a)

 

 

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1of Section 10-4, the Secretary shall notify the applicable
2regulator of each state in which the licensee is licensed to
3engage in money transmission, if any, of the establishment of
4the trust or the funds drawn on the letter of credit, as
5applicable. Notice shall be deemed satisfied if performed
6pursuant to a multistate agreement or through NMLS. Funds
7drawn on a letter of credit, and any other permissible
8investments held in trust for the benefit of the purchasers
9and holders of the licensee's outstanding money transmission
10obligations, are deemed held in trust for the benefit of such
11purchasers and holders on a pro rata and equitable basis in
12accordance with statutes pursuant to which permissible
13investments are required to be held in this State, and other
14states, as applicable. Any statutory trust established
15hereunder shall be terminated upon extinguishment of all of
16the licensee's outstanding money transmission obligations.
17    (e) The Secretary by rule or by order may allow other types
18of investments that the Secretary determines are of sufficient
19liquidity and quality to be a permissible investment. The
20Secretary is authorized to participate in efforts with other
21state regulators to determine that other types of investments
22are of sufficient liquidity and quality to be a permissible
23investment.
 
24    Section 10-4. Types of permissible investments.
25    (a) The following investments are permissible under

 

 

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1Section 10-3:
2        (1) cash, including demand deposits, savings deposits,
3    and funds in such accounts held for the benefit of the
4    licensee's customers in a federally insured depository
5    financial institution, and cash equivalents including ACH
6    items in transit to the licensee and ACH items or
7    international wires in transit to a payee, cash in transit
8    via armored car, cash in smart safes, cash in
9    licensee-owned locations, debit card or credit card-funded
10    transmission receivables owed by any bank, or money market
11    mutual funds rated "AAA" by S&P, or the equivalent from
12    any eligible rating service;
13        (2) certificates of deposit or senior debt obligations
14    of an insured depository institution, as defined in
15    Section 3 of the Federal Deposit Insurance Act, 12 U.S.C.
16    1813, as amended or recodified from time to time, or as
17    defined under the federal Credit Union Act, 12 U.S.C.
18    1781, as amended or recodified from time to time;
19        (3) an obligation of the United States or a
20    commission, agency, or instrumentality thereof; an
21    obligation that is guaranteed fully as to principal and
22    interest by the United States; or an obligation of a State
23    or a governmental subdivision, agency, or instrumentality
24    thereof;
25        (4) the full drawable amount of an irrevocable standby
26    letter of credit for which the stated beneficiary is the

 

 

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1    Secretary that stipulates that the beneficiary need only
2    draw a sight draft under the letter of credit and present
3    it to obtain funds up to the letter of credit amount within
4    7 days of presentation of the items required by
5    subparagraph (C) of this paragraph.
6            (A) The letter of credit must:
7                (i) be issued by a federally insured
8            depository financial institution, a foreign bank
9            that is authorized under federal law to maintain a
10            federal agency or federal branch office in a State
11            or states, or a foreign bank that is authorized
12            under State law to maintain a branch in a State
13            that (I) bears an eligible rating or whose parent
14            company bears an eligible rating; and (II) is
15            regulated, supervised, and examined by United
16            States federal or State authorities having
17            regulatory authority over banks, credit unions,
18            and trust companies;
19                (ii) be irrevocable, unconditional, and
20            indicate that it is not subject to any condition
21            or qualifications outside of the letter of credit;
22                (iii) not contain reference to any other
23            agreements, documents, or entities, or otherwise
24            provide for any security interest in the licensee;
25            and
26                (iv) contain an issue date and expiration date

 

 

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1            and expressly provide for automatic extension,
2            without a written amendment, for an additional
3            period of one year from the present or each future
4            expiration date, unless the issuer of the letter
5            of credit notifies the Secretary in writing by
6            certified or registered mail or courier mail or
7            other receipted means, at least 60 days before any
8            expiration date, that the irrevocable letter of
9            credit will not be extended.
10            (B) If any notice of expiration or nonextension of
11        a letter of credit issued under subdivision (iv) of
12        subparagraph (A), then the licensee shall be required
13        to demonstrate to the satisfaction of the Secretary,
14        15 days before expiration, that the licensee maintains
15        and will maintain permissible investments in
16        accordance with subsection (a) of Section 10-3 upon
17        the expiration of the letter of credit. If the
18        licensee is not able to do so, the Secretary may draw
19        on the letter of credit in an amount up to the amount
20        necessary to meet the licensee's requirements to
21        maintain permissible investments in accordance with
22        subsection (a) of Section 10-3. Any such draw shall be
23        offset against the licensee's outstanding money
24        transmission obligations. The drawn funds shall be
25        held in trust by the Secretary or the Secretary's
26        designated agent, to the extent authorized by law, as

 

 

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1        agent for the benefit of the purchasers and holders of
2        the licensee's outstanding money transmission
3        obligations.
4            (C) The letter of credit shall provide that the
5        issuer of the letter of credit will honor, at sight, a
6        presentation made by the beneficiary to the issuer of
7        the following documents on or before the expiration
8        date of the letter of credit:
9                (i) the original letter of credit, including
10            any amendments; and
11                (ii) a written statement from the beneficiary
12            stating that any of the following events have
13            occurred:
14                    (I) the filing of a petition by or against
15                the licensee under the United States
16                Bankruptcy Code, 11 U.S.C. Sections 101
17                through 110, as amended or recodified from
18                time to time, for bankruptcy or
19                reorganization;
20                    (II) the filing of a petition by or
21                against the licensee for receivership, or the
22                commencement of any other judicial or
23                administrative proceeding for its dissolution
24                or reorganization;
25                    (III) the seizure of assets of a licensee
26                by the Secretary pursuant to an emergency

 

 

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1                order issued in accordance with applicable
2                law, on the basis of an action, violation, or
3                condition that has caused or is likely to
4                cause the insolvency of the licensee; or
5                    (IV) the beneficiary has received notice
6                of expiration or nonextension of a letter of
7                credit and the licensee failed to demonstrate
8                to the satisfaction of the beneficiary that
9                the licensee will maintain permissible
10                investments in accordance with subsection (a)
11                of Section 10-3 upon the expiration or
12                nonextension of the letter of credit.
13            (D) The Secretary may designate an agent to serve
14        on the Secretary's behalf as beneficiary to a letter
15        of credit so long as the agent and letter of credit
16        meet requirements established by the Secretary. The
17        Secretary's agent may serve as agent for multiple
18        licensing authorities for a single irrevocable letter
19        of credit if the proceeds of the drawable amount for
20        the purposes of this Section are assigned to the
21        Secretary.
22            (E) The Secretary is authorized and encouraged to
23        participate in multistate processes designed to
24        facilitate the issuance and administration of letters
25        of credit, including, but not limited to, services
26        provided by the NMLS and State Regulatory Registry,

 

 

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1        LLC.
2        (5) 100% of the surety bond or deposit provided for
3    under Section 10-2 that exceeds the average daily money
4    transmission liability in this State.
5    (b) Unless permitted by the Secretary by rule or by order
6to exceed the limit as set forth herein, the following
7investments are permissible under Section 10-3 to the extent
8specified:
9        (1) receivables that are payable to a licensee from
10    its authorized delegates in the ordinary course of
11    business that are less than 7 days old, up to 50% of the
12    aggregate value of the licensee's total permissible
13    investments;
14        (2) of the receivables permissible under paragraph (1)
15    of this subsection (b), receivables that are payable to a
16    licensee from a single authorized delegate in the ordinary
17    course of business may not exceed 10% of the aggregate
18    value of the licensee's total permissible investments.
19        (3) the following investments are permissible up to
20    20% per category and combined up to 50% of the aggregate
21    value of the licensee's total permissible investments:
22            (A) a short-term, of up to 6 months, investment
23        bearing an eligible rating;
24            (B) commercial paper bearing an eligible rating;
25            (C) a bill, note, bond, or debenture bearing an
26        eligible rating;

 

 

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1            (D) U.S. tri-party repurchase agreements
2        collateralized at 100% or more with U.S. government or
3        agency securities, municipal bonds, or other
4        securities bearing an eligible rating;
5            (E) money market mutual funds rated less than
6        "AAA" and equal to or higher than "A-" by S&P, or the
7        equivalent from any other eligible rating service; and
8            (F) a mutual fund or other investment fund
9        composed solely and exclusively of one or more
10        permissible investments listed in paragraphs (1)
11        through (3) of subsection (a).
12        (4) cash, including demand deposits, savings deposits,
13    and funds in such accounts held for the benefit of the
14    licensee's customers, at foreign depository institutions
15    are permissible up to 10% of the aggregate value of the
16    licensee's total permissible investments if the licensee
17    has received a satisfactory rating in its most recent
18    examination and the foreign depository institution:
19            (A) has an eligible rating;
20            (B) is registered under the Foreign Account Tax
21        Compliance Act;
22            (C) is not located in any country subject to
23        sanctions from the Office of Foreign Asset Control;
24        and
25            (D) is not located in a high-risk or
26        non-cooperative jurisdiction as designated by the

 

 

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1        Financial Action Task Force.
 
2
ARTICLE XI. Enforcement

 
3    Section 11-1. Prohibited acts and practices for licensees.
4It is a violation of this Act for a licensee, or other person
5subject to this Act to:
6        (1) directly or indirectly employ any scheme, device,
7    or artifice to defraud or mislead any person, including,
8    but not limited to, engaging in bait and switch
9    advertising or sales practices;
10        (2) directly or indirectly engage in any unfair or
11    deceptive act or practice toward any person, including,
12    but not limited to, any false or deceptive statement about
13    fees or other terms of a money transmission or currency
14    exchange;
15        (3) directly or indirectly obtain property by fraud or
16    misrepresentation;
17        (4) knowingly make, publish, or disseminate any false,
18    deceptive, or misleading information in the provision of
19    money services;
20        (5) knowingly receive or take possession for personal
21    use of any property of any money services business, other
22    than in payment for services rendered, and with intent to
23    defraud, omit to make, or cause or direct to omit to make,
24    a full and true entry thereof in the books and accounts of

 

 

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1    the business;
2        (6) make or concur in making any false entry, or omit
3    or concur in omitting any material entry, in the books or
4    accounts of the business;
5        (7) knowingly make or publish to the Secretary or the
6    Secretary's designee, or concur in making or publishing to
7    the Secretary or the Secretary's designee any written
8    report, exhibit, or statement of its affairs or pecuniary
9    condition containing any material statement which is
10    false, or omit or concur in omitting any statement
11    required by law to be contained therein;
12        (8) fail to make any report or statement lawfully
13    required by the Secretary or other public official;
14        (9) demonstrate by course of conduct, negligence or
15    incompetence in performing any act directly or indirectly
16    relating to licensed activity;
17        (10) engage in unsafe and unsound practices directly
18    or indirectly relating to licensed activity; or
19        (11) fail to comply with the provisions of this Act or
20    with any lawful order or agreement, rule, or regulations
21    made or issued under the provisions of this Act.
 
22    Section 11-2. Suspension and revocation of licenses.
23    (a) The Secretary may issue an order to suspend or revoke a
24license of a licensee or order a licensee to revoke the
25designation of an authorized delegate if:

 

 

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1        (1) the licensee has failed to comply with any
2    provision of this Act, or any order, decision, finding,
3    rule, regulation or direction of the Secretary lawfully
4    made pursuant to the authority of this Act;
5        (2) the licensee does not cooperate with an
6    examination or investigation by the Secretary;
7        (3) the licensee engages in fraud, intentional
8    misrepresentation, or gross negligence;
9        (4) an authorized delegate is convicted of a violation
10    of a State or federal anti-money laundering statute, or
11    violates a rule adopted or an order issued under this Act,
12    as a result of the licensee's willful misconduct or
13    grossly negligent inattention to its legal obligations;
14        (5) the competence, experience, character, or general
15    fitness of the licensee, authorized delegate, person in
16    control of a licensee, key individual, or responsible
17    person of the authorized delegate indicates that it is not
18    in the public interest to permit the person to provide
19    money transmission;
20        (6) the licensee engages in an unsafe or unsound
21    practice;
22        (7) the licensee is insolvent, suspends payment of its
23    obligations, or makes a general assignment for the benefit
24    of its creditors;
25        (8) the licensee does not remove an authorized
26    delegate after the Secretary issues and serves upon the

 

 

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1    licensee a final order including a finding that the
2    authorized delegate has violated this Act;
3        (9) a fact or condition exists that, if it had existed
4    or had been known at the time the licensee applied for its
5    license, would have been ground for denying the
6    application;
7        (10) the licensee knowingly fails to make a report
8    required by this Act;
9        (11) the licensee fails to pay a judgment entered in
10    favor of a claimant, plaintiff, or credit in an action
11    arising out of the licensee's business regulated under
12    this Act within 30 days after the judgment becomes final
13    or within 30 days after the expiration or termination of a
14    stay of execution;
15        (12) the licensee has been convicted under the laws of
16    this State, another state, or the United States of a
17    felony or of a crime involving breach of trust or
18    dishonesty; or
19        (13) the licensee violates the Illinois Uniform
20    Revised Unclaimed Property Act.
21    (b) In determining whether a licensee is engaging in an
22unsafe or unsound practice, the Secretary may consider the
23size and condition of the licensee's money transmission, the
24magnitude of the loss, the gravity of the violation of this
25Act, and the previous conduct of the person involved.
26    (c) In every case in which a license is suspended or

 

 

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1revoked, the Secretary shall issue a formal written notice of
2the suspension or revocation, setting forth the specific
3reasons for the suspension or revocation of the license and
4serve the licensee, either personally or by certified mail.
5Service by certified mail shall be deemed completed when the
6notice is deposited into U.S. Mail and the order of suspension
7or revocation of a license shall take effect upon service of
8the order.
9    (d) A licensee whose license has been suspended or revoked
10by the Secretary under this Section may request a hearing, in
11writing, within 10 days after the date of service. If a
12licensee submits a timely request for a hearing, the order
13shall be stayed until a final administrative order is entered
14and the Secretary shall schedule a hearing unless otherwise
15agreed to by the parties.
16    (e) The Secretary shall conduct hearings pursuant to this
17Section and in accordance with 38 Ill. Adm. Code 100, as
18amended or recodified from time to time.
 
19    Section 11-3. Suspension and revocation of authorized
20delegates.
21    (a) The Secretary may issue an order to suspend or revoke
22the designation of an authorized delegate, if the Secretary
23finds that:
24        (1) the authorized delegate has failed to comply with
25    any provision of this Act or any order, decision, finding,

 

 

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1    rule, regulation, or direction of the Secretary lawfully
2    made pursuant to the authority of this Act;
3        (2) the authorized delegate does not cooperate with an
4    examination or investigation by the Secretary;
5        (3) the authorized delegate engages in fraud,
6    intentional misrepresentation, or gross negligence;
7        (4) the authorized delegate is convicted of a
8    violation of a State or federal anti-money laundering
9    statute;
10        (5) the competence, experience, character, or general
11    fitness of the authorized delegate or a person in control
12    of the authorized delegate indicates that it is not in the
13    public interest to permit the authorized delegate to
14    provide money transmission; or
15        (6) the authorized delegate engages in an unsafe or
16    unsound practice.
17    (b) In determining whether an authorized delegate is
18engaging in an unsafe or unsound practice, the Secretary may
19consider the size and condition of the authorized delegate's
20provision of money transmission, the magnitude of the loss,
21the gravity of the violation of this Act or a rule adopted or
22order issued under this Act, and the previous conduct of the
23authorized delegate.
24    (c) In every case in which the designation of an
25authorized delegate is suspended or revoked, the Secretary
26shall issue a formal written notice of the suspension or

 

 

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1revocation, setting forth the specific reasons for the
2suspension or revocation of the designation and serve the
3authorized delegate, either personally or by certified mail.
4Service by certified mail shall be deemed completed when the
5notice is deposited into U.S. Mail and the order of suspension
6or revocation of a license shall take effect upon service of
7the order.
8    (d) An authorized delegate whose designation has been
9suspended or revoked by the Secretary under this Section may
10request a hearing, in writing, within 10 days after the date of
11service. If an authorized delegate submits a timely request
12for a hearing, the order shall be stayed until a final
13administrative order is entered and the Secretary shall
14schedule a hearing unless otherwise agreed to by the parties.
15    (e) The Secretary shall conduct hearings pursuant to this
16Section and in accordance with 38 Ill. Adm. Code 100, as
17amended or recodified from time to time.
 
18    Section 11-4. Orders to cease and desist; civil penalties.
19    (a) If the Secretary determines that a licensee, an
20authorized delegate, or any other person has engaged or is
21engaged in practices contrary to this Act, the rules adopted
22under this Act, or an order issued under this Act, the
23Secretary may issue an order requiring the licensee or
24authorized delegate to cease and desist from the violation.
25The order becomes effective upon service of it upon the

 

 

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1licensee or authorized delegate.
2    (b) The Secretary may issue an order against a licensee to
3cease and desist from providing money transmission through an
4authorized delegate that is the subject of a separate order by
5the Secretary.
6    (c) The Secretary may, in addition to or without the
7issuance of a cease and desist order, assess a penalty of up to
8$1,000 against a licensee or other person for each violation
9of this Act, the rules adopted under this Act, or an order
10issued under this Act as set forth in Section 11-6. The
11issuance of an order under this Section shall not be a
12prerequisite to the taking of any action by the Secretary
13under this Section or any other Section of this Act.
14    (d) The Secretary shall issue a formal written notice of
15the cease and desist order, setting forth the specific reasons
16for the order and serve the licensee or the authorized
17delegate, either personally or by certified mail. Service by
18certified mail shall be deemed completed when the notice is
19deposited in United States mail.
 
20    Section 11-5. Consent orders; settlements.
21    (a) The Secretary may enter into a consent order or
22settlement agreement at any time with a person to resolve a
23matter arising under this Act, the rules adopted under this
24Act, or order issued under this Act. A consent order or
25settlement agreement must be signed by the person to whom it is

 

 

SB3670- 80 -LRB103 39026 RTM 69163 b

1issued or by the person's authorized representative, and must
2indicate agreement with the terms contained in the order. A
3consent order or settlement agreement may provide that it does
4not constitute an admission by a person that this Act or a rule
5adopted or an order issued under this Act has been violated.
6    (b) Notwithstanding the issuance of a consent order or
7settlement agreement, the Secretary may seek civil or criminal
8penalties or compromise civil penalties concerning matter
9encompassed by the consent order unless the consent order by
10its terms expressly precludes the Secretary from doing so.
11    (c) The Secretary is authorized to compromise, settle, and
12collect civil penalties and administrative penalties, as set
13by rule, with any person for violations of this Act or of any
14rule or order issued or adopted under this Act.
 
15    Section 11-6. Criminal penalties. A person who engages in
16conduct requiring a license under this Act and fails to obtain
17a license from the Secretary or knowingly makes a false
18statement, misrepresentation, or false certification in an
19application, financial statement, account record, report, or
20other document filed or required to be maintained or filed
21under this Act or who knowingly makes a false entry or omits a
22material entry in a document is guilty of a Class 3 felony.
 
23    Section 11-7. Civil penalties. The Secretary may assess a
24civil penalty against a person that violates this Act, a rule

 

 

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1adopted or an order issued under this Act in an amount not to
2exceed $1,000 per day for each day the violation is
3outstanding, plus this State's costs and expenses for the
4investigation and prosecution of the matter, including
5reasonable attorney's fees. Each transaction in violation of
6this Act or the rules adopted under this Act or issued under
7this Act, for each day that a violation continues shall be a
8separate offense.
 
9    Section 11-8. Unlicensed persons. Any person who, without
10the required license, engages in conduct requiring a license
11under this Act shall be liable to the Department in an amount
12equal to the greater of (1) $5,000 or (2) an amount of money
13accepted for transmission plus an amount equal to 3 times the
14amount accepted for transmission. The Department shall cause
15any funds so recovered to be deposited into the TOMA Consumer
16Protection Fund.
 
17    Section 11-9. Judicial review. All final administrative
18decisions of the Department under this Act are subject to
19judicial review under the Administrative Review Law and any
20rules adopted under the Administrative Review Law.
 
21
ARTICLE XII. Miscellaneous Provisions

 
22    Section 12-1. Uniformity of application and construction.

 

 

SB3670- 82 -LRB103 39026 RTM 69163 b

1In applying and construing this Act, consideration must be
2given to the need to promote uniformity of the law with respect
3to its subject matter among states that enact it.
 
4    Section 12-2. Severability. The provisions of this Act are
5severable under Section 1.31 of the Statute on Statutes.
 
6    Section 12-3. Transition period.
7    (a) Licensees pursuant to the Transmitters of Money Act in
8good standing on the effective date of this Act shall be
9licensed under this Act upon the filing of and approval by the
10Department of a renewal application in accordance with Section
115-6 and may continue to operate lawfully as a licensee in this
12State unless and until their next renewal application after
13the effective date is denied by the Department. An authorized
14seller of licensee pursuant to the Transmitters of Money Act
15in good standing as of the effective date shall become an
16authorized delegate of a licensee upon the filing of and
17approval by the Department of a renewal application by the
18licensee in accordance with Section 5-6 and may continue to
19operate lawfully in this State as an authorized delegate of a
20licensee unless and until the licensee's next renewal
21application after the effective date is denied by the
22Department.
23    (b) A person licensed in this State to engage in the
24business of money transmission and their authorized sellers

 

 

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1shall not be subject to the provisions of this Act, to the
2extent that this Act conflicts with the Transmitters of Money
3Act or this Act establishes new requirements not imposed under
4the Transmitters of Money Act, until the licensee renews its
5current license or for 6 months after the effective date of
6this Act, whichever is later, so long as they comply with the
7Transmitters of Money Act and its implementing rules.
8    (c) Notwithstanding subsection (a), a licensee shall only
9be required to amend its authorized delegate contracts for
10contracts entered into or amended after the effective date of
11this Act or the completion of any transition period
12contemplated under subsection (b). Nothing herein shall be
13construed as limiting an authorized delegate's obligations to
14operate in full compliance with this Act as required by
15subsection (c) of Section 8-1 after the time period set forth
16in subsection (b).
17    (d) A person not required to be licensed pursuant to the
18Transmitters of Money Act shall not be required to be licensed
19and comply with this Act until January 1, 2026, unless the
20Secretary extends the time by rule.
21    (e) Except as otherwise stated, this Act supersedes the
22Transmitters of Money Act.
 
23    Section 12-4. TOMA Consumer Protection Fund.
24    (a) The special income-earning fund in the State treasury
25is known as the TOMA Consumer Protection Fund.

 

 

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1    (b) All moneys paid into the fund together with all
2accumulated undistributed income thereon shall be held as a
3special fund in the State treasury. The fund shall be used
4solely for the purpose of providing restitution to consumers
5who have suffered monetary loss arising out of a transaction
6regulated by this Act.
7    (c) The fund shall be applied only to restitution when
8restitution has been ordered by the Secretary. Restitution
9shall not exceed the amount actually lost by the consumer. The
10fund shall not be used for the payment of any attorney or other
11fees.
12    (d) The fund shall be subrogated to the amount of the
13restitution, and the Secretary shall request the Attorney
14General to engage in all reasonable collection steps to
15collect restitution from the party responsible for the loss
16and reimburse the fund.
17    (e) Notwithstanding any other provisions of this Section,
18the payment of restitution from the fund shall be a matter of
19grace and not of right, and no consumer shall have any vested
20rights in the fund as a beneficiary or otherwise. Before
21seeking restitution from the fund, the consumer or beneficiary
22seeking payment of restitution shall apply for restitution on
23a form provided by the Secretary. The form shall include any
24information the Secretary may reasonably require in order to
25determine that restitution is appropriate.
26    (f) Notwithstanding any other provision of this Section,

 

 

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1moneys in the TOMA Consumer Protection Fund may be transferred
2to the Professions Indirect Cost Fund, as authorized under
3Section 2105-300 of the Department of Professional Regulation
4Law of the Civil Administrative Code of Illinois.
 
5
Article XIII. Token Currency

 
6    Section 13-1. Definitions. As used in this Article:
7    "Covered person" means a person required to obtain a
8license pursuant to this Article.
9    "Insured depository institution" means a federally insured
10depository financial institution as defined in this Act or an
11insured credit union exempt pursuant to paragraph (16) of
12Section 3-1 of this Act.
13    "National currency" means United States coins, Federal
14Reserve notes, or other lawful money under 12 U.S.C. 411;
15money issued by a central bank; or money issued by an
16intergovernmental organization pursuant to an agreement by one
17or more governments.
18    "Token currency" means a digital representation of value:
19        (1) the issuer of which (A) is obligated to convert,
20    redeem, or repurchase for a fixed amount of money or
21    monetary value denominated in national currency or (B)
22    represents will maintain, or creates the reasonable
23    expectation that it will maintain, a stable value relative
24    to the value of a fixed amount of money or monetary value

 

 

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1    denominated in national currency; and
2        (2) that is not (A) a national currency or (B) a
3    security issued by an investment company registered under
4    the Investment Company Act of 1940, 15 U.S.C. 80a et seq.
5    "Token currency" includes, without limitation, any
6    interest or instrument commonly known as a "dollar token,"
7    "electronic money token," or "stablecoin".
8    "Token currency business activity" means engaging in the
9business of token currency issuance or token currency
10transmission.
11    "Token currency issuance" means issuing token currency in
12this State or to a person located in this State.
13    "Token currency issuer" means a covered person engaged in
14token currency issuance.
15    "Token currency transmission" means:
16        (1) selling token currency to a person located in this
17    State; or
18        (2) receiving token currency for transmission from a
19    person located in this State or transmitting token
20    currency in this State.
 
21    Section 13-2. Scope. Nothing in this Article shall limit
22the authority of an insured depository institution to engage
23in activities permissible pursuant to applicable State and
24federal law, including accepting or receiving deposits and
25issuing token currency that represent deposits, or to limit

 

 

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1the authority of the Secretary or federal banking agencies to
2implement and interpret applicable law or establish
3limitations and conditions on such activities.
 
4    Section 13-3. Conditions precedent to engaging in token
5currency issuance or transmission.
6    (a) Except as provided in paragraphs (2) or (3) of
7subsection (b)of this Section, a covered person engaged in
8token currency issuance or token currency transmission is
9engaged in the business of money transmission and is subject
10to the requirements of this Act.
11    (b) A covered person shall not engage in token currency
12issuance, or hold himself or herself out as being able to
13engage in token currency issuance, unless the covered person
14is:
15        (1) licensed in this State by the Secretary pursuant
16    to Section 5-5 of this Act; or
17        (2) an insured depository institution.
18    (c) A covered person shall not engage in token currency
19transmission, or hold himself or herself out as being able to
20engage in token currency transmission, with or on behalf of
21another person unless the covered person is:
22        (1) licensed in this State by the Secretary pursuant
23    to Section 5-5 of this Act; or
24        (2) exempt from licensing under Section 3-1 of this
25    Act.
 

 

 

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1    Section 13-4. Required disclosures.
2    (a) A covered person that engages in token currency
3business activity shall provide to a person who uses the
4covered person's products or services the disclosures required
5by subsection (b) of this Section and any additional
6disclosure the Secretary, by rule, determines reasonably
7necessary for the protection of persons. The Secretary may
8determine, by rule, the time and form required for disclosure.
9A disclosure required by this Section must be made separately
10from any other information provided by the covered person, in
11a clear manner, and in a record the person may keep.
12    (b) Before establishing a relationship with a person, a
13covered person shall disclose:
14        (1) a schedule of fees and charges the covered person
15    may assess, the manner by which fees and charges will be
16    calculated if the fees or changes are not set in advance
17    and disclosed, and the timing of the fees and charges;
18        (2) that the product or service provided by the
19    covered person is not guaranteed by the United States
20    Government, covered by deposit insurance by the Federal
21    Deposit Insurance Corporation, or by share insurance of
22    the National Credit Union Administration;
23        (3) the irrevocability of a transfer or exchange and
24    any exception to irrevocability;
25        (4) a description of:

 

 

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1            (A) the covered person's liability for an
2        unauthorized, mistaken, or accidental transfer or
3        exchange;
4            (B) the person's responsibility to provide notice
5        to the covered person of an unauthorized, mistaken, or
6        accidental transfer or exchange;
7            (C) the basis for any recovery by the person from
8        the covered person in case of an unauthorized,
9        mistaken, or accidental transfer or exchange;
10            (D) general error-resolution rights applicable to
11        the transfer or exchange; and
12            (E) the method for the person to update the
13        person's contact information with the covered person;
14        (5) that the date or time when the transfer or
15    exchange is made and the person's account is debited may
16    differ from the date or time when the person initiates the
17    instruction to make the transfer or exchange;
18        (6) whether the person has a right to stop a
19    pre-authorized payment or revoke authorization for a
20    transfer and the procedure to initiate a stop-payment
21    order or revoke authorization for a subsequent transfer;
22        (7) the person's right to receive a receipt, trade
23    ticket, or other evidence of the transfer or exchange;
24        (8) the person's right to at least 14 days prior
25    notice of a change in the covered person's fee schedule,
26    other terms and conditions that have a material impact on

 

 

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1    token currency business activity with the person, or the
2    policies applicable to the person's account; and
3        (9) that token currency is not currently recognized as
4    legal tender by Illinois or the United States.
5    (c) Except as otherwise provided in subsection (d) of this
6Section, at the conclusion of a token currency transaction
7with or on behalf of a person, a covered person shall provide
8the person a confirmation in a record which contains:
9        (1) the name and contact information of the covered
10    person, including information the person may need to ask a
11    question or file a complaint;
12        (2) the type, value, date, precise time, and amount of
13    the transaction; and
14        (3) the fee charged for the transaction, including any
15    charge for conversion of token currency to other money or
16    monetary value.
17    (d) If a covered person discloses that he or she will
18provide a daily confirmation in the initial disclosure under
19subsection (c) of this Section, the covered person may elect
20to provide a single, daily confirmation for all transactions
21with or on behalf of a person on that day instead of a per
22transaction confirmation.
 
23    Section 13-5. Custody and protection of token currency on
24behalf of another person.
25    (a) A covered person that has custody or control of token

 

 

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1currency for a person shall:
2        (1) at all times hold an amount of each type of token
3    currency sufficient to satisfy the aggregate entitlements
4    of the person to the type of token currency;
5        (2) segregate such token currency from the other
6    assets of the covered person; and
7        (3) not sell, transfer, assign, lend, hypothecate,
8    pledge, or otherwise use or encumber such token currency,
9    except for the sale, transfer, or assignment of such token
10    currency at the direction of such other person.
11    (b) If a covered person violates subsection (a) of this
12Section, the property interests of the person in the token
13currency are pro rata property interests in the type of token
14currency to which the person is entitled without regard to the
15time the person became entitled to the token currency or the
16covered person obtained custody or control of the token
17currency.
18    (c) Token currency subject to this Section is:
19        (1) held for the persons entitled to the token
20    currency under subsection (a) of this Section;
21        (2) not property of the covered person; and
22        (3) not subject to the claims of creditors of the
23    covered person.
24    (d) Token currency subject to this Section, even if
25commingled with other assets of the covered person, are held
26in trust for the benefit of the person entitled to the token

 

 

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1currency under subsection (a) of this Section, in the event of
2insolvency, the filing of a petition by or against the covered
3person under 11 U.S.C. Sections et seq., as amended or
4recodified from time to time, for bankruptcy or
5reorganization, the filing of a petition by or against the
6covered person for receivership, the commencement of any other
7judicial or administrative proceeding for its dissolution or
8reorganization, or in the event of an action by a creditor
9against the covered person who is not a beneficiary of this
10statutory trust. No token currency impressed with a trust
11pursuant to this subsection shall be subject to attachment,
12levy of execution, or sequestration by order of any court,
13except for a beneficiary of this statutory trust.
 
14    Section 13-6. Books and records.
15    (a) A covered person shall maintain, for all token
16currency business activity with or on behalf of a person for
175years after the date of the activity, a record of all of the
18following:
19        (1) Any transaction of the covered person with or on
20    behalf of another person or for the covered person's
21    account in this State, including:
22            (A) the identity of the person;
23            (B) the form of the transaction;
24            (C) the amount, date, and payment instructions
25        given by the person; and

 

 

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1            (D) the account number, name, and physical address
2        of:
3                (i) the parties to the transaction that are
4            customers or account holders of the covered
5            person; and
6                (ii) to the extent practicable, any other
7            party to the transaction.
8        (2) The aggregate number of transactions and aggregate
9    value of transactions by the covered person with or on
10    behalf of other persons and for the covered person's
11    account in this State, expressed in United States Dollar
12    equivalent of token currency for the previous 12 calendar
13    months.
14        (3) Any transaction in which the covered person
15    exchanged one form of token currency for money or monetary
16    value or another form of token currency with or on behalf
17    of another person.
18        (4) A general ledger maintained at least monthly that
19    lists all assets, liabilities, capital, income, and
20    expenses of the covered person.
21        (5) Any report of condition or other reports to the
22    Department, at such times and in such form, as the
23    Department may request.
24        (6) Bank statements and bank reconciliation records
25    for the covered person and the name, account number, and
26    United States Postal Service address of any bank or credit

 

 

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1    union the covered person uses in the conduct of its token
2    currency business activity with or on behalf of another
3    person.
4        (7) A report of any dispute regarding token currency
5    business activity with or on behalf of a person.
6    (b) A covered person shall maintain records required by
7this Section in a form that enables the Department to
8determine whether the covered person is in compliance with
9this Act, any court order, and the laws of this State.
10    (c) If a covered person maintains records outside this
11State that pertain to token currency business activity with or
12on behalf of a person, then the covered person shall make the
13records available to the Department not later than 3 days
14after request, or, on a determination of good cause by the
15Department at a later time.
16    (d) All records maintained by a covered person, an
17affiliate, or a service provider are subject to inspection by
18the Department.
 
19    Section 13-7. Compliance; material changes.
20    (a) A covered person must comply with all provisions of
21this Act to the extent applicable to the covered person's
22activities and maintain appropriate controls to conduct his or
23her token currency business activities in a safe and sound
24manner and in compliance with any applicable State and federal
25law, rule, regulation, or order, or condition imposed in

 

 

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1writing by the Secretary.
2    (b) Each covered person must notify the Department and
3submit a written plan at least 60 days before engaging in a
4materially new token currency business activity or making a
5material change to an existing token currency business
6activity. The written plan shall describe the proposed
7materially new token currency business activity or the
8proposed material change, demonstrate that the covered person
9has established appropriate policies and practices to
10identify, measure, monitor, and control the risks of the
11proposed activity, and include such other information as
12requested by the Department. The Secretary may, by rule or
13order, impose limitations and conditions as the Secretary
14deems necessary or appropriate on covered persons proposing to
15engage in a materially new token currency business activity or
16a material change to an existing token currency business
17activity.
 
18    Section 13-8. Additional prudential standards.
19    (a) A token currency issuer shall at all times maintain
20reserves backing its token currency outstanding on at least a
21one-to-one basis and comprising only the following assets:
22        (1) National currency;
23        (2) Central bank reserve deposits;
24        (3) Funds held as insured demand deposits or insured
25    share accounts at insured depository institutions;

 

 

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1        (4) U.S. Treasury bills with a maturity of 90 days or
2    less;
3        (5) repurchase agreements with a maturity of 7 days or
4    less that are backed by U.S. Treasury bills with a
5    maturity of 90 days or less; and
6        (6) similar high-quality liquid assets, as defined by
7    rule by the Department.
8    (b) With respect to the reserves described in subsection
9(a) of this Section, a token currency issuer shall:
10        (1) obtain a monthly attestation and examination of
11    management's assertions pertaining to the composition and
12    value of the reserve assets by an independent certified
13    public accountant licensed in the United States and
14    applying the attestation standards of the American
15    Institute of Certified Public Accountants.
16        (2) segregate such reserves from the other assets of
17    the token currency issuer.
18        (3) not pledge, rehypothecate, or reuse the reserves,
19    except for the purpose of creating liquidity to meet
20    reasonable expectations of requests to redeem token
21    currency, subject to rule adopted or order issued by the
22    Secretary.
23    (c) The reserves described in subsection (a) of this
24Section, even if commingled with other assets of the covered
25person, are held in trust for the benefit of the purchaser or
26holder of the covered person's outstanding token currency

 

 

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1obligations in the event of insolvency, the filing of a
2petition by or against the licensee under the United States
3Bankruptcy Code, 11 U.S.C. Sections et seq., as amended or
4recodified from time to time, for bankruptcy or
5reorganization, the filing of a petition by or against the
6covered person for receivership, the commencement of any other
7judicial or administrative proceeding for its dissolution or
8reorganization, or in the event of an action by a creditor
9against the covered person who is not a beneficiary of this
10statutory trust. No reserves impressed with a trust pursuant
11to this subsection shall be subject to attachment, levy of
12execution, or sequestration by order of any court, except for
13a beneficiary of this statutory trust.
14    (d) A token currency issuer shall disclose the monthly
15attestation report required by paragraph (1) of subsection (b)
16of this Section on the website of the token currency issuer, in
17a form satisfactory to the Department, not more than 30 days
18after the end of the period covered by the attestation.
19    (e) A token currency issuer shall establish a process to
20allow redemption of token currency within a reasonable
21timeframe, as determined by rule or order by the Secretary.
22The timeframe to establish a process to allow redemption of
23token currency may not be longer than 2 business days after the
24redemption request. In extraordinary circumstances where the
25Secretary concludes that redemption would likely jeopardize
26the reserve-backing requirement of subsection (c) of this

 

 

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1Section or the orderly liquidation of reserves, the Secretary
2has the authority to vary this requirement as the Secretary
3deems necessary.
4    (f) In addition to the prudential standards under this
5Section and Article X of this Act, the Secretary may, by rule
6or order, establish additional capital, liquidity, and risk
7management requirements to ensure the financial integrity and
8ongoing operations of covered persons based on an assessment
9of the specific risks applicable to a covered person or class
10of covered persons.
 
11    Section 13-9. Implementation.
12    (a) In addition to the fees charged and collected under
13Section 5-8 of this Act and 38 Ill. Adm. Code 205, as amended
14or recodified from time to time, the Department shall charge
15and collect fees from a covered person, which shall be
16nonrefundable unless otherwise indicated, for the expenses of
17administering this Article, as follows:
18        (1) Each covered person shall pay $150 for each hour
19    or part thereof for each examiner or staff assigned to the
20    supervision of the covered person plus actual travel costs
21    for any examination of token currency business activity
22    pursuant to the Act.
23        (2) Each covered person shall pay an annual assessment
24    fee on token currency business activity, which may be
25    billed, yearly, quarterly, or some other frequency, based

 

 

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1    on the total United States Dollar value of token currency
2    issued or transmitted in this State and applying fee rates
3    at least equal to the rates applicable to money
4    transmission volume under 38 Ill. Adm. Code 205.35, as
5    amended or recodified from time to time.
6        (3) Each covered person shall pay to the Department
7    his or her pro rata share of the cost for administration of
8    this Article that exceeds other fees listed in this
9    subsection, as estimated by the Department, for the
10    current year and any deficit actually incurred in the
11    administration of the Article in prior years. Each covered
12    person's share under this paragraph shall initially be
13    divided equally among licensees engaged in token currency
14    business activity.
15        (4) Beginning one year after the effective date of
16    this Act, the Department may, by rule, amend the fees set
17    forth in this subsection in accordance with this Act. The
18    Department is authorized to consider setting fees for
19    token currency business activity based on the value of
20    token currency transacted held in custody by a covered
21    person, and volume of a token currency or volume of token
22    currency transacted by covered persons or held in custody
23    by a covered person.
24    (b) The Secretary is authorized to coordinate and consult
25with the Board of Governors of the Federal Reserve System,
26other federal banking agencies, and any law enforcement

 

 

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1officials and regulatory agencies that the Secretary
2determines to have an appropriate regulatory interest in the
3implementation of this Article.
4    (c) In addition to such powers and rulemaking authority as
5prescribed elsewhere in this Act, the Department is hereby
6authorized and empowered to adopt rules consistent with the
7purposes of this Article, including, but not limited to:
8        (1) such rules in connection with the activities of a
9    covered person as may be necessary and appropriate for the
10    protection of the residents of this State;
11        (2) such rules as may be necessary and appropriate to
12    define improper or fraudulent business practices in
13    connection with the activity of a covered person;
14        (3) rules as may define the terms used in this Article
15    and as may be necessary and appropriate to interpret and
16    implement the provisions of this Article;
17        (4) rules that may be necessary for the implementation
18    or enforcement of this Article;
19        (5) rules establishing fees the Secretary deems
20    necessary to cover the cost of administration of this
21    Article; and
22        (6) rules in connection with the activity of a covered
23    person as may be necessary and appropriate for the safety
24    and soundness of such covered persons and the stability of
25    the financial system in this State.
 

 

 

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1
Article 900. Amendatory Provisions

 
2    (205 ILCS 657/Act rep.)
3    Section 900-5. The Transmitters of Money Act is repealed.
 
4    Section 999-99
. Effective date. This Act takes effect upon
5becoming law, except that the changes to the Transmitters of
6Money Act take effect January 1, 2026.