Massachusetts H 4550: An Act relative to the regulation of the business of domestic and foreign money transmission by the Division of Banks

Bill Text

HOUSE . . . . . . . . No. 4550

The Commonwealth of Massachusetts

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HOUSE OF REPRESENTATIVES, March 24, 2022.
The committee on Financial Services to whom was referred the
petition (accompanied by bill, House, No. 1166) of James M. Murphy
relative to the regulation of the business of domestic and foreign money
transmission by the Division of Banks, reports recommending that the
accompanying bill (House, No. 4550) ought to pass.

For the committee,

JAMES M. MURPHY.

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FILED ON: 2/1/2022
HOUSE . . . . . . . . . . . . . . . No. 4550

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-Second General Court
(2021-2022)
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An Act relative to the regulation of the business of domestic and foreign money transmission by
the Division of Banks.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:

1 SECTION 1. Chapter 167F of the General Laws is hereby amended by striking out
2 section 4, as appearing in the 2018 Official Edition, and inserting in place thereof the following
3 section:--
4 Section 4. A bank may engage directly in the business of selling, issuing or registering
5 checks.
6 SECTION 2. Chapter 169 of the General Laws is hereby repealed.
7 SECTION 3. The General Laws are hereby amended by inserting after chapter 169A the
8 following chapter:-
9 Chapter 169B.
10 Licensing and Supervision of Money Transmitters

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11 Section 1. As used in this chapter, the following words shall, unless the context clearly
12 requires otherwise, have the following meanings:
13 “Authorized delegate”, a person designated by a licensee under the provisions of this
14 chapter to engage in money transmission on behalf of the licensee.
15 “Branch office”, any office in the commonwealth operated by a licensee at which the
16 licensee engages in money transmission.
17 “Commissioner”, the commissioner of banks.
18 “Closed loop stored value", stored value that is redeemable by the issuer only for goods
19 or services provided by the issuer or its affiliate or franchisees of the issuer or its affiliate, except
20 to the extent required by applicable law to be redeemable in cash for its cash value.
21 “Licensee”, a person licensed under this chapter to engage in the business of money
22 transmission.
23 “Material litigation”, any litigation that, according to generally accepted accounting
24 principles, is deemed significant to an applicant’s or licensee’s financial health and would be
25 required to be referenced in that entity’s annual audited financial statements, report to
26 shareholders or similar documents.
27 “Money transmission”, any of the following: (1) selling or issuing payment instruments
28 to a person located in the commonwealth; (2) selling or issuing stored value to a person located
29 in the commonwealth; or (3) receiving money for transmission from a person located in the
30 commonwealth. The term does not include: transactions undertaken for other than personal,

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31 family, or household purposes; or the provision solely of online or telecommunications services
32 or network access.
33 “Nationwide Multistate Licensing System and Registry” or “NMLS”, the multistate
34 system developed by the Conference of State Bank Supervisors and the American Association of
35 Residential Mortgage Regulators and owned and operated by the State Regulatory Registry,
36 LLC, or any successor or affiliated entity, for the licensing and registration of persons in
37 financial services industries.
38 "Outstanding money transmission obligations", (1) Any payment instrument or stored
39 value issued or sold by the licensee to a person located in the United States or reported as sold by
40 an authorized delegate of the licensee to a person that is located in the United States that has not
41 yet been paid or refunded by or for the licensee, or escheated in accordance with applicable
42 unclaimed property laws; or (2) Any money received for transmission by the licensee or an
43 authorized delegate in the United States from a person located in the United States that has not
44 been received by the payee or refunded to the sender, or escheated in accordance with applicable
45 unclaimed property laws.
46 “Payment instrument”, a written or electronic check, draft, money order, traveler's check,
47 or other written or electronic instrument for the transmission or payment of money or monetary
48 value, whether or not negotiable. The term does not include: any credit card voucher; any letter
49 of credit; stored value; or any instrument that (1) is redeemable by the issuer only for goods or
50 services provided by the issuer or its affiliate or franchisees of the issuer or its affiliate, except to
51 the extent required by applicable law to be redeemable in cash for its cash value; or (2) not sold
52 to the public but issued and distributed as part of a loyalty, rewards,