Substitute Senate Bill No. 230
Substitute Senate Bill No. 230
PUBLIC ACT NO. 98-192
AN ACT CONCERNING ELECTRONIC PAYMENT INSTRUMENTS
AND CURRENCY AND FOREIGN TRANSACTIONS REPORTING.
Be it enacted by the Senate and House of
Representatives in General Assembly convened:
Section 1. Section 36a-3 of the general
statutes, as amended by section 2 of public act
97-160 and section 1 of public act 97-209, is
repealed and the following is substituted in lieu
thereof:
Other definitions applying to this title or
to specified parts thereof and the sections in
which they appear are:
"Account". Sections 36a-155 and 36a-365.
"Advance fee". Sections 36a-510, 36a-485 and
36a-615.
"Agency bank". Section 36a-285.
"Alternative mortgage loan". Section 36a-265.
"Amount financed". Section 36a-690.
"Annual percentage rate". Section 36a-690.
"Annual percentage yield". Section 36a-316.
"Applicant". Section 36a-736.
"Associate". Section 36a-184.
"Bank". Section 36a-30.
"Bankers' bank". Section 36a-70.
"Banking business". Section 36a-425.
"Billing cycle". Section 36a-565.
"Bona fide nonprofit organization". Section
36a-655.
"Branch". Sections 36a-145 and 36a-410.
"Branch or agency net payment entitlement".
Section 1 of [this act] PUBLIC ACT 97-160.
"Branch or agency net payment obligation".
Section 1 of [this act] PUBLIC ACT 97-160.
"Broker". Section 36a-510.
"Business and Industrial Development
Corporation". Section 36a-626.
"Business and property in this state".
Section 1 of [this act] PUBLIC ACT 97-160.
"Cash advance". Section 36a-564.
"Cash price". Section 36a-770.
"Certificate of organization". Section
36a-435.
"Collective managing agency account". Section
36a-365.
"Commercial vehicle". Section 36a-770.
"Community bank". Section 36a-70.
"Community development bank". Section 36a-70.
"Connecticut holding company". Section
36a-410.
"Consumer". Sections 36a-155, 36a-676 and
36a-695.
"Consumer Credit Protection Act". Section
36a-676.
"Consumer debtor" and "debtor". Sections
36a-645 and 36a-800.
"Consumer collection agency". Section
36a-800.
"Controlling interest". Section 36a-276.
"Credit". Sections 36a-645 and 36a-676.
"Creditor". Sections 36a-676, 36a-695 and
36a-800.
"Credit card", "cardholder" and "card
issuer". Section 36a-676.
"Credit clinic". Section 36a-695.
"Credit rating agency". Section 36a-695.
"Credit report". Section 36a-695.
"Credit sale". Section 36a-676.
"De novo branch". Section 36a-410.
"Debt". Section 36a-645.
"Debt adjustment". Section 36a-655.
"Debt mutual fund". Section 36a-275.
"Debt securities". Section 36a-275.
"Deliver". Section 36a-316.
"Deposit". Section 36a-316.
"Deposit account". Section 36a-316.
"Deposit account charge". Section 36a-316.
"Deposit account disclosures". Section
36a-316.
"Deposit contract". Section 36a-316.
"Deposit services". Section 36a-425.
"Depositor". Section 36a-316.
"Earning period". Section 36a-316.
"ELECTRONIC PAYMENT INSTRUMENT". SECTION
36a-596, AS AMENDED BY SECTION 3 OF THIS ACT.
"Eligible account holder". Section 36a-136.
"Eligible collateral". Section 36a-330.
"Equity mutual fund". Section 36a-276.
"Federal Home Mortgage Disclosure Act".
Section 36a-736.
"Fiduciary". Section 36a-365.
"Filing fee". Section 36a-770.
"Finance charge". Sections 36a-690 and
36a-770.
"Financial institution". Sections 36a-41,
36a-155, 36a-316, 36a-330 and 36a-736.
"Financial records". Section 36a-41.
"First mortgage loan". Sections 36a-485,
36a-705 and 36a-715.
"Fiscal year". Section 36a-435.
"Foreign banking corporation". Section
36a-425.
"General facility". Section 36a-580.
"Global net payment entitlement". Section 1
of [this act] PUBLIC ACT 97-160.
"Global net payment obligation". Section 1 of
[this act] PUBLIC ACT 97-160.
"Goods". Sections 36a-535 and 36a-770.
"Graduated payment mortgage loan". Section
36a-265.
"Groups having a common bond of occupation or
association". Section 36a-435.
"Guardian". Section 36a-365.
"Holder". Section 36a-596, AS AMENDED BY
SECTION 3 OF THIS ACT.
"Home banking services". Section 36a-170.
"Home banking terminal". Section 36a-170.
"Home improvement loan". Section 36a-736.
"Home purchase loan". Section 36a-736.
"Home state". Section 36a-410.
"Immediate family". Section 36a-435.
"Instalment loan contract". Sections 36a-535
and 36a-770.
"Instrument". Section 36a-596, AS AMENDED BY
SECTION 3 OF THIS ACT.
"Insurance bank". Section 36a-285.
"Insurance department". Section 36a-285.
"Interest". Section 36a-316.
"Interest rate". Section 36a-316.
"Lender". Sections 36a-510 and 36a-770.
"Lessor". Section 36a-676.
"License". Section 36a-626.
"Licensee". Sections 36a-510, 36a-596, AS
AMENDED BY SECTION 3 OF THIS ACT and 36a-626.
"Limited branch". Section 36a-145.
"Limited facility". Section 36a-580.
"Loan broker". Section 36a-615.
"Loss". Section 36a-330.
"Made in this state". Section 36a-770.
"Managing agent". Section 36a-365.
"Member". Section 36a-435.
"Membership share". Section 36a-435.
"Money order". Section 36a-596, AS AMENDED BY
SECTION 3 OF THIS ACT.
"Mortgage broker". Section 36a-485.
"Mortgage insurance". Section 36a-725.
"Mortgage lender". Sections 36a-485 and
36a-705.
"Mortgage loan". Sections 36a-261 and
36a-265.
"Mortgage rate lock-in". Section 36a-705.
"Mortgage servicing company". Section
36a-715.
"Mortgagor". Section 36a-715.
"Motor vehicle". Section 36a-770.
"Municipality". Section 36a-800.
"Net worth". Section 36a-596, AS AMENDED BY
SECTION 3 OF THIS ACT.
"Network". Section 36a-155.
"Note account". Sections 36a-301 and 36a-445.
"Office". Section 36a-316.
"Open-end credit plan". Section 36a-676.
"Open-end loan". Section 36a-565.
"Organization". Section 36a-800.
"Out-of-state holding company". Section
36a-410.
"Outstanding". Section 36a-596, AS AMENDED BY
SECTION 3 OF THIS ACT.
"Passbook savings account". Section 36a-316.
"Periodic statement". Section 36a-316.
"Permissible investment". Section 36a-596, AS
AMENDED BY SECTION 3 OF THIS ACT.
"Person". Section 36a-184.
"Post". Section 36a-316.
"Prime quality". Section 36a-596, AS AMENDED
BY SECTION 3 OF THIS ACT.
"Principal amount of the loan". Section
36a-510.
"Principal officer". Section 36a-485.
"Processor". Section 36a-155.
"Public deposit". Section 36a-330.
"Purchaser". Section 36a-596, AS AMENDED BY
SECTION 3 OF THIS ACT.
"Qualified financial contract". Section 1 of
[this act] PUBLIC ACT 97-160.
"Qualified public depository" and
"depository". Section 36a-330.
"Records". Section 36a-17.
"Relocate". Section 36a-145.
"Residential property". Section 36a-485.
"Retail buyer". Sections 36a-535 and 36a-770.
"Retail credit transaction". Section 42-100b.
"Retail instalment contract". Sections
36a-535 and 36a-770.
"Retail instalment sale". Sections 36a-535
and 36a-770.
"Retail seller". Sections 36a-535 and
36a-770.
"Reverse annuity mortgage loan". Section
36a-265.
"Sales finance company". Sections 36a-535 and
36a-770.
"Savings department". Section 36a-285.
"Savings deposit". Section 36a-316.
"Secondary mortgage loan". Section 36a-510.
"Security convertible into a voting
security". Section 36a-184.
"Share". Section 36a-435.
"Social purpose investment". Section 36a-277.
"Standard mortgage loan". Section 36a-265.
"Tax and loan account". Sections 36a-301 and
36a-445.
"The Savings Bank Life Insurance Company".
Section 36a-285.
"Time account". Section 36a-316.
"Transaction". Section 36a-215.
"Travelers check". Section 36a-596, AS
AMENDED BY SECTION 3 OF THIS ACT.
"Troubled financial institution". Section
36a-215.
"Unsecured loan". Section 36a-615.
Sec. 2. Section 36a-586 of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) Each check cashing licensee shall use and
maintain at a general facility in this state, in
the form satisfactory to the commissioner, such
books, records and accounts as will enable the
commissioner to determine whether the licensee is
complying with the provisions of sections 36a-580
to 36a-589, inclusive. Each licensee shall retain
such books, records and accounts for not less than
the periods of time specified in regulations
adopted by the commissioner in accordance with
section 36a-588.
(b) Before a licensee deposits with any
financial institution a check, draft or money
order cashed by such licensee, the item shall be
endorsed with the actual name under which the
licensee is doing business and must have the words
"licensed check cashing service" legibly written
or stamped immediately after or below such name.
(c) EACH CHECK CASHING LICENSEE SHALL COMPLY
WITH THE APPLICABLE PROVISIONS OF THE CURRENCY AND
FOREIGN TRANSACTIONS REPORTING ACT, 31 USC SECTION
5311 ET SEQ., AS FROM TIME TO TIME AMENDED, AND
ANY REGULATIONS ADOPTED UNDER SUCH PROVISIONS, AS
FROM TIME TO TIME AMENDED.
Sec. 3. Section 36a-596 of the general
statutes is repealed and the following is
substituted in lieu thereof:
As used in sections 36a-595 to 36a-610,
inclusive, AS AMENDED BY THIS ACT:
(1) "ELECTRONIC PAYMENT INSTRUMENT" MEANS A
CARD OR OTHER TANGIBLE OBJECT FOR THE TRANSMISSION
OR PAYMENT OF MONEY WHICH CONTAINS A
MICROPROCESSOR CHIP, MAGNETIC STRIPE, OR OTHER
MEANS FOR THE STORAGE OF INFORMATION, THAT IS
PREFUNDED AND FOR WHICH THE VALUE IS DECREMENTED
UPON EACH USE, BUT DOES NOT INCLUDE A CARD OR
OTHER TANGIBLE OBJECT THAT IS REDEEMABLE BY THE
ISSUER IN THE ISSUER'S GOODS OR SERVICES.
[(1)] (2) "Holder" means a person, other than
a purchaser, who is either in possession of a
Connecticut instrument and is the named payee
thereon or in possession of a Connecticut
instrument issued or endorsed to him or bearer or
in blank. "Holder" does not include any person who
is in possession of a lost, stolen or forged
Connecticut instrument.
[(2)] (3) "Instrument" means a money order,
[or] travelers check OR ELECTRONIC PAYMENT
INSTRUMENT that evidences either an obligation for
the transmission or payment of money, or the
purchase or the deposit of funds for the purchase
of such money order, [or] travelers check OR
ELECTRONIC PAYMENT INSTRUMENT. An instrument is a
"Connecticut instrument" if it is sold in this
state.
[(3)] (4) "Licensee" means any person
licensed pursuant to sections 36a-595 to 36a-610,
inclusive, AS AMENDED BY THIS ACT.
[(4)] (5) "Money order" means any check,
draft, money order or other instrument for the
transmission or payment of money. "Money order"
does not include a travelers check OR ELECTRONIC
PAYMENT INSTRUMENT.
[(5)] (6) "Net worth" means the excess of
assets over liabilities as determined by generally
accepted accounting principles.
[(6)] (7) A money order, [or] travelers check
OR ELECTRONIC PAYMENT INSTRUMENT is "outstanding"
if: (A) It is sold in the United States; (B) a
report of it has been received by a licensee from
its agents or subagents; and (C) it has not yet
been paid BY THE ISSUER.
[(7)] (8) "Permissible investment" means: (A)
Cash in United States currency; (B) time deposits,
as defined in subdivision (62) of section 36a-2,
AS AMENDED, or other debt instruments of a bank;
(C) bills of exchange or bankers acceptances which
are eligible for purchase by member banks of the
Federal Reserve System; (D) commercial paper of
prime quality; (E) interest-bearing bills, notes,
bonds, debentures or other obligations issued or
guaranteed by: (i) The United States or any of its
agencies or instrumentalities, or (ii) any state,
or any agency, instrumentality, political
subdivision, school district or legally
constituted authority of any state if such
investment is of prime quality; (F)
interest-bearing bills or notes, or bonds,
debentures or preferred stocks, traded on any
national securities exchange or on a national
over-the-counter market, if such debt or equity
investments are of prime quality; (G) receivables
due from selling agents consisting of the proceeds
of the sale of instruments which are not past due
or doubtful of collection; (H) gold; and (I) any
other investments approved by the commissioner.
Notwithstanding the provisions of this
subdivision, if the commissioner at any time finds
that an investment of a licensee is unsatisfactory
for investment purposes, the investment shall not
qualify as a permissible investment.
[(8)] (9) An investment is of "prime quality"
if it is within the top four rating categories in
any rating service recognized by the commissioner
unless the commissioner determines for any
licensee that only those investments in the top
three rating categories qualify as "prime
quality".
[(9)] (10) "Purchaser" means a person who
buys or has bought a Connecticut instrument.
[(10)] (11) "Travelers check" means an
instrument for the payment of money that contains
a provision for a specimen signature of the
purchaser to be completed at the time of a
purchase of the instrument and a provision for a
countersignature of the purchaser to be completed
at the time of negotiation.
Sec. 4. Section 36a-598 of the general
statutes is repealed and the following is
substituted in lieu thereof:
Each application for an original or renewal
license required under sections 36a-595 to
36a-610, inclusive, AS AMENDED BY THIS ACT, shall
be made in writing and under oath to the
commissioner in such form as the commissioner may
prescribe. The application shall state:
(1) The exact name of the applicant and, if
incorporated, the date of incorporation and the
state where incorporated;
(2) The complete address of the principal
office from which the business is to be conducted,
and of the office where the books and records of
the applicant are maintained and to be maintained,
including the street and number, if any, and the
municipality and county of such offices;
(3) The complete name and address of each of
the applicant's branches, subsidiaries, affiliates
and agents and subagents, if any, engaging in this
state in the business of selling or issuing
Connecticut instruments, or of receiving money for
transmitting the same;
(4) The name, title, address and telephone
number of the person to whom notice of the
commissioner's approval or disapproval of the
application shall be sent and to whom any
inquiries by the commissioner concerning the
application shall be directed;
(5) The name and residence address (A) of the
applicant, if an individual; (B) if a partnership,
of its partners; or (C) if a corporation or
association, of its directors, trustees, principal
officers, and any shareholder owning twenty per
cent or more of each class of its stock;
(6) The most recently audited unconsolidated
financial statement of the applicant, including
its balance sheet and receipts and disbursements
for the preceding year, prepared by an independent
certified public accountant acceptable to the
commissioner;
(7) A list of the applicant's permissible
investments, the book and market values of such
investments, and the dollar amount of the
applicant's aggregate outstanding instruments (A)
as of the date of the financial statement filed in
accordance with subsection (6) of this section;
and (B) as of a date no earlier than thirty
business days prior to the filing of the
application;
(8) (A) The surety bond required by
subsection (a) of section 36a-602, AS AMENDED BY
SECTION 6 OF THIS ACT, if applicable;
(B) A list of the investments maintained in
accordance with subsection (b) of section 36a-602,
AS AMENDED BY SECTION 6 OF THIS ACT, if
applicable, and the book and market values of any
such investments (i) as of the date of the
financial statement filed in accordance with
subdivision (6) of this section; and (ii) as of a
date no earlier than thirty business days prior to
the filing of the application.
(C) The commissioner may defer compliance
with the provisions of this subsection until after
the commissioner rules on the application, but the
commissioner shall not issue a license until an
applicant complies with the provisions of this
subdivision;
(9) A statement of whether the applicant will
engage in the money order, [or] travelers check OR
ELECTRONIC PAYMENT INSTRUMENT business, or [both]
ANY TWO OR ALL OF SUCH BUSINESSES, in this state;
(10) Any other information the commissioner
may require.
Sec. 5. Subsection (a) of section 36a-599 of
the general statutes is repealed and the following
is substituted in lieu thereof:
(a) Each application for an original or
renewal license shall be accompanied by A
NONREFUNDABLE INVESTIGATION FEE OF FIVE HUNDRED
DOLLARS AND a license fee of one thousand dollars.
The license fee shall be refunded if the
application is denied or is withdrawn prior to
issuance of a license by the commissioner.
Sec. 6. Section 36a-602 of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) As a condition for the issuance and
retention of the license, applicants for a license
and licensees shall file with the commissioner a
corporate surety bond in a form satisfactory to
the commissioner and issued by a bonding company
or insurance company authorized to do business in
this state. The bond shall be in favor of the
commissioner, SHALL REMAIN IN PLACE FOR TWO YEARS
AFTER SUCH LICENSEE CEASES TO ENGAGE IN BUSINESS
IN THIS STATE, and SHALL BE in the principal sum
of (1) three hundred thousand dollars for any
applicant and any licensee THAT ENGAGES IN THE
BUSINESS OF ISSUING CONNECTICUT INSTRUMENTS with
an average daily balance of outstanding
Connecticut instruments during the two previous
reporting quarters of three hundred thousand
dollars or less OR ANY LICENSEE THAT ENGAGES IN
THE BUSINESS OF RECEIVING MONEY FOR TRANSMITTING
THE SAME WITH AN AVERAGE WEEKLY AMOUNT OF MONEY OR
EQUIVALENT THEREOF TRANSMITTED DURING THE TWO
PREVIOUS REPORTING QUARTERS OF ONE HUNDRED FIFTY
THOUSAND DOLLARS OR LESS; (2) five hundred
thousand dollars for any licensee THAT ENGAGES IN
THE BUSINESS OF ISSUING CONNECTICUT INSTRUMENTS
with an average daily balance of outstanding
Connecticut instruments during the two previous
reporting quarters of greater than three hundred
thousand dollars but less than five hundred
thousand dollars OR ANY LICENSEE THAT ENGAGES IN
THE BUSINESS OF RECEIVING MONEY FOR TRANSMITTING
THE SAME WITH AN AVERAGE WEEKLY AMOUNT OF MONEY
EQUIVALENT THEREOF TRANSMITTED DURING THE TWO
PREVIOUS REPORTING QUARTERS OF GREATER THAN ONE
HUNDRED FIFTY THOUSAND DOLLARS BUT LESS THAN TWO
HUNDRED FIFTY THOUSAND DOLLARS; and (3) one
million dollars for any licensee THAT ENGAGES IN
THE BUSINESS OF ISSUING CONNECTICUT INSTRUMENTS
with an average daily balance of outstanding
Connecticut instruments during the two previous
reporting quarters equal to or greater than five
hundred thousand dollars OR ANY LICENSEE THAT
ENGAGES IN THE BUSINESS OF RECEIVING MONEY FOR
TRANSMITTING THE SAME WITH AN AVERAGE WEEKLY
AMOUNT OF MONEY OR EQUIVALENT THEREOF TRANSMITTED
DURING THE TWO PREVIOUS REPORTING QUARTERS OF TWO
HUNDRED FIFTY THOUSAND DOLLARS OR GREATER. The
proceeds of the bond shall constitute a trust fund
for the exclusive benefit of the purchasers and
holders of Connecticut instruments issued by such
licensee.
(b) In lieu of all or part of the principal
sum of such corporate surety bonds, applicants for
a license and licensees may invest such sum as
provided in this subsection. The book or market
value, whichever is lower, of such investments
shall be equal to the amount of the bond required
by subsection (a) of this section less the amount
of the bond filed with the commissioner by the
applicant or licensee. Such investments may be:
(1) Deposits with such banks as such
applicants or licensees may designate and the
commissioner may approve, and in accordance with
such regulations as the commissioner may adopt; or
(2) Interest-bearing bills, notes, bonds,
debentures or other obligations issued or
guaranteed by (A) the United States or any of its
agencies or instrumentalities, or (B) any state,
or any agency, instrumentality, political
subdivision, school district or legally
constituted authority of any state if such
investment is of prime quality.
(c) The investments provided for in
subsection (b) of this section shall secure the
same obligation as would a corporate surety bond
filed under this section. As long as a licensee
continues business in the ordinary course, it
shall be permitted to collect interest on such
investments and at any time to exchange, examine,
and compare such investments. The investments made
pursuant to this section shall be maintained in
trust for the exclusive benefit of the purchasers
and holders of Connecticut instruments issued by
such licensee.
Sec. 7. Section 36a-604 of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) Each licensee which issues Connecticut
instruments which are money orders shall at all
times have a net worth of at least one hundred
thousand dollars.
(b) Each licensee which issues Connecticut
instruments which are travelers checks OR
ELECTRONIC PAYMENT INSTRUMENTS shall at all times
have a net worth of at least one million dollars.
(c) EACH LICENSEE THAT ENGAGES IN THE
BUSINESS OF RECEIVING MONEY FOR TRANSMITTING THE
SAME SHALL AT ALL TIMES HAVE A NET WORTH OF AT
LEAST FIVE HUNDRED THOUSAND DOLLARS.
Sec. 8. (NEW) Each licensee, as defined in
subdivision (4) of section 36a-596 of the general
statutes, as amended by section 3 of this act,
shall comply with the applicable provisions of the
Currency and Foreign Transactions Reporting Act,
31 USC Section 5311 et seq., as from time to time
amended, and any regulations adopted under such
provisions, as from time to time amended.
Approved June 4, 1998