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repealed and the following is substituted in  lieu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