Existing law provides for the licensure and regulation by the Commissioner of Financial Institutions of persons engaged in the business of selling or issuing checks or of receiving for transmission or transmitting money or credits. (Chapter 671 of NRS) This bill adds to, revises and repeals various provisions in the existing statutory scheme governing the licensure and regulation of such persons for the purposes of establishing a statutory scheme governing persons engaged in the business of money transmission which is modeled, in general, after the Model Money Transmission Modernization Act approved by the Conference of State Bank Supervisors. Sections 4-32 of this bill define words and terms for the purposes of this bill. Section 20 of this bill defines “money transmission” to mean: (1) selling or issuing payment instruments to a person located in this State; (2) selling or issuing stored value to a person located in this State; or (3) receiving money or credits for transmission from a person located in this State. Section 20 provides that the term includes payroll processing services and does not include the provision of certain other services. Section 66 of this bill exempts certain specified persons from the provisions of this bill. Section 34 of this bill authorizes the Commissioner to exempt additional persons under certain circumstances. Section 35 of this bill authorizes the Commissioner to require any person claiming an exemption to provide certain proof of that exemption. Existing law provides that certain reports relating to investigations, hearings and examinations conducted by the Commissioner to determine whether a licensee or other person has committed a violation of the provisions governing money transmission are confidential. (NRS 671.170) Sections 37 and 82 of this bill make certain additional information and documents confidential and set forth the circumstances under which such information and documents may be disclosed. Section 36 of this bill authorizes the Commissioner to engage in various activities to carry out the purposes of the provisions of this bill. Section 67 of this bill prohibits a person from engaging in the business of money transmission unless the person: (1) has been issued a license; or (2) is an authorized delegate of a licensee that is acting within the scope of authority conferred by a written contract with the licensee. Section 68 of this bill sets forth certain requirements for an application for a license. Section 69 of this bill sets forth the circumstances under which the Commissioner is required to issue a license to an applicant. Section 70 of this bill sets forth certain requirements for the renewal of a license. Section 38 of this bill requires a licensee who wishes to engage in the business of money transmission through an authorized delegate to: (1) enter into a written contract with the authorized delegate that meets certain requirements; and (2) take certain other actions. Section 71 of this bill makes a conforming change to refer to an authorized delegate instead of a duly appointed agent. Existing law requires all money or credit received by an agent of a licensee from the sale and issuance of checks or for the purpose of transmission to be remitted to the licensee or deposited with a bank or credit union authorized to do business in this State within a certain amount of time following the receipt of the money or credits. (NRS 671.150) Sections 38, 40 and 84 of this bill revise requirements regarding the remittance of money, credits or monetary value by a person who engages in money transmission on behalf of a licensee. Section 38 requires an authorized delegate to remit and handle money, credits and monetary value in accordance with the terms of the written contract entered into with the licensee. Section 38 defines “remit” to mean, in general, to make a direct payment of money, credits or monetary value to a licensee or to deposit money in an account in a bank or credit union specified by the licensee. Section 38 provides that all money net of fees received by an authorized delegate from money transmission is held in trust by the authorized delegate to the benefit of the licensee. Section 40 provides that an authorized delegate who knowingly fails to remit money held in trust for the benefit of a licensee is guilty of a misdemeanor. Section 39 of this bill provides that a person who engages in the business of money transmission on behalf of an unlicensed person who is not exempt from licensure is jointly and severally liable with the person. Sections 40-44 of this bill set forth certain requirements relating to transactions involving money transmission. Section 33 of this bill sets forth the method for determining whether a transaction involving money transmission takes place in this State. Existing law requires a licensee to at all times maintain certain securities or assets having a value that is equal to or more than the aggregate liability of the licensee with respect to checks sold and issued and money or credits received for transmission. (NRS 671.150) Section 84 repeals that requirement. Section 45 of this bill instead requires a licensee to maintain at all times permissible investments with a market value of not less than the aggregate amount of all of the outstanding money transmission obligations, as defined in section 23 of this bill, of the licensee. Sections 46 and 47 of this bill set forth the investments that qualify as permissible investments for the purposes of section 45. Existing law requires a licensee to have in force a surety bond meeting certain requirements. (NRS 671.100) Section 74 of this bill revises the requirements for such a surety bond. Section 49 of this bill requires a licensee to at all times maintain a tangible net worth in a specified amount. Sections 56-61 of this bill impose certain requirements on a licensee concerning reporting and recordkeeping. Section 78 of this bill eliminates certain reporting requirements for a licensee. Existing law requires the rates charged for services related to money transmission to be posted in every place of business licensed or covered by a license and prohibits fees from being charged or collected in excess of the posted rates. (NRS 671.140) Section 84 repeals those provisions. Section 50 of this bill requires a person or group of persons acting in concert seeking to acquire control of a licensee to obtain the approval of the Commissioner before acquiring control of the licensee. Section 50 sets forth the process for obtaining such approval. Section 51 of this bill establishes a process by which a person may request that the Commissioner determine whether the person would be considered a person in control of a licensee upon consummation of a proposed transaction. Section 52 of this bill sets forth certain persons who are not required to comply with the requirements of section 50 under certain circumstances. Section 53 of this bill requires a licensee to provide certain notice to the Commissioner if the licensee adds or replaces a “key individual,” which section 13 of this bill defines, in general, to mean any natural person ultimately responsible for establishing or directing policies and procedures of a licensee. Section 53 authorizes the Commissioner to disapprove a key individual under certain circumstances. Existing law authorizes the Commissioner to participate in the Nationwide Multistate Licensing System and Registry and sets forth various actions the Commissioner is authorized to take relating to participating in the Registry. (NRS 671.092) Section 72 of this bill authorizes the Commissioner to take certain additional actions relating to the Registry. Section 54 of this bill authorizes the Commissioner to participate in certain multistate supervisory processes. Existing law requires an applicant for a license and certain other persons to submit to the Registry a complete set of fingerprints and certain information relating to the background of the person. (NRS 671.098) Section 73 of this bill: (1) requires certain additional information to be submitted to the Commissioner through the Registry; and (2) revises the list of persons who are required to submit a complete set of fingerprints and such information. Section 75 of this bill revises provisions relating to examinations of licensees conducted by the Commissioner. Existing law authorizes the Commissioner to issue an order requiring the immediate cessation of the business of a licensee under certain circumstances. (NRS 671.160) Section 63 of this bill authorizes the Commissioner to issue an order requiring a licensee or authorized delegate to cease and desist certain violations. Section 62 of this bill authorizes the Commissioner to issue an order suspending or revoking the designation of an authorized delegate under certain circumstances. Section 64 of this bill authorizes the Commissioner to resolve a matter arising from a violation or alleged violation by a person through a consent order. Section 79 of this bill revises the list of acts that constitute grounds for suspension, revocation or denial of renewal of a license. Section 48 of this bill authorizes the Commissioner to suspend or revoke the license of a licensee if the licensee does not continue to meet the requirements applicable to an applicant for a license. Section 81 of this bill provides that any person who, without a license, knowingly engages in any activity for which a license is required is guilty of a misdemeanor. Section 55 of this bill provides that, if a provision of this bill is inconsistent with a federal law governing money transmission, the federal law governs to the extent of the inconsistency. Section 65 of this bill requires that consideration of the need to promote uniformity of the law with respect to money transmission be given in applying and construing the provisions of this bill. Section 83 of this bill authorizes a person who is licensed on June 30, 2023, to engage in the business of selling or issuing checks or of receiving for transmission money or credits to continue engaging in such business in accordance with the provisions of existing law as they existed before July 1, 2023, until January 1, 2024. Section 84 repeals certain provisions relating to an agent of a licensee, certain qualifications for licensure and certain requirements imposed on licensees and their agents. Section 84 also repeals the definition of “check,” “licensee” and “Nationwide Multistate Licensing System and Registry.” Sections 14 and 22 of this bill, respectively, reenact the definitions of “licensee” and “Nationwide Multistate Licensing System and Registry.” Section 1 of this bill makes a conforming change to reflect the terminology used to describe persons licensed to engage in the business of money transmission as set forth in this bill.

Statutes affected:
As Introduced: 658.098, 671.020, 671.040, 671.050, 671.060, 671.070, 671.080, 671.092, 671.098, 671.100, 671.120, 671.140, 671.150, 671.170, 671.180, 671.185, 671.190, 239.010
Reprint 1: 658.098, 671.020, 671.040, 671.050, 671.060, 671.070, 671.080, 671.092, 671.098, 671.100, 671.120, 671.170, 671.180, 671.190, 239.010
As Enrolled: 658.098, 671.020, 671.040, 671.050, 671.060, 671.070, 671.080, 671.092, 671.098, 671.100, 671.120, 671.170, 671.180, 671.190, 239.010
BDR: 658.098, 671.020, 671.040, 671.050, 671.060, 671.070, 671.080, 671.092, 671.098, 671.100, 671.120, 671.140, 671.150, 671.170, 671.180, 671.185, 671.190, 239.010