Existing law provides for the licensure and regulation of various financial institutions by the Commissioner of Financial Institutions. (Title 55 of NRS) This bill provides for the licensure and regulation by the Commissioner of payments banks. Under section 70 of this bill, a payments bank, with certain exceptions, has all the powers, privileges and authorities that a state bank or national bank has, including, engaging in money transmission, engaging in activities concerning the maintenance of deposit accounts and the conducting of merchant acquiring activities, which section 18 of this bill defines to mean activities associated with effecting transactions within payment card networks. Section 70 prohibits a payments bank from making loans and engaging in various activities relating to loans. Sections 3-29 of this bill define words and terms for the purposes of this bill. Sections 30, 32-35, 37, 39 and 40 of this bill set forth various powers and duties of the Commissioner with respect to the licensure and regulation of payments banks. Section 31 of this bill prohibits an officer or employee of the Division of Financial Institutions from having certain involvement with a payments bank. Section 36 of this bill sets forth certain requirements for the provision of notices required under the provisions of this bill. Sections 38 and 43-45 of this bill set forth procedures and requirements for the organization and licensure of a payments bank. Section 41 of this bill requires a payments bank to pay to the Commissioner a fee equal to 0.0025 percent of each transaction effectuated through the merchant acquiring activities of the payments bank. Section 42 of this bill exempts a participant in the Regulatory Experimentation Program for Product Innovation from the provisions of this bill. Sections 46-49 of this bill require that: (1) the deposit accounts of a payments bank be insured by the Federal Deposit Insurance Corporation or a private insurer approved by the Commissioner and the Commissioner of Insurance; or (2) the payments bank obtain the approval of the Commissioner to operate without such insurance, in which case the payments bank must furnish a surety bond or pledge certain assets. Section 50 of this bill requires a payments bank to maintain bond coverage in an amount and form acceptable to the Commissioner. Sections 71 and 77 of this bill require a payments bank to maintain certain capital. Section 51 of this bill authorizes the Commissioner to require: (1) a payments bank to provide a letter of credit made payable to the Commissioner for the benefit of merchants; and (2) the holding company of a payments bank to provide a certain guaranty to the Commissioner to maintain certain minimum levels of capital. Section 52 of this bill authorizes a payments bank to establish and maintain offices in this State. Section 52 also requires a payments bank to provide certain notice to the Commissioner relating to a change in the location of any such office. Section 53 of this bill sets forth certain restrictions on advertising by a payments bank. Section 54 of this bill imposes restrictions on the use of a business name and the use of printed forms which may mislead or confuse the public. Sections 55-62 and 64-68 of this bill establish certain requirements and restrictions on the operations of the board of directors of a payments bank. Section 63 of this bill requires: (1) a payments bank to notify the Commissioner of certain changes or proposed changes in the ownership of the payments bank; and (2) the Commissioner to investigate such changes unless an exception applies. Sections 69, 70, 72, 73, 76, 79, 80, 82 and 83 of this bill set forth various powers of a payments bank. Section 78 of this bill sets forth the investments in which a payments bank is authorized to invest. Section 81 of this bill prohibits the aggregate amount of all borrowing of a payments bank from exceeding an amount which would impair the insurance of the deposit accounts of the payments bank, if any. Section 74 of this bill sets forth certain restrictions on the sale or issuance of certain stock of a payments bank, including by prohibiting a payments bank from selling or issuing such stock without a license issued by the Commission which authorizes the action. Section 75 of this bill sets forth provisions governing the issuance and renewal of any such license. Sections 84 and 85 of this bill require a payments bank to provide certain reports and information to the Commissioner. Sections 86-92 of this bill set forth various powers and duties of the Commissioner with respect to examinations of payments banks and other powers relating to the investigation and enforcement of the provisions of this bill. Sections 86 and 137 of this bill provide for the confidentiality of certain information obtained by the Commissioner. Section 93 of this bill requires a payments bank to obtain an annual audit at its own expense. Section 94 of this bill requires a payments bank to: (1) cooperate with any audits and examinations performed by the Commissioner; and (2) pay certain assessments related to such audits or examinations. Sections 95 and 96 of this bill authorize the Commissioner to take certain disciplinary actions against a payments bank. Section 97 of this bill sets forth requirements for the reorganization, merger or consolidation of a payments bank. Section 98 of this bill sets forth certain requirements for the voluntary liquidation of a payments bank. Sections 99-116 of this bill establish procedures and requirements for the liquidation of a payments bank whose deposit accounts are insured by the Federal Deposit Insurance Corporation. Section 117 of this bill establishes procedures and requirements for the reorganization of a dissolved payments bank. Sections 118-125 of this bill impose certain requirements upon a payments bank relating to the exploitation of older persons and vulnerable persons. Section 126 of this bill makes it a misdemeanor to make certain untrue and derogatory statements concerning a payments bank, or take certain similar actions, under certain circumstances. Section 127 of this bill imposes certain penalties upon a payments bank for engaging in certain prohibited acts. Sections 128-136 and 138 of this bill add references to payments banks and the provisions of this bill to various provisions of existing law pertaining to financial institutions so that payments banks are treated similarly to other financial institutions for certain purposes.

Statutes affected:
As Introduced: 657.037, 658.098, 659.125, 671.020, 52.450, 78.020, 78.045, 111.711, 162A.520, 239.010, 239A.030
BDR: 657.037, 658.098, 659.125, 671.020, 52.450, 78.020, 78.045, 111.711, 162A.520, 239.010, 239A.030