Relating to money transmission services, providing penalties, and including effective date and retroactive applicability provisions

The bill authorizes the superintendent of banking (superintendent) to suspend or revoke a license, place a licensee in receivership, or order a licensee to revoke the designation of an authorized delegate (delegate) in the circumstances described in the bill. The bill authorizes the superintendent to issue an order suspending or revoking the designation of a delegate in the circumstances detailed in the bill. A delegate whose designation has been suspended or revoked may apply for relief from the suspension or revocation according to the procedures prescribed by the superintendent. The bill establishes the procedure for issuance of orders to cease and desist by the superintendent. The superintendent may issue an order requiring a licensee or delegate to cease and desist from a violation if the superintendent determines that the violation is likely to cause immediate and irreparable harm to the licensee, the licensee’s customers, or the public, or cause insolvency or significant dissipation of assets of the licensee. Where a delegate is the subject of a separate order by the superintendent, the superintendent may issue an order for the licensee to cease and desist from providing money transmission through such delegate.502 should not be issued. In an emergency, the superintendent may petition the district court for a temporary restraining order ex parte. An order to cease and desist is effective upon service and remains effective and enforceable pending the completion of an administrative proceeding. A person, licensee, or delegate served with an order to cease and desist may petition the court for an order setting aside, limiting, or suspending the enforcement, operation, or effectiveness of the order pending the completion of an administrative proceeding. An order to cease and desist expires days after issuance unless an administrative proceeding is commenced by the superintendent. The superintendent may enter into a consent order with a person to resolve a matter arising under Code chapter 533C. The consent order must be signed by the person or the person’s authorized representative and indicate agreement with the terms contained in the order. The bill authorizes the attorney general or a county attorney to conduct investigations to determine if any licensee, delegate, or person engaged in a trade or business has failed to file a required report, or has engaged in any act, practice, or transaction that constitutes a violation of Code chapter 533C. Upon presentation of a subpoena from a person specified in the bill, all licensees, delegates, and financial institutions shall make their books and records available during normal business hours for inspection and examination in connection with an investigation. The bill authorizes the superintendent to assess civil penalties against a person for violation of Code chapter 533C in an amount not to exceed $1,000 per day for each day of the violation, plus costs and expenses for the investigation and prosecution, and reasonable attorney fees. Under the bill, a person commits an aggravated misdemeanor if the person is not licensed and knowingly engages in an activity for which a license is required, punishable by confinement for no more than two years and a fine of at least $855 but not more than $8,540. A person commits a class “C” felony, and is subject to a civil penalty of three times the value of the property involved in the transaction, or $5,000, where, with the requisite intent as laid out in the bill, the person knowingly furnishes or provides to a given party any false, inaccurate, or incomplete information; knowingly conceals a material fact in connection with a transaction for which a report is required to be filed; or, with the requisite intent laid out in the bill, conducts or structures a transaction by or through a licensee, delegate, financial institution, or persons engaged in a trade or business. A class “C” felony is punishable by confinement for no more than years and a fine of at least $1,370 but not more than $13,660. A person commits a class “D” felony if the person intentionally makes a false statement, misrepresentation, or false certification in a record filed or required to be maintained under Code chapter 533C or intentionally makes a false entry or omits a material entry in such a record. A class “D” felony is punishable by confinement for no more than five years and a fine of at least $1,025 but not more than $10,245. Each violation constitutes a separate, punishable offense. The bill prohibits the superintendent from suspending or revoking a license, placing a licensee in receivership, issuing an order to cease and desist, suspending or revoking the designation of a delegate, or assessing a civil penalty without notice and an opportunity to be heard. The superintendent is required to hold a hearing when requested to do so by an applicant whose application for a license is denied. The bill shall be construed to effectuate both its remedial and general purposes. Civil remedies are supplemental and not mutually exclusive, and are not precluded by any other provision of law. The attorney general may enter into reciprocal agreements with the attorney general or chief prosecuting attorney of any state to effectuate the purposes of the bill. The bill creates a separate financial services licensing fund (fund) in the state treasury under the authority of the banking division of the department of commerce. Moneys deposited in the fund shall be used to pay for staffing necessary to perform duties required of the superintendent and the banking division. Moneys appropriated or credited to the fund remain in the financial services licensing fund and remain available for expenditure for the designated purposes.103, the bill applies retroactively to July 1, 2023. The bill takes effect upon enactment.