093_SB0024eng SB24 Engrossed LRB093 02172 JLS 03494 b 1 AN ACT concerning transmitters of money. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Transmitters of Money Act is amended by 5 changing Sections 5, 65, and 90 and adding Sections 37 and 93 6 as follows: 7 (205 ILCS 657/5) 8 Sec. 5. Definitions. As used in this Act, unless the 9 context otherwise requires, the words and phrases defined in 10 this Section have the meanings set forth in this Section. 11 "Authorized seller" means a person not an employee of a 12 licensee who engages in the business regulated by this Act on 13 behalf of a licensee under a contract between that person and 14 the licensee. 15 "Bill payment service" means the business of transmitting 16 money on behalf of an Illinois resident for the purpose of 17 paying the resident's bills. 18 "Controlling person" means a person owning or holding the 19 power to vote 25% or more of the outstanding voting 20 securities of a licensee or the power to vote the securities 21 of another controlling person of the licensee. For purposes 22 of determining the percentage of a licensee controlled by a 23 controlling person, the person's interest shall be combined 24 with the interest of any other person controlled, directly or 25 indirectly, by that person or by a spouse, parent, or child 26 of that person. 27 "Department" means the Department of Financial 28 Institutions. 29 "Director" means the Director of Financial Institutions. 30 "Licensee" means a person licensed under this Act. 31 "Location" means a place of business at which activity SB24 Engrossed -2- LRB093 02172 JLS 03494 b 1 regulated by this Act occurs. 2 "Material litigation" means any litigation that, 3 according to generally accepted accounting principles, is 4 deemed significant to a licensee's financial health and would 5 be required to be referenced in a licensee's annual audited 6 financial statements, reports to shareholders, or similar 7 documents. 8 "Money" means a medium of exchange that is authorized or 9 adopted by a domestic or foreign government as a part of its 10 currency and that is customarily used and accepted as a 11 medium of exchange in the country of issuance. 12 "Money transmitter" means a person who is located in or 13 doing business in this State and who directly or through 14 authorized sellers does any of the following in this State: 15 (1) Sells or issues payment instruments. 16 (2) Engages in the business of receiving money for 17 transmission or transmitting money. 18 (3) Engages in the business of exchanging, for 19 compensation, money of the United States Government or a 20 foreign government to or from money of another 21 government. 22 "Outstanding payment instrument" means, unless otherwise 23 treated by or accounted for under generally accepted 24 accounting principles on the books of the licensee, a payment 25 instrument issued by the licensee that has been sold in the 26 United States directly by the licensee or has been sold in 27 the United States by an authorized seller of the licensee and 28 reported to the licensee as having been sold, but has not 29 been paid by or for the licensee. 30 "Payment instrument" means a check, draft, money order, 31 traveler's check, stored value card, or other instrument or 32 memorandum, written order or written receipt for the 33 transmission or payment of money sold or issued to one or 34 more persons whether or not that instrument or order is SB24 Engrossed -3- LRB093 02172 JLS 03494 b 1 negotiable. Payment instrument does not include an 2 instrument that is redeemable by the issuer in merchandise or 3 service, a credit card voucher, or a letter of credit. A 4 written order for the transmission or payment of money that 5 results in the issuance of a check, draft, money order, 6 traveler's check, or other instrument or memorandum is not a 7 payment instrument. 8 "Person" means an individual, partnership, association, 9 joint stock association, corporation, or any other form of 10 business organization. 11 "Stored value card" means any magnetic stripe card or 12 other electronic payment instrument given in exchange for 13 money received, merchandise returned, or other consideration, 14 where the card or other electronic payment instrument 15 represents a dollar value that the consumer can either use or 16 give to another individual. 17 "Transmitting money" means the transmission of money by 18 any means, including transmissions to or from locations 19 within the United States or to and from locations outside of 20 the United States by payment instrument, facsimile or 21 electronic transfer, or otherwise, and includes bill payment 22 services. 23 (Source: P.A. 92-400, eff. 1-1-02.) 24 (205 ILCS 657/37 new) 25 Sec. 37. Display of disclosure notice. 26 (a) Each authorized seller shall conspicuously display a 27 disclosure notice supplied by the licensee. 28 (b) The disclosure notice shall contain all of the 29 following information: 30 (1) The name of the authorized seller's licensee 31 issuing the disclosure notice. 32 (2) The office or agent authorized to accept 33 service of process for the licensee and the office's or SB24 Engrossed -4- LRB093 02172 JLS 03494 b 1 agent's address and telephone number. 2 (3) A toll-free telephone number for the Department 3 of Financial Institutions which will provide customer 4 support for suspected violations of this Act. 5 (4) A statement that the authorization may be 6 revoked at any time by the licensee. 7 (c) A licensee shall notify the Department when an 8 authorized seller is no longer an authorized seller for the 9 licensee. An authorized seller who has been terminated shall 10 remove the disclosure notice from the premises within 10 11 business days after such termination. A terminated 12 authorized seller who wilfully and knowingly refuses to 13 remove the disclosure notice within 10 business days of 14 termination commits a Class B misdemeanor. 15 (d) If a customer of a former authorized seller 16 detrimentally relies on a disclosure notice that was not 17 removed, the former authorized seller shall be civilly liable 18 if the customer proves: (1) that the entity possessed the 19 disclosure notice beyond 10 business days from the 20 termination of authorization by the licensee, (2) that the 21 entity held itself out as an authorized seller, without 22 informing the customer that the seller was no longer 23 authorized by the licensee, (3) that the customer justifiably 24 relied upon the conspicuously displayed disclosure notice 25 formerly provided by the licensee, and (4) that the entity 26 engaged in the business of transmitting money after its 27 termination as an authorized seller. 28 (e) As used in this Section, "civil liability" means 29 liability for actual loss, reasonable attorney's fees, and 30 costs. 31 (205 ILCS 657/65) 32 Sec. 65. Notice of source of instrument; transaction 33 records. SB24 Engrossed -5- LRB093 02172 JLS 03494 b 1 (a) Every payment instrument sold through an authorized 2 seller shall bear the name of the licensee and a unique 3 consecutive number clearly stamped or imprinted on it. When 4 an order for the transmission of money results in the 5 issuance of a payment instrument, both the order and the 6 payment instrument may bear the same unique number. 7 (b) A licensee or authorized seller shall create a 8 record, which may be reduced to computer or other electronic 9 medium, upon receiving any money from a customer. 10 (c) For each payment instrument sold, the licensee shall 11 require the authorized seller to record the face amount of 12 the payment instrument and the serial number of the payment 13 instrument. 14 (d) For each transmission of money, the licensee or 15 authorized seller shall record the date the money was 16 received, the face amount of the payment instrument, the name 17 of the customer, the manner of transmission, including the 18 identity and location of any bank or other financial 19 institution receiving or otherwise involved in accomplishing 20 the transmission, the location to which the money is 21 transmitted if different from the bank or other financial 22 institution required to be recorded, the name of the intended 23 recipient, and the date the transmission was accomplished or 24 the money was refunded to the customer due to an inability to 25 transmit or failure of the intended recipient to receive or 26 obtain the money transmitted. The transmission shall be made 27 by the licensee or authorized seller within 3 business days 28 after the receipt of the money to be transmitted. The 29 licensee or authorized seller, in addition to the records 30 required to be kept, shall issue a receipt to each person 31 delivering or depositing money with the licensee or 32 authorized seller indicating the date of the transaction, the 33 face amount of the payment instrument, to whom the money is 34 to be transmitted, the service charge, and the name and SB24 Engrossed -6- LRB093 02172 JLS 03494 b 1 address of the licensee or authorized seller. The licensee 2 or authorized seller shall keep a copy of every receipt in a 3 permanent record book or maintain the data embodied in the 4 receipt using photographic, electronic, or other means. 5 (e) For each exchange of money of the United States 6 government or a foreign government to or from money of 7 another government, the licensee or authorized seller shall 8 record the date of the transaction, the amount of the 9 transaction, the amount of funds stated in currency received 10 by the recipient, and the rate of exchange at the time of the 11 transaction. The licensee or authorized seller, in addition 12 to the records required to be kept, shall issue a receipt to 13 each person delivering or depositing money with the licensee 14 or authorized seller indicating the date of the transaction, 15 the amount of the transaction, the service charge, and the 16 name and address of the licensee or authorized seller making 17 the transaction. The licensee or authorized seller shall 18 keep a copy of every receipt in a permanent record book or 19 maintain data embodied in the receipt using photographic, 20 electronic, or other means. 21 An authorized seller shall also include the following, 22 either on each receipt or a separate disclosure: "This 23 facility is an authorized seller of (insert name of licensee) 24 who is licensed under the Transmitters of Money Act. The 25 Department of Financial Institutions regulates licensed 26 transmitters of money. Consumers have certain protections 27 under that Act. For assistance regarding your transmission of 28 money, contact (insert telephone number), a toll-free 29 telephone number for the licensee which will provide customer 30 support for suspected violations of this Act, or call (insert 31 telephone number), a toll-free telephone number for the 32 Department of Financial Institutions which will provide 33 customer support for suspected violations of this Act.". An 34 inadvertent or non-wilful failure to give a consumer the SB24 Engrossed -7- LRB093 02172 JLS 03494 b 1 disclosure provided for in this Section shall not constitute 2 a violation of this Act. 3 (f) Records required to be kept by the licensee or 4 authorized seller under this Act shall be preserved for at 5 least 5 years or as required to comply with any other Act the 6 administration of which is vested in the Director. The 7 records shall be made available for examination in accordance 8 with Sections 55 and 60 of this Act. 9 (Source: P.A. 88-643, eff. 1-1-95.) 10 (205 ILCS 657/90) 11 Sec. 90. Enforcement. 12 (a) If it appears to the Director that a person has 13 committed or is about to commit a violation of this Act, a 14 rule promulgated under this Act, or an order of the Director, 15 the Director may apply to the circuit court for an order 16 enjoining the person from violating or continuing to violate 17 this Act, the rule, or order and for injunctive or other 18 relief that the nature of the case may require and may, in 19 addition, request the court to assess a civil penalty up to 20 $1,000 along with costs and attorney fees. 21 (b) If the Director finds, after an investigation that 22 he considers appropriate, that a licensee or other person is 23 engaged in practices contrary to this Act or to the rules 24 promulgated under this Act, the Director may issue an order 25 directing the licensee or person to cease and desist the 26 violation. The Director may, in addition to or without the 27 issuance of a cease and desist order, assess an 28 administrative penalty up to $1,000 against a licensee for 29 each violation of this Act or the rules promulgated under 30 this Act. The issuance of an order under this Section shall 31 not be a prerequisite to the taking of any action by the 32 Director under this or any other Section of this Act. The 33 Director shall serve notice of his action, including a SB24 Engrossed -8- LRB093 02172 JLS 03494 b 1 statement of the reasons for his actions, either personally 2 or by certified mail, return receipt requested. Service by 3 mail shall be deemed completed if the notice is deposited in 4 the post office, postage paid, addressed to the last known 5 address for a license. 6 (c) In the case of the issuance of a cease and desist 7 order or assessment order, a hearing may be requested in 8 writing within 30 days after the date of service. The 9 hearing shall be held at the time and place designated by the 10 Director in either the City of Springfield or the City of 11 Chicago. The Director and any administrative law judge 12 designated by him shall have the power to administer oaths 13 and affirmations, subpoena witnesses and compel their 14 attendance, take evidence, authorize the taking of 15 depositions, and require the production of books, papers, 16 correspondence, and other records or information that he 17 considers relevant or material to the inquiry. 18 (d) After the Director's final determination under a 19 hearing under this Section, a party to the proceedings whose 20 interests are affected by the Director's final determination 21 shall be entitled to judicial review of that final 22 determination under the Administrative Review Law. 23 (e) The costs for administrative hearings shall be set 24 by rule. 25 (f) Except as otherwise provided in this Act, a 26 violation of this Act shall subject to the party violating it 27 to a fine of $1,000 for each offense. 28 (g) Each transaction in violation of this Act or the 29 rules promulgated under this Act and each day that a 30 violation continues shall be a separate offense. 31 (h) A person who engages in conduct requiring a license 32 under this Act and fails to obtain a license from the 33 Director or knowingly makes a false statement, 34 misrepresentation, or false certification in an application, SB24 Engrossed -9- LRB093 02172 JLS 03494 b 1 financial statement, account record, report, or other 2 document filed or required to be maintained or filed under 3 this Act or who knowingly makes a false entry or omits a 4 material entry in a document is guilty of a Class 3 felony. 5 (i) The Director is authorized to compromise, settle, 6 and collect civil penalties and administrative penalties, as 7 set by rule, with any person for violations of this Act or of 8 any rule or order issued or promulgated under this Act. Any 9 person who, without the required license, engages in conduct 10 requiring a license under this Act shall be liable to the 11 Department in an amount equal to the greater of (i) $5,000 or 12 (ii) an amount of money accepted for transmission plus an 13 amount equal to 3 times the amount accepted for transmission. 14 The Department shall cause any funds so recovered to be 15 deposited in the TOMA Consumer Protection Fund. 16 (j) The Director may enter into consent orders at any 17 time with a person to resolve a matter arising under this 18 Act. A consent order must be signed by the person to whom it 19 is issued and must indicate agreement to the terms contained 20 in it. A consent order need not constitute an admission by a 21 person that this Act or a rule or order issued or promulgated 22 under this Act has been violated, nor need it constitute a 23 finding by the Director that the person has violated this Act 24 or a rule or order promulgated under this Act. 25 (k) Notwithstanding the issuance of a consent order, the 26 Director may seek civil or criminal penalties or compromise 27 civil penalties concerning matter encompassed by the consent 28 order unless the consent order by its terms expressly 29 precludes the Director from doing so. 30 (l) Appeals from all final orders and judgments entered 31 by the circuit court under this Section in review of a 32 decision of the Director may be taken as in other civil 33 actions by any party to the proceeding. 34 (Source: P.A. 88-643, eff. 1-1-95; 89-601, eff. 8-2-96.) SB24 Engrossed -10- LRB093 02172 JLS 03494 b 1 (205 ILCS 657/93 new) 2 Sec. 93. Consumer Protection Fund. 3 (a) A special income-earning fund is hereby created in 4 the State treasury, known as the TOMA Consumer Protection 5 Fund. 6 (b) All moneys paid into the fund together with all 7 accumulated undistributed income thereon shall be held as a 8 special fund in the State treasury. The fund shall be used 9 solely for the purpose of providing restitution to consumers 10 who have suffered monetary loss arising out of a transaction 11 regulated by this Act. 12 (c) The fund shall be applied only to restitution when 13 restitution has been ordered by the Director. Restitution 14 shall not exceed the amount actually lost by the consumer. 15 The fund shall not be used for the payment of any attorney or 16 other fees. 17 (d) The fund shall be subrogated to the amount of the 18 restitution, and the Director shall request the Attorney 19 General to engage in all reasonable collection steps to 20 collect restitution from the party responsible for the loss 21 and reimburse the fund. 22 (e) Notwithstanding any other provisions of this 23 Section, the payment of restitution from the fund shall be a 24 matter of grace and not of right, and no consumer shall have 25 any vested rights in the fund as a beneficiary or otherwise. 26 Before seeking restitution from the fund, the consumer or 27 beneficiary seeking payment of restitution shall apply for 28 restitution on a form provided by the Director. The form 29 shall include any information the Director may reasonably 30 require in order to determine that restitution is 31 appropriate. 32 Section 95. The State Finance Act is amended by adding 33 Section 5.595 as follows: SB24 Engrossed -11- LRB093 02172 JLS 03494 b 1 (30 ILCS 105/5.595 new) 2 Sec. 5.595. The TOMA Consumer Protection Fund.