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
 
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 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
 
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 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
 
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 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.
 
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 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
 
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 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
 
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 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.