093_SB0024enr

SB24 Enrolled                        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  and  other  similar  consideration,  including but not
14    limited to checks,  debit  payments,  money  orders,  drafts,
15    credit  payments,  and  traveler's  checks, where the card or
16    other electronic payment instrument represents a dollar value
17    that  the  consumer  can  either  use  or  give  to   another
18    individual.
19        "Transmitting  money"  means the transmission of money by
20    any means,  including  transmissions  to  or  from  locations
21    within  the United States or to and from locations outside of
22    the  United  States  by  payment  instrument,  facsimile   or
23    electronic  transfer, or otherwise, and includes bill payment
24    services.
25    (Source: P.A. 92-400, eff. 1-1-02.)

26        (205 ILCS 657/37 new)
27        Sec. 37.  Display of disclosure notice.
28        (a)  Each authorized seller shall conspicuously display a
29    disclosure notice supplied by  the  licensee;  each  licensee
30    that   transmits  money  directly  shall  also  conspicuously
31    display a disclosure notice.
32        (b)  The disclosure notice shall  contain  the  following
33    information:
 
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 1             (1)  In  the  case of an authorized seller only, the
 2        name of the  authorized  seller's  licensee  issuing  the
 3        disclosure notice.
 4             (2)  A toll-free telephone number for the Department
 5        of  Financial  Institutions  which  will provide customer
 6        support for suspected violations of this Act.
 7             (3)  A  statement  that  the  authorization  may  be
 8        revoked at any time by the licensee.
 9        (c)  A licensee shall notify  the  Department  within  30
10    days  when  an  authorized  seller is no longer an authorized
11    seller for the licensee. An authorized seller  who  has  been
12    terminated  shall  remove  the  disclosure  notice  from  the
13    premises  within  10 business days after such termination.  A
14    terminated  authorized  seller  who  wilfully  and  knowingly
15    refuses to remove the disclosure notice  within  10  business
16    days of termination commits a Class B misdemeanor.
17        (d)  If   a   customer  of  a  former  authorized  seller
18    detrimentally relies on a  disclosure  notice  that  was  not
19    removed, the former authorized seller shall be civilly liable
20    if  the  customer  proves:  (1) that the entity possessed the
21    disclosure  notice  beyond  10   business   days   from   the
22    termination  of  authorization  by the licensee, (2) that the
23    entity held itself  out  as  an  authorized  seller,  without
24    informing   the  customer  that  the  seller  was  no  longer
25    authorized by the licensee, (3) that the customer justifiably
26    relied upon the  conspicuously  displayed  disclosure  notice
27    formerly  provided  by  the licensee, and (4) that the entity
28    engaged in the  business  of  transmitting  money  after  its
29    termination as an authorized seller.
30        (e)  As  used  in  this  Section, "civil liability" means
31    liability for actual loss, reasonable  attorney's  fees,  and
32    costs.

33        (205 ILCS 657/65)
 
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 1        Sec.  65.  Notice  of  source  of instrument; transaction
 2    records.
 3        (a)  Every payment instrument other than a  stored  value
 4    card sold through an authorized seller shall bear the name of
 5    the  licensee and a unique consecutive number clearly stamped
 6    or imprinted on it.  When an order for  the  transmission  of
 7    money  results  in the issuance of a payment instrument, both
 8    the order and the payment instrument may bear the same unique
 9    number.
10        (b)  A licensee  or  authorized  seller  shall  create  a
11    record,  which may be reduced to computer or other electronic
12    medium, upon receiving any money from a customer.
13        (c)  For each payment  instrument  other  than  a  stored
14    value  card  sold,  the licensee shall require the authorized
15    seller to record the face amount of  the  payment  instrument
16    and the serial number of the payment instrument.
17        (d)  For  each  transmission  of  money,  the licensee or
18    authorized  seller  shall  record  the  date  the  money  was
19    received, the face amount of the payment instrument, the name
20    of the customer, the manner of  transmission,  including  the
21    identity   and  location  of  any  bank  or  other  financial
22    institution receiving or otherwise involved in  accomplishing
23    the   transmission,  the  location  to  which  the  money  is
24    transmitted if different from the  bank  or  other  financial
25    institution required to be recorded, the name of the intended
26    recipient,  and the date the transmission was accomplished or
27    the money was refunded to the customer due to an inability to
28    transmit or failure of the intended recipient to  receive  or
29    obtain the money transmitted.  The transmission shall be made
30    by  the  licensee or authorized seller within 3 business days
31    after the receipt  of  the  money  to  be  transmitted.   The
32    licensee  or  authorized  seller,  in addition to the records
33    required to be kept, shall issue a  receipt  to  each  person
34    delivering   or   depositing   money  with  the  licensee  or
 
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 1    authorized seller indicating the date of the transaction, the
 2    face amount of the payment instrument, to whom the  money  is
 3    to  be  transmitted,  the  service  charge,  and the name and
 4    address of the licensee or authorized seller. The receipt  or
 5    a  separate  disclosure at the time of the money transmission
 6    shall also include  a  statement  of  the  licensee's  refund
 7    procedures  as  well  as  a  toll-free  telephone  number for
 8    customer assistance.  An inadvertent or non-wilful failure to
 9    give a consumer the disclosure provided for in  this  Section
10    shall not constitute a violation of this Act. The licensee or
11    authorized  seller  shall  keep  a copy of every receipt in a
12    permanent record book or maintain the data  embodied  in  the
13    receipt using photographic, electronic, or other means.
14        (e)  For  each  exchange  of  money  of the United States
15    government or a  foreign  government  to  or  from  money  of
16    another  government,  the licensee or authorized seller shall
17    record the  date  of  the  transaction,  the  amount  of  the
18    transaction,  the amount of funds stated in currency received
19    by the recipient, and the rate of exchange at the time of the
20    transaction.  The licensee or authorized seller, in  addition
21    to  the records required to be kept, shall issue a receipt to
22    each person delivering or depositing money with the  licensee
23    or  authorized seller indicating the date of the transaction,
24    the amount of the transaction, the service  charge,  and  the
25    name  and address of the licensee or authorized seller making
26    the transaction.  The licensee  or  authorized  seller  shall
27    keep  a  copy  of every receipt in a permanent record book or
28    maintain data embodied in  the  receipt  using  photographic,
29    electronic, or other means.
30        (f)  Records  required  to  be  kept  by  the licensee or
31    authorized seller under this Act shall be  preserved  for  at
32    least 5 years or as required to comply with any other Act the
33    administration  of  which  is  vested  in  the Director.  The
34    records shall be made available for examination in accordance
 
SB24 Enrolled              -7-       LRB093 02172 JLS 03494 b
 1    with Sections 55 and 60 of this Act.
 2    (Source: P.A. 88-643, eff. 1-1-95.)

 3        (205 ILCS 657/90)
 4        Sec. 90.  Enforcement.
 5        (a)  If it appears to the  Director  that  a  person  has
 6    committed  or  is  about to commit a violation of this Act, a
 7    rule promulgated under this Act, or an order of the Director,
 8    the Director may apply to the  circuit  court  for  an  order
 9    enjoining  the person from violating or continuing to violate
10    this Act, the rule, or order  and  for  injunctive  or  other
11    relief  that  the  nature of the case may require and may, in
12    addition, request the court to assess a civil penalty  up  to
13    $1,000 along with costs and attorney fees.
14        (b)  If  the  Director finds, after an investigation that
15    he considers appropriate, that a licensee or other person  is
16    engaged  in  practices  contrary  to this Act or to the rules
17    promulgated under this Act, the Director may issue  an  order
18    directing  the  licensee  or  person  to cease and desist the
19    violation.  The Director may, in addition to or  without  the
20    issuance   of   a   cease   and   desist   order,  assess  an
21    administrative penalty up to $1,000 against  a  licensee  for
22    each  violation  of  this  Act or the rules promulgated under
23    this Act. The issuance of an order under this  Section  shall
24    not  be  a  prerequisite  to  the taking of any action by the
25    Director under this or any other Section of  this  Act.   The
26    Director  shall  serve  notice  of  his  action,  including a
27    statement of the reasons for his actions,  either  personally
28    or  by  certified mail, return receipt requested.  Service by
29    mail shall be deemed completed if the notice is deposited  in
30    the  post  office,  postage paid, addressed to the last known
31    address for a license.
32        (c)  In the case of the issuance of a  cease  and  desist
33    order  or  assessment  order,  a  hearing may be requested in
 
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 1    writing within 30  days  after  the  date  of  service.   The
 2    hearing shall be held at the time and place designated by the
 3    Director  in  either  the  City of Springfield or the City of
 4    Chicago.  The  Director  and  any  administrative  law  judge
 5    designated  by  him  shall have the power to administer oaths
 6    and  affirmations,  subpoena  witnesses  and   compel   their
 7    attendance,   take   evidence,   authorize   the   taking  of
 8    depositions, and require the  production  of  books,  papers,
 9    correspondence,  and  other  records  or  information that he
10    considers relevant or material to the inquiry.
11        (d)  After the Director's  final  determination  under  a
12    hearing  under this Section, a party to the proceedings whose
13    interests are affected by the Director's final  determination
14    shall   be   entitled   to  judicial  review  of  that  final
15    determination under the Administrative Review Law.
16        (e)  The costs for administrative hearings shall  be  set
17    by rule.
18        (f)  Except   as   otherwise  provided  in  this  Act,  a
19    violation of this Act shall subject to the party violating it
20    to a fine of $1,000 for each offense.
21        (g)  Each transaction in violation of  this  Act  or  the
22    rules  promulgated  under  this  Act  and  each  day  that  a
23    violation continues shall be a separate offense.
24        (h)  A  person who engages in conduct requiring a license
25    under this Act  and  fails  to  obtain  a  license  from  the
26    Director    or    knowingly    makes   a   false   statement,
27    misrepresentation, or false certification in an  application,
28    financial   statement,   account  record,  report,  or  other
29    document filed or required to be maintained  or  filed  under
30    this  Act  or  who  knowingly  makes a false entry or omits a
31    material entry in a document is guilty of a Class 3 felony.
32        (i)  The Director is authorized  to  compromise,  settle,
33    and  collect civil penalties and administrative penalties, as
34    set by rule, with any person for violations of this Act or of
 
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 1    any rule or order issued or promulgated under this  Act.  Any
 2    person  who, without the required license, engages in conduct
 3    requiring a license under this Act shall  be  liable  to  the
 4    Department in an amount equal to the greater of (i) $5,000 or
 5    (ii)  an  amount  of  money accepted for transmission plus an
 6    amount equal to 3 times the amount accepted for transmission.
 7    The Department shall cause  any  funds  so  recovered  to  be
 8    deposited in the TOMA Consumer Protection Fund.
 9        (j)  The  Director  may  enter into consent orders at any
10    time with a person to resolve a  matter  arising  under  this
11    Act.  A consent order must be signed by the person to whom it
12    is  issued and must indicate agreement to the terms contained
13    in it.  A consent order need not constitute an admission by a
14    person that this Act or a rule or order issued or promulgated
15    under this Act has been violated, nor need  it  constitute  a
16    finding by the Director that the person has violated this Act
17    or a rule or order promulgated under this Act.
18        (k)  Notwithstanding the issuance of a consent order, the
19    Director  may  seek civil or criminal penalties or compromise
20    civil penalties concerning matter encompassed by the  consent
21    order  unless  the  consent  order  by  its  terms  expressly
22    precludes the Director from doing so.
23        (l)  Appeals  from all final orders and judgments entered
24    by the circuit court  under  this  Section  in  review  of  a
25    decision  of  the  Director  may  be  taken as in other civil
26    actions by any party to the proceeding.
27    (Source: P.A. 88-643, eff. 1-1-95; 89-601, eff. 8-2-96.)

28        (205 ILCS 657/93 new)
29        Sec. 93.  Consumer Protection Fund.
30        (a)  A special income-earning fund is hereby  created  in
31    the  State  treasury,  known  as the TOMA Consumer Protection
32    Fund.
33        (b)  All moneys paid into  the  fund  together  with  all
 
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 1    accumulated  undistributed  income thereon shall be held as a
 2    special fund in the State treasury.  The fund shall  be  used
 3    solely  for the purpose of providing restitution to consumers
 4    who have suffered monetary loss arising out of a  transaction
 5    regulated by this Act.
 6        (c)  The  fund  shall be applied only to restitution when
 7    restitution has been ordered  by  the  Director.  Restitution
 8    shall  not  exceed  the amount actually lost by the consumer.
 9    The fund shall not be used for the payment of any attorney or
10    other fees.
11        (d)  The fund shall be subrogated to the  amount  of  the
12    restitution,  and  the  Director  shall  request the Attorney
13    General to engage  in  all  reasonable  collection  steps  to
14    collect  restitution  from the party responsible for the loss
15    and reimburse the fund.
16        (e)  Notwithstanding  any  other   provisions   of   this
17    Section,  the payment of restitution from the fund shall be a
18    matter of grace and not of right, and no consumer shall  have
19    any  vested rights in the fund as a beneficiary or otherwise.
20    Before seeking restitution from the  fund,  the  consumer  or
21    beneficiary  seeking  payment  of restitution shall apply for
22    restitution on a form provided by  the  Director.   The  form
23    shall  include  any  information  the Director may reasonably
24    require  in  order   to   determine   that   restitution   is
25    appropriate.

26        Section  95.   The State Finance Act is amended by adding
27    Section 5.595 as follows:

28        (30 ILCS 105/5.595 new)
29        Sec. 5.595.  The TOMA Consumer Protection Fund.