Illinois General Assembly - Full Text of SB0024
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Full Text of SB0024  93rd General Assembly

SB0024sam002 93rd General Assembly


093_SB0024sam002

 










                                     LRB093 02172 JLS 14391 a

 1                     AMENDMENT TO SENATE BILL 24

 2        AMENDMENT NO.     .  Amend Senate Bill 24, AS AMENDED, by
 3    replacing everything  after  the  enacting  clause  with  the
 4    following:

 5        "Section  5.  The Transmitters of Money Act is amended by
 6    changing Sections 5, 65, and 90 and adding Sections 37 and 93
 7    as follows:

 8        (205 ILCS 657/5)
 9        Sec. 5.  Definitions.  As used in this  Act,  unless  the
10    context  otherwise requires, the words and phrases defined in
11    this Section have the meanings set forth in this Section.
12        "Authorized seller" means a person not an employee  of  a
13    licensee who engages in the business regulated by this Act on
14    behalf of a licensee under a contract between that person and
15    the licensee.
16        "Bill payment service" means the business of transmitting
17    money  on  behalf  of an Illinois resident for the purpose of
18    paying the resident's bills.
19        "Controlling person" means a person owning or holding the
20    power  to  vote  25%  or  more  of  the  outstanding   voting
21    securities  of a licensee or the power to vote the securities
22    of another controlling person of the licensee.  For  purposes
 
                            -2-      LRB093 02172 JLS 14391 a
 1    of  determining  the percentage of a licensee controlled by a
 2    controlling person, the person's interest shall  be  combined
 3    with the interest of any other person controlled, directly or
 4    indirectly,  by  that person or by a spouse, parent, or child
 5    of that person.
 6        "Department"   means   the   Department   of    Financial
 7    Institutions.
 8        "Director" means the Director of Financial Institutions.
 9        "Licensee" means a person licensed under this Act.
10        "Location"  means  a  place of business at which activity
11    regulated by this Act occurs.
12        "Material  litigation"   means   any   litigation   that,
13    according  to  generally  accepted  accounting principles, is
14    deemed significant to a licensee's financial health and would
15    be required to be referenced in a licensee's  annual  audited
16    financial  statements,  reports  to  shareholders, or similar
17    documents.
18        "Money" means a medium of exchange that is authorized  or
19    adopted  by a domestic or foreign government as a part of its
20    currency and that is  customarily  used  and  accepted  as  a
21    medium of exchange in the country of issuance.
22        "Money  transmitter"  means a person who is located in or
23    doing business in this State  and  who  directly  or  through
24    authorized sellers does any of the following in this State:
25             (1)  Sells or issues payment instruments.
26             (2)  Engages  in the business of receiving money for
27        transmission or transmitting money.
28             (3)  Engages in  the  business  of  exchanging,  for
29        compensation,  money of the United States Government or a
30        foreign  government  to  or   from   money   of   another
31        government.
32        "Outstanding  payment instrument" means, unless otherwise
33    treated  by  or  accounted  for  under   generally   accepted
34    accounting principles on the books of the licensee, a payment
 
                            -3-      LRB093 02172 JLS 14391 a
 1    instrument  issued  by the licensee that has been sold in the
 2    United States directly by the licensee or has  been  sold  in
 3    the United States by an authorized seller of the licensee and
 4    reported  to  the  licensee  as having been sold, but has not
 5    been paid by or for the licensee.
 6        "Payment instrument" means a check, draft,  money  order,
 7    traveler's  check,  stored value card, or other instrument or
 8    memorandum,  written  order  or  written  receipt   for   the
 9    transmission  or  payment  of  money sold or issued to one or
10    more persons whether or  not  that  instrument  or  order  is
11    negotiable.    Payment   instrument   does   not  include  an
12    instrument that is redeemable by the issuer in merchandise or
13    service, a credit card voucher, or a  letter  of  credit.   A
14    written  order  for the transmission or payment of money that
15    results in the issuance  of  a  check,  draft,  money  order,
16    traveler's  check, or other instrument or memorandum is not a
17    payment instrument.
18        "Person" means an individual,  partnership,  association,
19    joint  stock  association,  corporation, or any other form of
20    business organization.
21        "Stored value card" means any  magnetic  stripe  card  or
22    other  electronic  payment  instrument  given in exchange for
23    money received, merchandise returned, or other consideration,
24    where  the  card  or  other  electronic  payment   instrument
25    represents a dollar value that the consumer can either use or
26    give to another individual.
27        "Transmitting  money"  means the transmission of money by
28    any means,  including  transmissions  to  or  from  locations
29    within  the United States or to and from locations outside of
30    the  United  States  by  payment  instrument,  facsimile   or
31    electronic  transfer, or otherwise, and includes bill payment
32    services.
33    (Source: P.A. 92-400, eff. 1-1-02.)
 
                            -4-      LRB093 02172 JLS 14391 a
 1        (205 ILCS 657/37 new)
 2        Sec. 37.  Display of disclosure notice.
 3        (a)  Each authorized seller shall conspicuously display a
 4    disclosure notice supplied by the licensee.
 5        (b)  The disclosure  notice  shall  contain  all  of  the
 6    following information:
 7             (1)  The  name  of  the authorized seller's licensee
 8        issuing the disclosure notice.
 9             (2)  The  office  or  agent  authorized  to   accept
10        service  of  process for the licensee and the office's or
11        agent's address and telephone number.
12             (3)  A toll-free telephone number for the Department
13        of Financial Institutions  which  will  provide  customer
14        support for suspected violations of this Act.
15             (4)  A  statement  that  the  authorization  may  be
16        revoked at any time by the licensee.
17        (c)  A  licensee  shall  notify  the  Department  when an
18    authorized seller is no longer an authorized seller  for  the
19    licensee.  An authorized seller who has been terminated shall
20    remove the disclosure notice  from  the  premises  within  10
21    business   days   after   such   termination.   A  terminated
22    authorized seller  who  wilfully  and  knowingly  refuses  to
23    remove  the  disclosure  notice  within  10  business days of
24    termination commits a Class B misdemeanor.
25        (d)  If  a  customer  of  a  former   authorized   seller
26    detrimentally  relies  on  a  disclosure  notice that was not
27    removed, the former authorized seller shall be civilly liable
28    if the customer proves: (1) that  the  entity  possessed  the
29    disclosure   notice   beyond   10   business  days  from  the
30    termination of authorization by the licensee,  (2)  that  the
31    entity  held  itself  out  as  an  authorized seller, without
32    informing  the  customer  that  the  seller  was  no   longer
33    authorized by the licensee, (3) that the customer justifiably
34    relied  upon  the  conspicuously  displayed disclosure notice
 
                            -5-      LRB093 02172 JLS 14391 a
 1    formerly provided by the licensee, and (4)  that  the  entity
 2    engaged  in  the  business  of  transmitting  money after its
 3    termination as an authorized seller.
 4        (e)  As used in  this  Section  "civil  liability"  means
 5    liability  for  actual  loss, reasonable attorney's fees, and
 6    costs.

 7        (205 ILCS 657/65)
 8        Sec. 65.  Notice of  source  of  instrument;  transaction
 9    records.
10        (a)  Every  payment instrument sold through an authorized
11    seller shall bear the name  of  the  licensee  and  a  unique
12    consecutive  number clearly stamped or imprinted on it.  When
13    an order  for  the  transmission  of  money  results  in  the
14    issuance  of  a  payment  instrument,  both the order and the
15    payment instrument may bear the same unique number.
16        (b)  A licensee  or  authorized  seller  shall  create  a
17    record,  which may be reduced to computer or other electronic
18    medium, upon receiving any money from a customer.
19        (c)  For each payment instrument sold, the licensee shall
20    require the authorized seller to record the  face  amount  of
21    the  payment  instrument and the serial number of the payment
22    instrument.
23        (d)  For each transmission  of  money,  the  licensee  or
24    authorized  seller  shall  record  the  date  the  money  was
25    received, the face amount of the payment instrument, the name
26    of  the  customer,  the manner of transmission, including the
27    identity  and  location  of  any  bank  or  other   financial
28    institution  receiving or otherwise involved in accomplishing
29    the  transmission,  the  location  to  which  the  money   is
30    transmitted  if  different  from  the bank or other financial
31    institution required to be recorded, the name of the intended
32    recipient, and the date the transmission was accomplished  or
33    the money was refunded to the customer due to an inability to
 
                            -6-      LRB093 02172 JLS 14391 a
 1    transmit  or  failure of the intended recipient to receive or
 2    obtain the money transmitted.  The transmission shall be made
 3    by the licensee or authorized seller within 3  business  days
 4    after  the  receipt  of  the  money  to  be transmitted.  The
 5    licensee or authorized seller, in  addition  to  the  records
 6    required  to  be  kept,  shall issue a receipt to each person
 7    delivering  or  depositing  money  with   the   licensee   or
 8    authorized seller indicating the date of the transaction, the
 9    face  amount  of the payment instrument, to whom the money is
10    to be transmitted, the  service  charge,  and  the  name  and
11    address  of  the licensee or authorized seller.  The licensee
12    or authorized seller shall keep a copy of every receipt in  a
13    permanent  record  book  or maintain the data embodied in the
14    receipt using photographic, electronic, or other means.
15        (e)  For each exchange of  money  of  the  United  States
16    government  or  a  foreign  government  to  or  from money of
17    another government, the licensee or authorized  seller  shall
18    record  the  date  of  the  transaction,  the  amount  of the
19    transaction, the amount of funds stated in currency  received
20    by the recipient, and the rate of exchange at the time of the
21    transaction.   The licensee or authorized seller, in addition
22    to the records required to be kept, shall issue a receipt  to
23    each  person delivering or depositing money with the licensee
24    or authorized seller indicating the date of the  transaction,
25    the  amount  of  the transaction, the service charge, and the
26    name and address of the licensee or authorized seller  making
27    the  transaction.   The  licensee  or authorized seller shall
28    keep a copy of every receipt in a permanent  record  book  or
29    maintain  data  embodied  in  the receipt using photographic,
30    electronic, or other means.
31        An authorized seller shall also  include  the  following,
32    either  on  each  receipt  or  a  separate  disclosure: "This
33    facility is an authorized seller of (insert name of licensee)
34    who is licensed under the  Transmitters  of  Money  Act.  The
 
                            -7-      LRB093 02172 JLS 14391 a
 1    Department   of  Financial  Institutions  regulates  licensed
 2    transmitters of money.  Consumers  have  certain  protections
 3    under that Act. For assistance regarding your transmission of
 4    money,   contact   (insert  telephone  number),  a  toll-free
 5    telephone number for the licensee which will provide customer
 6    support for suspected violations of this Act, or call (insert
 7    telephone number),  a  toll-free  telephone  number  for  the
 8    Department  of  Financial  Institutions  which  will  provide
 9    customer  support for suspected violations of this Act.".  An
10    inadvertent or non-wilful failure  to  give  a  consumer  the
11    disclosure  provided for in this Section shall not constitute
12    a violation of this Act.
13        (f)  Records required to  be  kept  by  the  licensee  or
14    authorized  seller  under  this Act shall be preserved for at
15    least 5 years or as required to comply with any other Act the
16    administration of which  is  vested  in  the  Director.   The
17    records shall be made available for examination in accordance
18    with Sections 55 and 60 of this Act.
19    (Source: P.A. 88-643, eff. 1-1-95.)

20        (205 ILCS 657/90)
21        Sec. 90.  Enforcement.
22        (a)  If  it  appears  to  the  Director that a person has
23    committed or is about to commit a violation of  this  Act,  a
24    rule promulgated under this Act, or an order of the Director,
25    the  Director  may  apply  to  the circuit court for an order
26    enjoining the person from violating or continuing to  violate
27    this  Act,  the  rule,  or  order and for injunctive or other
28    relief that the nature of the case may require  and  may,  in
29    addition,  request  the court to assess a civil penalty up to
30    $1,000 along with costs and attorney fees.
31        (b)  If the Director finds, after an  investigation  that
32    he  considers appropriate, that a licensee or other person is
33    engaged in practices contrary to this Act  or  to  the  rules
 
                            -8-      LRB093 02172 JLS 14391 a
 1    promulgated  under  this Act, the Director may issue an order
 2    directing the licensee or person  to  cease  and  desist  the
 3    violation.   The  Director may, in addition to or without the
 4    issuance  of  a   cease   and   desist   order,   assess   an
 5    administrative  penalty  up  to $1,000 against a licensee for
 6    each violation of this Act or  the  rules  promulgated  under
 7    this  Act.  The issuance of an order under this Section shall
 8    not be a prerequisite to the taking  of  any  action  by  the
 9    Director  under  this  or any other Section of this Act.  The
10    Director shall  serve  notice  of  his  action,  including  a
11    statement  of  the reasons for his actions, either personally
12    or by certified mail, return receipt requested.   Service  by
13    mail  shall be deemed completed if the notice is deposited in
14    the post office, postage paid, addressed to  the  last  known
15    address for a license.
16        (c)  In  the  case  of the issuance of a cease and desist
17    order or assessment order, a  hearing  may  be  requested  in
18    writing  within  30  days  after  the  date  of service.  The
19    hearing shall be held at the time and place designated by the
20    Director in either the City of Springfield  or  the  City  of
21    Chicago.   The  Director  and  any  administrative  law judge
22    designated by him shall have the power  to  administer  oaths
23    and   affirmations,   subpoena  witnesses  and  compel  their
24    attendance,  take   evidence,   authorize   the   taking   of
25    depositions,  and  require  the  production of books, papers,
26    correspondence, and other  records  or  information  that  he
27    considers relevant or material to the inquiry.
28        (d)  After  the  Director's  final  determination under a
29    hearing under this Section, a party to the proceedings  whose
30    interests  are affected by the Director's final determination
31    shall  be  entitled  to  judicial  review   of   that   final
32    determination under the Administrative Review Law.
33        (e)  The  costs  for administrative hearings shall be set
34    by rule.
 
                            -9-      LRB093 02172 JLS 14391 a
 1        (f)  Except  as  otherwise  provided  in  this   Act,   a
 2    violation of this Act shall subject to the party violating it
 3    to a fine of $1,000 for each offense.
 4        (g)  Each  transaction  in  violation  of this Act or the
 5    rules  promulgated  under  this  Act  and  each  day  that  a
 6    violation continues shall be a separate offense.
 7        (h)  A person who engages in conduct requiring a  license
 8    under  this  Act  and  fails  to  obtain  a  license from the
 9    Director   or   knowingly   makes    a    false    statement,
10    misrepresentation,  or false certification in an application,
11    financial  statement,  account  record,  report,   or   other
12    document  filed  or  required to be maintained or filed under
13    this Act or who knowingly makes a  false  entry  or  omits  a
14    material entry in a document is guilty of a Class 3 felony.
15        (i)  The  Director  is  authorized to compromise, settle,
16    and collect civil penalties and administrative penalties,  as
17    set by rule, with any person for violations of this Act or of
18    any  rule  or order issued or promulgated under this Act. Any
19    person who, without the required license, engages in  conduct
20    requiring  a  license  under  this Act shall be liable to the
21    Department in an amount equal to the greater of (i) $5,000 or
22    (ii) an amount of money accepted  for  transmission  plus  an
23    amount equal to 3 times the amount accepted for transmission.
24    The  Department  shall  cause  any  funds  so recovered to be
25    deposited in the TOMA Consumer Protection Fund.
26        (j)  The Director may enter into consent  orders  at  any
27    time  with  a  person  to resolve a matter arising under this
28    Act.  A consent order must be signed by the person to whom it
29    is issued and must indicate agreement to the terms  contained
30    in it.  A consent order need not constitute an admission by a
31    person that this Act or a rule or order issued or promulgated
32    under  this  Act  has been violated, nor need it constitute a
33    finding by the Director that the person has violated this Act
34    or a rule or order promulgated under this Act.
 
                            -10-     LRB093 02172 JLS 14391 a
 1        (k)  Notwithstanding the issuance of a consent order, the
 2    Director may seek civil or criminal penalties  or  compromise
 3    civil  penalties concerning matter encompassed by the consent
 4    order  unless  the  consent  order  by  its  terms  expressly
 5    precludes the Director from doing so.
 6        (l)  Appeals from all final orders and judgments  entered
 7    by  the  circuit  court  under  this  Section  in review of a
 8    decision of the Director may  be  taken  as  in  other  civil
 9    actions by any party to the proceeding.
10    (Source: P.A. 88-643, eff. 1-1-95; 89-601, eff. 8-2-96.)

11        (205 ILCS 657/93 new)
12        Sec. 93.  Consumer Protection Fund.
13        (a)  A  special  income-earning fund is hereby created in
14    the State treasury, known as  the  TOMA  Consumer  Protection
15    Fund.
16        (b)  All  moneys  paid  into  the  fund together with all
17    accumulated undistributed income thereon shall be held  as  a
18    special  fund  in the State treasury.  The fund shall be used
19    solely for the purpose of providing restitution to  consumers
20    who  have suffered monetary loss arising out of a transaction
21    regulated by this Act.
22        (c)  The fund shall be applied only to  restitution  when
23    restitution  has  been  ordered  by the Director. Restitution
24    shall not exceed the amount actually lost  by  the  consumer.
25    The fund shall not be used for the payment of any attorney or
26    other fees.
27        (d)  The  fund  shall  be subrogated to the amount of the
28    restitution, and the  Director  shall  request  the  Attorney
29    General  to  engage  in  all  reasonable  collection steps to
30    collect restitution from the party responsible for  the  loss
31    and reimburse the fund.
32        (e)  Notwithstanding   any   other   provisions  of  this
33    Section, the payment of restitution from the fund shall be  a
 
                            -11-     LRB093 02172 JLS 14391 a
 1    matter  of grace and not of right, and no consumer shall have
 2    any vested rights in the fund as a beneficiary or  otherwise.
 3    Before  seeking  restitution  from  the fund, the consumer or
 4    beneficiary seeking payment of restitution  shall  apply  for
 5    restitution  on  a  form  provided by the Director.  The form
 6    shall include any information  the  Director  may  reasonably
 7    require   in   order   to   determine   that  restitution  is
 8    appropriate.

 9        Section 95.  The State Finance Act is amended  by  adding
10    Section 5.595 as follows:

11        (30 ILCS 105/5.595 new)
12        Sec. 5.595.  The TOMA Consumer Protection Fund.".