Public Act 93-0535

SB24 Enrolled                        LRB093 02172 JLS 03494 b

    AN ACT concerning transmitters of money.

    Be it  enacted  by  the  People  of  the  State  of  Illinois,
represented in the General Assembly:

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

    (205 ILCS 657/5)
    Sec.  5.  Definitions.   As  used in this Act, unless the
context otherwise requires, the words and phrases defined  in
this Section have the meanings set forth in this Section.
    "Authorized  seller"  means a person not an employee of a
licensee who engages in the business regulated by this Act on
behalf of a licensee under a contract between that person and
the licensee.
    "Bill payment service" means the business of transmitting
money on behalf of an Illinois resident for  the  purpose  of
paying the resident's bills.
    "Controlling person" means a person owning or holding the
power   to  vote  25%  or  more  of  the  outstanding  voting
securities of a licensee or the power to vote the  securities
of  another controlling person of the licensee.  For purposes
of determining the percentage of a licensee controlled  by  a
controlling  person,  the person's interest shall be combined
with the interest of any other person controlled, directly or
indirectly, by that person or by a spouse, parent,  or  child
of that person.
    "Department"    means   the   Department   of   Financial
Institutions.
    "Director" means the Director of Financial Institutions.
    "Licensee" means a person licensed under this Act.
    "Location" means a place of business  at  which  activity
regulated by this Act occurs.
    "Material   litigation"   means   any   litigation  that,
according to generally  accepted  accounting  principles,  is
deemed significant to a licensee's financial health and would
be  required  to be referenced in a licensee's annual audited
financial statements, reports  to  shareholders,  or  similar
documents.
    "Money"  means a medium of exchange that is authorized or
adopted by a domestic or foreign government as a part of  its
currency  and  that  is  customarily  used  and accepted as a
medium of exchange in the country of issuance.
    "Money transmitter" means a person who is located  in  or
doing  business  in  this  State  and who directly or through
authorized sellers does any of the following in this State:
         (1)  Sells or issues payment instruments.
         (2)  Engages in the business of receiving money  for
    transmission or transmitting money.
         (3)  Engages  in  the  business  of  exchanging, for
    compensation, money of the United States Government or  a
    foreign   government   to   or   from  money  of  another
    government.
    "Outstanding payment instrument" means, unless  otherwise
treated   by   or  accounted  for  under  generally  accepted
accounting principles on the books of the licensee, a payment
instrument issued by the licensee that has been sold  in  the
United  States  directly  by the licensee or has been sold in
the United States by an authorized seller of the licensee and
reported to the licensee as having been  sold,  but  has  not
been paid by or for the licensee.
    "Payment  instrument"  means a check, draft, money order,
traveler's check, stored value card, or other  instrument  or
memorandum,   written   order  or  written  receipt  for  the
transmission or payment of money sold or  issued  to  one  or
more  persons  whether  or  not  that  instrument or order is
negotiable.   Payment  instrument   does   not   include   an
instrument that is redeemable by the issuer in merchandise or
service,  a  credit  card  voucher, or a letter of credit.  A
written order for the transmission or payment of  money  that
results  in  the  issuance  of  a  check, draft, money order,
traveler's check, or other instrument or memorandum is not  a
payment instrument.
    "Person"  means  an individual, partnership, association,
joint stock association, corporation, or any  other  form  of
business organization.
    "Stored  value  card"  means  any magnetic stripe card or
other electronic payment instrument  given  in  exchange  for
money  and  other  similar  consideration,  including but not
limited to checks,  debit  payments,  money  orders,  drafts,
credit  payments,  and  traveler's  checks, where the card or
other electronic payment instrument represents a dollar value
that  the  consumer  can  either  use  or  give  to   another
individual.
    "Transmitting  money"  means the transmission of money by
any means,  including  transmissions  to  or  from  locations
within  the United States or to and from locations outside of
the  United  States  by  payment  instrument,  facsimile   or
electronic  transfer, or otherwise, and includes bill payment
services.
(Source: P.A. 92-400, eff. 1-1-02.)

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

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

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

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

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

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