PRINTER'S NO. 1883
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
1320
Session of
2024
INTRODUCED BY DiSANTO, STREET, VOGEL AND PHILLIPS-HILL,
SEPTEMBER 16, 2024
REFERRED TO BANKING AND INSURANCE, SEPTEMBER 16, 2024
AN ACT
Amending the act of September 2, 1965 (P.L.490, No.249),
entitled "An act providing for the licensing and regulation
of the business of transmitting money or credit for a fee or
other consideration by the issuance of money orders, by the
sale of checks or by other methods; conferring powers and
duties upon the Department of Banking and Securities; and
imposing penalties," further providing for title of act and
for definitions; providing for short title; and further
providing for license required, for exemptions, for
qualifications for a license, for fee, financial statement
and security, for liability of licensees, for licensee
requirements and for agents.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The title of the act of September 2, 1965
(P.L.490, No.249), referred to as the Money Transmission
Business Licensing Law, is amended to read:
AN ACT
Providing for the licensing and regulation of the business of
transmitting money, virtual currency or credit for a fee or
other consideration by the issuance of money orders, by the
sale of checks or by other methods; conferring powers and
duties upon the Department of Banking and Securities; and
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imposing penalties.
Section 2. The definitions of "agent" and "transmittal
instrument" in section 1 of the act are amended and the section
is amended by adding a definition to read:
Section 1. Definitions.--Unless the context clearly
indicates otherwise, the following words when used in this act
shall have the following meanings:
"Agent" means any person that provides money transmission or
virtual currency transmission services on behalf of another
person.
* * *
"Transmittal instrument" means any check, draft, money order,
personal money order, debit card, stored value card, electronic
transfer or other method for the payment of money or virtual
currency or transmittal of credit or virtual currency, other
than a merchandise gift certificate or instrument with a similar
purpose sold in the regular course of business by a vendor of
personal property or services in a closed loop system or hybrid
closed loop system.
"Virtual currency" means as follows:
(1) The term includes a digital representation of value
that:
(i) Is used as a medium of exchange, unit of account or
store of value.
(ii) Is not money, unless the virtual currency was adopted
or authorized by a domestic or international government as a
medium of exchange, whether denominated in cash.
(2) The term does not include:
(i) A transaction in which a merchant grants, as part of an
affinity or rewards program, value that cannot be taken from or
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exchanged with the merchant for money, bank credit or virtual
currency.
(ii) A digital representation of value issued by or on
behalf of a publisher and used solely within an online game,
game platform or family of games sold by the same publisher or
offered on the same game platform.
Section 3. The act is amended by adding a section to read:
Section 1.1. Short Title.-- This act shall be known and may
be cited as the Money Transmission and Virtual Currency
Transmission Business Licensing Law.
Section 4. Sections 2, 3(1), 4(a)(1) and (c)(5) introductory
paragraph, 6 heading and (a)(2) and (3) and (b.1), 11(a),
11.1(2), (3) and (4) and 12(b) and (c)(2), (3) and (6) of the
act are amended to read:
Section 2. License Required.--(a) No person shall [engage]:
(1) Engage in the business of transmitting money by means of
a transmittal instrument for a fee or other consideration with
or on behalf of an individual without first having obtained a
money transmission license from the department.
(2) Engage in the business of transmitting virtual currency
by means of a transmittal instrument for a fee or other
consideration with or on behalf of an individual without first
having obtained a virtual currency transmission license from the
department.
(b) This act does not apply to money transmission or virtual
currency transmission between business entities in connection
with commercial contracts, unless the contracts involve money
transmission or virtual currency transmission for personal or
household purposes involving individuals.
Section 3. Exemptions.--No license shall be required for any
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of the following:
(1) Banks, bank and trust companies, credit unions, savings
banks and [private banks] trust companies organized under the
laws of this Commonwealth; similar banking institutions
organized under the laws of the United States or of any other
state [which are insured by the Federal Deposit Insurance
Corporation]; similar credit unions organized under the laws of
the United States or another state[, and insured by the National
Credit Union Share Insurance Fund]; and savings and loan
associations and building and loan associations organized under
the laws of another state or of the United States; or their
affiliates or agents.
* * *
Section 4. Qualifications for a License.--(a) To qualify
for a license an applicant shall:
(1) have a tangible net worth of at least five hundred
thousand dollars ($500,000) as determined by audited financials
prepared in accordance with United States generally accepted
accounting principles; and
* * *
(c) The department may deny a license or otherwise restrict
a license if it finds that the applicant, or a director,
officer, partner, employee, agent or ultimate equitable owner of
ten percent or more of the applicant:
* * *
(5) does not possess the financial responsibility,
character, reputation, integrity and general fitness to command
confidence of the public to warrant the belief that the money
transmission or virtual currency transmission business will be
operated lawfully, honestly, fairly and within the legislative
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intent of this act and in accordance with the general laws of
this Commonwealth. For purposes of this clause, an applicant is
not financially responsible if the applicant has shown a
disregard in the management of the applicant's own financial
condition. The factors that the department may consider in
making a determination regarding an applicant's financial
responsibility shall include:
* * *
Section 6. Fee, Financial Statement and Security Bond.--(a)
Each application for a license shall be accompanied by:
* * *
(2) a financial statement showing a tangible net worth of at
least five hundred thousand dollars ($500,000) as determined by
audited financials prepared in accordance with United States
generally accepted accounting principles;
(3) a bond in the penal sum of one million dollars
($1,000,000) executed by a surety company authorized to transact
business within the Commonwealth of Pennsylvania [or securities
as provided in the following subsection]. The bond shall run to
the Commonwealth of Pennsylvania and shall be for the use of the
Commonwealth and of any person or persons who may have a cause
of action against the licensee for failure to carry out the
terms of any transmittal instrument which the licensee shall
have issued and who were residents of the Commonwealth of
Pennsylvania at the time the cause of action arose. The
condition of the bond shall be that the licensee will comply
with and abide by the provisions of this act and the rules and
regulations of the department lawfully promulgated under this
act and that the licensee will pay to the Commonwealth, to the
department or to any other person any moneys that may become due
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from the licensee to the Commonwealth or to the department or to
any other person under the provisions of this act or of any
transmittal instrument issued by the licensee within this
Commonwealth and who were residents of the Commonwealth of
Pennsylvania at the time the cause of action arose. If any
person shall be aggrieved by the misconduct of any licensee, he
may upon recovering judgment against such licensee, issue
execution under such judgment and maintain an action upon the
bond of the licensee in any court having jurisdiction of the
amount claimed, provided the department assents thereto.
(b.1) If the department, in its discretion, shall determine
the bond [or deposit of securities] provided for in clause (3)
of subsection (a) is not adequate, the department may, after an
examination and a consent agreement or order, require an
additional bond in an amount up to the average daily outstanding
balance of money received for transmission in this Commonwealth
during the thirty days preceding the department's requirement
plus an additional ten percent of the amount of the average
daily outstanding balance subject to the same conditions and the
same right of execution provided for in clause (3) of subsection
(a).
* * *
Section 11. Liability of Licensees.--(a) Every licensee
shall be liable for the payment of all moneys or virtual
currency covered by transmittal instruments which he issues in
this Commonwealth whether directly or through an agent and
whether as a maker or a drawer.
* * *
Section 11.1. Licensee Requirements.--A licensee shall:
* * *
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(2) Comply with all applicable Federal or State laws and
rules pertaining to the business of money transmission[.] or
virtual currency transmission, including 12 U.S.C. Ch. 21
(relating to financial recordkeeping) and 31 U.S.C. Ch. 53
(relating to monetary transactions).
(3) Register all of its agents who engage in the business of
money transmission or virtual currency transmission involving
individuals who are located in this Commonwealth.
(4) On a date determined by the department, file a report
setting forth such information as the department shall require
concerning the money transmission or virtual currency
transmission business conducted by the licensee. Licensees who
fail to file the required report by the date required by the
department may be subject to a penalty of one hundred dollars
($100) for each day after the due date until the report is
filed.
* * *
Section 12. Agents.--* * *
(b) An agent engaged in the business of money transmission
or virtual currency transmission under subsection (a) or subject
to an exemption under section 3 shall be appointed pursuant to a
written agreement between the agent and the person on whose
behalf the agent is acting.
(c) The written agreement shall contain at least the
following provisions:
* * *
(2) The agent is acting on behalf of the person employing
the agent's service for the transmission of money or virtual
currency.
(3) The agent is subject to the control of the person on
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whose behalf the agent is acting, meaning that the licensee or
exempted person takes complete financial responsibility for the
money or virtual currency being transmitted from the moment an
individual initiates the transmission of money or virtual
currency until the intended recipient receives the transmitted
money or virtual currency.
* * *
(6) The agent may not provide money transmission or virtual
currency transmission outside the scope of activity permissible
under the written agreement between the agent and the person on
whose behalf the agent is acting except to the extent that the
agent is licensed itself or operating as an agent for another
person.
* * *
Section 5. This act shall take effect in 60 days.
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