Connecticut General Statutes, Chapter 668 (incl. §§ 36a-596 definitions and 36a-613 virtual currency kiosks) (Part 3 of 4)

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as provided in section 36a-485.

(7) “Unique identifier” has the same meaning as provided in section 36a-485.

(b) The provisions of this section and sections 36a-581 to 36a-589, inclusive, shall not apply to: (1) Checks, drafts or money orders cashed without consideration or charge; (2) checks, drafts or money orders cashed as an incident to the conduct of any other lawful business where not more than fifty cents is charged for cashing such check, draft or money order; or (3) any institution subject to and under the general supervision of any agency of the United States or any Connecticut bank or Connecticut credit union.

(P.A. 88-200, S. 1; P.A. 94-122, S. 269, 340; P.A. 95-253, S. 12, 19; P.A. 05-192, S. 1; P.A. 06-35, S. 3; P.A. 17-233, S. 16; P.A. 18-173, S. 42.)

History: Sec. 21-111 transferred to Sec. 36-564 in 1991; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-564 transferred to Sec. 36a-580 in 1995; P.A. 95-253 added the definitions of “general facility” and “limited facility” as Subsec. (a) and designated prior provisions as Subsec. (b), effective July 6, 1995; P.A. 05-192 amended Subsec. (b)(3) to substitute “bank” for “entity”; P.A. 06-35 amended Subsec. (b)(3) to exempt Connecticut credit unions from licensure as check cashing licensees and to make a technical change, effective May 8, 2006; P.A. 17-233 amended Subsec. (a) by adding new Subdiv. (1) defining “advertise” or “advertising”, adding new Subdiv. (2) defining “control person” and redesignating existing Subdivs. (1) and (2) as Subdivs. (3) and (4); P.A. 18-173 amended Subsec. (a) by adding new Subdiv. (2) re definition of “branch office”, redesignating existing Subdivs. (2) to (4) as Subdivs. (3) to (5), and adding Subdivs. (6) and (7) re definitions of “main office” and “unique identifier”, respectively.

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Sec. 36a-581. (Formerly Sec. 36-565). License required. Application. Criminal history records check. Change in information. Required system filing or notice to commissioner. Authority of commissioner to deny application for license. Abandonment of application. (a) Except as provided for in section 36a-580, no person shall engage in the business of cashing checks, drafts or money orders for consideration without obtaining a general facility license for its main office and a general or limited facility license for each branch office location where such business is to be conducted. Any activity subject to licensure pursuant to sections 36a-580 to 36a-589, inclusive, shall be conducted from an office located in the state, as defined in section 36a-2.

(b) Each licensee of a limited facility shall continuously maintain at least one operating general facility. A licensee of a limited facility shall not pay any compensation or consideration to any employer.

(c) An application for a check cashing license or renewal of such license shall be made and processed on the system pursuant to section 36a-24b, in the form provided by the commissioner. Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purposes of sections 36a-580 to 36a-589, inclusive. The applicant shall, at minimum, furnish to the system information concerning the identity of the applicant, any control person of the applicant, the qualified individual and any branch manager responsible for the actions of the licensee, including, but not limited to, information related to such person's personal history and experience, and any administrative, civil or criminal findings by any governmental jurisdiction relating to such person. Each application for an initial license shall also include: (1) Each location where the check cashing business is to be conducted and the type of facility that will be operated at that location; (2) the business plan of each location, which shall include the proposed days and hours of operation; (3) the amount of liquid assets available for each location, which shall not be less than the amount specified in subdivision (4) of subsection (e) of this section; (4) for each limited facility, a copy of the executed contract evidencing the proposed arrangement between the applicant and the employer; and (5) any other information that the commissioner may require. As part of an application, the commissioner may (A) in accordance with section 29-17a, conduct a state or national criminal history records check of the applicant, any control person of the applicant, the qualified individual and any branch manager, and (B) in accordance with section 36a-24b, (i) require the submission of fingerprints of the applicant, any control person of the applicant, the qualified individual and any branch manager to the Federal Bureau of Investigation or other state, national or international criminal databases, and (ii) investigate the financial condition of each such person and require authorization of each such person for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time.

(d) (1) No licensee may use any name other than its legal name or a fictitious name approved by the commissioner, provided such licensee may not use its legal name if the commissioner disapproves use of such name. No licensee shall use any name and address other than the name and address specified on the license issued by the commissioner. A licensee may change the name of the licensee or address of the office specified on the most recent filing with the system if, at least thirty calendar days prior to such change, the licensee files such change with the system and the commissioner does not disapprove such change, in writing, or request further information from the licensee within such thirty-day period.

(2) A licensee of a limited facility shall not change its approved days and hours of operation, unless the licensee files an amendment on the system at least thirty days prior to the effective date of such change and receives the approval of the commissioner.

(e) Upon the filing of the required application, the applicable license fee and any other required fees or charges, the commissioner shall investigate the facts and may issue a license if the commissioner finds that (1) the applicant and the applicant's control persons, qualified individual and any branch managers are in all respects properly qualified and of good character, including, but not limited to, financial character, (2) granting such license would not be against the public interest, (3) the applicant has a feasible plan for conducting business, (4) the applicant has available and shall continuously maintain liquid assets of at least ten thousand dollars for each general facility location and at least two thousand five hundred dollars for each limited facility location specified in the application, and (5) the name of the applicant is not likely to cause a consumer to reasonably believe that such applicant is in any way endorsed by or affiliated with this state. If the commissioner fails to make such findings or if the commissioner finds that the applicant has made any material misstatement in the application, the commissioner shall not issue a license and shall notify the applicant of the denial and the reasons for such denial. The commissioner may deny an application if the commissioner finds that the applicant or any control person, qualified individual or branch manager of the applicant has been convicted of any misdemeanor involving any aspect of the check cashing services business, or any felony. Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80.

(f) Except as otherwise specified in subdivision (1) of subsection (a) of section 36a-583 and subdivision (1) of subsection (d) of this section, each check cashing applicant or licensee and each individual designated as a control person, qualified individual or branch manager of such applicant or licensee shall file on the system any change in the information such licensee, applicant, control person, qualified individual or branch manager most recently submitted to the system in connection with the application or license, or, if the information cannot be filed on the system, notify the commissioner, in writing, not later than fifteen days after the date such applicant, licensee, control person, qualified individual or branch manager had reason to know of the change. A check cashing licensee shall file with the system or, if the information cannot be filed on the system, notify the commissioner, in writing, of the occurrence of any of the following developments not later than fifteen days after the date the licensee had reason to know of the development:

(1) Filing for bankruptcy or the consummation of a corporate restructuring of the licensee;

(2) Filing of a criminal indictment against the licensee in any way related to the check cashing activities of the licensee, or receiving notification of the filing of any criminal felony indictment or felony conviction of any control person, branch manager or qualified individual of the licensee;

(3) Receiving notification of the institution of license denial, cease and desist, suspension or revocation procedures, or other formal or informal action by any governmental agency against the licensee or any control person, branch manager or qualified individual of the licensee and the reasons therefor;

(4) Receiving notification of the initiation of any action against the licensee or any control person, branch manager or qualified individual of the licensee by the Attorney General or the attorney general of any other state and the reasons therefor;

(5) Receiving notification of filing for bankruptcy of any control person, branch manager or qualified individual of the licensee; or

(6) Any decrease in the amount of liquid assets available for each location below the minimum amount required pursuant to subdivision (4) of subsection (e) of this section.

(g) The commissioner may deem an application for a license for a general facility or limited facility abandoned if the applicant fails to respond to any request for information required under sections 36a-580 to 36a-589, inclusive, or any regulations adopted pursuant to said sections 36a-580 to 36a-589, inclusive. The commissioner shall notify the applicant on the system that if such information is not submitted not later than sixty days after such request, the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license under sections 36a-580 to 36a-589, inclusive.

(h) The minimum standards for renewal of a check cashing license shall include the following: (1) The applicant continues to meet the minimum standards under subsection (c) of this section; (2) the applicant has paid all required fees for renewal of the license; and (3) the applicant has paid any outstanding examination fees or other moneys due to the commissioner. The license of a check cashing licensee failing to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system. Each license shall remain in force and effect until the license has been surrendered, revoked or suspended or has expired in accordance with the provisions of sections 36a-580 to 36a-589, inclusive.

(P.A. 88-200, S. 2; P.A. 89-178, S. 2, 8; P.A. 91-11, S. 1; P.A. 94-122, S. 270, 340; P.A. 95-253, S. 13, 19; P.A. 04-14, S. 1; P.A. 05-46, S. 8; 05-288, S. 223; P.A. 06-35, S. 4; P.A. 08-119, S. 8, 9; P.A. 09-208, S. 10, 12; 09-209, S. 40; P.A. 11-216, S. 34; P.A. 17-233, S. 34; P.A. 18-173, S. 43.)

History: P.A. 89-178 substituted the commissioner of banking for the commissioner of consumer protection in Subsec. (a); Sec. 21-112 transferred to Sec. 36-565 in 1991; P.A. 91-11 amended Subsec. (c) to insert Subdiv. indicators, adding provisions to require the commissioner, prior to issuing a license, to find a need in the community for the services to be provided by the applicant and that the applicant has a feasible business plan; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-565 transferred to Sec. 36a-581 in 1995; P.A. 95-253 amended Subsec. (a) to provide for separate licenses for general and limited facilities, added a new Subsec. (b) to require a licensee of a limited facility to maintain at least one general facility, relettered Subsec. (b) as (c) and amended Subsec. (c) by providing for the form of application and by adding Subdivs. (4) to (7), inclusive, re the contents of the application, added a new Subsec. (d) re change in location, in type of facility or in time of operation, relettered Subsec. (c) as (e) and amended Subsec. (e) by adding new Subdivs. (2) and (3) re applications by firms, partnerships or corporations, deleting former Subdiv. (3) re need for services, renumbering Subdivs. (4) and (5) as (5) and (6), respectively, and adding a fee for each limited facility in Subdiv. (6), effective July 6, 1995; P.A. 04-14 amended Subsec. (c) to insert new Subdiv. (4) requiring application to set forth the names and addresses of each manager and authorized agent if applicant is a limited liability company and to redesignate existing Subdivs. (4) to (8) as Subdivs. (5) to (9), respectively, amended Subsec. (d) to restate provisions and require approval of the commissioner for application for change in location, to provide that licensee of limited facility shall not change approved days and hours of operation unless licensee files application with and receives approval of commissioner, and to eliminate prohibition re change in the type of facility, amended Subsec. (e) to insert new Subdiv. (4) authorizing commissioner to issue license if commissioner finds that each manager and authorized agent is in all respects properly qualified and of good character if applicant is a limited liability company and to redesignate existing Subdivs. (4) to (6) as Subdivs. (5) to (7), respectively, and added Subsec. (f) requiring applicant or licensee to notify commissioner of any change in information provided; P.A. 05-46 amended Subsec. (d) to prohibit licensee from changing the name specified on license unless licensee files application, pays applicable name change fee specified in Sec. 36a-582 and receives approval of commissioner; P.A. 05-288 made a technical change in Subsec. (c)(7), effective July 13, 2005; P.A. 06-35 amended Subsec. (d) to prohibit licensee from using any name other than the name specified on the license issued by commissioner, and amended Subsec. (e) to delete reference to application fees and to insert reference to location fees; P.A. 08-119 amended Subsec. (c)(4) and Subsec. (e)(4) by replacing “manager” with “member”; P.A. 09-208 amended Subsec. (c) by adding new Subdiv. (5) requiring license application to include a history of criminal convictions and by redesignating existing Subdivs. (5) to (9) as Subdivs. (6) to (10), and amended Subsec. (e) by authorizing commissioner to deny application based on certain criminal convictions, effective July 7, 2009; P.A. 09-209 made a technical change, effective July 9, 2009; P.A. 11-216 amended Subsec. (c) to delete provision re ten-year period re history of criminal convictions and add provision authorizing commissioner to conduct state and national criminal history records check of applicant and each member, officer, director, authorized agent and shareholder owning at least 10% of outstanding stock of applicant, amended Subsec. (e) to delete provision re ten-year period re misdemeanor and felony convictions, and added Subsec. (g) re abandonment of application; P.A. 17-233 amended Subsec. (e) by adding Subdiv. (8) re name of applicant not likely to cause consumer to believe applicant is endorsed or affiliated with this state, and making a technical change; P.A. 18-173 amended Subsec. (a) by adding “general facility”, replacing “to operate a general facility or a license to operate a limited facility” with “for its main office and a general or limited facility license”, adding “branch office” and adding provision re licensed activity to be conducted from an office in the state, amended Subsec. (c) by replacing “in writing, under oath on a” with “made and processed on the system pursuant to section 36a-24b in the”, adding provision re content of form, deleting former Subdivs. (1) to (10) re application requirements, adding new Subdivs. (1) to (5) re same, adding provisions re commissioner's authority to conduct background checks, require submission of fingerprints and investigate financial condition of certain persons, amended Subsec. (d) by deleting provisions re change to licensee's name and location specified on license, change to limited facility's approved days and hours of operation, and licensee's use of name other than name specified on license, adding Subdiv. (1) re use of and change to name and address of licensee, and adding Subdiv. (2) re change to approved days and hours of operation, amended Subsec. (e) by replacing “license and location fees” with “license fee and any other required fees or charges”, adding “and the applicant's control persons, qualified individual and any branch managers are” and “including, but not limited to, financial character” in Subdiv. (1), deleting former Subdivs. (2) to (4) re if applicant is a firm or partnership, a corporation, or a limited liability company, respectively, redesignating existing Subdivs. (5) to (7) as Subdivs. (2) to (5), adding provision re commissioner's failure to make certain findings or findings of material misstatement in application, replacing “or any member, officer, director, or authorized agent or shareholder owning ten per cent or more of the outstanding stock of the applicant” with “or any control person, qualified individual or branch manager of the applicant”, amended Subsec. (f) by replacing existing provisions re notification by applicant or licensee, adding provisions re filing certain information on the system or notification to commissioner, amended Subsec. (g) by replacing “in writing” with “on the system” and replacing “36a-560” with “36a-580”, added Subsec. (h) re check cashing license, and made technical and conforming changes.

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Sec. 36a-582. (Formerly Sec. 36-566). License and location fees. Automatic suspension of license or renewal license. Notice. Opportunity for hearing. Expenses of examination. (a) Each applicant for a check cashing license shall pay to the system any required fees or charges and a nonrefundable initial license fee of one thousand one hundred dollars. Each license issued pursuant to section 36a-581 shall expire at the close of business on December thirty-first of the year in which the license is approved, unless such license is renewed, except that any such license approved on or after November first shall expire at the close of business on December thirty-first of the year following the year in which it is approved. An application for renewal of a license shall be filed between November first and December thirty-first of the year in which such license expires. Each applicant for the renewal of such license shall pay to the system any required fees or charges and a nonrefundable renewal fee of eight hundred dollars.

(b) The commissioner may, in accordance with section 36a-24b, automatically suspend the license of any licensee who has received a deficiency on the system indicating that a required payment was Returned-ACH or returned pursuant to any other term as may be utilized by the system to indicate that payment was not accepted. After a license has been automatically suspended pursuant to this subsection, the commissioner shall (1) give the licensee notice of such automatic suspension pending proceedings for revocation of or refusal to renew the license pursuant to section 36a-587 and an opportunity for a hearing in accordance with section 36a-51, and (2) require the licensee to take or refrain from taking action as the commissioner deems necessary to effectuate the purpose of this section.

(c) Each licensee shall pay the expenses of any examination or other investigation under sections 36a-580 to 36a-589, inclusive.

(d) No abatement of any fee required by this section shall be made if the application is denied or withdrawn prior to issuance of the license or if the license is surrendered, cancelled, revoked or suspended prior to the expiration of the period for which it was issued.

(P.A. 88-200, S. 3; P.A. 89-178, S. 3, 8; P.A. 92-89, S. 16, 20; P.A. 94-122, S. 271, 340; P.A. 95-253, S. 14, 19; P.A. 04-14, S. 2; 04-257, S. 106; P.A. 05-46, S. 9; P.A. 06-35, S. 5; P.A. 09-208, S. 11; P.A. 18-173, S. 44.)

History: P.A. 89-178 substituted the commissioner of banking for the commissioner of consumer protection in Subsec. (a); Sec. 21-113 transferred to Sec. 36-566 in 1991; P.A. 92-89 increased the license fees in Subsec. (a) from $250 to $1,000; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-566 transferred to Sec. 36a-582 in 1995; P.A. 95-253 amended Subsec. (a) to change the license fee and renewal license fee and to add application and location transfer fees, and made technical changes to Subsecs. (b) and (c), effective July 6, 1995; P.A. 04-14 inserted new Subsec. (b), requiring commissioner to automatically suspend license or approval or renewal license if commissioner determines that a check filed to pay an application or license fee has been dishonored and requiring commissioner to give notice of the automatic suspension pending proceedings for revocation or refusal to renew and an opportunity for a hearing in accordance with Sec. 36a-51, and providing that if commissioner determines a check filed to pay a location transfer fee has been dishonored, commissioner shall automatically suspend the location transfer approval pending revocation of such approval by commissioner and an opportunity for a hearing in accordance with Sec. 36a-51, and redesignated existing Subsecs. (b) and (c) as Subsecs. (c) and (d), respectively; P.A. 04-257 made a technical change in Subsec. (a); P.A. 05-46 amended Subsec. (a) to add Subdiv. (1) re nonrefundable name change fee of $100 for each application to change a name and to designate provision re location transfer fee as Subdiv. (2), amended Subsec. (b) to delete requirement for automatic suspension of location transfer approval if commissioner determines that check filed with commissioner to pay location transfer fee has been dishonored, and amended Subsec. (d) to delete provision re no abatement of location transfer fee; P.A. 06-35 amended Subsec. (a) to revise procedures and fees for application, renewal and expiration of licenses, changing period of validity of licenses from one to two years, deleting reference to application fee and inserting references to license and location fees, and imposing a $100 late fee for late filings of renewal applications, and amended Subsecs. (b) and (d) to delete reference to application fee and insert reference to location fee; P.A. 09-208 made a technical change in Subsec. (a), effective July 7, 2009; P.A. 18-173 amended Subsec. (a) by replacing “commissioner” with “system any required fees or charges and”, changing initial license fee from $2,000 to $1,100, deleting provision re nonrefundable location fee, deleting provision re fees when application is filed not earlier than one year before license expiration, deleting provisions re nonrefundable fees in former Subdivs. (1) and (2) and replacing provisions re license expiration and renewal with provisions re same, amended Subsec. (b) by replacing provisions re automatic suspension of license with provisions re same, amended Subsec. (c) by deleting “applicant or”, amended Subsec. (d) by replacing “the license or location fee” with “any fee required by this section” and adding “application is denied or withdrawn prior to issuance of the license or if the”, and made technical and conforming changes.

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Sec. 36a-583. (Formerly Sec. 36-567). License not transferable or assignable. Change in control person. Automatic suspension. Surrender of license. (a)(1) A license issued under section 36a-581 shall not be transferable or assignable. A change in any control person of the licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or change of control of the licensee, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall occur without the commissioner's approval. For purposes of this section, “change of control” means any change causing the majority ownership, voting rights or control of a licensee to be held by a different control person or group of control persons.

(2) The commissioner may automatically suspend any license for a violation of subdivision (1) of this subsection or for a violation of subdivision (1) of subsection (d) of section 36a-581. After a license has been automatically suspended pursuant to this subsection, the commissioner shall (A) give the licensee notice of the automatic suspension, pending proceedings for revocation of or refusal to renew the license pursuant to section 36a-587 and an opportunity for a hearing in accordance with section 36a-51, and (B) require the licensee to take or refrain from taking action as the commissioner deems necessary to effectuate the purpose of this section.

(b) Not later than fifteen days after the date a licensee ceases to engage in this state in the business of cashing checks, drafts or money orders for consideration at a general facility or limited facility for any reason, including, but not limited to, a business decision to terminate operations in this state, license revocation, bankruptcy or voluntary dissolution, such licensee shall surrender, in accordance with subsection (c) of section 36a-51, its license for each location in which such licensee has ceased to engage in such business.

(P.A. 88-200, S. 4; P.A. 95-253, S. 15, 19; P.A. 08-119, S. 10; P.A. 18-173, S. 45; P.A. 21-138, S. 10.)

History: Sec. 21-114 transferred to Sec. 36-567 in 1991; Sec. 36-567 transferred to Sec. 36a-583 in 1995; P.A. 95-253 made technical changes re the contents, location and timing of the postings, effective July 6, 1995; P.A. 08-119 added requirement for surrender of license when licensee ceases to engage in the business of cashing checks, drafts or money orders for consideration; P.A. 18-173 designated existing provisions re license not transferable or assignable as Subsec. (a)(1) and substantially amended same by deleting provision re license to be conspicuously posted in facility, adding reference to Sec. 36a-581 and adding provision re change in control person of licensee, added Subsec. (a)(2) re automatic suspension of license, designated existing provisions re surrender of license as Subsec. (b) and amended same by replacing “to the commissioner in person or by registered or certified mail” with “in accordance with subsection (c) of section 36a-51”, and made technical and conforming changes; P.A. 21-138 defined “change of control” in Subsec. (a)(1).

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Sec. 36a-584. (Formerly Sec. 36-568). Maximum fees for the cashing of state checks. Regulations. Maximum amount of check that may be cashed by check cashing licensee. Exceptions. Report. (a) A check cashing licensee shall not charge or collect in fees, charges or otherwise, a sum in excess of one per cent of the check for cashing a check drawn by the state of Connecticut and payable within this state to a recipient of public assistance, as provided in section 36a-304, if the check is negotiated to the licensee by the original payee of the check, and if the payee produces reasonable identification, as provided for in regulations adopted pursuant to section 36a-305.

(b) No check cashing licensee shall cash an item if the amount exceeds six thousand dollars. This subsection shall not apply to (1) the cashing of any check, draft or money order drawn by the United States, any state or any political subdivision of a state, or by any department, bureau, agency, authority, instrumentality or officer, acting in such officer's official capacity, of the United States, any state or any political subdivision of a state, (2) the cashing of any check which has been certified by the depository institution on which it has been drawn, (3) the cashing of any check drawn by an insurance company for the payment of a claim, (4) the cashing of any check drawn by an attorney from the attorney's clients' funds account, and (5) the cashing of any check, draft or money order where the payee is not an individual as long as the licensee complies with all recordkeeping and reporting requirements specified in sections 36a-580 to 36a-589, inclusive.

(c) Not later than January 15, 2019, and quarterly thereafter, each check cashing licensee shall submit a report to the commissioner that specifies the number and type of checks cashed by such licensee that exceed six thousand dollars during the previous calendar quarter, unless no such activity occurred in the previous quarter, in which case the licensee shall file a written statement to that effect. Each check cashing licensee shall, to the extent required by the system, timely submit to the system accurate reports of condition that shall be in such form and contain such information as the system may require. Failure by a licensee to submit timely and accurate reports shall constitute a violation of this provision. Any person making any filing or submission of any information on the system shall do so in accordance with the procedures and requirements of the system and pay the applicable fees or charges to the system.

(P.A. 88-200, S. 5; P.A. 89-178, S. 4, 8; P.A. 91-11, S. 2; P.A. 94-122, S. 272, 340; P.A. 95-253, S. 16, 19; P.A. 05-74, S. 2; 05-192, S. 2; P.A. 18-173, S. 46.)

History: P.A. 89-178 amended Subsec. (a) by imposing a cap of 1% per check on certain state checks and requiring the commissioner of banking to establish by regulation a fee schedule for other checks; Sec. 21-115 transferred to Sec. 36-568 in 1991; P.A. 91-11 added Subsec. (b)(1) to (4), inclusive, re exceptions to the maximum amount of a check that may be cashed by a check cashing service; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-568 transferred to Sec. 36a-584 in 1995; P.A. 95-253 changed “check cashing service” to “check cashing licensee”, effective July 6, 1995; P.A. 05-74 amended Subsec. (a) to make a technical change, effective June 2, 2005; P.A. 05-192 amended Subsec. (b) to substitute $6,000 for $2,500 as the maximum amount of check that may be cashed by check cashing licensee and add Subdiv. (5) re exception for cashing of any check where payee is not an individual, and added Subsec. (c) re quarterly report to commissioner; P.A. 18-173 amended Subsec. (c) by replacing “2006” with “2019”, replacing $2,500 with $6,000, adding provisions re filing of statement when activity in previous quarter and submission of accurate reports of condition, and making technical changes.

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Sec. 36a-585. (Formerly Sec. 36-569). Maximum fees set by Banking Commissioner. The commissioner shall, by regulation adopted in accordance with the provisions of chapter 54, establish the maximum fees which may be charged by a licensee for cashing a check, draft or money order drawn on a depository institution. No check cashing licensee shall charge any sum in excess of that established by such regulation or one dollar, whichever is greater. In establishing maximum fees under this section, the commissioner shall consider: (1) The effect any change in rates will have on consumers; (2) start-up costs, operational expenses, volume of business, and any other information the commissioner deems relevant. The licensee shall conspicuously post and at all times display, at each place of business, a schedule of fees permitted under sections 36a-580 to 36a-589, inclusive. The sum of any payment made by an employee or by an employer on behalf of the employee to a licensee of a limited facility for cashing payroll checks shall not exceed the percentage limitation for maximum fees established by the commissioner in regulations adopted pursuant to this section.

(P.A. 89-178, S. 5, 8; P.A. 94-122, S. 273, 340; P.A. 95-253, S. 17, 19; P.A. 05-192, S. 3.)

History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-569 transferred to Sec. 36a-585 in 1995; P.A. 95-253 added the ceiling on the sum of payments to a licensee of a limited facility and changed “check cashing service” to “checking cashing licensee”, effective July 6, 1995; P.A. 05-192 established maximum fee of $1 or that established by regulation, “whichever is greater”.

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Sec. 36a-586. (Formerly Sec. 36-570). Records to be maintained by check cashing license. Reporting requirements. Prohibited acts. Advertisements. (a) Each check cashing licensee shall use and maintain at a general facility in this state, in the form satisfactory to the commissioner, such books, records and accounts as will enable the commissioner to determine whether the licensee is complying with the provisions of sections 36a-580 to 36a-589, inclusive. Each licensee shall retain such books, records and accounts for not less than the periods of time specified in regulations adopted by the commissioner in accordance with section 36a-588.

(b) Before a check cashing licensee deposits with any financial institution a check, draft or money order cashed by such licensee, the item shall be endorsed with the actual name under which the licensee is doing business and have the words “licensed check cashing service” legibly written or stamped immediately after or below such name.

(c) Each check cashing licensee shall comply with the applicable provisions of the Currency and Foreign Transactions Reporting Act, 31 USC Section 5311 et seq., as from time to time amended, and any regulations adopted under such provisions, as from time to time amended.

(d) No person required to be licensed and who is subject to the provisions of sections 36a-580 to 36a-589, inclusive, and no control person shall, directly or indirectly: (1) Employ any scheme, device or artifice to defraud or mislead any person in connection with a check cashing transaction; (2) engage in any unfair or deceptive practice toward any person in connection with a check cashing transaction; (3) obtain property by fraud or misrepresentation; (4) fail to comply with the provisions of sections 36a-580 to 36a-589, inclusive, or the rules or regulations adopted under said sections, or fail to comply with any other state or federal law, including the rules and regulations thereunder; (5) make, in any manner, any false or deceptive statement or representation in connection with a check cashing transaction or engage in bait and switch advertising; (6) negligently make any false statement or knowingly and wilfully make any omission of material fact in connection with any information or reports filed with a governmental agency or the system, or in connection with any investigation conducted by the commissioner or another governmental agency; (7) collect, charge, attempt to collect or charge or use or propose any agreement purporting to collect or charge any fee prohibited by sections 36a-580 to 36a-589, inclusive; (8) fail to truthfully account for moneys belonging to a party to a check cashing transaction; (9) fail to comply with any demand or requirement made by the commissioner under and within the authority of sections 36a-580 to 36a-589, inclusive; or (10) fail to establish, enforce and maintain policies and procedures for supervising employees, agents and office operations that are reasonably designed to achieve compliance with applicable check cashing laws and regulations.

(e) The unique identifier of any person licensed under section 36a-581 shall be clearly shown on all solicitations and advertisements, including business cards and Internet web sites, and any other documents as established by rule, regulation or order of the commissioner, and shall be clearly stated in all audio solicitations and advertisements. The solicitations or advertisements of any person licensed under section 36a-581: (1) Shall not include any statement that such person is endorsed in any way by this state, except that such solicitations and advertisements may include a statement that such person is licensed in this state; (2) shall not include any statement or claim that is deceptive, false or misleading; (3) shall otherwise conform to the requirements of sections 36a-580 to 36a-589, inclusive, any regulations issued thereunder and any other applicable law; and (4) shall be retained for two years from the date of use of such solicitation or advertisement.

(P.A. 88-200, S. 6; P.A. 89-178, S. 6, 8; P.A. 94-122, S. 274, 340; P.A. 95-253, S. 18, 19; P.A. 98-192, S. 2; P.A. 17-233, S. 17; P.A. 18-173, S. 47.)

History: P.A. 89-178 amended Subsec. (a) by substituting the commissioner of banking for the commissioner of consumer protection; Sec. 21-116 transferred to Sec. 36-570 in 1991; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-570 transferred to Sec. 36a-586 in 1995; P.A. 95-253 changed “check cashing service” to “check cashing licensee” and made technical changes in Subsec. (a), effective July 6, 1995; P.A. 98-192 added new Subsec. (c) re compliance with federal Currency and Foreign Transactions Reporting Act; P.A. 17-233 added Subsec. (d) re acts by person required to be licensed and subject to provisions of Secs. 36a-580 to 36a-589 and control person; P.A. 18-173 amended Subsec. (b) by adding Subsec. (e) re solicitations and advertisements and made technical changes.

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Sec. 36a-587. (Formerly Sec. 36-571). Suspension, revocation or refusal to renew license or taking of other action. Removal from office and from employment or retention. Temporary order to cease business. (a) The commissioner may suspend, revoke or refuse to renew any license issued pursuant to section 36a-581 or take any other action, in accordance with the provisions of section 36a-51, for any reason which would be sufficient grounds for the commissioner to deny an application for a license under sections 36a-580 to 36a-589, inclusive, or if the commissioner finds that the licensee or any control person of the licensee, qualified individual or branch manager with supervisory authority, trustee, employee or agent of such licensee has done any of the following: (1) Made any material misstatement in the application; (2) committed any fraud, engaged in dishonest activities or made any misrepresentation; (3) violated any provision of this title or any regulation or order adopted or issued pursuant thereto pertaining to such person, or any other law or regulation applicable to the conduct of such licensee's check cashing business; or (4) demonstrated incompetency or untrustworthiness to act as a licensed check cashing service.

(b) Whenever it appears to the commissioner that (1) any person has violated, is violating or is about to violate any of the provisions of sections 36a-580 to 36a-589, inclusive, or any regulation adopted pursuant to said sections, (2) any person is, was or would be a cause of the violation of any such provision or regulation due to an act or omission such person knew or should have known would contribute to such violation; or (3) any licensee or any control person of the licensee, qualified individual or branch manager with supervisory authority, trustee, employee or agent of such licensee has committed any fraud, engaged in dishonest activities or made any misrepresentation, the commissioner may take action against such person or licensee in accordance with sections 36a-50 and 36a-52.

(c) The commissioner may order a licensee to remove any individual conducting business under sections 36a-580 to 36a-589, inclusive, from office and from employment or retention as an independent contractor in the check cashing business in this state in accordance with section 36a-51a.

(d) The commissioner may issue a temporary order to cease business under a license if the commissioner determines that such license was issued erroneously. Such temporary order shall be issued in accordance with subsection (j) of section 36a-24b.

(P.A. 88-200, S. 7; 88-230, S. 1, 12; P.A. 89-178, S. 7, 8; P.A. 90-98, S. 1, 2; P.A. 93-142, S. 4, 7, 8; P.A. 94-122, S. 275, 340; P.A. 05-46, S. 10; P.A. 06-35, S. 6; P.A. 07-91, S. 21; P.A. 18-173, S. 48.)

History: P.A. 88-230 replaced “judicial district of Hartford-New Britain” with “judicial district of Hartford”, effective September 1, 1991; P.A. 89-178 amended Subsec. (a) by substituting the commissioner of banking for the commissioner of consumer protection; Sec. 21-117 transferred to Sec. 36-571 in 1991; P.A. 90-98 changed the effective date of P.A. 88-230 from September 1, 1991, to September 1, 1993; P.A. 93-142 changed the effective date of P.A. 88-230 from September 1, 1993, to September 1, 1996, effective June 14, 1993; P.A. 94-122 deleted Subsec. (c) re cease and desist provisions and made technical changes, effective January 1, 1995; Sec. 36-571 transferred to Sec. 36a-587 in 1995; P.A. 05-46 amended Subsec. (b) to allow commissioner to impose civil penalty or issue cease and desist order against licensee or owner, director, officer, member, partner, shareholder, trustee, employee or agent of such licensee who has committed fraud, engaged in dishonest activities or made any misrepresentation; P.A. 06-35 amended Subsec. (b) to authorize commissioner to take enforcement action under Secs. 36a-50 and 36a-52 for violation of “any of” the provisions of Secs. 36a-580 to 36a-589, inclusive, or any regulation adopted pursuant to said Secs., effective May 8, 2006; P.A. 07-91 amended Subsec. (a) to authorize commissioner to take any other action, in accordance with Sec. 36a-51, effective June 5, 2007; P.A. 18-173 amended Subsec. (a) by replacing “owner, director, officer, member, partner, shareholder” with “control person of the licensee, qualified individual or branch manager with supervisory authority”, replacing reference to Secs. 36a-580 to 36a-589 with reference to title in Subdiv. (3), replacing “promulgated under said sections” with “or order adopted or issued pursuant thereto pertaining to such person, or any other law or regulation applicable to the conduct of such licensee's check cashing business” in Subdiv. (3), amended Subsec. (b) by designating provision re violation of Secs. 36a-580 to 36a-589 as Subdiv. (1), adding Subdiv. (2) re violation of provision of sections or regulation, designating provision re fraud, dishonest activity and misrepresentations as Subdiv. (3) and amended same by replacing “owner, director, officer, member, partner, shareholder” with “control person of the licensee, qualified individual or branch manager with supervisory authority”, added Subsec. (c) re commissioner's authority to order removal of individual from office and from employment or retention as an independent contractor, added Subsec. (d) re temporary order to cease business under license, and made technical changes.

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Sec. 36a-588. (Formerly Sec. 36-572). Regulations. The commissioner shall adopt, pursuant to chapter 54, such regulations as may be necessary to carry out the provisions of sections 36a-580 to 36a-589, inclusive.

(P.A. 88-200, S. 8.)

History: Sec. 21-118 transferred to Sec. 36-572 in 1991; Sec. 36-572 transferred to Sec. 36a-588 in 1995.

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Sec. 36a-589. (Formerly Sec. 36-573). Violations. A violation of any of the provisions of sections 36a-580 to 36a-589, inclusive, shall be deemed an unfair or deceptive trade practice under subsection (a) of section 42-110b.

(P.A. 88-200, S. 9.)

History: Sec. 21-119 transferred to Sec. 36-573 in 1991; Sec. 36-573 transferred to Sec. 36a-589 in 1995.

Annotation to former section 36-573:

Cited. 231 C. 707.

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Secs. 36a-590 to 36a-594. Reserved for future use.

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PART V

PAYMENT INSTRUMENTS. MONEY TRANSMISSION

Sec. 36a-595. (Formerly Sec. 36-530). Short title: Money Transmission Act. Sections 36a-595 to 36a-612, inclusive, shall be known and may be cited as the “Money Transmission Act”.

(P.A. 81-264, S. 1; P.A. 01-56, S. 2; P.A. 13-253, S. 1.)

History: Sec. 36-530 transferred to Sec. 36a-595 in 1995; P.A. 01-56 changed citation from “Money Order and Travelers Check Licensees Act” to “Money Transmission Act”; P.A. 13-253 added reference to Secs. 36a-611 and 36a-612.

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Sec. 36a-596. (Formerly Sec. 36-531). Definitions. As used in sections 36a-595 to 36a-614, inclusive, unless the context otherwise requires:

(1) “Advertise” or “advertising” has the same meaning as provided in section 36a-485.

(2) “Authorized delegate” means a person designated by a person licensed pursuant to sections 36a-595 to 36a-612, inclusive, to provide money transmission services on behalf of such licensed person.

(3) “Control” means (A) the power to vote, directly or indirectly, at least twenty-five per cent of the outstanding voting shares or voting interests of a licensee or person in control of a licensee, (B) the power to elect or appoint a majority of key individuals or executive officers, managers, directors, trustees or other persons exercising managerial authority of a person in control of a licensee, or (C) the power to exercise, directly or indirectly, a controlling influence over the management or policies of a licensee or person in control of a licensee. For purposes of this subdivision, (i) a person is presumed to exercise a controlling influence when the person holds the power to vote, directly or indirectly, at least ten per cent of the outstanding voting shares or voting interests of a licensee or person in control of a licensee, (ii) a person presumed to exercise a controlling influence can rebut such presumption if the person is a passive investor, and (iii) to determine the percentage of control, a person's interest shall be aggregated with the interest of any other immediate family member, including the person's spouse, parent, child, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law and any other person who shares the person's home.

(4) “Control person” means any individual in control of a licensee or applicant, any individual who seeks to acquire control of a licensee or a key individual.

(5) “Electronic payment instrument” (A) means a card or other tangible object (i) for the transmission of money or monetary value or payment of money, (ii) which contains a microprocessor chip, magnetic stripe or other means for the storage of information, (iii) that is prefunded, and (iv) for which the value is decremented upon each use, and (B) does not include a card or other tangible object that is redeemable by the issuer in the issuer's goods or services.

(6) “Existing customer” means a consumer who (A) is engaging in a transaction at a virtual currency kiosk in the state, (B) has performed not fewer than three virtual currency transactions with the owner or operator of such virtual currency kiosk, and (C) has been registered as a customer of such owner or operator for more than seventy-two hours.

(7) “Holder” means a person, other than a purchaser, who is either in possession of a payment instrument and is the named payee thereon or in possession of a payment instrument issued or endorsed to such person or bearer or in blank. “Holder” does not include any person who is in possession of a lost, stolen or forged payment instrument.

(8) “Key individual” means any individual ultimately responsible for establishing or directing policies and procedures of the licensee, including, but not limited to, an executive officer, manager, director or trustee.

(9) “Licensee” means any person licensed or required to be licensed pursuant to sections 36a-595 to 36a-612, inclusive.

(10) “Main office” has the same meaning as provided in section 36a-485.

(11) “Monetary value” means a medium of exchange, whether or not redeemable in money.

(12) “Money transmission” means engaging in the business of issuing or selling payment instruments or stored value, receiving money or monetary value for current or future transmission or the business of transmitting money or monetary value within the United States or to locations outside the United States by any and all means including, but not limited to, payment instrument, wire, facsimile, electronic transfer or virtual currency kiosk.

(13) “New customer” means a consumer who (A) is engaging in a transaction at a virtual currency kiosk in the state, (B) has performed fewer than three virtual currency transactions with the owner or operator of such virtual currency kiosk, and (C) has been registered as a customer of such owner or operator for less than seventy-two hours.

(14) “Outstanding” means (A) in the case of a payment instrument or stored value, that (i) such instrument or value is sold or issued in the United States, (ii) a report of such instrument or value has been received by a licensee from its authorized delegates, and (iii) such instrument or value has not yet been paid by the issuer, and (B) for all other money transmissions, the value reported to the licensee for which the licensee or any authorized delegate has received money or its equivalent value from the customer for transmission, but has not yet completed the money transmission by delivering the money or monetary value to the person designated by the customer.

(15) “Passive investor” means a person that (A) does not have the power to elect a majority of key individuals or executive officers, managers, directors, trustees or other persons exercising managerial authority of a person in control of a licensee, (B) is not employed by and does not have any managerial duties of the licensee or person in control of a licensee, (C) does not have the power to exercise, directly or indirectly, a controlling influence over the management or policies of a licensee or person in control of a licensee, and (D) attests to subparagraphs (A), (B) and (C) of this subdivision in the form and manner prescribed by the commissioner.

(16) “Payment instrument” means a check, draft, money order, travelers check or electronic payment instrument that evidences either an obligation for the transmission of money or monetary value or payment of money, or the purchase or the deposit of funds for the purchase of such check, draft, money order, travelers check or electronic payment instrument.

(17) “Permissible investment” means (A) (i) cash in United States currency, including, but not limited to, demand deposits, savings deposits and funds in demand deposit and savings deposit accounts held for the benefit of a licensee's customers in an insured depository institution, and (ii) cash equivalents, including, but not limited to, (I) automated clearing house items in transit to a licensee or payee, (II) international wires in transit to a payee, (III) cash in transit via armored car, (IV) cash in smart safes, (V) cash in locations owned by licensees, (VI) transmission receivables that are funded by debit cards or credit cards and owed by any bank, and (VII) money market mutual funds rated “AAA” or the equivalent by S & P Global, Incorporated, in the “S & P Global Ratings” or by any other rating service recognized by the commissioner, (B) time deposits, as defined in section 36a-2, or other debt instruments of a bank, (C) bills of exchange or bankers acceptances which are eligible for purchase by member banks of the Federal Reserve System, (D) commercial paper of prime quality, (E) interest-bearing bills, notes, bonds, debentures or other obligations issued or guaranteed by (i) the United States or any of its agencies or instrumentalities, or (ii) any state, or any agency, instrumentality, political subdivision, school district or legally constituted authority of any state if such investment is of prime quality, (F) interest-bearing bills or notes, or bonds, debentures or preferred stocks, traded on any national securities exchange or on a national over-the-counter market, if such debt or equity investments are of prime quality, (G) receivables due from authorized delegates consisting of the proceeds of the sale of payment instruments which are not past due or doubtful of collection, (H) gold, and (I) any other investments approved by the commissioner. Notwithstanding the provisions of this subdivision, if the commissioner at any time finds that an investment of a licensee is unsatisfactory for investment purposes, the investment shall not qualify as a permissible investment.

(18) “Prime quality” of an investment means that it is within the top four rating categories in any rating service recognized by the commissioner unless the commissioner determines for any licensee that only those investments in the top three rating categories qualify as prime quality.

(19) “Purchaser” means a person who buys or has bought a payment instrument or who has given money or monetary value for current or future transmission.

(20) “Receipt” means a paper record, electronic record or other written confirmation of a money transmission transaction.

(21) “Stored value” means monetary value that is evidenced by an electronic record. For the purposes of this subdivision, “electronic record” means information that is stored in an electronic medium and is retrievable in perceivable form.

(22) “Travelers check” means a payment instrument for the payment of money that contains a provision for a specimen signature of the purchaser to be completed at the time of a purchase of the instrument and a provision for a countersignature of the purchaser to be completed at the time of negotiation.

(23) “Unique identifier” has the same meaning as provided in section 36a-485.

(24) “Virtual currency” means any type of digital unit that is used as a medium of exchange or a form of digitally stored value or that is incorporated into payment system technology. Virtual currency shall be construed to include digital units of exchange that (A) have a centralized repository or administrator, (B) are decentralized and have no centralized repository or administrator, or (C) may be created or obtained by computing or manufacturing effort. Virtual currency shall not be construed to include digital units that are used (i) solely within online gaming platforms with no market or application outside such gaming platforms, or (ii) exclusively as part of a consumer affinity or rewards program, and can be applied solely as payment for purchases with the issuer or other designated merchants, but cannot be converted into or redeemed for fiat currency.

(25) “Virtual currency address” means an alphanumeric identifier representing a destination for a virtual currency transfer that is associated with a virtual currency wallet.

(26) “Virtual currency kiosk” means an electronic terminal acting as a mechanical agent of the owner or operator to enable the owner or operator to facilitate the exchange of virtual currency for fiat currency or other virtual currency, including, but not limited to, by (A) connecting directly to a separate virtual currency exchanger that performs the actual virtual currency transmission, or (B) drawing upon the virtual currency in the possession of the owner or operator of the electronic terminal.

(27) “Virtual currency wallet” means a software application or other mechanism providing a means for holding, storing and transferring virtual currency.

(P.A. 81-264, S. 2; P.A. 87-9, S. 2, 3; P.A. 92-12, S. 96; P.A. 94-122, S. 276, 340; P.A. 98-192, S. 3; 98-258, S. 4; P.A. 01-56, S. 3; P.A. 02-73, S. 84; P.A. 04-14, S. 3; 04-136, S. 43; P.A. 07-91, S. 8; P.A. 09-208, S. 13; P.A. 13-253, S. 2; P.A. 15-53, S. 5; P.A. 17-233, S. 18; P.A. 18-173, S. 49; P.A. 22-94, S. 2; 22-96, S. 2; P.A. 23-82, S. 2; P.A. 24-146, S. 1.)

History: (Revisor's note: Pursuant to P.A. 87-9 “banking commissioner” was changed editorially by the Revisors to “commissioner of banking”); P.A. 92-12 redesignated Subdivs. and Subparas.; P.A. 94-122 deleted former Subdivs. (1) and (2) defining “commissioner” and “financial institution”, renumbered former Subdivs. (3) through (9) as Subdivs. (1) through (7), deleted Subdiv. (10) defining “person” and renumbered former Subdivs. (11) through (13) as Subdivs. (8) through (10), effective January 1, 1995; Sec. 36-531 transferred to Sec. 36a-596 in 1995; (Revisor's note: In 1997 the reference in Subdiv. (7) to “... time deposits, as defined in subdivision (55) of section 36a-2 ...” was corrected editorially by the Revisors to “... time deposits, as defined in subdivision (62) of section 36a-2 ...” to reflect the current internal numbering of that section); P.A. 98-192 added new Subdiv. (1) defining “electronic payment instrument”, made conforming changes and redesignated existing Subdivs. (1) to (10) as Subdivs. (2) to (11); P.A. 98-258 made a technical change in Subdiv. (7); P.A. 01-56 made technical changes in Subdiv. (2) defining “holder”, deleted former Subdiv. (3) defining “instrument” and renumbered existing Subdiv. (4) as Subdiv. (3), added new Subdiv. (4) defining “material litigation”, made technical changes in Subdiv. (5) defining “money order”, added new Subdiv. (6) defining “money transmission” and renumbered existing Subdivs. (6) and (7) as Subdivs. (7) and (8), redefined “outstanding” in redesignated Subdiv. (8), added new Subdiv. (9) defining “payment instrument”, renumbered existing Subdivs. (8) to (11) as Subdivs. (10) to (13) and made technical changes in redesignated Subdivs. (10) to (13); P.A. 02-73 amended Subdiv. (10)(B) by changing reference from Subdiv. (63) to Subdiv. (65) of Sec. 36a-2; P.A. 04-14 added definitions of “monetary value” in new Subdiv. (5) and “stored value” and “electronic record” in new Subdiv. (14), renumbering the existing Subdivs. accordingly, inserted references to “monetary value” and “current or future” transmission in definition of “money transmission”, inserted references to “stored value” in definitions of “money transmission” and “outstanding” and, in Subpara. (A) of the latter definition, inserted “or issued”, and made a technical change in definition of “permissible investment”, effective April 16, 2004; P.A. 04-136 amended Subdiv. (10)(B) to make a technical change, effective May 12, 2004; P.A. 07-91 inserted references to transmission “of money or monetary value” in definitions of “electronic payment instrument” and “payment instrument” in Subdivs. (1) and (10); P.A. 09-208 redefined “licensee” in Subdiv. (3), “outstanding” in Subdiv. (9) and “purchaser” in Subdiv. (13) and defined “unsafe or unsound practice” in Subdiv. (16), effective July 7, 2009; P.A. 13-253 added reference to Secs. 36a-611 and 36a-612, added new Subdiv. (1) defining “authorized delegate”, redesignated existing Subdivs. (1) to (3) as Subdivs. (2) to (4), deleted former Subdiv. (4) defining “material litigation”, deleted former Subdiv. (6) defining “money order”, redesignated existing Subdiv. (7) as Subdiv. (6) and amended same to redefine “money transmission”, deleted former Subdiv. (8) defining “net worth”, redesignated existing Subdiv. (9) as Subdiv. (7) and amended same to redefine “outstanding”, redesignated existing Subdiv. (10) as Subdiv. (8) and amended same to redefine “payment instrument”, redesignated existing Subdiv. (11) as Subdiv. (9) and amended same to redefine “permissible investment”, redesignated existing Subdivs. (12) to (15) as Subdivs. (10) to (13), deleted former Subdiv. (16) defining “unsafe or unsound practice”, and made technical and conforming changes; P.A. 15-53 added Subdiv. (14) defining “virtual currency”; P.A. 17-233 added new Subdiv. (1) defining “advertise” or “advertising”, redesignated existing Subdiv. (1) as Subdiv. (2), added new Subdiv. (3) defining “control person” and redesignated existing Subdivs. (2) to (14) as Subdivs. (4) to (16); P.A. 18-173 added new Subdiv. (7) re definition of “main office”, redesignated existing Subdivs. (7) to (15) as new Subdivs. (8) to (16), added Subdiv. (17) re definition of “unique identifier”, and redesignated existing Subdiv. (16) as Subdiv. (18); P.A. 22-94 added new Subdiv. (3) to define “control”, redesignated existing Subdivs. (3) to (5) as Subdivs. (4) to (6), redefined “control person” in new Subdiv. (4), added new Subdiv. (7) to define “key individual”, redesignated existing Subdivs. (6) to (10) as Subdivs. (8) to (12), added new Subdiv. (13) to define “passive investor”, redesignated existing Subdivs. (11) to (18) as Subdivs. (14) to (21) and made a technical change in new Subdiv. (16); P.A. 22-96 redefined “control person” in Subdiv. (4) and “key individual” in Subdiv. (7); P.A. 23-82 added reference to Sec. 36a-613 in introductory language, redefined “money transmission” in Subdiv. (11) and added Subdivs. (22) to (24) defining “virtual currency address”, “virtual currency kiosk” and “virtual currency wallet”, respectively; P.A. 24-146 replaced “36a-613” with “36a-614” and inserted “unless the context otherwise requires” in the introductory language, designated existing provisions in Subdiv. (5) defining “electronic payment instrument” as Subdiv. (5)(A) and (B), defined “existing customer” in new Subdiv. (6), redesignated existing Subdivs. (6) to (11) as Subdivs. (7) to (12), defined “new customer” in new Subdiv. (13), redesignated existing Subdivs. (12) to (17) as Subdivs. (14) to (19), redefined “permissible investment” in new Subdiv. (17), defined “receipt” in new Subdiv. (20), redesignated existing Subdivs. (18) to (24) as Subdivs. (21) to (27) and made technical and conforming changes throughout.

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Sec. 36a-597. (Formerly Sec. 36-532). License required. Penalty. (a) No person shall engage in the business of money transmission in this state, or advertise or solicit such services, without a main office license issued by the commissioner as provided in sections 36a-595 to 36a-612, inclusive, except as an authorized delegate of a person that has been issued a license by the commissioner and in accordance with section 36a-607. Any activity subject to licensure pursuant to sections 36a-595 to 36a-612, inclusive, shall be conducted from an office located in a state, as defined in section 36a-2. On and after October 1, 2024, any person who owns, operates, solicits, markets, advertises or facilitates virtual currency kiosks in this state shall be deemed to be engaged in the business of money transmission in this state and shall be subject to licensure pursuant to sections 36a-595 to 36a-612, inclusive. A person engaged in the business of money transmission is acting in this state under this section if such person: (1) Has a place of business located in this state, (2) receives money or monetary value in this state or from a person located in this state, (3) transmits money or monetary value from a location in this state or to a person located in this state, (4) issues stored value or payment instruments that are sold in this state, (5) sells stored value or payment instruments in this state, or (6) owns, operates, solicits, markets, advertises or facilitates virtual currency kiosks physically located in this state.

(b) Any person who knowingly engages in the business of money transmission in this state, without obtaining a license, as provided in sections 36a-595 to 36a-612, inclusive, shall be guilty of a class D felony. Each transaction in violation of the provisions of this subsection shall constitute a separate offense.

(P.A. 81-264, S. 3; P.A. 01-56, S. 4; P.A. 03-61, S. 3; P.A. 04-61, S. 1; P.A. 09-208, S. 14; P.A. 13-253, S. 3; P.A. 16-65, S. 7; P.A. 18-173, S. 50; P.A. 24-146, S. 2.)

History: Sec. 36-532 transferred to Sec. 36a-597 in 1995; P.A. 01-56 changed “Connecticut instruments” to “Connecticut payment instruments” and reworded language re money transmission; P.A. 03-61 substituted “or an entity or a person exempt under section 36a-609 and in accordance with” for “as provided in”; P.A. 04-61 designated existing provisions as Subsec. (a) and added new Subsec. (b) re criminal penalty for knowingly engaging in business of issuing Connecticut payment instruments or money transmission without a license; P.A. 09-208 amended Subsec. (a) by removing references to “subagents” of licensees, requiring licensee and agent to notify commissioner in writing of the termination of the contract between them, and making technical changes, effective July 7, 2009; P.A. 13-253 amended Subsec. (a) by deleting references to issuing Connecticut payment instruments, adding provision requiring that money transmission occur in this state and prohibiting the advertising or soliciting of money transmission services without a license, deleting references to Sec. 36a-600, adding reference to Secs. 36a-611 and 36a-612, changing “agent” to “authorized delegate”, deleting provision re entity or person exempt under Sec. 36a-609, adding provision re when person deemed to be engaged in the business of money transmission and making technical changes, and amended Subsec. (b) by deleting reference to issuing Connecticut payment instruments, adding provision requiring that money transmission occur in this state and replacing reference to Sec. 36a-600 with reference to Secs. 36a-595 to 36a-612; P.A. 16-65 amended Subsec. (a) by replacing “person shall be deemed to be engaged in the business of money transmission in this state” with “person engaged in the business of money transmission is acting in this state under this section” and, in Subdiv. (1), adding “located”, effective July 1, 2016; P.A. 18-173 amended Subsec. (a) by adding “main office”, adding provision re licensed activity to be conducted from office located in a state and deleting provision re licensee to notify the commissioner of termination of contract between the licensee and authorized delegate; P.A. 24-146 amended Subsec. (a) to add provisions re persons who own, operate, solicit, market, advertise or facilitate virtual currency kiosks being deemed to be in the business of money transmission and subject to licensure, make a conforming change and add Subdiv. (6) re owning, operating, soliciting, marketing, advertising or facilitating virtual currency kiosks.

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Sec. 36a-598. (Formerly Sec. 36-533). Application. Criminal history records check. Abandonment of application. Required system filing or notice to commissioner. License not assignable or transferable. Use of name. Automatic suspension. (a) Each application for an initial or renewal license required under sections 36a-595 to 36a-612, inclusive, shall be made and processed on the system pursuant to section 36a-24b, in the form prescribed by the commissioner. Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purposes of sections 36a-595 to 36a-612, inclusive. The applicant shall, at a minimum, furnish to the system information concerning the identity of the applicant, any control person of the applicant, the qualified individual and any branch manager responsible for the actions of the licensee, including, but not limited to, information related to such person's personal history and experience and any administrative, civil or criminal findings by any governmental jurisdiction. As part of an application, the commissioner may, (1) in accordance with section 29-17a, conduct a state or national criminal history records check of the applicant, any control person of the applicant, the qualified individual and any branch manager, and, (2) in accordance with section 36a-24b, (A) require the submission of fingerprints of any such person to the Federal Bureau of Investigation or other state, national or international criminal databases, and (B) investigate the financial condition of any such person and require authorization from any such person for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time. An application for an initial license shall also include:

(i) A copy of the applicant's audited financial statements for the most recent fiscal year, and (I) if the applicant is a wholly-owned subsidiary of another corporation, the most recent audited consolidated annual financial statements of the parent corporation, (II) if the applicant is publicly traded, a copy of the most recent 10-K report that such applicant filed with the Securities and Exchange Commission, or, if the applicant is a wholly-owned subsidiary of a publicly traded company, a copy of the parent company's most recent 10-K report that was filed with the Securities and Exchange Commission, and (III) if the applicant or parent company of a wholly-owned subsidiary applicant is publicly traded on a foreign exchange, a copy of documentation similar to the 10-K report that was filed with the applicable securities regulator for the applicant or the parent company of the wholly-owned subsidiary applicant, as applicable. Notwithstanding the provisions of this clause, if the applicant has operated for not more than one calendar year, the applicant shall only be required to include an initial statement of condition;

(ii) A list of the applicant's permissible investments, the book and market values of such investments, and the dollar amount of the applicant's aggregate outstanding money transmissions (I) as of the date of the financial statement filed in accordance with clause (i) of this subparagraph; and (II) as of a date no earlier than thirty business days prior to the filing of the application;

(iii) (I) The surety bond required by subsection (a) of section 36a-602, if applicable; and

(II) A list of the investments maintained in accordance with subsection (d) of section 36a-602, if applicable, and the book and market values of any such investments as of the date of the financial statement filed in accordance with clause (i) of this subparagraph; and as of a date no earlier than thirty business days prior to the filing of the application;

(iv) A statement describing the type of money transmission business that will be conducted by the applicant in this state and whether such money transmission will include the transmission of monetary value in the form of virtual currency;

(v) The name and address of any financial institution used by the applicant for its money transmission business in this state;

(vi) For each authorized delegate, a sample of the contract evidencing the proposed arrangement between the applicant and the authorized delegate; and

(vii) Any other information the commissioner may require.

(b) The commissioner may deem an application for a license to engage in the business of money transmission in this state abandoned if the applicant fails to respond to any request for information required under sections 36a-595 to 36a-612, inclusive, or any regulations adopted pursuant to said sections. The commissioner shall notify the applicant on the system that if the applicant fails to submit such information not later than sixty days after such request, the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license under sections 36a-595 to 36a-612, inclusive.

(c) Except as otherwise specified in subsections (d) and (e) of this section, each applicant, licensee, control person and qualified individual shall file with the system any change in the information most recently submitted to the system by such licensee, control person or qualified individual in connection with the application or license, or, if the information cannot be filed on the system, notify the commissioner, in writing, of such change in the information not later than fifteen days after the date the applicant, licensee, control person or qualified individual has reason to know of such change.

(d) (1) A money transmission license shall not be transferable or assignable, but a licensee may be acquired in accordance with the requirements of this subsection. Any change in any control person of the licensee, except a change of a key individual that is not the result of an acquisition or a change of control of the licensee, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall occur without the commissioner's approval. For purposes of this section, “change of control” means any change causing the majority ownership, voting rights or control of a licensee to be held by a different control person or group of control persons.

(2) No licensee may use any name other than its legal name or a fictitious name approved by the commissioner, provided such licensee may not use its legal name if the commissioner disapproves use of such name. No licensee shall use any name or address other than the name and address specified on the license issued by the commissioner. A licensee may change the name of the licensee or the address of the office specified on the most recent filing with the system if, at least thirty calendar days prior to such change, the licensee files such change with the system and provides a bond rider, endorsement or addendum, as applicable, to the surety bond on file with the commissioner that reflects the new name or address, and the commissioner does not disapprove such change, in writing, or request further information within such thirty-day period.

(3) The commissioner may automatically suspend any license for a violation of this subsection. After a license has been automatically suspended pursuant to this subsection, the commissioner shall (A) give the licensee notice of the automatic suspension, pending proceedings for revocation of or refusal to renew the license pursuant to section 36a-608 and an opportunity for a hearing in accordance with section 36a-51, and (B) require the licensee to take or refrain from taking action as the commissioner deems necessary to effectuate the purpose of this section.

(e) A licensee shall file with the system or, if the information cannot be filed on the system, provide a written notice to the commissioner not later than one business day after the licensee has reason to know of the occurrence of any of the following events:

(1) The filing of a petition by or against the licensee under the United States Bankruptcy Code for bankruptcy or reorganization or the filing of a petition under the United States Bankruptcy Code for bankruptcy or reorganization by any control person, qualified individual or authorized delegate of the licensee;

(2) The filing of a petition by or against the licensee for receivership, the commencement of any other judicial or administrative proceeding for its dissolution or reorganization, or the making of a general assignment for the benefit of its creditors;

(3) The commencement of a proceeding to revoke or suspend its license to engage in money transmission in another state or a foreign country, or other formal or informal regulatory action by any governmental agency against the licensee or any control person, qualified individual or authorized delegate of the licensee and the reasons therefor;

(4) The commencement of any action by the Attorney General or the attorney general of any other state against the licensee or any control person, qualified individual or authorized delegate of the licensee and the reasons therefor;

(5) The cancellation or other impairment of the licensee's bond or other security, including notice of claims filed against the licensee's bond or other security;

(6) A conviction or indictment of the licensee or of any control person or qualified individual of the licensee for a misdemeanor involving the money transmission business or a felony; or

(7) A conviction or indictment of an authorized delegate for a misdemeanor involving the money transmission business or a felony.

(P.A. 81-264, S. 4; P.A. 92-12, S. 97; P.A. 94-122, S. 277, 340; P.A. 98-192, S. 4; P.A. 01-56, S. 5; P.A. 03-19, S. 84; P.A. 04-14, S. 4; P.A. 05-46, S. 11; P.A. 08-119, S. 11; P.A. 09-208, S. 15; P.A. 11-216, S. 35; P.A. 13-253, S. 4; P.A. 15-53, S. 6; P.A. 17-233, S. 19; P.A. 18-173, S. 51; P.A. 21-138, S. 11; P.A. 22-94, S. 3.)

History: P.A. 92-12 redesignated Subsecs. and Subdivs.; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-533 transferred to Sec. 36a-598 in 1995; P.A. 98-192 amended Subdiv. (9) by adding reference to electronic payment instrument and making conforming changes; P.A. 01-56 amended Subdiv. (5) by changing 20% stock ownership threshold to 10% ownership of securities and required name and addresses of persons holding securities, added new Subdiv. (8) re history of material litigation and criminal convictions, renumbered existing Subdivs. (8) to (10) as Subdivs. (9) to (11), added language re money transmission in Subdivs. (3) and (10) and made technical and conforming changes throughout; P.A. 03-19 made a technical change in Subdiv. (10), effective May 12, 2003; P.A. 04-14 designated existing provisions as Subsec. (a), and amended same by inserting in Subdivs. (5) and (8) new Subpara. (D) re managers, if applicant is a limited liability company, inserting reference to “managers” in Subdiv. (5), and making technical changes in Subdivs. (7)(A) and (9)(B), and inserted new Subsec. (b) requiring applicant or licensee to notify commissioner of any change in information provided; P.A. 05-46 added Subsec. (c) to prohibit licensee from changing the name specified on license unless licensee files application, pays name change fee specified in Sec. 36a-599(a) and receives approval of commissioner; P.A. 08-119 amended Subsec. (a) to make a technical change and to replace “managers” with “members” in Subdivs. (5)(D) and (8)(D); P.A. 09-208 amended Subsec. (a) by deleting provision in Subdiv. (5) requiring applicants to submit sufficient information to commissioner as commissioner deems necessary to make the findings required under Sec. 36a-600, adding new Subdiv. (9) requiring applicants to submit information concerning criminal convictions, redesignating existing Subdiv. (9) as Subdiv. (10), deleting Subpara. (C) therein re commissioner to defer compliance, redesignating existing Subdivs. (10) and (11) as Subdivs. (11) and (12), and making conforming and technical changes, and added Subsec. (d) requiring licensee to provide written notice to commissioner upon the occurrence of events listed in Subdivs. (1) to (7); P.A. 11-216 amended Subsec. (a)(9) to delete provision re ten-year period re history of criminal convictions, added new Subsec. (b) authorizing commissioner to conduct state and national criminal history records check of applicant and each partner, director, trustee, principal officer, member and shareholder owning at least 10% of each class of securities of applicant and re abandonment of application, and redesignated existing Subsecs. (b) to (d) as Subsecs. (c) to (e); P.A. 13-253 amended Subsec. (a) by adding reference to Secs. 36a-611 and 36a-612, by changing “branches, subsidiaries, affiliates and agents” to “locations and authorized delegates” and adding provision requiring that money transmission occur in this state in Subdiv. (3), by adding provision re a copy of audited financial statements for the most recent fiscal year and, if a wholly-owned subsidiary, the most recent audited consolidated annual financial statements of the parent corporation or most recent audited consolidated annual financial statement of the applicant, deleting requirement that financial statements be prepared by an independent certified public accountant, and adding provision re a 10-K report for publicly traded applicants or a report similar to a 10-K if publicly traded on a foreign exchange in Subdiv. (6), by changing “payment instruments” to “money transmissions” in Subdiv. (7), by adding definition of “material litigation” in Subdiv. (8), by replacing former provision with provision requiring a statement describing the type of money transmission business to be conducted in the state in Subdiv. (11), by adding new Subdivs. (12) and (13) re name and address of financial institution used and sample of contract, and by redesignating existing Subdiv. (12) as Subdiv. (14), amended Subsec. (b) by adding provision requiring that money transmission occur in this state and adding references to Secs. 36a-611 and 36a-612, amended Subsec. (c) by deleting “promptly” and adding provision re notification to occur not later than 15 days after the applicant or licensee has reason to know of the change, amended Subsec. (e) by adding “or indictment” in Subdivs. (6) and (7), deleting reference to Connecticut payment instruments in Subdiv. (6) and changing “agent” to “authorized delegate” and adding “misdemeanor involving the money transmission business” in Subdiv. (7), and made technical changes; P.A. 15-53 amended Subsec. (a)(11) by adding provision re applicant to indicate on application whether money transmission business will include transmitting monetary value in form of virtual currency; P.A. 17-233 amended Subsec. (a) by deleting Subdiv. (8) re history of material litigation and by redesignating existing Subdivs. (9) to (14) as Subdivs. (8) to (13); P.A. 18-173 substantially amended Subsec. (a) including by deleting former Subdivs. (1) to (5), adding provisions re processing of application for license on system, adding new Subdivs. (1) and (2) re commissioner's authority to conduct criminal history records check, require submission of fingerprints and investigate financial condition of person, redesignating Subdivs. (6) and (7) as new Subdivs. (5)(i) and (ii), deleting Subdiv. (8), and redesignating Subdivs. (9) to (13) as Subdivs. (5)(iii) to (viii), amended Subsec. (b) by deleting provision re commissioner's authority to conduct criminal history records check, and replacing provision re commissioner to notify applicant in writing with provision re commissioner to notify applicant on system, substantially amended Subsec. (c) including by adding references to control person and qualified individual, replacing provision re notification to commissioner in writing with provision re filing with system, and adding provision re filing change in information on system or notifying commissioner of change in writing, amended Subsec. (d) by deleting provisions re licensee's change to name specified on license, adding Subdivs. (1) to (3) re money transmission license not transferable or assignable and change in control person to be subject of advance change notice filed on system, licensee's use of name and address specified on license and change of licensee's name or address, and commissioner's automatic suspension of license, respectively, amended Subsec. (e) by adding reference to filing with system, adding provision re filing petition under U.S. Bankruptcy Code in Subdiv. (1), adding references to control person, qualified individual or authorized delegate of licensee in Subdivs. (3) and (4), replacing references to partner, director, trustee, principal officer, member or shareholder with references to control person or qualified individual in Subdiv. (6), and made technical and conforming changes; P.A. 21-138 amended Subsec. (a)(2)(B)(i) by deleting provision re applicant's most recent audited consolidated and unconsolidated financial statements and adding provision re applicants that have not operated for more than 1 calendar year, amended Subsec. (d)(1) by defining “change of control”, and made technical and conforming changes; P.A. 22-94 amended Subsec. (d)(1) by adding provision stating licensee may be acquired in accordance with Subsec. (d) and changed “director, general partner or executive officer” to “key individual”.

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Sec. 36a-599. (Formerly Sec. 36-534). License fees. Surrender of license. Plan and accounting. Termination of business. (a) Each applicant for a money transmission license shall pay to the system any required fees or charges and a license fee of one thousand eight hundred seventy-five dollars. Each such license shall expire at the close of business on December thirty-first of the year in which the license was approved, unless such license is renewed, except that any such license approved on or after November first shall expire at the close of business on December thirty-first of the year following the year in which it is approved. An application for renewal of a license shall be filed between November first and December thirty-first of the year in which the license expires. Each applicant for renewal of a money transmission license shall pay to the system any required fees or charges and a renewal fee of one thousand one hundred twenty-five dollars.

(b) Not later than fifteen days after the date a licensee ceases to engage in the business of money transmission in this state for any reason, including a business decision to terminate operations in this state, license revocation, bankruptcy or voluntary dissolution, such licensee shall request surrender of the license in accordance with subsection (c) of section 36a-51 for each location where such licensee has ceased to engage in such business. The licensee shall also identify, in writing, to the commissioner the location where the records of the licensee will be stored and the name, address and telephone number of an individual authorized to provide access to the records. The surrender of a license does not reduce or eliminate the licensee's civil or criminal liability arising from acts or omissions occurring prior to the surrender of the license, including any administrative actions undertaken by the commissioner to revoke or suspend a license, assess a civil penalty, order restitution or exercise any other authority provided to the commissioner.

(c) Each license shall remain in force and effect until the license has been surrendered, revoked or suspended or has expired in accordance with the provisions of sections 36a-595 to 36a-612, inclusive. No abatement of the license fee shall be made if the applicant is denied or withdrawn prior to issuance of the license or if the license is surrendered, revoked or suspended prior to the expiration of the period for which it was issued. All fees required by this section shall be nonrefundable.

(d) Each licensee shall maintain a detailed plan and accounting as to how the licensee shall engage in winding down operations, and shall provide such plan and accounting to the commissioner upon request. Such plan and accounting shall contain:

(1) A record showing that the licensee's minimum net worth and reserves are sufficient to prevent losses to consumers and purchasers and to repay any outstanding obligations or accounts payable;

(2) Procedures to ensure that, after winding down operations, the licensee shall not retain any consumer funds, purchaser funds or other client funds;

(3) A plan demonstrating that consumers shall have access to consumer funds in the licensee's custody;

(4) Detailed instructions informing consumers how they may withdraw consumer funds upon request; and

(5) Any other records and information requested by the commissioner regarding winding down operations.

(e) No licensee shall terminate such licensee's business unless the following conditions are met:

(1) The licensee provides written notice to the commissioner of the proposed termination at least thirty days prior to the effective date of such proposed termination;

(2) The licensee notifies, in writing, all consumers, purchasers and users of the licensee of the proposed termination, and the date of such proposed termination, at least thirty days prior to the date of such proposed termination;

(3) The licensee provides all consumers, purchasers and users of the licensee with detailed final accountings of the accounts of such consumers, purchasers and users;

(4) The licensee remits all money held in the custody of the licensee on behalf of consumers, purchasers and users to such consumers, purchasers and users; and

(5) The licensee files a request to surrender such licensee's license and the commissioner accepts such request.

(P.A. 81-264, S. 5; P.A. 88-150, S. 8; P.A. 92-89, S. 15, 20; P.A. 98-192, S. 5; P.A. 01-56, S. 6; P.A. 05-46, S. 12; P.A. 06-35, S. 7; P.A. 08-119, S. 12; June Sp. Sess. P.A. 09-3, S. 381; P.A. 13-253, S. 5; P.A. 18-173, S. 52; P.A. 24-146, S. 3.)

History: P.A. 88-150 amended Subsec. (a) by increasing the investigation fee to $500 and increasing the license fee to $500, and deleted obsolete Subsec. (c) concerning license fees and the term of a license; P.A. 92-89 deleted the $500 investigation fee and increased the license fee from $500 to $1,000 in Subsec. (a); Sec. 36-534 transferred to Sec. 36a-599 in 1995; P.A. 98-192 amended Subsec. (a) by imposing a nonrefundable investigation fee of $500; P.A. 01-56 amended Subsec. (a) by eliminating the investigation fee for a renewal license and by making conforming language changes re renewal license fee and refund of fees; P.A. 05-46 amended Subsec. (a) to add provision re nonrefundable name change fee of $100 for each application to change a name; P.A. 06-35 amended Subsec. (a) to increase fee for original license from $1,000 to $2,000, to add exception that if application is filed not earlier than one year before date the license expires, applicant shall pay nonrefundable investigation fee of $500 and license fee of $1,000, to increase license fee for renewal license from $1,000 to $2,000, to provide that if license expires on June 30, 2007, fee shall be $2,250, and to prohibit licensee from using any name other than that specified on license issued by commissioner, and amended Subsec. (b) to provide that license expires at close of business on September thirtieth of odd-numbered year following issuance, unless renewed, surrendered, suspended or revoked, except that license renewed effective July 1, 2007, expires on September 30, 2009, and to delete reference to license expiration on thirtieth day of June following date of issuance; P.A. 08-119 amended Subsec. (b) to add requirement for surrender of license when licensee ceases to engage in the business of issuing Connecticut payment instruments or of money transmission; June Sp. Sess. P.A. 09-3 amended Subsec. (a) to increase fees; P.A. 13-253 amended Subsec. (a) by changing “original” to “initial”, making the license fee nonrefundable and deleting provision re license that expires on June 30, 2007, and amended Subsec. (b) to add reference to Secs. 36a-611 and 36a-612, delete reference to renewals effective July 1, 2007, delete reference to issuing Connecticut payment instruments, add provisions re written notice of surrender, delete requirement that surrender be in person or by registered or certified mail, and add provision re surrender of a license does not reduce or eliminate the licensee's civil or criminal liability; P.A. 18-173 substantially amended Subsec. (a) by replacing provisions re application for initial license and renewal license with provisions re applicant for money transmission license and renewal, amended Subsec. (b) by deleting provision re expiration of license, replacing provision re licensee to provide written notice of surrender to commissioner with provision re licensee to request surrender of license in accordance with Sec. 36a-51(c), added Subsec. (c) re license to remain in force and effect, abatement of licensee fee and fees nonrefundable, and made technical and conforming changes; P.A. 24-146 added Subsec. (d) re each licensee shall maintain plan and accounting and requirements of such plan and accounting and added Subsec. (e) re conditions required for licensee to terminate such licensee's business.

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Sec. 36a-600. (Formerly Sec. 36-536). Investigation of applicant. Issuance of license. Authority of commissioner to deny application for license. (a) Upon the filing of an application for an initial license, and the payment of required fees, the commissioner shall investigate the financial condition and responsibility, financial and business experience, character and general fitness of the applicant, and the applicant's control persons and qualified individual. The commissioner may issue a license if the commissioner finds that:

(1) The applicant's financial condition is sound;

(2) The applicant's business will be conducted honestly, fairly, equitably, carefully and efficiently within the purposes and intent of sections 36a-595 to 36a-612, inclusive, and in a manner commanding the confidence and trust of the community;

(3) The applicant's control persons and qualified individual demonstrate financial responsibility and are in all respects properly qualified and of good character;

(4) The applicant is in compliance with the provisions of sections 36a-602 to 36a-604, inclusive;

(5) No person on behalf of the applicant knowingly has made any incorrect statement of a material fact in the application, or in any report or statement made pursuant to sections 36a-595 to 36a-612, inclusive;

(6) No person on behalf of the applicant knowingly has omitted to state any material fact necessary to give the commissioner any information lawfully required by the commissioner; and

(7) The applicant has paid the investigation fee and license fee required under section 36a-599.

(b) The commissioner may deny an application if the commissioner finds that the applicant or the applicant's control persons or qualified individual (1) is listed on the specially designated nationals and blocked persons list prepared by the United States Department of the Treasury, or (2) has been convicted of any misdemeanor involving any aspect of the money transmission business or any felony. Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80.

(c) Notwithstanding the provisions of this section, the commissioner may deny any application of a person who will or may engage in the business of transmitting monetary value in the form of virtual currency if, in the commissioner's discretion, the issuance of such a license would represent undue risk of financial loss to consumers, considering the applicant's proposed business model.

(d) The commissioner may, in the commissioner's discretion, place additional requirements, restrictions or conditions upon the license of any applicant who will or may engage in the business of transmitting monetary value in the form of virtual currency, including the amount of surety bond required by section 36a-602.

(P.A. 81-264, S. 7; P.A. 94-122, S. 278, 340; P.A. 01-56, S. 7; P.A. 04-14, S. 5; P.A. 08-119, S. 13; P.A. 09-208, S. 16; P.A. 11-216, S. 36; P.A. 13-253, S. 6; P.A. 15-53, S. 7; P.A. 18-173, S. 53.)

History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-536 transferred to Sec. 36a-600 in 1995; P.A. 01-56 amended Subsec. (a) by adding new Subdiv. (3) re good character of various persons as applicants and by renumbering existing Subdivs. (3) to (5) as Subdivs. (4) to (6); P.A. 04-14 amended Subsec. (b) to require that applicant pay investigation and license fee required under Sec. 36a-599; P.A. 08-119 added Subsec. (a)(3)(D) re applicant that is a limited liability company; P.A. 09-208 added Subsec. (c) authorizing commissioner to deny application based on certain convictions; P.A. 11-216 amended Subsec. (c) to delete provision re ten-year period re misdemeanor and felony convictions and delete “Connecticut” re payment instruments; P.A. 13-253 amended Subsec. (a) by changing “original” to “initial”, deleting provision re conditional approval and adding provision authorizing commissioner to issue a license, adding reference to Secs. 36a-611 and 36a-612 in Subdiv. (2), deleting reference to Sec. 36a-603 and adding reference to Sec. 36a-602 in Subdiv. (4), adding reference to Sec. 36a-611 and 36a-612 in Subdiv. (5) and adding Subdiv. (7) re payment of fees, deleted former Subsec. (b) re conditional approval, and redesignated existing Subsec. (c) as Subsec. (b) and amended same by adding Subdiv. (1) re applicants or members listed on the specially designated nationals and blocked persons list, designating existing provision re conviction as Subdiv. (2) and making a technical change; P.A. 15-53 added Subsecs. (c) and (d) re commissioner may deny, or place additional requirements on, money transmission license for persons engaging in business involving virtual currency; P.A. 18-173 amended Subsec. (a) by replacing “payment of the fees for investigation and license” with “payment of required fees”, adding “and the applicant's control persons and qualified individual”, deleting Subparas. (A) to (D) and adding provision re applicant's control persons and qualified individual demonstrate financial responsibility and are in all respects properly qualified and of good character in Subdiv. (3), amended Subsec. (b) by deleting references to partners, directors, trustees, principal officers or shareholders with references to applicant's control persons or qualified individual, and made technical and conforming changes.

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Sec. 36a-601. (Formerly Sec. 36-537). Renewal of license. Automatic suspension of renewal license. Notice. Opportunity for hearing. (a) The minimum standards for renewal of a license shall include the following: (1) The applicant continues to meet the minimum standards under section 36a-600; (2) the applicant has paid all required fees for renewal of the license; and (3) the applicant has paid any outstanding examination fees or other moneys due to the commissioner. The license of a money transmitter failing to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system.

(b) In accordance with section 36a-24b, the commissioner may automatically suspend any license if such person receives a deficiency on the system indicating that a required payment was Returned-ACH or returned pursuant to any other term as may be utilized by the system to indicate that payment was not accepted. After a license has been automatically suspended pursuant to this subsection, the commissioner shall (1) give the licensee notice of the automatic suspension pending proceedings for revocation or refusal to renew pursuant to section 36a-608 and an opportunity for a hearing on such action in accordance with section 36a-51, and (2) require the licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.

(P.A. 81-264, S. 8; P.A. 94-122, S. 279, 340; P.A. 01-56, S. 8; P.A. 04-14, S. 6; P.A. 06-35, S. 8; P.A. 13-253, S. 7; P.A. 18-173, S. 54.)

History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-537 transferred to Sec. 36a-601 in 1995; P.A. 01-56 added reference to Sec. 36a-598(9) and eliminated fee for investigation associated with renewal; P.A. 04-14 designated existing provisions as Subsec. (a), making a technical change therein, and added new Subsec. (b) requiring commissioner to automatically suspend renewal license if commissioner determines that a check filed to pay an investigation or license fee has been dishonored and requiring commissioner to give notice of the automatic suspension pending proceedings for refusal to renew such license and an opportunity for a hearing in accordance with Sec. 36a-51; P.A. 06-35 amended Subsec. (a) to provide that license may be renewed for ensuing twenty-four-month period, rather than twelve-month period, to delete reference to information required by Sec. 36a-598 (a)(6) to (9), to require that renewal application be filed on or before September first of year in which license expires, or in the case of license that expires on June 30, 2007, on or before June 1, 2007, to provide that renewal application filed after September first, or in the case of license that expires on June 30, 2007, after June 1, 2007, shall be accompanied by $100 late fee and that any such filing shall be deemed timely and sufficient for purposes of Sec. 4-182(b), and to substitute reference to the date “the license expires” for the date “the commissioner has specified”; P.A. 13-253 amended Subsec. (a) by deleting references to application for license that expires on June 30, 2007, and changing “original” to “initial” and amended Subsec. (b) by adding reference to a check made by ACH that has been returned; P.A. 18-173 substantially amended Subsec. (a) by replacing provisions re application for license renewal with provisions re minimum standards for license renewal and commissioner's authority to adopt procedures for reinstatement of expired licenses, substantially amended Subsec. (b) by replacing provisions check for license fee dishonored and automatic suspension of license with provisions re same.

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Sec. 36a-602. (Formerly Sec. 36-538). Surety bond. Investments in lieu of surety bond. (a) As a condition for the issuance and retention of the license, applicants for a license and licensees shall file with the commissioner a surety bond, the form of which shall be approved by the Attorney General, issued by a bonding company or insurance company authorized to do business in this state. The bond shall be conditioned upon the licensee and the licensee's authorized delegates faithfully performing all obligations with respect to the licensee's money transmission business in this state and conducting such business in this state consistent with the provisions of sections 36a-595 to 36a-612, inclusive. The bond shall be in favor of the commissioner and run concurrently with the period of the license. For applicants and licensees who will not be engaged in the business of transmitting monetary value in the form of virtual currency, such bond shall be in the principal sum of not less than: (1) Three hundred thousand dollars for any applicant and any licensee with an average weekly amount of money transmissions in this state of less than three hundred thousand dollars for the most recent twelve-month period ending June thirtieth, (2) five hundred thousand dollars for any licensee with an average weekly amount of money transmissions in this state equal to or greater than three hundred thousand dollars but less than or equal to five hundred thousand dollars for the most recent twelve-month period ending June thirtieth, or (3) one million dollars for any licensee with an average weekly amount of money transmissions in this state exceeding five hundred thousand dollars for the most recent twelve-month period ending June thirtieth. For purposes of this section, “money transmissions” includes (A) money or monetary value received or transmitted in this state, and (B) stored value and payment instruments issued or sold in this state. For applicants and licensees who will or may engage in the business of transmitting monetary value in the form of virtual currency, such bond shall be in a principal sum as determined by the commissioner and shall be calculated reasonably to address the current and prospective volatility of the market in such currency or currencies.

(b) The proceeds of the bond, even if commingled with other assets of the licensee, shall be deemed by operation of law to be held in trust for the benefit of any claimants against the licensee to serve the faithful performance of the obligations of the licensee and the licensee's authorized delegates with respect to the licensee's money transmission business in this state in the event of the bankruptcy of the licensee, and shall be immune from attachment by creditors or judgment creditors. Any person who may be damaged as a result of the failure by the licensee or the licensee's authorized delegates to perform obligations with respect to the licensee's money transmission business in this state may proceed against the licensee's bond to recover damages. The commissioner may proceed on such bond against the principal or surety thereon, or both, to collect any civil penalty imposed upon the licensee pursuant to subsection (a) of section 36a-50, any restitution imposed pursuant to subsection (c) of section 36a-50, and any unpaid costs of examination of the licensee as determined pursuant to subdivision (6) of subsection (c) of section 36a-65. The bond shall cover claims for damages arising from the licensee's money transmission business in this state made not later than two years from the date of the act, error or omission that allegedly caused or resulted in such damages. When an action is commenced on a licensee's bond, the commissioner may require the filing of a new bond and, immediately upon recovery on any action on the bond, the licensee shall file a new bond. If the commissioner finds that the financial condition of a licensee so requires, as evidenced by the reduction of tangible net worth, financial losses or potential losses as a result of a violation of sections 36a-595 to 36a-612, inclusive, the commissioner may require one or more additional bonds meeting the standards set forth in this section. The licensee shall file any such additional bonds not later than ten days after receipt of the commissioner's written notice of such requirement.

(c) The surety company may cancel the bond at any time by a written notice to the licensee and the commissioner, stating the date cancellation shall take effect. If the bond is issued electronically on the system, such written notice may be provided by the surety company to the licensee and the commissioner through the system at least thirty days prior to the date of cancellation. Any notice of cancellation not provided through the system shall be sent by certified mail to the licensee and the commissioner at least thirty days prior to the date of cancellation. A surety bond shall not be cancelled unless the surety company notifies the commissioner in writing not less than thirty days prior to the effective date of cancellation. After receipt of such notification from the surety company, the commissioner shall give written notice to the licensee of the date such bond cancellation shall take effect. The commissioner shall automatically suspend the license on such date, unless the licensee, prior to such date, submits (1) a letter of reinstatement of the bond from the surety company, (2) a new bond, (3) evidence that all of the principal sum of such surety bond has been invested as provided in subsection (d) of this section, (4) a new bond that replaces the surety bond in part and evidence that the remaining part of the principal sum of such surety bond has been invested as provided in subsection (d) of this section, or (5) evidence that the licensee has ceased business and has surrendered the license. After a license has been automatically suspended, the commissioner shall (A) give the licensee notice of the automatic suspension pending proceedings for revocation or refusal to renew such license and an opportunity for a hearing on such actions in accordance with section 36a-51, and (B) require the licensee to take or refrain from taking such action as the commissioner deems necessary to effectuate the purposes of this section.

(d) In lieu of all or part of the principal sum of such surety bonds, applicants for a license and licensees may invest such sum as provided in this subsection. The book or market value, whichever is lower, of such investments shall be equal to the amount of the bond required by subsection (a) of this section less the amount of the bond filed with the commissioner by the applicant or licensee. Such applicants and licensees shall keep such investments with such banks, Connecticut credit unions or federal credit unions as such applicants or licensees may designate and the commissioner may approve, and subject to such conditions as the commissioner deems necessary for the protection of consumers and in the public interest. As used in this subsection, “investments” means: (1) Dollar deposits; and (2) interest-bearing bills, notes, bonds, debentures or other obligations issued or guaranteed by (A) the United States or any of its agencies or instrumentalities, or (B) any state, or any agency, instrumentality, political subdivision, school district or legally constituted authority of any state if such investment is of prime quality. The investments shall secure the same obligation as would a surety bond filed under this section. The investments shall be held at such banks or credit unions to cover claims during the period the license remains in full force and effect and the succeeding two years after such license has been surrendered, revoked or suspended or has expired in accordance with the provisions of sections 36a-595 to 36a-612, inclusive. The licensee shall be permitted to collect interest on such investments and at any time to exchange, examine and compare such investments. The investments made pursuant to this section, even if commingled with other assets of the licensee, shall be deemed by operation of law to be held in trust for the benefit of any claimants against the licensee to serve the faithful performance of the obligations of the licensee and the licensee's authorized delegates with respect to the licensee's money transmission business in this state in the event of the bankruptcy of the licensee, and shall be immune from attachment by creditors or judgment creditors.

(P.A. 81-264, S. 9; P.A. 91-306, S. 1; P.A. 94-122, S. 280, 340; P.A. 98-192, S. 6; P.A. 01-56, S. 9; P.A. 02-111, S. 39; P.A. 03-61, S. 4; P.A. 04-14, S. 7; P.A. 06-35, S. 9; P.A. 07-91, S. 9; P.A. 09-208, S. 17; P.A. 13-253, S. 8; P.A. 15-53, S. 8; P.A. 18-173, S. 55.)

History: P.A. 91-306 amended Subsec. (a) by deleting existing provisions re amount of bond and added Subdivs. (1), (2) and (3) re principal sum of bond; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-538 transferred to Sec. 36a-602 in 1995; P.A. 98-192 amended Subsec. (a) by adding provision re two-year time period for bond to remain in place and adding specific requirements for licensees that engage in the business of receiving money for transmitting the same; P.A. 01-56 amended Subsec. (a) by changing “Connecticut instruments” to “Connecticut payment instruments”, by rewording language re money transmission and by replacing provisions re trust fund with provisions re proceeds of bond deemed to be held in trust for benefit of claimants, and amended Subsec. (c) by replacing provisions re investment maintained in trust with provisions re investments deemed to be held in trust for benefit of claimants; P.A. 02-111 amended Subsec. (a) by adding provision re authority of commissioner to proceed on bond to collect civil penalty imposed pursuant to Sec. 36a-50(a); P.A. 03-61 changed “corporate surety bond” to “surety bond” throughout, amended Subsec. (a) by revising provisions re approval of form, coverage of bond and beginning of two-year period and by adding provision re surrendered, revoked, suspended or expired license and amended Subsec. (c) by inserting “Connecticut”; P.A. 04-14 amended Subsec. (a)(1), (2) and (3) to replace references to “equivalent thereof” with references to “monetary value received or transmitted, whichever amount is greater”, and to insert references to “monetary value” in provisions re proceeds of the bond to be held in trust for benefit of claimants against licensee, added new Subsec. (b) re cancellation of surety bond and automatic suspension of license and redesignated existing Subsecs. (b) and (c) as new Subsecs. (c) and (d), respectively, revising internal reference accordingly, effective April 16, 2004; P.A. 06-35 amended Subsec. (c) to require applicants and licensees to keep investments with such banks, Connecticut credit unions or federal credit unions as applicants or licensees designate, to require that investments be held subject to such conditions as commissioner deems necessary for protection of consumers and in the public interest and to define “investments” to include “dollar deposits” and “interest-bearing” bills, notes, bonds, debentures or other obligations, deleting former Subdiv. designators (1) and (2), reference to “in accordance with such regulations as the commissioner may adopt”, and Subsec. designator (d), to add provision requiring investments to be held at banks or credit unions to cover claims during period license remains in effect and the succeeding two years after license has been surrendered, revoked or suspended or has expired, and to make conforming changes, effective May 8, 2006; P.A. 07-91 amended Subsec. (a) to insert references to “Connecticut” payment instruments and transmission of “monetary value”, and amended Subsec. (c) to insert references to transmission or payment of “monetary value” and to make a technical change; P.A. 09-208 amended Subsec. (b) by requiring commissioner to give written notice to licensee of the effective date of a bond cancellation, by providing that license shall be automatically suspended unless licensee submits letter of reinstatement from the surety company or a new bond, and by making conforming and technical changes; P.A. 13-253 amended Subsec. (a) by adding provision requiring that bond be conditioned upon faithful performance of all obligations with respect to money transmission business in this state, deleting provisions re bond covering claims arising during licensure period and bond amounts being dependent upon daily balances and adding provisions re bond running concurrently with period of the license and being in a sum dependent upon the amount of applicant's average weekly transmissions, designated provisions re proceeds of the bond as new Subsec. (b) and amended same to add reference to licensee's authorized delegates, replace provision re sale and issuance of Connecticut payment instruments or transmission of money with provision re licensee's money transmission business in this state, add provision re person damaged as a result of a failure to perform obligations may proceed against the bond to recover damages, delete provision re lowering principal sum of bond, add provision re commissioner to proceed on bond to collect any restitution imposed pursuant to Sec. 36a-50 and any unpaid costs of examination, add provision re bond to cover claims for damages and add provision re commissioner to require filing of new bond when action is commenced on licensee's bond or if licensee's financial condition so requires, redesignated existing Subsec. (b) as Subsec. (c) and amended same by making technical changes, and redesignated existing Subsec. (c) as Subsec. (d) and amended same to add reference to Secs. 36a-611 and 36a-612, add reference to the licensee's authorized delegates and replace provision re sale and issuance of Connecticut payment instruments or transmission of money with provision re licensee's money transmission business in this state; P.A. 15-53 amended Subsec. (a) by adding provisions re surety bond requirements for engaging in transmissions involving virtual currency; P.A. 18-173 amended Subsec. (c) by adding references to the commissioner, and adding provision re notice of cancellation for bond issued electronically, designating provision re notice of automatic suspension as Subpara. (A) and designating provision re commissioner to require licensee take or refrain from taking action as Subpara. (B), and making technical and conforming changes.

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Sec. 36a-603. (Formerly Sec. 36-539). Investments equal to amount of money transmissions. Virtual currency equal to amount owed or obligated. Investments and virtual currency held in trust. (a) Each licensee shall at all times maintain permissible investments having a value, computed in accordance with generally accepted accounting principles, at least equal to the aggregate amount of its outstanding money transmissions in this state, provided the value of receivables due from authorized delegates consisting of the proceeds of the sale of payment instruments that are not past due or doubtful of collection shall not exceed thirty per cent of the permissible investments held by the licensee and receivables due from any one person shall not exceed ten per cent of the value of permissible investments held by the licensee.

(b) Each licensee that engages in the business of money transmission in this state by receiving, transmitting, storing or maintaining custody or control of virtual currency on behalf of another person shall at all times hold virtual currency of the same type and amount owed or obligated to such other person. As used in subsection (a) of this section, outstanding money transmissions does not include any virtual currency held pursuant to this subsection, and “value” means the lower of book or market value, except that with regard to debt obligations which the licensee as a matter of policy retains until maturity, “value” means the greater of book or market value unless the commissioner orders that for some or all investments of a particular licensee, “value” means the lower of book or market value.

(c) Permissible investments and virtual currency held pursuant to subsection (b) of this section, even if commingled with other assets of the licensee, shall be deemed by operation of law to be held in trust for the benefit of any claimants against the licensee to serve the faithful performance of the obligations of the licensee and the licensee's authorized delegates with respect to the licensee's money transmission business in this state in the event of the bankruptcy of the licensee, and shall be immune from attachment by creditors or judgment creditors.

(P.A. 81-264, S. 10; P.A. 01-56, S. 10; P.A. 04-14, S. 8; P.A. 07-91, S. 10; P.A. 13-253, S. 9; P.A. 17-233, S. 20.)

History: Sec. 36-539 transferred to Sec. 36a-603 in 1995; P.A. 01-56 amended Subsec. (a) by making a technical change and added new Subsec. (c) re permissible investments deemed to be held in trust for benefit of claimants; P.A. 04-14 amended Subsec. (a) to insert reference to “stored value”, and amended Subsec. (c) to insert references to “monetary value”, effective April 16, 2004; P.A. 07-91 amended Subsecs. (a) and (c) to insert reference to “Connecticut” payment instruments; P.A. 13-253 amended Subsec. (a) to change “Connecticut payment instruments and stored value” to “money transmissions in this state” and add provision re value of receivables due from authorized delegates and amended Subsec. (c) to add reference to licensee's authorized delegates and replace provision re sale and issuance of Connecticut payment instruments or transmission of money with provision re licensee's money transmission business in this state; P.A. 17-233 amended Subsec. (b) by adding provisions licensees engaging in business of money transmission to hold virtual currency equal to the amount owed or obligated to other persons and re outstanding money transmissions, and amended Subsec. (c) by adding “and virtual currency held pursuant to subsection (b) of this section”.

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Sec. 36a-604. (Formerly Sec. 36-540). Net worth requirements. (a) Each licensee which issues or sells payment instruments in this state which are checks, drafts or money orders shall at all times have a tangible net worth of at least one hundred thousand dollars.

(b) Each licensee which issues or sells payment instruments in this state which are travelers checks or electronic payment instruments shall at all times have a tangible net worth of at least one million dollars.

(c) Each licensee that engages in the business of money transmission in this state, except by issuing or selling stored value or payment instruments, shall at all times have a tangible net worth of at least five hundred thousand dollars. Each licensee that issues or sells stored value in this state shall at all times have a tangible net worth of at least one million dollars or a higher amount as determined by the commissioner, in accordance with generally accepted accounting principles.

(P.A. 81-264, S. 11; P.A. 98-192, S. 7; P.A. 01-56, S. 11; P.A. 04-14, S. 9; P.A. 05-74, S. 3; P.A. 07-72, S. 7; P.A. 13-253, S. 10.)

History: Sec. 36-540 transferred to Sec. 36a-604 in 1995; P.A. 98-192 amended Subsec. (b) by adding reference to electronic payment instruments and added new Subsec. (c) re net worth requirements for licensees that engage in the business of receiving money for transmitting the same; P.A. 01-56 amended Subsecs. (a) and (b) by changing “Connecticut instruments” to “Connecticut payment instruments” and amended Subsec. (c) by rewording language re money transmission; P.A. 04-14 amended Subsec. (c) to insert exception re issuing stored value and provision requiring each licensee that engages in business of money transmission by issuing stored value to have at all times a net worth of at least $500,000 or a higher amount as determined by the commissioner, effective April 16, 2004; P.A. 05-74 amended Subsec. (c) to make a technical change, effective June 2, 2005; P.A. 07-72 made a technical change in Subsec. (c); P.A. 13-253 amended Subsec. (a) to delete “Connecticut” and add “or sells”, “in this state”, “checks, drafts or” and “tangible”, amended Subsec. (b) to delete “Connecticut” and add “or sells”, “in this state” and “tangible” and amended Subsec. (c) to add “in this state”, “or selling”, “or payment instruments” and “tangible”, change “engages in the business of money transmission by issuing” to “issues or sells” and change “five hundred thousand dollars” to “one million dollars”.

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Sec. 36a-605. (Formerly Sec. 36-541). Examination of licensees. In connection with the examination of a licensee under section 36a-17, the commissioner may also examine the authorized delegates of such licensee.

(P.A. 81-264, S. 12; P.A. 87-9, S. 2, 3; P.A. 94-122, S. 281, 340; P.A. 01-56, S. 12; P.A. 04-14, S. 10; P.A. 08-176, S. 78; P.A. 09-208, S. 18; P.A. 13-253, S. 11; P.A. 18-173, S. 56.)

History: (Revisor's note: Pursuant to P.A. 87-9 “banking department” was changed editorially by the Revisors to “department of banking”); P.A. 94-122 deleted language allowing authorized employees of the commissioner to examine a licensee's books and records, language allowing employees of a licensee to be examined by the commissioner and language requiring a licensee to pay the cost of such examination, effective January 1, 1995; Sec. 36-541 transferred to Sec. 36a-605 in 1995; P.A. 01-56 deleted existing provisions re commissioner's examination of licensee, added new Subsec. (a) re examination under Sec. 36a-17 or acceptance of a report in lieu thereof and added new Subsec. (b) permitting the commissioner to enter into cooperative, coordinating and information-sharing agreements; P.A. 04-14 amended Subsec. (b) to provide that agreement may include provisions re assessment or sharing of fees for examination or supervision; P.A. 08-176 deleted former Subsec. (b) re information sharing agreements and made a technical change, effective July 1, 2008; P.A. 09-208 removed reference to subagents of licensee; P.A. 13-253 changed “agents” to “authorized delegates” and added references to Secs. 36a-611 and 36a-612; P.A. 18-173 deleted provisions re commissioner's authority to accept certain reports as official examination report.

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Sec. 36a-606. (Formerly Sec. 36-542). Reports. Annual financial reports required. (a) Any person making any filing or submission of any information on the system shall do so in accordance with the procedures and requirements of the system and pay the applicable fees or charges to the system. Licensees shall complete any reports of condition and any reports relating to authorized delegates required by the system. Any such report shall be timely and accurately filed on the system in accordance with the due dates and formats required by the system.

(b) Each licensee shall file with the commissioner not later than ninety days from the licensee's fiscal year end:

(1) A copy of audited financial statements for the most recent fiscal year. If the licensee is a wholly-owned subsidiary of another corporation, it shall file (A) the most recent audited consolidated annual financial statements of the parent corporation or the licensee's most recent audited consolidated annual financial statement, and (B) the most recent audited unconsolidated financial statement of the licensee, including its balance sheet and receipts and disbursements for the preceding year. If the licensee is publicly traded, it shall file a copy of the most recent 10-K report that was filed with the Securities and Exchange Commission or, if the licensee is a wholly-owned subsidiary of a publicly-traded company, a copy of the parent company's most recent 10-K report that was filed with said commission. If the licensee or parent company of a wholly-owned subsidiary licensee is publicly traded on a foreign exchange, it shall file a copy of documentation similar to the 10-K report that was filed with the applicable securities regulator;

(2) To the extent it is not already captured by a report of condition, a list of permissible investments, the book and market value of such investments, and the dollar amount of the licensee's aggregate outstanding money transmissions; and

(3) To the extent it is not already captured by a report of condition, a list of investments maintained in accordance with subsection (d) of section 36a-602, if applicable, the book and market values of such investments and the dollar amount of the licensee's aggregate outstanding money transmissions in this state.

(c) The lists and other information filed as provided in subdivisions (2) and (3) of subsection (b) of this section shall be as of the same date as the financial statement filed in accordance with subdivision (1) of subsection (b) of this section.

(d) The commissioner may require of any licensee such additional reports, under oath, certified, or otherwise, concerning such licensee's business in this state as the commissioner may consider necessary for the enforcement of sections 36a-595 to 36a-612, inclusive. Any licensee that fails to timely and accurately furnish any report required by this section shall be in violation of this section.

(P.A. 81-264, S. 13; P.A. 94-122, S. 282, 340; P.A. 01-56, S. 13; P.A. 04-14, S. 11; P.A. 13-253, S. 12; P.A. 18-173, S. 57.)

History: P.A. 94-122 changed “he” to “the commissioner”, effective January 1, 1995; Sec. 36-542 transferred to Sec. 36a-606 in 1995; P.A. 01-56 amended Subsec. (a)(2) and (3) by changing “instruments” to “payment instruments”; P.A. 04-14 amended Subsec. (a)(3) to substitute “subsection (c)” for “subsection (b)” in reference to Sec. 36a-602 and to add reference to “stored value”, effective April 16, 2004; P.A. 13-253 amended Subsec. (a) to replace former provisions with requirement that licensee file a copy of audited financial statements for most recent fiscal year or the most recent 10-K report or similar report in Subdiv. (1), to change “payment instruments” to “money transmissions” in Subdiv. (2) and to change “(c)” to “(d)” and “Connecticut payment instruments and stored value” to “money transmissions in this state” in Subdiv. (3), and amended Subsec. (c) to add reference to Secs. 36a-611 and 36a-612; P.A. 18-173 amended Subsec. (a) by replacing provisions re information to be filed with commissioner with provisions re submission of information on system and licensee's completion of reports, added new Subsec. (b) re information to be filed with commissioner not later than 90 days from licensee's fiscal year end, redesignated Subsecs. (a)(1) to (3) as Subsecs. (b)(1) to (3), replaced reference to report filed pursuant to Subpara. (C) with reference to 10-K report in redesignated Subsec. (b)(1), added “To the extent it is not already captured by a report of condition,” in redesignated Subsecs. (b)(2) and (3), redesignated existing Subsecs. (b) and (c) as Subsecs. (c) and (d), amended redesignated Subsec. (d) by adding provision re licensee's failure to timely and accurately furnish report, and made technical and conforming changes.

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Sec. 36a-606a. Federal reporting requirements. Anti-money-laundering program. (a) Each licensee shall comply with the applicable provisions of the Currency and Foreign Transactions Reporting Act, 31 USC Section 5311 et seq., as from time to time amended, and any regulations adopted under such provisions, as from time to time amended and, upon request, shall provide proof of such compliance to the commissioner. In addition to any other remedies provided by law, a violation of such federal law or regulation shall be deemed a violation of this section and a basis upon which the commissioner may take enforcement action pursuant to section 36a-608.

(b) Each licensee shall establish an anti-money-laundering program, which shall include, but need not be limited to, (1) internal policies, procedures and controls, (2) a designated compliance officer, (3) an ongoing employee training program, and (4) an independent audit function to test the effectiveness of such anti-money-laundering program.

(P.A. 98-192, S. 8; P.A. 99-36, S. 32; P.A. 13-253, S. 13; P.A. 17-236, S. 13.)

History: P.A. 99-36 made a technical change; P.A. 13-253 added provisions re proof of compliance to be sent to commissioner upon request and re enforcement action by commissioner; P.A. 17-236 designated existing provisions re compliance with Currency and Foreign Transactions Reporting Act as Subsec. (a) and added Subsec. (b) reestablishment of anti-money-laundering program.

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Sec. 36a-607. (Formerly Sec. 36-543). Conduct of business authorized by delegate. Prohibited practices. Deadline to remit value received for transmission. (a) A licensee may conduct its business at one or more locations within this state as follows:

(1) The business may be conducted by the licensee or through or by means of such authorized delegates as the licensee may periodically designate or appoint on the system in such form and manner as required by the commissioner. The licensee shall pay any associated processing fees imposed by the system. The licensee shall notify the commissioner on the system of all authorized delegates that act on its behalf. An authorized delegate may not engage in the business of money transmission in this state on behalf of a licensee through or by means of any person who is not identified on the system as an authorized delegate of the licensee.

(2) No license under sections 36a-595 to 36a-612, inclusive, shall be required of any authorized delegate.

(3) Each authorized delegate shall, from the moment of receipt, hold the proceeds of a sale or delivery of a licensee's money transmissions in this state in trust for the benefit of such licensee.

(4) A licensee shall be liable for the loss caused to any purchaser or holder of the licensee's payment instruments or stored value sold in this state by the failure of an authorized delegate to forward to the licensee the amount due from the proceeds of a sale or delivery of the licensee's payment instruments or stored value, or money or monetary value received for transmission.

(5) The licensee shall enter into a contract with each of its authorized delegates that requires the authorized delegate to operate in full compliance with sections 36a-595 to 36a-612, inclusive, and provides that appointment of the authorized delegate is not effective during any period when the license of the licensee has been suspended. The licensee shall provide each authorized delegate with policies and procedures sufficient to ensure compliance with sections 36a-595 to 36a-612, inclusive.

(6) An authorized delegate shall remit all money owing to the licensee in accordance with the terms of the contract between the licensee and the authorized delegate.

(7) An authorized delegate shall not provide money transmission services in this state outside the scope of activity permissible under the contract between the authorized delegate and the licensee.

(b) For purposes of subsection (a) of this section, “licensee” means any person that has obtained a license from the commissioner as provided in section 36a-600.

(c) No person who is required to be licensed and who is subject to the provisions of sections 36a-595 to 36a-612, inclusive, and no control person shall, directly or indirectly: (1) Employ any scheme, device or artifice to defraud or mislead any person in connection with a money transmission; (2) engage in any unfair or deceptive practice toward any person in connection with a money transmission; (3) obtain property by fraud or misrepresentation; (4) fail to comply with the provisions of sections 36a-595 to 36a-612, inclusive, or the rules or regulations adopted under said sections, or fail to comply with any other state or federal law, including the rules and regulations thereunder; (5) make, in any manner, any false or deceptive statement or representation in connection with a money transmission or engage in bait and switch advertising; (6) negligently make any false statement or knowingly and wilfully make any omission of material fact in connection with any information or reports filed with a governmental agency or the system, or in connection with any investigation conducted by the commissioner or another governmental agency; (7) fail to truthfully account for moneys belonging to a party to a money transmission transaction; (8) fail to perform any written agreement with any party to a money transmission transaction; (9) fail to comply with any demand or requirement made by the commissioner under and within the authority of sections 36a-595 to 36a-612, inclusive; and (10) fail to establish, enforce and maintain policies and procedures for supervising employees, agents and office operations that are reasonably designed to achieve compliance with applicable money transmission laws and regulations.

(d) Each licensee shall remit any money or monetary value received for transmission by the licensee or its authorized delegates to the person designated by the purchaser of such transmission not later than seven calendar days from the date of receipt of such money or monetary value from the purchaser unless otherwise directed by the purchaser.

(P.A. 81-264, S. 14; P.A. 92-12, S. 98; P.A. 01-56, S. 14; P.A. 03-61, S. 5; P.A. 07-91, S. 11; P.A. 09-208, S. 19; P.A. 13-253, S. 14; P.A. 17-233, S. 21; P.A. 18-173, S. 58.)

History: P.A. 92-12 redesignated Subdivs.; Sec. 36-543 transferred to Sec. 36a-607 in 1995; P.A. 01-56 amended Subdivs. (3) and (4) by changing “Connecticut instruments” to “Connecticut payment instruments” and amended Subdiv. (4) by adding language re money transmission; P.A. 03-61 designated existing provisions as Subsec. (a) and added Subsec. (b) providing that licensee includes entity or person exempt under Sec. 36a-609; P.A. 07-91 amended Subsec. (a)(4) to insert reference to “monetary value”; P.A. 09-208 amended Subsec. (a) by prohibiting agent of a licensee from engaging in the business of issuing Connecticut payment instruments or of money transmission on behalf of a licensee through or by means of a subagent in Subdiv. (1), by deleting references to subagents in Subdivs. (1) to (4) and making a conforming change in Subdiv. (3), and by adding Subdivs. (5) to (7) re contracts between licensees and their agents and amended Subsec. (b) by redefining “licensee”; P.A. 13-253 amended Subsec. (a) by changing references to agent to references to authorized delegate, requiring notification of authorized delegates acting on licensee's behalf, deleting reference to issuing Connecticut payment instruments, adding requirement that money transmission occur in this state and changing “subagent” to “any person who is not an authorized delegate of the licensee” in Subdiv. (1), adding reference to Secs. 36a-611 and 36a-612 and changing “agent of a licensee” to “authorized delegate” in Subdiv. (2), changing “agent of a licensee” to “authorized delegate” and “Connecticut payment instruments” to “money transmissions in this state” in Subdiv. (3), deleting “Connecticut”, adding “or stored value sold in this state” and changing “agent of the licensee” to “authorized delegate” in Subdiv. (4), changing references to agent to references to authorized delegate and adding references to Secs. 36a-611 and 36a-612 in Subdiv. (5), and changing references to agent to references to authorized delegate in Subdivs. (6) and (7), and amended Subsec. (b) by deleting reference to any entity or person exempt under Sec. 36a-609 and making a technical change; P.A. 17-233 added Subsec. (c) re acts by persons required to be licensed and subject to provisions of Secs. 36a-595 to 36a-612 and control persons, and added Subsec. (d) re licensees to remit money or monetary value received for transmission not later than seven calendar days from date of receipt; P.A. 18-173 amended Subsec. (a)(1) by adding references to the system and adding provision re licensee to pay any associated processing fees imposed by the system.

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Sec. 36a-608. (Formerly Sec. 36-544). Enforcement powers of commissioner. Removal from office and from employment or retention. Temporary order to cease business. (a) The commissioner shall make such investigations as the commissioner considers necessary to determine whether any licensee or any other person has violated, is violating or is about to violate any of the provisions of sections 36a-595 to 36a-612, inclusive, or whether any licensee has acted in such manner as otherwise would justify the suspension or revocation of the license or a refusal to renew the license. The provisions of section 36a-17 shall apply to such investigation. For purposes of this section, “unsafe or unsound practice” means a practice or conduct by a licensee or an authorized delegate that is likely to result in a material loss, insolvency or dissipation of the licensee's assets or otherwise materially prejudice the interests of purchasers.

(b) The commissioner may suspend, revoke or refuse to renew a license or take any other action, in accordance with section 36a-51, (1) on any ground on which the commissioner might deny an initial license, (2) for any violation by the licensee, or by the licensee's control persons, qualified individual, trustee, employee or agent, including, but not limited to, the licensee's authorized delegates, of any provision of sections 36a-595 to 36a-612, inclusive, or of any regulation or order adopted or issued pursuant thereto pertaining to such person, or any other law or regulation applicable to the conduct of such licensee's money transmission business, (3) for failure of the licensee to pay a judgment ordered by any court within or outside this state within thirty days after the judgment becomes final or within thirty days after expiration or termination of a stay of execution of the judgment, (4) for engaging in fraud, intentional misrepresentation or gross negligence, or (5) for engaging in an unsafe or unsound practice.

(c) Whenever it appears to the commissioner that (1) any person has violated, is violating or is about to violate any provision of sections 36a-595 to 36a-612, inclusive, or any regulation adopted under said sections, (2) any person is, was or would be a cause of the violation of any such provision or regulation due to an act or omission such person knew or should have known would contribute to such violation, or (3) any licensee has failed to pay a judgment ordered by any court within or outside of this state thirty days after the date on which the judgment becomes final or thirty days after the date of the expiration or termination of a stay of execution of the judgment, or engaged in fraud, intentional misrepresentation or gross negligence, or engaged in an unsafe or unsound practice, the commissioner may take action against such person in accordance with sections 36a-50 and 36a-52.

(d) The commissioner may order a licensee to terminate its relationship with any authorized delegate if the commissioner finds that: (1) The authorized delegate violated any provision of sections 36a-595 to 36a-612, inclusive, or any regulation adopted under said sections or any other law or regulation applicable to the conduct of its business; (2) the authorized delegate failed to cooperate with an examination or investigation by the commissioner; (3) the authorized delegate engaged in fraud, intentional misrepresentation, or gross negligence or misappropriated funds; (4) the authorized delegate has been convicted of a violation of a state or federal anti-money laundering statute; (5) the competence, experience, character or general fitness of the authorized delegate or any control person of the authorized delegate demonstrates that it would not be in the public interest to permit such authorized delegate to engage in the business of money transmission in this state on behalf of a licensee; (6) the authorized delegate is engaging in an unsafe or unsound practice; or (7) the authorized delegate is convicted of any act involving fraud or dishonesty.

(e) The commissioner may, in accordance with section 36a-51a, order a licensee to (1) remove a director, general partner, executive officer or employee of a licensee, and (2) terminate retention of an independent contractor in the money transmission business in this state.

(f) The commissioner may issue a temporary order to cease business under a license if the commissioner determines that such license was issued erroneously. Such temporary order shall be issued in accordance with subsection (j) of section 36a-24b.

(P.A. 81-264, S. 15; P.A. 94-122, S. 283, 340; P.A. 01-56, S. 15; P.A. 07-91, S. 22; P.A. 09-208, S. 20; P.A. 13-253, S. 15; P.A. 18-173, S. 59.)

History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-544 transferred to Sec. 36a-608 in 1995; P.A. 01-56 amended Subsec. (a) to add provision re person who “is about to violate”, amended Subsec. (b) by eliminating requirement that violation be wilful and amended Subsec. (d) by referencing subagent; P.A. 07-91 amended Subsec. (b) to authorize commissioner to take any other action, in accordance with Sec. 36a-51, effective June 5, 2007; P.A. 09-208 amended Subsec. (b) by authorizing commissioner to suspend or revoke a license or to take any other authorized action if the licensee engaged in fraud, intentional misrepresentation or gross negligence, or engaged in an unsafe and unsound practice, and by making technical changes, amended Subsec. (c) to authorize commissioner to take action against any licensee who has failed to pay a judgment ordered by a court or has engaged in fraud, intentional misrepresentation or gross negligence, or engaged in an unsafe and unsound practice, and by referencing Sec. 36a-52, and amended Subsec. (d) by replacing former provisions with Subdivs. (1) to (6) authorizing commissioner to order licensee to terminate its agency relationship under certain circumstances; P.A. 13-253 amended Subsec. (a) to add “is violating”, add reference to Secs. 36a-611 and 36a-612 and amended definition of “unsafe or unsound practice”, amended Subsec. (b) to change “original” to “initial”, add reference to Secs. 36a-611 and 36a-612 and make a technical change, amended Subsec. (c) to add reference to Secs. 36a-611 and 36a-612 and make a technical change, and amended Subsec. (d) to change references to agent to references to authorized delegate, add reference to Secs. 36a-611 and 36a-612, replace provision re refusal of agent to allow examination with provision re failure of authorized delegate to cooperate with an examination or investigation by commissioner in Subdiv. (2), add Subdiv. (7) re conviction of an authorized delegate and make a technical change; P.A. 18-173 amended Subsec. (a) by adding “or a refusal to renew the license”, amended Subsec. (b) by inserting Subdiv. (1) to (5) designators, adding “or refuse to renew”, adding reference to control persons, qualified individual, trustee, employee or agent, adding reference to order, and replacing provision re violation under sections for noncompliance with order with provision re violation issued pursuant to sections, other law or regulation applicable to conduct of licensee's money transmission business in Subdiv. (2), amended Subsec. (c) by inserting Subdiv. (1) designator, adding Subdiv. (2) re person is, was or would be cause of violation of provision or regulation, inserting Subdiv. (3) designator, amended Subsec. (d) by replacing references to manager, partner, director, trustee, principal officer, member or shareholder with reference to control person of authorized delegate, added Subsec. (e) re commissioner's authority to order licensee to remove director, general partner, executive officer or employee and terminate retention of independent contractor, added Subsec. (f) re commissioner's authority to issue temporary order, and made technical changes.

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Sec. 36a-609. (Formerly Sec. 36-545). Exemptions. The provisions of sections 36a-597 to 36a-607, inclusive, and sections 36a-611 and 36a-612 shall not apply to:

(1) Any federally insured federal bank, out-of-state bank, Connecticut bank, Connecticut credit union, federal credit union or out-of-state credit union, provided such institution does not engage in the business of money transmission in this state through any person who is not (A) a federally insured federal bank, out-of-state bank, Connecticut bank, Connecticut credit union, federal credit union or out-of-state credit union, (B) a person licensed pursuant to sections 36a-595 to 36a-612, inclusive, or an authorized delegate acting on behalf of such licensed person, or (C) a person exempt pursuant to subdivisions (2) to (4), inclusive, of this section;

(2) Any Connecticut bank that is an innovation bank organized pursuant to subsection (t) of section 36a-70;

(3) The United States Postal Service and any contractor that engages in the business of money transmission in this state on behalf of the United States Postal Service; and

(4) A person whose activity is limited to the electronic funds transfer of governmental benefits for or on behalf of a federal, state or other governmental agency, quasi-governmental agency or government sponsored enterprise.

(P.A. 81-264, S. 16; P.A. 91-357, S. 58, 78 P.A. 92-12, S. 99; P.A. 94-122, S. 284, 340; P.A. 01-56, S. 16; P.A. 03-61, S. 6; P.A. 04-14, S. 12; P.A. 09-208, S. 21; P.A. 13-253, S. 16; P.A. 23-126, S. 26; June Sp. Sess. P.A. 24-1, S. 29.)

History: P.A. 91-357 deleted reference to the Federal Savings and Loan Insurance Corporation from Subsec. (a); P.A. 92-12 redesignated Subdivs.; P.A. 94-122 changed “financial institution” to “bank”, effective January 1, 1995; Sec. 36-545 transferred to Sec. 36a-609 in 1995; P.A. 01-56 amended Subdiv. (1) by replacing reference to banks with insurable deposits with list of specific types of financial institutions and amended Subdiv. (3) by replacing former provisions re telegraph or cable company with language re electronic funds transfer of governmental benefits; P.A. 03-61 substituted “36a-597 to 36a-606a” for “36a-595 to 36a-610”, amended Subdiv. (1) by deleting “Except in its capacity as an agent of a licensee”, substituting “federally insured federal bank” for “federally insured bank” and deleting “Connecticut credit union”, inserted new Subdiv. (2) re exemption for any Connecticut bank or Connecticut credit union and redesignated existing Subdivs. (2) and (3) as new Subdivs. (3) and (4); P.A. 04-14 amended Subdiv. (1) to add reference to “monetary value”, effective April 16, 2004; P.A. 09-208 deleted reference to subagent in Subdiv. (1); P.A. 13-253 replaced reference to Sec. 36a-606a with reference to Sec. 36a-607 and added references to Secs. 36a-611 and 36a-612, amended Subdiv. (1) to add references to Connecticut bank and Connecticut credit union, change “issue or sell Connecticut payment instruments or transmit money or monetary value” to “engage in the business of money transmission in this state”, change “agent” to “any person”, add Subparas. (B) and (C) re licensed or exempt person and designate provision re federally insured institutions as Subpara. (A), deleted former Subdiv. (2) re Connecticut bank or credit union, redesignated existing Subdiv. (3) as Subdiv. (2) and amended same to add “any contractor that engages in the business of money transmission in this state on behalf of the United States Postal Service”, and redesignated existing Subdiv. (4) as Subdiv. (3); P.A. 23-126 made a technical and conforming change in Subdiv. (1), added new Subdiv. (2) re exemption for certain uninsured banks, and redesignated existing Subdivs. (2) and (3) as Subdivs. (3) and (4); June Sp. Sess. P.A. 24-1 amended Subdiv. (2) by changing reference from “uninsured bank” to “innovation bank”, effective July 1, 2024.

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Sec. 36a-610. (Formerly Sec. 36-546). Regulations. The commissioner may adopt regulations, in accordance with chapter 54, which are necessary or appropriate for the administration of sections 36a-595 to 36a-609, inclusive, and sections 36a-611 and 36a-612.

(P.A. 81-264, S. 17; P.A. 01-56, S. 17; P.A. 13-253, S. 17.)

History: Sec. 36-546 transferred to Sec. 36a-610 in 1995; P.A. 01-56 changed “enforcement” to “administration” and made technical changes; P.A. 13-253 added references to Secs. 36a-611 and 36a-612.

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Sec. 36a-611. Maintenance of records. Unique identifier of license. Advertising of license. (a) Each licensee shall maintain and prepare such records as will enable the commissioner to determine whether the licensee and any of its authorized delegates are complying with the provisions of sections 36a-595 to 36a-612, inclusive, at the office named in the license, or, if requested by the commissioner, shall make such records available at such office or send such records to the commissioner by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt, not later than five business days after such request by the commissioner. Upon request, the commissioner may grant a licensee additional time to make such records available or send such records to the commissioner.

(b) Each licensee shall maintain the following records for at least five years:

(1) A record of each payment instrument or stored-value obligation sold within this state;

(2) A general ledger posted at least monthly containing all asset, liability, capital, income and expense accounts;

(3) Bank statements and bank reconciliation records;

(4) Records of outstanding money transmissions in this state;

(5) Records of each payment instrument and stored value obligation paid during the previous five years;

(6) A list of the last known names and addresses of all of the licensee's authorized delegates; and

(7) Any other records the commissioner may require.

(c) (1) The unique identifier of any person licensed under section 36a-600 shall be clearly shown on all solicitations and advertisements, including any business card used to solicit money transmission business and Internet web site, and any other documents as established by rule, regulation or order of the commissioner, and shall be clearly stated in all audio solicitations and advertisements. The solicitations or advertisements of any person licensed under section 36a-600 (A) shall not include any statement that such person is endorsed in any way by this state, except that such solicitations and advertisements may include a statement that such person is licensed in this state; (B) shall not include any statement or claim that is deceptive, false or misleading; (C) shall otherwise conform to the requirements of sections 36a-595 to 36a-612, inclusive, any regulations issued thereunder and any other applicable law; and (D) shall be retained for two years from the date of use of such solicitation or advertising.

(2) Notwithstanding the provisions of subdivision (1) of this subsection, an advertisement or solicitation on a third-party Internet web site need not include the unique identifier of a person licensed under section 36a-600, provided such advertisement or solicitation contains a link to a solicitation, advertisement or Internet web site that clearly shows the unique identifier of such person.

(P.A. 13-253, S. 18; P.A. 18-173, S. 60.)

History: P.A. 18-173 amended Subsec. (a) by deleting reference to Sec. 36a-596, added Subsec. (c) re unique identifier of license and requirements for solicitations or advertisements, and made technical changes, effective July 1, 2019.

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Sec. 36a-612. Notification of change in list of authorized delegates or locations. A licensee shall notify the commissioner on the system not later than fifteen days after the date of any change in the list of the licensee's authorized delegates or locations where the licensee or the licensee's authorized delegates engage in the business of money transmission in this state. Such notice shall state the name and address of each location and authorized delegate removed or added to the licensee's list.

(P.A. 13-253, S. 19; P.A. 18-173, S. 61.)

History: P.A. 18-173 deleted reference to Sec. 36a-596, replaced provision re notification to commissioner in writing with provision re notification to commissioner on the system, and made a technical change.

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Sec. 36a-613. Virtual currency kiosks. Disclosures. Receipts. Fee and commission. Maximum daily transaction limits. Cancellation and refund. Requirements applicable to owners or operators. (a) The owner or operator of a virtual currency kiosk shall, in establishing a relationship with a customer and prior to entering into an initial virtual currency transaction for, on behalf of or with the customer, disclose in clear, conspicuous and legible writing in the English language all material risks associated with virtual currency generally, including, but not limited to, the following:

(1) A disclosure, which shall be acknowledged by the customer, provided separately from the disclosures provided pursuant to subdivisions (2) to (9), inclusive, of this subsection and written prominently and in bold type, stating the following: “WARNING: LOSSES DUE TO FRAUDULENT OR ACCIDENTAL TRANSACTIONS MAY NOT BE RECOVERABLE AND TRANSACTIONS IN VIRTUAL CURRENCY ARE IRREVERSIBLE.”;

(2) Virtual currency is not backed or insured by the government and accounts and value balances are not subject to Federal Deposit Insurance Corporation, National Credit Union Administration or Securities Investor Protection Corporation protections;

(3) Some virtual currency transactions shall be deemed to be made when recorded on a public ledger, which may not be the date or time when the customer initiates the virtual currency transaction;

(4) The value of virtual currency may be derived from the continued willingness of market participants to exchange fiat currency for virtual currency, which may result in the permanent and total loss of the value of a particular virtual currency, if the market for that virtual currency disappears;

(5) The volatility and unpredictability of the price of virtual currency relative to fiat currency may result in a significant loss over a short period of time;

(6) Any bond maintained by the owner or operator for the benefit of the customers of such owner or operator may not be sufficient to cover all losses incurred by such customers; and

(7) Virtual currency transactions are irreversible and are used by persons seeking to defraud customers, including, but not limited to, a person impersonating a customer's loved one, threatening jail time, stating that a customer's identity has been stolen, insisting that a customer withdraw money from the customer's bank account and purchase cryptocurrency or alleging a customer's personal computer has been hacked.

(b) The owner or operator of a virtual currency kiosk shall, when opening an account for a new customer and prior to entering into an initial virtual currency transaction for, on behalf of or with such customer, disclose in clear, conspicuous and legible writing in the English language, using not less than twenty-four point sans-serif-type font, all relevant terms and conditions associated with the products, services and activities of the owner or operator and virtual currency generally, including, but not limited to, the following:

(1) The customer's liability for unauthorized virtual currency transactions;

(2) The customer's right to stop payment of a preauthorized virtual currency transfer and the procedure used to initiate a stop-payment order;

(3) Under what circumstances the owner or operator will, absent a court or government order, disclose information concerning the customer's account to third parties;

(4) The requirement that the owner or operator communicate to the customer what customer information may be disclosed to third parties;

(5) The customer's right to receive a physical, printed receipt for a virtual currency transaction at the time of the transaction; and

(6) Upon any change in the rules or policies of the owner or operator, the customer's right to consent to such changed rules or policies prior to performing any transaction after such change.

(c) The owner or operator of a virtual currency kiosk shall, prior to each transaction in virtual currency for, on behalf of or with a customer, disclose to such customer in clear, conspicuous and legible writing in the English language, using not less than twenty-four point sans-serif-type font, the terms and conditions of the virtual currency transaction, including, but not limited to, the following:

(1) The amount of the transaction;

(2) Any fees, expenses and charges borne by the customer, including, but not limited to, applicable exchange rates;

(3) The type and nature of the virtual currency transaction;

(4) A warning that, once executed, the virtual currency transaction may not be undone, if applicable;

(5) A daily virtual currency transaction limit in accordance with subsection (g) of this section; and

(6) The difference in the sale price of the virtual currency versus the current market price.

(d) The owner or operator of a virtual currency kiosk shall ensure that each customer acknowledges receipt of all disclosures required under this section.

(e) (1) The owner or operator of a virtual currency kiosk shall, upon the completion of any virtual currency transaction, provide to the customer a receipt containing the following information:

(A) The name of, and contact information for, the owner or operator, including, but not limited to, the owner or operator's business address and a customer service telephone number established by the owner or operator to answer questions and register complaints;

(B) The name of the customer;

(C) The type, value, date and precise time of such virtual currency transaction, and each virtual currency address;

(D) The amount of such virtual currency transaction expressed in United States currency;

(E) The full unique transaction hash or identification number;

(F) The public virtual currency address of the customer;

(G) The unique identifier;

(H) Any fee charged, including, but not limited to, any fee charged directly or indirectly by the owner or operator or a third party involved in such virtual currency transaction;

(I) The exchange rate, if applicable;

(J) Any tax collected by the owner or operator for such virtual currency transaction;

(K) A statement of the liability of the owner or operator for nondelivery or delayed delivery;

(L) A statement of the refund policy of the owner or operator;

(M) The name and telephone number of the Department of Banking and a statement disclosing that the owner or operator's customers may contact the department with questions or complaints about the owner or operator's virtual currency kiosk services; and

(N) Any additional information the Banking Commissioner may require.

(2) The receipt required under subdivision (1) of this subsection:

(A) Shall be provided in (i) a retainable form, (ii) the English language, and (iii) the language principally used by the owner or operator of the virtual currency kiosk to advertise, solicit or negotiate, either orally or in writing; and

(B) May be provided electronically if the customer requests or agrees to receive an electronic receipt.

(f) The total amount of any fee and commission charged by an owner or operator of a virtual currency kiosk for a virtual currency transaction shall not exceed fifteen per cent of the amount of the virtual currency transaction.

(g) There are established the following maximum daily virtual currency kiosk transaction limits:

(1) Two thousand dollars for each new customer of a virtual currency kiosk; and

(2) Five thousand dollars for each existing customer of a virtual currency kiosk.

(h) The owner or operator of a virtual currency kiosk shall allow a new customer, upon the request of the new customer, to cancel and receive a full refund for any fraudulent virtual currency transactions that occurred not later than seventy-two hours after the new customer registered as a customer of such owner or operator if, not later than thirty days after the last virtual currency transaction that occurred during such seventy-two hour period, the new customer:

(1) Contacts such owner or operator and a government or law enforcement agency to inform such owner or operator and government or law enforcement agency of the fraudulent nature of such virtual currency transaction; and

(2) Files a report with a government or law enforcement agency memorializing the fraudulent nature of such virtual currency transaction.

(i) Each owner or operator of a virtual currency kiosk shall:

(1) Obtain a copy of a government-issued identification card that identifies each customer of such owner or operator;

(2) Maintain restrictions that prevent more than one customer of such owner or operator from using the same virtual currency wallet;

(3) Be able to prevent designated virtual currency wallets from being used at any virtual currency kiosk owned or operated by such owner or operator;

(4) Use an established third party that specializes in performing blockchain analyses to preemptively perform such analyses to identify and prevent high risk or sanctioned virtual currency wallets from being used by customers at virtual currency kiosks owned or operated by such owner or operator;

(5) Define, in such owner or operator's policies and procedures, a risk-based method of monitoring customers of such owner or operator on a post-transaction basis;

(6) Offer, during the hours of operation of the virtual currency kiosks owned or operated by such owner or operator, live customer support by telephone from a telephone number prominently displayed at or on such virtual currency kiosks;

(7) Identify and speak by telephone with any new customer over sixty years of age prior to such new customer completing such new customer's first virtual currency transaction with such owner or operator. During such communication, which shall be recorded and retained by such owner or operator, the owner or operator shall (A) reconfirm any attestations made by such new customer at a virtual currency kiosk owned or operated by such owner or operator, (B) discuss the transaction, and (C) discuss types of fraudulent schemes relating to virtual currency. Such owner or operator's approval of the transaction shall be dependent upon such owner or operator's assessment of such communication;

(8) Identify and speak by telephone with any new customer attempting to perform a virtual currency transaction that exceeds an amount that has been predesignated by such owner or operator as a large transaction amount before such transaction may be completed. During such communication, which shall be recorded and retained by such owner or operator, the owner or operator shall (A) positively identify such new customer, (B) review such new customer's stated purpose of the transaction, and (C) discuss types of fraudulent schemes relating to virtual currency. Such owner or operator's approval of the transaction shall be dependent upon such owner or operator's assessment of such communication;

(9) Designate and employ a chief compliance officer who shall:

(A) Be qualified to coordinate and monitor a compliance program to ensure compliance with this section and all other applicable federal and state laws, rules and regulations;

(B) Be employed on a full-time basis by such owner or operator; and

(C) Not own more than twenty per cent of the virtual currency kiosk owner or operator that employs such officer; and

(10) Use full-time employees to fulfill such owner or operator's compliance responsibilities under federal and state laws, rules and regulations.

(P.A. 23-82, S. 3; P.A. 24-146, S. 4.)

History: P.A. 24-146 amended Subsec. (a) to delete former Subdiv. (5) re continued acceptance of virtual currency, redesignate existing Subdiv. (6) as Subdiv. (5), delete former Subdiv. (7) re risk of fraud or cyber attack, delete former Subdiv. (8) re technological difficulties, redesignate existing Subdiv. (9) as Subdiv. (6) and add new Subdiv. (7) re irreversibility of virtual currency transactions and use of such transactions to defraud, amended Subsec. (b) to delete former Subdiv. (4) re statements and valuations, add new Subdiv. (4) re disclosure of information, add “physical, printed”, replace “trade ticket or other evidence of” with “for” and add “at the time of the transaction” in Subdiv. (5) and add provision re upon any change in rules or policies of owner or operator and replace “prior notice of a change in the” with “consent to such changed” and “of the owner or operator” with “prior to performing any transaction after such change” in Subdiv. (6), amended Subsec. (e) to designate existing introductory language re receipts as Subdiv. (1), redesignate existing Subdiv. (1) as Subdiv. (1)(A), add “but not limited to, the owner or operator's business address and” and “customer service” in redesignated Subdiv. (1)(A), add Subdiv. (1)(B) re name of customer, redesignate existing Subdiv. (2) as Subdiv. (1)(C), add Subdiv. (1)(D) re transaction amount, add Subdiv. (1)(E) re transaction hash or identification number, add Subdiv. (1)(F) re virtual currency address, add Subdiv. (1)(G) re unique identifier, redesignate existing Subdiv. (3) as Subdiv. (1)(H), change “The fee” to “Any fee” and add provision re fee charged directly or indirectly in redesignated Subdiv. (1)(H), redesignate existing Subdiv. (4) as Subdiv. (1)(I), add Subdiv. (1)(J) re tax collected, redesignate existing Subdivs. (5) and (6) as Subdiv. (1)(K) and (L), add Subdiv. (1)(M) re contacting Department of Banking, redesignate existing Subdiv. (7) as Subdiv. (1)(N), add Subdiv. (2) re receipt requirements and receipts may be provided electronically, amended Subsec. (f) to replace provision authorizing Banking Commissioner to establish maximum fees with provision re amount of fee and commission shall not exceed 15 per cent of transaction, amended Subsec. (g) to replace transaction limit of $2,500 with transaction limits of $2,000 for new customers and $5,000 for existing customers, amended Subsec. (h) to delete provision re at owner's or operator's cost and within 72 hours after virtual currency transaction, add provisions re allowing cancelation and refund upon request of new customers, change “the virtual currency” to “any fraudulent virtual currency”, delete former Subdivs. (1) and (2) re cancelation and refund, add provision re allowing cancelation and refund for transactions that occurred not later than 72 hours after registration if new customer satisfies certain requirements not later than 30 days after certain transaction and add new Subdivs. (1) and (2) re requirements for cancelation and refund, added Subsec. (i) re requirements applicable to owners or operators of virtual currency kiosks and made technical and conforming changes throughout.

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Sec. 36a-614. Regulations. (a) For purposes of this section, “commissioner” has the same meaning as provided in section 36a-2.

(b) The commissioner may, in accordance with the provisions of chapter 54, adopt, amend and rescind regulations, forms and orders governing the business use of digital assets, including, but not limited to, virtual currencies, stablecoins and nonfungible tokens, by entities that, and individuals who, are subject to regulation by the commissioner, which regulations, forms and orders shall ensure consumer protection. As used in this subsection, “nonfungible tokens” shall not include tokens issued or sold primarily for consumptive, personal or household purposes.

(c) In adopting, amending or rescinding any regulation, form or order pursuant to subsection (b) of this section, the commissioner may consult with federal financial services regulators, financial services regulators of other states, other stakeholders and industry professionals to ensure that digital assets receive, to the extent practicable, consistent treatment.

(P.A. 23-82, S. 1; P.A. 24-146, S. 5.)

History: P.A. 23-82 effective June 27, 2023; P.A. 24-146 amended Subsec. (b) to add “and nonfungible tokens” and provision re nonfungible tokens not including tokens issued or sold primarily for certain purposes and make technical and conforming changes.

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PART VI

LOAN BROKERS

Sec. 36a-615. (Formerly Sec. 36-577). Definitions. As used in sections 36a-615 to 36a-620, inclusive, unless the context otherwise requires:

(1) “Advance fee” means any consideration paid or given, directly or indirectly, to a loan broker prior to the distribution of the proceeds of an unsecured loan to any person.

(2) “Loan broker” means any person who: (A) For or in expectation of a fee (i) arranges, negotiates, places, solicits or finds an unsecured loan; (ii) assists or advises a person in obtaining an unsecured loan; or (iii) offers or attempts to engage in the activities described in subparagraph (i) or (ii) of this subdivision; (B) acts for or on behalf of a loan broker; (C) holds himself out to the public generally as a person engaging in the activities described in subdivision (A) of this subsection. A principal, officer, director, partner, joint venturer, manager or other person with similar supervisory or managerial responsibility for persons engaging in the activities described in subdivisions (A) to (C), inclusive, of this subsection shall be deemed to be a loan broker. “Loan broker” shall not include any bank, out-of-state bank, Connecticut credit union, federal credit union, out-of-state credit union, small loan licensee, nondepository mortgage lender, mortgage correspondent lender or mortgage broker, sales finance company, securities broker-dealer or investment adviser, investment company as defined in the Investment Company Act of 1940, as amended from time to time, forwarder of money, trustee under a mortgage or deed of trust of real property, corporation exercising fiduciary powers, money order and travelers check licensee, check cashing licensee, real estate broker or agent, attorney, Federal Housing Authority or United States Department of Veterans Affairs approved lender, or insurance company; provided any such person or entity so excluded is licensed by and subject to the regulation and supervision of the appropriate regulatory agency of the United States or this state or any other state and is acting within the scope of the license.

(3) “Unsecured loan” means any loan of money or extension of credit that is not secured by a security interest, as defined in Regulation Z, 12 CFR Section 1026.2(a)(25), as from time to time amended.

(P.A. 92-67, S. 1, 9; P.A. 94-122, S. 285, 340; P.A. 08-176, S. 74; P.A. 15-235, S. 40; P.A. 18-72. S. 35.)

History: P.A. 94-122 deleted definition of “commissioner” in Subdiv. (2), renumbered the remaining Subdivs. and made technical changes, effective January 1, 1995; Sec. 36-577 transferred to Sec. 36a-615 in 1995; P.A. 08-176 amended Subdiv. (2) to add reference to “mortgage correspondent lender” and make conforming and technical changes, effective July 1, 2008; P.A. 15-235 amended Subdiv. (3) to change “226.2(a)(25)” to “1026.2(a)(25)”, effective August 1, 2015; P.A. 18-72 amended Subdiv. (2) to replace “Veterans' Administration” with “United States Department of Veterans Affairs”.

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Sec. 36a-616. (Formerly Sec. 36-578). Advance fees imposed by loan brokers prohibited. No loan broker may assess, collect, charge, impose or cause to be paid, directly or indirectly, an advance fee as an incident to, condition of or in connection with providing the services of a loan broker.

(P.A. 92-67, S. 2, 9.)

History: Sec. 36-578 transferred to Sec. 36a-616 in 1995.

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Sec. 36a-617. (Formerly Sec. 36-580). Penalties for violations. Any loan broker who knowingly violates any provision of sections 36a-615 to 36a-620, inclusive, or any regulation or order adopted or issued under said sections, shall be fined not more than one thousand dollars or imprisoned not more than one year, or both, for each violation. Each loan of money or extension of credit in which an advance fee was charged, imposed or caused to be paid shall constitute a separate violation.

(P.A. 92-67, S. 4, 9; P.A. 94-122, S. 286, 340.)

History: P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-580 transferred to Sec. 36a-617 in 1995.

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Sec. 36a-618. (Formerly Sec. 36-581). Remedies. Any loan broker who violates any provision of sections 36a-615 to 36a-620, inclusive, with respect to any person shall be liable to such person for actual damages, a reasonable attorney's fee, court costs and such punitive damages as may be awarded by the Superior Court. In addition to such remedies, such person shall have a right of rescission of any contract such person may have with the loan broker.

(P.A. 92-67, S. 5, 9.)

History: Sec. 36-581 transferred to Sec. 36a-618 in 1995.

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Sec. 36a-619. (Formerly Sec. 36-582). Remedies provided by sections 36a-615 to 36a-620, inclusive, not exclusive. The remedies provided by sections 36a-615 to 36a-620, inclusive, are in addition to any other remedies provided by state or federal law.

(P.A. 92-67, S. 6, 9.)

History: Sec. 36-582 transferred to Sec. 36a-619 in 1995.

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Sec. 36a-620. (Formerly Sec. 36-583). Regulations. The commissioner may adopt regulations, in accordance with the provisions of chapter 54, as may be necessary to carry out the provisions of sections 36a-615 to 36a-620, inclusive.

(P.A. 92-67, S. 7, 9.)

History: Sec. 36-583 transferred to Sec. 36a-620 in 1995.

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Secs. 36a-621 to 36a-624. Reserved for future use.

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PART VII

CONNECTICUT BUSINESS AND INDUSTRIAL
DEVELOPMENT CORPORATION ACT

Sec. 36a-625. Short title: Connecticut Business and Industrial Development Corporation Act. Sections 36a-625 to 36a-634, inclusive, shall be known and may be cited as the “Connecticut Business and Industrial Development Corporation Act”.

(P.A. 93-382, S. 56, 69; P.A. 94-122, S. 287, 340.)

History: P.A. 93-382 effective July 1, 1993; P.A. 94-122 made a technical change, effective January 1, 1995.

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Sec. 36a-626. Definitions. As used in sections 36a-625 to 36a-634, inclusive, unless the context otherwise requires:

(1) “Business and industrial development corporation” means a person approved or seeking approval by the federal Small Business Administration as a participating lender under its loan guarantee programs, which applies to the commissioner for a license in accordance with sections 36a-625 to 36a-634, inclusive.

(2) “License” means a license issued under sections 36a-625 to 36a-634, inclusive, authorizing a person to transact business as a business and industrial development corporation.

(3) “Licensee” means a person that is licensed under sections 36a-625 to 36a-634, inclusive.

(P.A. 93-382, S. 57, 69; P.A. 94-122, S. 288, 340.)

History: P.A. 93-382 effective July 1, 1993; P.A. 94-122 deleted definitions of “commissioner” and “person” and made technical changes, effective January 1, 1995.

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Sec. 36a-627. License required. Exemptions. (a) No person shall engage in the business of a business and industrial development corporation as a participating lender under the loan guarantee programs of the federal Small Business Administration in this state without having received a license under sections 36a-625 to 36a-634, inclusive.

(b) Notwithstanding subsection (a) of this section, the following shall be exempt from the provisions of sections 36a-625 to 36a-634, inclusive: (1) Any person licensed by the federal Small Business Administration as a small business investment company or a small business lending company; (2) any bank, out-of-state bank, Connecticut credit union, federal credit union or out-of-state credit union; or (3) any person that is not approved or is not seeking approval by the federal Small Business Administration as a participating lender under one or more of its loan guarantee programs.

(P.A. 93-382, S. 58, 69; P.A. 94-122, S. 289, 340.)

History: P.A. 93-382 effective July 1, 1993; P.A. 94-122 made technical changes, effective January 1, 1995.

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Sec. 36a-628. Application. Fee. Examination. Criminal history records check. (a) An application for a license shall be in writing upon forms to be furnished by the commissioner and shall contain the full name and address of the applicant and, if the applicant is a corporation, each of the officers and directors thereof, and a statement of the assets and liabilities of the applicant in such form as the commissioner requires. Such application shall be accompanied by a copy of the applicant's business plan and such other information and exhibits as the commissioner shall require.

(b) Upon the filing of the required application and license fee, the commissioner shall investigate the facts and may issue a license if the commissioner finds that:

(1) The applicant has a net worth which is not less than two million five hundred thousand dollars and which is adequate for the applicant to transact business as a business and industrial development corporation;

(2) If the applicant is a corporation, the directors and officers of the applicant are each of good character, each competent to perform their functions with respect to the applicant and collectively adequate to manage the business of the applicant as a business and industrial development corporation;

(3) It is reasonable to believe that the applicant, if licensed, will comply with all applicable provisions of sections 36a-625 to 36a-634, inclusive, and of any regulation adopted pursuant to said sections; and

(4) The licensing of the applicant will promote the public convenience and advantage.

(c) In connection with an application for such license and at any other time, the commissioner may, in accordance with section 29-17a, arrange for a criminal history records check requiring the fingerprinting of each principal, executive officer and director of the business and industrial development corporation or for conducting any other method of positive identification of such individuals required by the State Police Bureau of Identification.

(P.A. 93-382, S. 59, 69; P.A. 94-122, S. 290, 340; P.A. 11-50, S. 14; P.A. 12-96, S. 3.)

History: P.A. 93-382 effective July 1, 1993; P.A. 94-122 made technical changes, effective January 1, 1995; P.A. 11-50 added Subsec. (c) authorizing commissioner to arrange for criminal history records check of each principal, executive officer and director, effective July 1, 2011; P.A. 12-96 amended Subsec. (c) to make a technical change, effective June 8, 2012.

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