N.Y. Comp. Codes R. & Regs. tit. 3 § 400.12

Current through Register Vol. 46, No. 50, December 11, 2024

Section 400.12 - Agents of money transmitters

(a) Definitions. As used in this section:

(1) The term money transmission activities shall mean any of those activities for which a license is required under article 13-B of the Banking Law, including but not limited to the sale of money orders and the transfer of funds.

(2) The term transfer of funds shall mean the transmission of funds from one location to another by electronic devices or otherwise, including but not limited to the acceptance of funds for utility bill payments (but not including the sale of money orders).

(3) The term licensed money transmitter shall mean all entities licensed under article 13-B of the Banking Law and all entitles exempt from such licensing.

(b) A licensee shall not engage in any money transmission activities as an agent for a licensed money transmitter without first obtaining the written approval of the superintendent for the contemplated money transmission activities.

(c) To seek such approval, a written application containing the following information shall be submitted to the superintendent:

(1) the name and address of the licensed money transmitter;

(2) the locations at which the licensee will engage in money transmission activities as agent;

(3) the activities to be engaged in as agent to the licensed money transmitter; and

(4) a brief description of the procedures and methods by which the money transmission activities will be carried out.

(d) The following documents shall also be submitted to the superintendent together with the written application:

(1) a copy of the agency agreement with the licensed money transmitter, which agreement must specifically state that the licensee is acting as agent for the money transmitter for the money transmission activity or activities; and

(2) copies of any documentation which the licensee intends to furnish to the public in connection with the money transmission activities (e.g., forms, receipts).

(e) The superintendent may request further information and documentation from the licensee in determining whether to approve the agency activities of the licensee.

(f) The superintendent may prohibit a licensee from acting as agent for a licensed money transmitter if it is determined that:

(1) the licensee has not or is not conducting its business in accordance with applicable laws and regulations;

(2) the Banking Department's regulatory experience with the licensee has not been satisfactory; or

(3) it would not be in the public interest to authorize the licensee to act as agent for a licensed money transmitter.

(g) The superintendent may prohibit a licensee from acting as agent for a licensed money transmitter if it is determined that the money transmitter does not have adequate capital or sufficient expertise to utilize licensed check cashers as agents for the intended activity.

(h) All licensees acting under the authority of this Part shall clearly display on their premises, in full public view, a sign for each money transmission activity, which shall be no less than 18 inches wide and 12 inches high, prominently indicating the following:

(1) the name and address of the money transmitter and the type of money transmission activity for which the licensee is acting as agent;

(2) except in the case of acceptance of utility bill payments, a toll-free number established by the money transmitter which may be called to answer complaints or questions;

(3) that the check casher is licensed and regulated by the New York State Banking Department located at the New York City office location specified in Supervisory Policy G 1 of this Title; and

(4) in the case of the transfer of funds, that persons receiving funds may not be charged any fee by the licensee and that the licensee is acting as agent of the licensed money transmitter in accepting such funds. If the licensee is transferring funds to utility companies for payment of utility bills, it must be indicated that utility payments are not considered paid until received by the utility company.

(i) Except in the case of acceptance of utility bill payments, the form utilized by the licensee for persons requesting a transfer of funds shall contain the information required by paragraphs (h)(1), (2) and (4) of this section and the following additional information:

(1) a statement of the liability of the money transmitter for delayed delivery or nondelivery;

(2) a statement of the refund policy of the licensed money transmitter;

(3) the dollar amount of the transmission; and

(4) the fee charged to persons who transfer funds.

A copy of this form shall be given to every person who utilizes a licensee to transfer funds, together with a receipt for the amount of money transmitted. The form and receipt may be contained in a single document.

(j) Except in the case of utility bill payments, the licensee shall receive all agency fees from the licensed money transmitter for the transfer of funds subsequent to the remittance of the monies to the licensed money transmitter.

(k) A licensee's acceptance of utility bill payments as agent for a licensed money transmitter shall be in accordance with the following:

(1) Funds received by the licensee for payment of utility bills must be remitted to the utility company by means of money orders issued by a licensed money transmitter. Such funds must be remitted using such money orders on a current basis no less than twice a week.

(2) The licensee shall insure against the loss to the licensed money transmitter and the customer of any utility bill payment accepted by securing a surety bond payable to the licensed money transmitter, in the amount of at least $100,000 for each of the licensee's locations, covering all utility bill payments accepted by the licensee. Evidence of such surety bond, satisfactory to the superintendent, shall be given to the superintendent prior to the acceptance of the utility bill payments by a licensee.

(3) At the time any licensee accepts a utility bill payment for remittance, the licensee shall furnish to the customer a separate receipt for each utility bill payment showing the date, the amount accepted by the licensee, and the public utility company to which the payment is to be remitted. A stamped customer's copy of the utility bill shall be deemed a separate receipt for purposes of this section, if the stamp identifies the licensee accepting the utility bill payment and shows the amount accepted for remittance and the date of receipt.

(l) The books and records of the licensee which relate to its activities as an agent for a licensed money transmitter shall be kept separate and distinct from those relating to any other business of the licensee and shall be readily available for examination by the superintendent.

(m) Any licensee which terminates its agency relationship with a licensed money transmitter for one or more money transmission activities shall notify the Banking Department within 30 days of such termination. If a licensee seeks to act as agent for another licensed money transmitter, it shall follow the procedures set forth in subdivisions (c) and (d) of this section.

(n) The superintendent may, upon 30 days' written notice to the licensee, suspend or revoke the authorization for any or all of its money transmission activities if it shall be determined that any of the grounds for denying an application specified in subdivision (f) of this section exist.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 400.12