Senate Bill No. 211

(By Senator Helmick)

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[Introduced January 23, 1998; referred to the Committee
on Banking and Insurance.]
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A BILL to amend chapter thirty-two-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto two new articles, designated articles three and four, all relating to licensing and regulating the businesses of the issuance and sale of checks and money orders, money transmitting, currency exchange, currency transportation and check cashing.

Be it enacted by the Legislature of West Virginia:
That chapter thirty-two-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto two new articles, designated articles three and four, all to read as follows:
CHAPTER 32A. LAND SALES; FALSE ADVERTISING; ISSUANCE

AND SALE OF CHECKS, DRAFTS, MONEY ORDERS, ETC.

 ARTICLE 3. CHECKS AND MONEY ORDER SALES, MONEY TRANSMISSION SERVICES, TRANSPORTATION AND CURRENCY EXCHANGE.
§32A-3-1. Definitions.
(1) "Commissioner" means the commissioner of banking of this state.
(2) "Check" means any check, traveler's check, draft, money order, personal money order or other instrument for the transmission or payment of money.
(3) "Currency" means a medium of exchange authorized or adopted by a domestic or foreign government.
(4) "Currency exchange" means the conversion of the currency of one government into the currency of another government, but does not include the issuance and sale of traveler's checks denominated in a foreign currency.
(5) "Currency exchange, transportation, transmission business" means a person who is engaging in currency exchange, currency transportation, or currency transmission as a service or for profit.
(6) "Currency transmission" or "money transmission" means engaging in the business of receiving currency for the purpose of transmitting the currency or its equivalent by wire, computer modem, facsimile, or other electronic means, or through the use of a financial institution, financial intermediary, the federal reserve system, or other funds transfer network. It includes check cashing as set forth in article three of this chapter and the transmission of funds through the issuance and sale of stored value cards which are intended for general acceptance and use in commercial or consumer transactions.
(7) "Licensee" means a person licensed by the commissioner under this article.
(8) "Person" means any individual, partnership, association, joint stock association, trust or corporation, but does not include the United States of America, any department, agency, commission or officer thereof, the state of West Virginia, any department, agency, commission or officer thereof, or any political subdivision of or any municipality in this state.
(9) "Personal money order" means any instrument for the transmission or payment of money in relation to which the purchaser or remitter appoints or purports to appoint the seller thereof as his agent for the receipt, transmission or handling of money, whether such instrument be signed by the seller or by the purchaser or remitter or some other person.
(10) "Principal" means an owner, officer, director, partner, trustee, agent, or other person participating in the conduct of the affairs of a licensee or exercising supervisory duties.
(11) "Securities" means all bonds, debentures or other evidences of indebtedness (a) issued by the United States of America or any agency thereof, or guaranteed by the United States of America, or for which the credit of the United States of America or any agency thereof is pledged for the payment of the principal and interest thereof; and/or (b) which are direct general obligations of this state, or any other state if unconditionally guaranteed as to the principal and interest by such other state and if such other state has the power to levy taxes for the payment of the principal and interest thereof and is not in default in the payment of any part of the principal or interest owing by it upon any part of its funded indebtedness; and/or (c) which are general obligations of any county, school district or municipality in this state issued pursuant to law and payable from ad valorem taxes levied on all of the taxable property located therein, if such county, school district or municipality is not in default in the payment of any part of the principal or interest on any debt evidenced by its bonds, debentures or other evidences of indebtedness.
§32A-3-2. License required.
(a) Except as provided by section three of this article, a person may not engage in the business of issuing and selling checks or money orders, or the business of currency exchange, transportation or transmission in this state without a license issued under this article.
(b) Any person who was previously licensed as a check seller under this chapter and holds a valid license on the effective date of this article, shall be issued a provisional license under this article without the need of an additional application and fee. This provisional license shall expire upon six months of its issuance, during which time said licensee may continue to conduct its check selling business, provided that it maintains the net worth and security required under its previous license. The commissioner may require the licensee to obtain expanded bond coverage consistent with this article for the protection of purchasers of money transmission services and currency exchange services, as well as for covered currency transportation services, where the licensee conducts such business(es). At the expiration of a provisional license granted by this section, said person must apply for a license and meet the criteria under the provisions of this article, if they wish to continue to engage in any business regulated hereunder. A provisional license granted by this section may upon hearing be suspended or revoked by the commissioner for good cause shown.
§32A-3-3. Exemptions.
(a) The following are exempt from the provisions of this article:
(1) Banks, trust companies, foreign bank agencies, credit unions, savings banks and savings and loan associations authorized to do business in the state, or which qualify as federally insured depository institutions, whether organized under the laws of this state, any other state, or the United States;
(2) The United States and any department or agency thereof;
(3) This state and any political subdivision thereof;
(4) Persons engaged in the business of currency transportation who transport money only on behalf of above-listed exempt financial institutions or governmental entities, or solely for delivery to or from said financial institutions or governmental entities in the regular course of business: Provided, That such exemption does not authorize said persons to engage in the business of currency exchange or transmission or the business of issuing and selling checks without a license issued under this article. Persons seeking to claim this exemption must notify the commissioner of their intent to do so and demonstrate that they qualify for its use; and
(5) Persons who receive money for transmission as an incident to the conduct of another lawful business, provided that such exemption does not authorize said persons to engage in the business of currency exchange or transportation, or the business of issuing and selling checks without a license issued under this article.
(b) Any person who holds and maintains a valid license under this article may engage in the business of issuing and selling checks, or the business of money transmission at one or more locations in this state through or by means of an agent or agents as set forth in section twenty-seven of this article as said licensee may designate and appoint from time to time, and no such authorized agent shall be required to obtain a separate license under this article, provided that such locations limit their transactions to accepting United States currency and do not engage in foreign currency exchange.
(c) The issuance and sale of stored value cards which are intended to purchase items from a specific seller, provider or business is exempt from the provisions of this article.
§32A-3-4. License application, issuance and renewal.
(a) An applicant for a license must submit an application to the commissioner on a form prescribed by the commissioner.
(b) Each application must be accompanied by a nonrefundable application fee and a license fee. If the application is approved, the application fee is the license fee for the first year of licensure.
(c) The commissioner shall issue a license if the commissioner finds that the applicant meets the requirements of this article and the rules adopted under this article. A license is valid for one year from the date the license is issued by the commissioner.
(d) A separate license is required for each location at which currency is exchanged. A person who desires to operate more than one location for currency exchange must submit a separate application for each location. The licensee shall prominently display the license at the place of business for which the license was issued.
(e) As a condition for renewal of a license, the licensee must submit to the commissioner an application for renewal on a form prescribed by the commissioner and an annual license renewal fee.
(f) A license issued under this article may not be transferred or assigned.
(g) An applicant for a license who is not located in this state must file an irrevocable consent, duly acknowledged, that suits and actions may be commenced against the applicant in the courts of this state by service of process upon a person located within the state designated to accept service, or by service upon the secretary of state, as well as by service as set forth in this chapter.
§32A-3-5. Fees.
(a) The commissioner shall charge and collect the license application fees, license fees, license renewal fees and examination fees in amounts reasonable and necessary to defray the cost of administering this article as set forth below.
(1) For applying for a license, an application and licensing fee of five hundred dollars, plus ten dollars for each location within the state at which the applicant and its authorized agents are conducting business or propose to conduct business excepting the applicant's principal place of business.
(2) For renewal of a license, a fee of two hundred fifty dollars, plus ten dollars for each location within the state at which the licensee and its authorized agents are conducting business or propose to conduct business excepting the applicant's principal place of business.
(3) For an application to add an authorized agent location, ten dollars for each location.
(4) For a change in address by the licensee, a fee of one hundred dollars.
(5) For failure to timely submit an application of renewal or file financial statements required for renewal as set forth in this article, a penalty fee of ten dollars per day for each day late, unless an extension of time has been granted or the fee waived by the commissioner.
(b) Beginning one year after the effective date of this article, the commissioner may, by rule, amend the fees set forth in this section and in subsection (b), section eleven of this article.
(c) Fees and moneys received and collected under this article shall be paid into the special revenue account in the state treasury for the division of banking established in section eight, article two, chapter thirty-one-a of this code.
§32A-3-6. Denial of license or renewal of license.
(a) The commissioner may deny the granting of a license or renewal of a license for a failure to comply or otherwise meet the requirements and qualifications of this article or a rule adopted under this article, including failure to submit a complete application.
(b) The denial of a license or denial of renewal by the commissioner and the appeal from that action are governed by the procedures for a contested case hearing under the provisions of article five, chapter twenty-nine-a of this code and shall conform to that provided for financial institutions pursuant to sections one and two, article eight, chapter thirty-one-a of this code and the rules thereto.
(c) Whenever the commissioner shall refuse to issue a license, or shall refuse to renew a license, he or she shall make and enter an order to that effect and shall cause a copy of such order to be served in person or by certified mail, return receipt requested, or in any other manner in which process in a civil action in this state may be served, on the applicant or licensee, as the case may be.
§32A-3-7. Adoption of rules.
The commissioner may promulgate rules as he or she deems appropriate to implement, interpret or effectuate this article, including rules regarding the record-keeping and reporting requirements of a licensee.
§32A-3-8. Qualifications for license or renewal of license.
(a) Before the commissioner issues a license to an applicant, the commissioner must determine that the financial condition, business experience and character and general fitness of an applicant are such that the issuance of a license to the applicant under this article is in the public interest.
(b) An applicant for a license must agree in writing to comply with the currency reporting and record-keeping requirements of 31 U.S.C. §5313, 31 C.F.R. Part 103, and other relevant federal law.
(c) A person is not eligible for a license or must surrender an existing license if, during the previous ten years:
(1) The person or a principal of the person, if a business:
(A) Has been convicted of a felony or a crime involving fraud, deceit, or moral turpitude under the laws of this state, any other state, or the United States;
(B) Has been convicted of a crime under the laws of another country that involves fraud, deceit or moral turpitude or would be a felony if committed in the United States; or
(C) Has been convicted under a state or federal law relating to currency exchange or transmission or any state or federal monetary instrument reporting requirement; or
(2) The person, a principal of the person, or the spouse of the person has been convicted of an offense under a state or federal law relating to drug trafficking, money laundering, or a reporting requirement of the Bank Secrecy Act (Pub. L. 91-508).
(d) An applicant for a license must demonstrate that the applicant:
(1) Has not recklessly failed to file or evaded the obligation to file a currency transaction report as required by 31 U.S.C. Section 5313 during the previous three years;
(2) Has not recklessly accepted currency for exchange, transport or transmission during the previous three years in which a portion of the currency was derived from an illegal transaction or activity;
(3) Will conduct its authorized business within the bounds of state and federal law;
(4) Warrants the trust of the community;
(5) Has and will maintain a minimum net worth of fifty thousand dollars, computed according to generally accepted accounting principles as shown by financial statements filed with and satisfactory to the commissioner, and in addition has and will maintain a minimum net worth of twenty-five thousand dollars, computed according to generally accepted accounting principles for each office or agent location in the state other than its principal office at which its licensed business is transacted, except that an applicant for a license or renewal of a license may not be required to maintain a net worth of more than one million dollars, computed according to generally accepted accounting principles; and
(6) Does not owe delinquent taxes, fines or fees to any local, state or federal taxing authority or governmental agency, department or other political subdivision.
(e) A person is not eligible for a license, and a person who holds a license shall surrender the license to the commissioner, if the person or a principal of the person has at any time been convicted of:
(1) A felony involving the laundering of money that is the product of or proceeds from criminal activity under chapter sixty-one of this code, or a similar provision of the laws of another state or the United States; or
(2) A felony violation of 31 U.S.C. Section 5313 or 5324 or a rule adopted under those sections.
(f) Before approving an application for a license, the commissioner may, in his or her discretion, conduct an on-site investigation of an applicant at the sole expense of the applicant and may require the applicant to pay a nonrefundable payment of the anticipated expenses for conducting the investigation. Failure to make the payment or cooperate with the investigation is grounds for denying the application.
§32A-3-9. Access to criminal history information.
The commissioner may refuse to grant a license or may suspend or revoke a license if the applicant, licensee, principal of the applicant or licensee, or spouse of such persons fails to provide upon request a complete set of fingerprints, recent photograph, or other information sought by the commissioner relevant to conducting an adequate criminal background check.
§32A-3-10. Bond.
(a) A person who is licensed under this article shall post a bond with a qualified surety company doing business in this state that is acceptable to the commissioner. The bond shall be in an amount determined by the commissioner. The commissioner shall determine the amount of the bond based on the dollar volumes of the licensee's currency exchange, transportation or transmission business as well as the dollar volume of checks and money orders sold and outstanding, but the bond must be at least twenty-five thousand dollars for a person conducting a currency exchange business; at least three hundred thousand dollars for a person conducting a currency transmission or currency transportation business; and the bond for issuing and sale of checks and money orders shall be at least one hundred thousand dollars.
(b) Instead of the bond(s) required under subsection (a) of this section, a licensee, with the prior written permission of the commissioner, may deposit with the commissioner or a federally-insured depository institution in this state designated by the licensee and approved for such purpose by the commissioner, United States currency or cash equivalent instruments or securities acceptable to the commissioner. The amount of currency or the fair market value of the instruments or securities must be an amount equal to or exceeding the amount required for the bond(s) under subsection (a) of this section. When securities are deposited as aforesaid, the value of such securities must at all times be equal to the amount of bond(s) otherwise required, computed on the basis of the principal amount or the market value thereof, whichever is lower.
(c) A bond posted by a licensee must be conditioned so that as long as the person holds the license the person will not violate this article or a rule adopted under this article. The deposit or bond, as the case may be, shall be made to the state of West Virginia for the benefit and protection of any claimant against the applicant or licensee with respect to the receipt, handling, transmission and payment of money by the licensee or authorized agent in connection with the licensed operations in this state. A claimant damaged by a breach of the conditions of the bond or deposit shall upon the assent of the commissioner have a right of action against the bond or deposit for damages suffered thereby and may bring suit directly thereon, or the commissioner may bring suit on behalf of the claimant. The aggregate liability of the surety in no event shall exceed the principal sum of the bond. So long as the person making a deposit under this section is not in violation of any of the provisions of this article, such person shall be permitted to receive all interest and dividends on said deposit, and shall have the right, with the approval of the commissioner, to substitute other securities. If the deposit is made at a bank, any custodial fees therefor shall be paid by the person making such deposit.
(d) A penalty fee under subdivision five, subsection (a), section five of this article, expenses under section eleven of this article, or a civil penalty under section nineteen of this article may be paid out of and collected from the proceeds of a bond or deposit under this section.
(e) After receiving a license, the licensee must maintain the required bond(s) or securities until five years after it ceases to do business in this state unless all outstanding payment instruments are cleared or covered by the provisions of article eight, chapter thirty-six of this code pertaining to the distribution of unclaimed property which have become operative and are adhered to by the licensee. Notwithstanding this provision, however, the commissioner may permit the security to be reduced following cessation of business in the state to the extent the amount of such licensee's payment instruments outstanding in this state are reduced.
(f) If the commissioner at any time reasonably determines that the required bond or deposit is insecure, deficient in amount, or exhausted in whole or in part, he may in writing require the filing of a new or supplemental bond or other security in order to secure compliance with this article and may demand compliance with the requirement within thirty days following service on the licensee.
§32A-3-11. Examination and fraudulently structured transactions.
(a) Each licensee is subject to a periodic examination of the licensee's business records by the commissioner at the expense of the licensee. For the purpose of carrying out this article, the commissioner may examine all books, records, papers or other objects that the commissioner determines are necessary for conducting a complete examination and may also examine under oath any principal associated with the license holder, including an officer, director or employee of the licensee. If a person required by the commissioner to submit to an examination refuses to permit the examination or to answer any question authorized by this article, the commissioner may suspend the person's license until the examination is completed.
(b) The licensee shall bear the cost of any on-site examination made pursuant to this section which cost shall be at a rate of fifty dollars per each examiner hour expended, together with all reasonable and necessary travel expenses incurred in connection with the examination.
(c) A person, for the purpose of evading a reporting or record-keeping requirement of 31 U.S.C. Section 5313, 31 C.F.R. Part 103, this article, or a rule adopted under this article, may not with respect to a transaction with a licensee:
(1) Cause or attempt to cause the licensee to:
(A) Not maintain a record or file a report required by a law listed by this subsection; or
(B) Maintain a record or file a report required by a law listed by this subsection that contains a material omission or misstatement of fact; or
(2) Fraudulently structure the transaction.
(d) For the purposes of this article, a person fraudulently structures a transaction if the person conducts or attempts to conduct a transaction in any amount of currency with a licensee in a manner having the purpose of evading a record-keeping or reporting requirement of this article, or of a law listed by subsection (c) of this section, including the division of a single amount of currency into smaller amounts or the conduct of a transaction or series of transactions in amounts equal to or less than the reporting or record-keeping threshold of a law listed by subsection (c) of this section.
(e) A transaction is not required to exceed a record-keeping or reporting threshold of a single licensee on a single day to be a fraudulently structured transaction.
§32A-3-12. Investigations and subpoenas.
(a) In addition to the examinations required by section eleven of this article, the commissioner is authorized to inspect, examine and audit the books, records, accounts and papers of all licensees at such times as circumstances in his or her opinion may warrant. The commissioner may call for and require all such data, reports and information from licensees under his or her jurisdiction, at such times and in such form, content and detail, deemed necessary by the commissioner in the faithful discharge of his or her duties and responsibilities in the supervision of the licensees.
(b) In connection with the investigations undertaken pursuant to this article, the commissioner shall have the authority to issue subpoenas and subpoenas duces tecum, administer oaths, examine persons under oath, and hold and conduct hearings, with any such subpoenas or subpoenas duces tecum to be issued, served and enforced in the manner provided in section one, article five, chapter twenty-nine-a of this code. Any person appearing and testifying at such a hearing may be accompanied by an attorney.
§32A-3-13. Notification requirements.
(a) A licensee must notify the commissioner of any change in its principal place of business, or its headquarters office if different from its principal place of business within fifteen days after the date of the change.
(b) A licensee must notify the commissioner of any of the following significant developments within fifteen days after gaining actual notice of its occurrence:
(1) The filing of bankruptcy or for reorganization under the bankruptcy laws;
(2) The institution of license revocation or suspension procedures against the licensee in any other state;
(3) A felony indictment related to money transmission, currency exchange, fraud, failure to fulfill a fiduciary duty, or other activities of the type regulated under this article of the licensee or its authorized agents in this state, or of the licensee's or authorized agent's officers, directors, controlling persons or principals; and
(4) A felony conviction or plea related to the money transmission, currency exchange, fraud, failure to fulfill a fiduciary duty, or other activities of the type regulated under this article of the licensee or its authorized agents in this state, or of the licensee's or authorized agent's officers, directors, controlling persons or principals.
(c) A licensee must notify the commissioner of any merger or acquisition which may result in a change of control or a change in principals of a licensee within fifteen days of announcement or publication of such proposal. Upon notice of such circumstances by a corporate licensee, the commissioner may require all information necessary to determine whether it results in a transfer or assignment and thus if a new application is required in order for the company to continue doing business under this article. A licensee that is an entity other than a corporation shall in such circumstances submit a new application for licensure at the time of notice.
§32A-3-14. Records maintenance.
(a) A licensee shall keep and use in its business books, accounts, and records in accordance with generally accepted accounting principals. A licensee shall retain all of its records of final entry for the period of time as required in section thirty-five, article four, chapter thirty-one-a of this code for banking institutions. The licensee shall also preserve its general ledger, settlement sheets from its authorized agents, bank statements and bank reconciliation records for this said same established period of time.
(b) Unless the documents or data therefrom has been transmitted to the licensee for recordation, the licensee shall require its authorized agents to preserve records relating to its licensed activities for the period set forth in subsection (a) of this section.
(c) Records may be kept using retention technologies, including nonerasable optical disk, as is provided for banking institutions and with the same effect as set forth in section thirty-five, article four, chapter thirty-one-a of this code.
(d) A licensee shall maintain records relating to its business under this article at its principal place of business, or with notice to the commissioner, at another location designated by the licensee. If the records are located outside the state, the licensee at its option shall make them available to the commissioner at a convenient location within this state, or pay the reasonable and necessary expenses for the commissioner or his or her representatives to examine them at the place where they are maintained.
§32A-3-15. Transaction records.
(a) Every check sold by the licensee or its authorized agents shall bear the name of the licensee and a unique number clearly stamped or imprinted thereon. When an order for the transmission of money results in the issuance of a check, both the order and the check may bear the same number.
(b) The licensee or its authorized agents shall record the face amount and unique number of its checks upon their sale.
(c) The licensee or its authorized agents shall record the date on which money was received for transmission, the amount transmitted, the name of the customer and the intended recipient, and the location to which the money was transmitted. Unless otherwise directed by the customer, the transmission of money shall be made by the licensee or authorized agent within three business days after the receipt of payment. The customer shall be provided a written receipt sufficient to identify the transaction, the licensee, and the amount.
(d) If the transaction involves the exchange of foreign currency, or the sale of travelers checks denominated in a foreign currency, the licensee or authorized agent shall record the date of the transaction, the amount of the transaction and the rate of exchange at the time of transaction. The customer shall be provided a written receipt sufficient to identify the transaction, the licensee and the amount.
(e) Records required by this section shall be maintained by the licensee or authorized agent as set forth in section fourteen of this article, and shall be available for examination by the commissioner.
§32A-3-16. Enforcement.
The commissioner, with the assistance of the state police, may investigate violations of this article or rules adopted under this article. Based on the investigation, the commissioner or any law enforcement agency may file a criminal referral with the prosecuting attorney of Kanawha County or with the prosecuting attorney of the county in which a violation is alleged to have occurred. In addition, the commissioner may bring civil actions to enforce the provisions of this article or the rules adopted under this article.
§32A-3-17. Cooperative agreements.
(a) The commissioner shall cooperate with federal and state agencies in discharging the commissioner's responsibilities under this article. The commissioner may:
(1) Arrange for the exchange of information among government officials concerning the regulation of a currency exchange, transportation or transmission business, or the sale of checks;
(2) Cooperate in and coordinate training programs concerning the regulation of currency exchange, transportation or transmission businesses, or the sale of checks; and
(3) Assist state and federal agencies in their enforcement and investigatory activities and supply those agencies with documentation and information.
(b) The commissioner may request the assistance of the state police in enforcing this article.
§32A-3-18. Criminal penalty.
(a) A person commits a criminal offense if the person knowingly:
(1) Violates a requirement of this article;
(2) Makes a false, fictitious, or fraudulent statement, representation, or entry in a record or report required under 31 U.S.C. Section 5313, 31 C.F.R. Part 103, this article, or a rule adopted under this article; or
(3) Fraudulently structures or attempts to fraudulently structure a transaction in violation of section eleven of this article.
(b) An offense under this section is a felony.
(c) Any officer, director, employee or agent of any licensee or any other person guilty of any felony offense as provided in this section shall, upon conviction thereof, be imprisoned in the penitentiary not less than one nor more than five years and also, in the discretion of the court, may be fined up to ten thousand dollars for each violation. Each transaction in violation of this article and each day that a violation continues shall be a separate offense.
§32A-3-19. Civil penalty.
The commissioner may bring civil actions to enforce this article in the circuit court of Kanawha County or the county in which the violation occurred and seek civil penalties. If, after notice and a hearing, the court finds that a person has violated this article, a rule adopted under this article, or an order of the commissioner issued under this article, the court may order the person to pay to the state a civil penalty. The amount of a civil penalty under this section may not exceed five thousand dollars for each violation or, in the case of a continuing violation, up to five thousand dollars for each day that the violation continues. A civil penalty assessed may be collected from the bond or deposit required under section ten of this article.
§32A-3-20. Injunction.
If it appears to the commissioner that a person has committed or is about to commit a violation of this article, a rule promulgated thereunder, or an order of the commissioner, the commissioner may apply to the circuit court of Kanawha County or the county in which the violation occurred for an order enjoining the person from violating or continuing to violate the article, rule or order and for injunctive or other relief that the nature of the case may require and may, in addition, request the court to assess civil penalties as provided under this article.
§32A-3-21. Consent orders.
(a) The commissioner may enter into consent orders at any time with a person to resolve a matter arising under this article. A consent order must be signed by the person to whom it is issued and must indicate agreement to the terms contained in it. A consent order need not constitute an admission by a person that this article or a rule or order issued or promulgated under this article has been violated, nor need it constitute a finding by the commissioner that the person has committed a violation.
(b) Notwithstanding the issuance of a consent order, the commissioner may seek civil or criminal penalties or compromise civil penalties concerning matters encompassed by the consent order unless by its terms the consent order expressly precludes the commissioner from doing so.
§32A-3-22. Cease and desist orders.
(a) If the commissioner, upon information, has cause to believe that a licensee or other person is engaged in practices contrary to this article or the rules adopted under this article, the commissioner may issue an order directing the licensee or person to cease and desist the violation. A cease and desist order is appropriate where, inter alia, the information indicates that the principal or the licensee acting through any authorized person has:
(1) Violated or refused to comply with a provision of this article, a rule adopted under this article, or any other law or regulation applicable to a currency exchange, transportation or transmission business, or to the issuance and sale of checks;
(2) Committed a fraudulent practice in the conduct of the licensee's business;
(3) Refused to submit to an examination;
(4) Conducted business in an unsafe or unauthorized manner; or
(5) Violated any condition of its license or of any agreement entered into with the commissioner.
(b) The commissioner shall serve notice and a copy of the cease and desist order on the affected party either personally or by certified mail, return receipt requested. Service by mail shall be deemed completed if the notice is deposited in the post office, postage prepaid, addressed to the last known address for a licensee or the person designated by the licensee to accept service in this state.
(c) The order shall include a statement of the alleged conduct of the licensee or principal which gave rise to the order, and set forth the facts and law on which it is based.
(d) A person is entitled to a hearing on the cease and desist order before the commissioner or a hearing examiner appointed by him or her, if the person files with the commissioner a written demand for such hearing within ten days after receiving written notice of such order, or within thirty days after the date of service whichever event shall occur first. A person's right to a hearing as provided by this subsection shall be disclosed in the notice of service.
(e) The hearing procedures and judicial review of any such order will be afforded as set forth in sections one and two, article eight, chapter thirty-one-a of this code and the procedural rules thereunder.
(f) The issuance of a cease and desist order under this section shall not be a prerequisite to the taking of any action by the commissioner or others under any other section of this article.
§32A-3-23. Liability of licensees.
A licensee is liable for the payment of any moneys covered by payment instruments that it sells or issues in any form in this state through its authorized agents and all moneys it receives itself or through its authorized agents for transmission by any means whether or not any instrument is a negotiable instrument under the laws of this state.
§32A-3-24. Confidential information.
(a) Reports of investigation and examination together with related documents shall be confidential and may not be disclosed to the public by the commissioner or employees of the division of banking, nor are they subject to the state's freedom of information act. The commissioner may release information if:
(1) The commissioner finds that immediate and irreparable harm is threatened to the licensee's customers or potential customers or the general public;
(2) The licensee consents before the release;
(3) The commissioner finds that release of the information is required in connection with a hearing under this article, in which event information may be related to the parties of that hearing; or
(4) The commissioner finds that the release is reasonably necessary for the protection of the public and in the interest of justice, in which event information may be distributed to representatives of an agency, department or instrumentality of this state, any other state, or the federal government.
(b) Nothing herein prevents release to the public of any list of licensees or aggregated financial data for the licensees; nor either prevents disclosure of information the presiding officer deems relevant to the proper adjudication or administration of justice at public administrative or judicial hearings, or prevents disclosure of information relevant to supporting the issuance of any administrative or judicial order.
§32A-3-25. Hearing on suspension or revocation of license.
(a) A license may not be revoked or suspended except after notice and opportunity for hearing on that action. The commissioner may issue to a person licensed under this article an order to show cause why the license should not be revoked or should not be suspended for a period not in excess of six months. The order shall state the place for a hearing and set a time for the hearing that is no less than ten days from the date of the order. After the hearing the commissioner shall revoke or suspend the license if he or she finds that:
(1) The licensee has knowingly or repeatedly violated this chapter or any rule or order lawfully made or issued pursuant to this article;
(2) The licensee has failed to remit its required renewal fees, or to maintain their status as a business in good standing with the office of the secretary of state, notwithstanding notification in writing by the commissioner sent by certified mail to the licensee's last known address providing for thirty days to rectify such failure;
(3) Facts or conditions exist which would clearly have justified the commissioner in refusing to grant a license had these facts or conditions been known to exist at the time the application for the license was made.
(4) The licensee does not have available the net assets required by the provisions of section eight of this article;
(5) The licensee has failed or refused to keep the bond or other security required by section ten of this article in full force and effect; or
(6) In the case of a foreign corporation, the licensee does not remain qualified to do business in this state.
(b) No revocation or suspension of a license under this article is lawful unless prior to institution of proceedings by the commissioner notice is given to the licensee of the facts or conduct which warrant the intended action, and the licensee is given an opportunity to show compliance with all lawful requirements for retention of the license.
(c) If the commissioner finds that probable cause for revocation of a license exists and that enforcement of this article to prevent imminent harm to public welfare requires immediate suspension of the license pending investigation, the commissioner may, after a hearing upon five days' written notice, enter an order suspending the license for not more than thirty days.
(d) Nothing in this section limits the authority of the commissioner to take action against a licensee or person under other sections of this article.
(e) Whenever the commissioner revokes or suspends a license, an order to that effect shall be entered and the commissioner shall forthwith notify the licensee of the revocation or suspension. Within five days after the entry of the order the commissioner shall mail by registered or certified mail or shall cause personal deliver to the licensee a copy of the order and the findings supporting the order.
(f) Any person holding a license under this article may relinquish the license by notifying the commissioner in writing of its relinquishment, but this relinquishment shall not affect his or her liability for acts previously committed.
(g) No revocation, suspension or relinquishment of a license shall impair or affect the obligation of any preexisting lawful contract between the licensee and any person.
(h) The commissioner may reinstate a license, terminate a suspension or grant a new license to a person whose license has been revoked or suspended if no fact or condition then exists which clearly would have justified the commissioner in refusing to grant a license.
§32A-3-26. Deceptive name or advertising.
(a) A licensee who advertises the prices to be charged by the currency exchange or currency transmission business for services that are governed by this article must specifically state in the advertisement all fees or commissions to be charged to the consumer.
(b) The commissioner by rule may establish requirements for the size and type of lettering a licensee must use in an advertisement for prices or rates.
(c) A person who violates this section or a rule adopted under this section commits an unfair and deceptive act or practice within the meaning of section one hundred four, article six, chapter forty-six-a of this code.
(d) A corporate licensee may not use the same name as, or a name deceptively similar to, the name of any domestic corporation existing under the laws of this state, or the name of any foreign corporation authorized to transact business in this state, except as otherwise provided by the commissioner or secretary of state pursuant to law.
§32A-3-27. Authorized agents.
(a) A licensee may conduct the business of issuing and selling checks and money orders, as well as the business of money transmission (other than check cashing services) regulated by this article at one or more locations in this state through authorized agents designated by the licensee.
(b) A licensee shall not allow a person to act as its authorized agent until all applicable requirements of this article have been complied with and the name and address of the person, on a form prescribed by the commissioner, along with all applicable fees have been submitted by the licensee. A licensee shall not knowingly authorize a person to act as its agent, which person has in the prior ten year a disqualifying criminal conviction of the type set forth in subdivision two, subsection (c), section eight of this article.
(c) A licensee shall enter into a contract with its authorized agent detailing the nature and scope of the relationship between the licensee and the authorized agent. The contract must require that the authorized agent operate in full compliance with the laws of this state and of the United States. The licensee shall, upon request, provide the commissioner with the sample written contract.
(d) The financial responsibility of a licensee for the actions of its authorized seller shall not exceed the amount of funds received by the authorized agent on behalf of its licensee for the business regulated under this article.
(e) An authorized agent has an affirmative duty not to (i) commit fraud or misrepresentation; and (ii) submit fraudulent statements to the licensee. A licensee shall promptly report to the commissioner and to any other appropriate state or federal official when it has probable cause to believe an authorized agent has violated the affirmative duty set forth in this subsection.
(f) The licensee shall require the authorized agent to hold in trust for the licensee from the moment of receipt of the proceeds of any business transacted under this article in an amount equal to the amount of proceeds due the licensee less the amount due the authorized agent. The funds shall remain the property of the licensee whether or not commingled by the authorized agent with its own funds. In the event that the license is revoked by the commissioner, all proceeds held in trust by the authorized agent of that licensee shall be deemed to have been assigned to the commissioner. If an authorized agent fails to remit funds to the licensee in accordance with the time specified in the contract with the licensee, the licensee may bring a civil action against the authorized agent for three times the actual damages. The commissioner may by rule set a maximum remittance time for authorized agents.
(g) A licensee shall, upon discovery, promptly report to the commissioner, and an authorized agent shall, upon discovery, promptly report to its licensee, the theft or loss of any payment instrument from the licensee or authorized agent, having a value in excess of one hundred dollars or an aggregate value of one thousand dollars in any three month period.
(h) Upon any suspension or revocation of a license, the failure of a licensee to renew its license, or the denial of the renewal of a license, the licensee shall notify its authorized agents of the event and demand they immediately cease operations as its authorized agents.
(i) A licensee shall report the removal of an authorized agent location or the termination of operations of an authorized agent location to the commissioner on a quarterly basis.
(j) No authorized agent shall act outside its scope of authority as defined under this article and by its contract with the licensee with regard to any transaction regulated by this article.
ARTICLE 4. CHECK CASHING.
§32A-4-1. Check cashing permitted.
(a) A merchant primarily in the business of making retail consumer sales may offer check cashing services at its stores to accommodate its customers in the course of said business and collect a fee thereon: Provided, That the check cashing service and any fees charged are incidental to the main business of the merchant. Except as set forth in subsection (b) of this section, the term "check cashing services" does not include any transaction where a customer presents a check for the exact amount of any purchase. The fees charged in connection with providing check cashing services shall not exceed the greater of one dollar or 1 percent of the face value of the check cashed.
(b) Merchants may not in connection with providing check cashing services agree to hold checks submitted to them for deposit at a later date for the purpose of providing a loan of money and deriving profit therefrom.
(c) No license shall be required as a condition for a merchant providing check cashing services in conformity with subsections (a) and (b) of this section.
(d) Where a merchant derives more than 5 percent of his or her gross income from cashing checks, then its check cashing services will no longer be considered incidental to its main business, and the merchant must obtain a license as a money transmitter under article two of this chapter.
(e) Persons holding a money transmitters license pursuant to article two of this chapter may, through its employees at offices that the licensee operates in West Virginia, engage in the business of check cashing. Fees charged for check cashing services by a licensed money transmitter shall be posted and conform to that permitted merchants under this section. No money transmitter licensee may in connection with providing check cashing services agree to hold checks submitted to it for deposit at a later date for the purpose of providing a loan of money and deriving profit therefrom.
(f) Federally-insured depository institutions, financial institutions, and governmental entities exempt from licensure as money transmitters under this chapter are exempt from the provisions of this article. Other financial institutions licensed by and under the jurisdiction of the commissioner of banking may upon written approval engage in the check cashing business as permitted to merchants under this article.
(g) Except as provided or allowed by this article, no person shall engage in the check cashing business. As used in this article the term "check cashing business" means any person who engages in the business of cashing checks, including drafts, money orders, or other instruments for the transmission or payment of money for a fee.
§32A-4-2. Obstruction of investigations.
No merchant or person subject to this article shall obstruct or refuse to permit any lawful investigation into their check cashing activities by the commissioner of banking, a person acting on behalf of an agency of the state or political subdivision thereof, or a law enforcement officer.
§32A-4-3. Violations and penalties.
(a) The charging of fees for check cashing services in excess of that permitted under this article shall give rise to a cause of action by the injured party to recover twice the actual damages suffered by reason of the violation.
(b) The charging of fees for check cashing services in violation of the provisions prohibiting lending through a check cashing transaction set forth in subsection (b) or (e) of section one of this article shall constitute a prohibited finance charge and give rise to a cause of action by the party on whom the charge was imposed to recover all fees paid and all actual damages suffered by reason of the violation, notwithstanding conformity with the fee schedule set forth in section one of this article. In addition, where the transaction is of an amount and is for such purposes as would constitute a consumer loan, the conduct of such impermissible check cashing services shall be considered an unfair and deceptive act and may also be subject to the provisions and penalties set forth in chapter forty-six-a of this code.
(c) Engaging in the check cashing business without a money transmitters license where required by this article shall give rise to a cause of action by the injured party to recover all fees paid and all actual damages suffered by reason of the violation. In addition, the conduct of a check cashing business without a required license shall constitute the conduct of an unlicensed money transmission business and may also be subject to the provisions and penalties set forth in article two of this chapter.
(d) Actions brought under this article by customers for recovery of actual damages shall be brought within one year of the occurrence of the transaction.
§32A-4-4. Injunctions.
If any merchant or person is in violation of this article, the commissioner of banking or other appropriate law enforcement officer may apply to the circuit court of Kanawha County or the county in which the violation occurred for an order enjoining the merchant or person from violating or continuing to violate the article, rule or order and for injunctive or other relief that the nature of the case may require. The authority to seek injunctions under this section is cumulative with any other enforcement right accruing under other provisions of law and this code.


NOTE: The purpose of this bill is to modernize the licensure and regulation of the sale and issuance of checks and money orders by integrating these provisions with the licensure and regulation of money transmitters, currency exchange, currency transportation, and check cashing; set definitions; exceptions; and to establish civil and criminal penalties for violations thereof.

These articles are new; therefore, strike-throughs and underscoring have been omitted.