SENATE BILL No. 1393

 

 

September 15, 2004, Introduced by Senators SCOTT, BRATER, OLSHOVE, JACOBS, CLARKE, BASHAM, SCHAUER, LELAND, CHERRY, EMERSON, PRUSI and BARCIA and referred to the Committee on Banking and Financial Institutions.

 

 

        

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                 A bill to regulate the money transmission services business;                      

                                                                                

    to require the licensing of persons engaged in providing money              

                                                                                

    transmission services; to prescribe powers and duties of certain            

                                                                                

    state agencies and officials; to prescribe penalties and provide            

                                                                                

    remedies; and to repeal acts and parts of acts.                             

                                                                                

                THE PEOPLE OF THE STATE OF MICHIGAN ENACT:                      

                                                                                

1       Sec. 1.  This act shall be known and may be cited as the                    

                                                                                

2   "money transmission services act".                                          

                                                                                

3       Sec. 2.  As used in this act:                                               

                                                                                

4       (a) "Agency" means the office of financial and insurance                    

                                                                                

5   services in the department of labor and economic growth.                    

                                                                                

6       (b) "Applicant" means a person that files an application for                

                                                                                

7   a license under this act.                                                   

                                                                                

8       (c) "Authorized delegate" means a person that a licensee                    

                                                                                

9   designates to provide money transmission services in this state             

                                                                                


                                                                                

1   on behalf of the licensee.                                                  

                                                                                

2       (d) "Commissioner" means the commissioner of the office of                  

                                                                                

3   financial and insurance services.                                           

                                                                                

4       (e) "Control" means any of the following:                                   

                                                                                

5                                                                                (i) Ownership of, or the power to vote, directly or                                 

                                                                                

6   indirectly, at least 25% of a class of voting securities or                 

                                                                                

7   voting interests of a licensee or person in control of a                    

                                                                                

8   licensee.                                                                   

                                                                                

9       (ii) Power to elect a majority of executive officers,                        

                                                                                

10  managers, directors, trustees, or other persons exercising                  

                                                                                

11  managerial authority of a licensee or person in control of a                

                                                                                

12  licensee.                                                                   

                                                                                

13      (iii) The power to exercise directly or indirectly a                         

                                                                                

14  controlling influence over the management or policies of a                  

                                                                                

15  licensee or person in control of a licensee.                                

                                                                                

16      (f) "Control person" means a director, manager, or executive                

                                                                                

17  officer of a licensee or a natural person who has the authority             

                                                                                

18  to participate in the direction, directly or indirectly through 1           

                                                                                

19  or more other natural persons, of the management or policies of a           

                                                                                

20  licensee.                                                                   

                                                                                

21      (g) "Depository financial institution" means a bank,                        

                                                                                

22  national bank, savings and loan association, savings bank, or               

                                                                                

23  credit union organized under the laws of this state, another                

                                                                                

24  state, the District of Columbia, the United States, or a                    

                                                                                

25  territory or protectorate of the United States whose deposits are           

                                                                                

26  insured by an agency of the federal government.                             

                                                                                

27      (h) "Executive officer" means an officer, member, or partner                


                                                                                

1   of a licensee, including, but not limited to, a chief executive             

                                                                                

2   officer, president, vice president, chief financial officer,                

                                                                                

3   controller, compliance officer, or any other similar position.              

                                                                                

4       (i) "Financial licensing act" means any of the financial                    

                                                                                

5   services acts, as that term is defined in section 2 of the                  

                                                                                

6   consumer financial services act, 1988 PA 161, MCL 487.2052.                 

                                                                                

7       (j) "Licensee" means a person licensed or required to be                    

                                                                                

8   licensed under this act.                                                    

                                                                                

9       (k) "Location" means a place of business at which activities                

                                                                                

10  regulated by this act occur.                                                

                                                                                

11      Sec. 3.  As used in this act:                                               

                                                                                

12      (a) "Material litigation" means litigation that, according                  

                                                                                

13  to generally accepted accounting principles, is significant to an           

                                                                                

14  applicant's or a licensee's financial health and must be                    

                                                                                

15  disclosed in the applicant's or licensee's audited financial                

                                                                                

16  statements, report to shareholders, or similar records.                     

                                                                                

17      (b) "Money" means a medium of exchange authorized or adopted                

                                                                                

18  by the United States or a foreign government as a part of its               

                                                                                

19  currency that is customarily used and accepted as a medium of               

                                                                                

20  exchange in the country of issuance.  The term includes a                   

                                                                                

21  monetary unit of account established by an intergovernmental                

                                                                                

22  organization or by agreement between 2 or more governments.                 

                                                                                

23      (c) "Money transmission services" means any of the                          

                                                                                

24  following:                                                                  

                                                                                

25                                                                               (i) Selling or issuing payment instruments for a fee,                               

                                                                                

26  commission, or other consideration.                                         

                                                                                

27      (ii) Receiving money in an amount of at least $3,000.00 in                   


                                                                                

1   any period of 7 consecutive calendar days for transmission or               

                                                                                

2   transmitting money within the United States or to locations                 

                                                                                

3   abroad by any means, including, but not limited to, payment                 

                                                                                

4   instrument, wire transfer, electronic transfer, stored value                

                                                                                

5   device, facsimile, or otherwise, for a fee, commission, or other            

                                                                                

6   consideration.                                                              

                                                                                

7       (d) "Outstanding payment instrument" means any check, draft,                

                                                                                

8   money order, travelers check, other written instrument,                     

                                                                                

9   electronic or wire transfer, stored value device, or facsimile              

                                                                                

10  issued by a licensee that has been sold in the United States                

                                                                                

11  directly by the licensee or any payment instrument issued by the            

                                                                                

12  licensee that has been sold by an agency, office, or                        

                                                                                

13  representative of the licensee in the United States, that has               

                                                                                

14  been reported to the licensee as having been sold, and that has             

                                                                                

15  not yet been paid by or for the licensee.                                   

                                                                                

16      (e) "Payment instrument" means any electronic or written                    

                                                                                

17  check, draft, money order, travelers check, or other wire,                  

                                                                                

18  electronic, or written instrument or order for the transmission             

                                                                                

19  or payment of money, sold or issued to 1 or more persons, whether           

                                                                                

20  or not the instrument is negotiable.  The term includes any                 

                                                                                

21  stored value device or facsimile.  The term does not include any            

                                                                                

22  credit card voucher, letter of credit, or tangible object                   

                                                                                

23  redeemable by the issuer in goods or services.                              

                                                                                

24      (f) "Person" means an individual, partnership, association,                 

                                                                                

25  corporation, limited liability company, trust, estate, joint                

                                                                                

26  venture, government, governmental subdivision, agency or                    

                                                                                

27  instrumentality, public corporation, or any other legal entity.             


                                                                                

1       (g) "Record" means information that is inscribed on a                       

                                                                                

2   tangible medium or that is stored in an electronic or other                 

                                                                                

3   medium and is retrievable in perceivable form.                              

                                                                                

4       (h) "State" means a state of the United States, the District                

                                                                                

5   of Columbia, Puerto Rico, the United States Virgin Islands, or              

                                                                                

6   any territory or protectorate of the United States.                         

                                                                                

7       (i) "Stored value device" means a card or other tangible                    

                                                                                

8   object used for the transmission or payment of money that                   

                                                                                

9   contains a microprocessor chip, magnetic stripe, or other means             

                                                                                

10  for the storage of information; that is prefunded; and the value            

                                                                                

11  of which is reduced after each use.  The term does not include a            

                                                                                

12  tangible object the value of which is redeemable in the issuer's            

                                                                                

13  goods and services.                                                         

                                                                                

14      (j) "Travelers check" means an instrument for the payment of                

                                                                                

15  money or a foreign currency instrument in any denomination that             

                                                                                

16  provides for both of the following:                                         

                                                                                

17                                                                               (i) A specimen signature of the purchaser to be completed at                        

                                                                                

18  the time of purchase of the instrument.                                     

                                                                                

19      (ii) A countersignature of the purchaser to be completed                     

                                                                                

20  when the instrument is negotiated.                                          

                                                                                

21      Sec. 4.  This act does not apply to any of the following:                   

                                                                                

22      (a) The United States or a department, agency, or                           

                                                                                

23  instrumentality of the United States.                                       

                                                                                

24      (b) Money transmission services provided by the United                      

                                                                                

25  States postal service or by a contractor on behalf of the United            

                                                                                

26  States postal service.                                                      

                                                                                

27      (c) A state, county, city, or any other governmental                        


                                                                                

1   subdivision of a state.                                                     

                                                                                

2       (d) A depository financial institution, bank holding                        

                                                                                

3   company, office of an international banking corporation, or                 

                                                                                

4   branch of a foreign bank; a bank service company organized under            

                                                                                

5   the bank service company act, 12 USC 1861 to 1867; or a                     

                                                                                

6   corporation organized under the Edge act, 12 USC 611 to 633.                

                                                                                

7       (e) Electronic funds transfer of governmental benefits for a                

                                                                                

8   federal, state, county, or governmental agency by a contractor on           

                                                                                

9   behalf of the United States or a department, agency, or                     

                                                                                

10  instrumentality of the United States or a state or governmental             

                                                                                

11  subdivision, agency, or instrumentality of a state.                         

                                                                                

12      (f) A board of trade designated as a contract market under                  

                                                                                

13  the commodity exchange act, 7 USC 1 to 27f, or a person that in             

                                                                                

14  the ordinary course of business provides clearance and settlement           

                                                                                

15  services for a board of trade, to the extent of its operation as            

                                                                                

16  or for that board.                                                          

                                                                                

17      (g) A registered futures commission merchant under the                      

                                                                                

18  federal commodities laws, to the extent of its operation as a               

                                                                                

19  merchant.                                                                   

                                                                                

20      (h) A person that provides clearance or settlement services                 

                                                                                

21  under a registration as a clearing agency or an exemption from              

                                                                                

22  registration granted under the federal securities laws, to the              

                                                                                

23  extent of its operation as a provider under this subdivision.               

                                                                                

24      (i) An operator of a payment system, to the extent that it                  

                                                                                

25  provides processing, clearing, or settlement services between or            

                                                                                

26  among persons excluded by this section in connection with wire              

                                                                                

27  transfers, credit card transactions, debit card transactions,               


                                                                                

1   stored value transactions, automated clearinghouse transfers, or            

                                                                                

2   similar funds transfers.                                                    

                                                                                

3       (j) A person registered as a securities broker-dealer under                 

                                                                                

4   federal or state securities laws, to the extent of its operation            

                                                                                

5   as a registered broker-dealer.                                              

                                                                                

6       Sec. 11.  (1) Except as otherwise provided in this section                  

                                                                                

7   and subject to section 4, a person shall not provide money                  

                                                                                

8   transmission services in this state on or after the effective               

                                                                                

9   date of this act without a license under this act.                          

                                                                                

10      (2) A person licensed under the sale of checks act, 1969 PA                 

                                                                                

11  136, MCL 487.901 to 487.916, on the effective date of this act              

                                                                                

12  may continue to provide money transmission services under that              

                                                                                

13  license until December 31, 2005 if the person meets all of the              

                                                                                

14  following:                                                                  

                                                                                

15      (a) The person files an application for a license under                     

                                                                                

16  section 12 within 90 days after the effective date of this act.             

                                                                                

17      (b) The person meets the requirements of sections 12, 13, 14,               

                                                                                

18  and 15 in conducting its money transmission business before                 

                                                                                

19  January 1, 2006.                                                            

                                                                                

20      (c) The person only provides money transmission services                    

                                                                                

21  authorized under the sale of checks act, 1969 PA 136, MCL 487.901           

                                                                                

22  to 487.916.                                                                 

                                                                                

23      (3) A person described in subsection (2) shall not provide                  

                                                                                

24  money transmission services after December 31, 2005 without a               

                                                                                

25  license under this act.                                                     

                                                                                

26      (4) A license under this act is not required for a person to                

                                                                                

27  act as an authorized delegate of a person licensed under this               


                                                                                

1   act.                                                                        

                                                                                

2       Sec. 12.  (1) A person applying for a license under this act                

                                                                                

3   shall apply on a form and in a medium prescribed by the                     

                                                                                

4   commissioner.  The application shall include all of the following           

                                                                                

5   information:                                                                

                                                                                

6       (a) The legal name and residential and business addresses of                

                                                                                

7   the applicant and any assumed or trade name used by the applicant           

                                                                                

8   in conducting its business.                                                 

                                                                                

9       (b) A list of any criminal convictions of the applicant and                 

                                                                                

10  any material litigation in which the applicant was involved in              

                                                                                

11  the 10-year period preceding the submission of the application.             

                                                                                

12      (c) A description of any money transmission services                        

                                                                                

13  previously provided by the applicant and the money transmission             

                                                                                

14  services that the applicant intends to provide in this state.               

                                                                                

15      (d) A list of the applicant's proposed authorized delegates                 

                                                                                

16  and the locations in this state where the applicant and its                 

                                                                                

17  authorized delegates propose to engage in providing money                   

                                                                                

18  transmission services.                                                      

                                                                                

19      (e) A list of all other states in which the applicant is                    

                                                                                

20  licensed to engage in providing money transmission services and             

                                                                                

21  any license revocations, suspensions, or other disciplinary                 

                                                                                

22  action taken against the applicant in any other state.                      

                                                                                

23      (f) Information concerning any bankruptcy or receivership                   

                                                                                

24  proceedings affecting the applicant.                                        

                                                                                

25      (g) The name and address of any depository financial                        

                                                                                

26  institution through which the applicant's payment instrument will           

                                                                                

27  be paid.                                                                    


                                                                                

1       (h) A description of the source of money and credit to be                   

                                                                                

2   used by the applicant to provide money transmission services.               

                                                                                

3       (i) Any other information the commissioner reasonably                       

                                                                                

4   requires with respect to the applicant.                                     

                                                                                

5       (2) If an applicant is not a natural person, the applicant                  

                                                                                

6   shall also provide all of the following information with the                

                                                                                

7   application:                                                                

                                                                                

8       (a) The date of the applicant's incorporation or formation                  

                                                                                

9   and state or country of incorporation or formation.                         

                                                                                

10      (b) A brief description of the structure or organization of                 

                                                                                

11  the applicant, including any parent or subsidiary of the                    

                                                                                

12  applicant, and whether the applicant or a parent or subsidiary of           

                                                                                

13  the applicant is publicly traded.                                           

                                                                                

14      (c) The name, all assumed or trade names, and all business                  

                                                                                

15  addresses of the applicant.                                                 

                                                                                

16      (d) The name, all assumed or trade names, all business and                  

                                                                                

17  residential addresses, and the employment history for the 10-year           

                                                                                

18  period preceding the submission of the application of each                  

                                                                                

19  control person of the applicant.                                            

                                                                                

20      (e) A list of any criminal convictions and material                         

                                                                                

21  litigation in which any control person of the applicant has been            

                                                                                

22  involved in the 10-year period preceding the submission of the              

                                                                                

23  application.                                                                

                                                                                

24      (f) If the applicant is publicly traded, a copy of the most                 

                                                                                

25  recent report filed with the securities and exchange commission             

                                                                                

26  under section 13 of the federal securities exchange act of 1934,            

                                                                                

27  15 USC 78m.                                                                 


                                                                                

1       (g) If the applicant is a wholly owned subsidiary of a                      

                                                                                

2   corporation publicly traded in the United States, a copy of                 

                                                                                

3   financial statements for the parent corporation for the most                

                                                                                

4   recent fiscal year or a copy of the parent corporation's most               

                                                                                

5   recent report filed under section 13 of the federal securities              

                                                                                

6   exchange act of 1934, 15 USC 78m.                                           

                                                                                

7       (h) If the applicant is a wholly owned subsidiary of a                      

                                                                                

8   corporation publicly traded outside the United States, a copy of            

                                                                                

9   any documentation similar to that described in subdivision (g)              

                                                                                

10  that is filed with the regulator of the parent corporation's                

                                                                                

11  domicile outside the United States.                                         

                                                                                

12      (i) If the applicant has a registered agent in this state,                  

                                                                                

13  the name and address of that registered agent.                              

                                                                                

14      (j) Any other information the commissioner reasonably                       

                                                                                

15  requires with respect to the applicant.                                     

                                                                                

16      Sec. 13.  (1) At the time of filing an application for a                    

                                                                                

17  license under this act, an applicant shall provide the                      

                                                                                

18  commissioner with copies of the applicant's financial statements            

                                                                                

19  for the most recent fiscal year and, if available, for the 2-year           

                                                                                

20  period preceding the submission of the application.  The                    

                                                                                

21  financial statements shall meet all of the following:                       

                                                                                

22      (a) If subdivision (b) does not apply, show that the                        

                                                                                

23  applicant's net worth exceeds $100,000.00.                                  

                                                                                

24      (b) If the applicant intends to engage in providing money                   

                                                                                

25  transmission services in this state at more than 1 location or              

                                                                                

26  through authorized delegates, show that the applicant has a net             

                                                                                

27  worth that equals or exceeds either the sum of $100,000.00 plus             


                                                                                

1   an additional $25,000.00 for each location or authorized                    

                                                                                

2   delegate, as applicable, or $1,000,000.00, whichever is less.               

                                                                                

3       (c) Are in the form prescribed by the commissioner, except                  

                                                                                

4   that financial statements prepared by or reviewed by an                     

                                                                                

5   independent certified public accountant may be in the form                  

                                                                                

6   prescribed by that accountant.                                              

                                                                                

7       (d) Are prepared in accordance with generally accepted                      

                                                                                

8   accounting principles.                                                      

                                                                                

9       (2) A licensee shall at all times maintain a net worth that                 

                                                                                

10  meets the amounts described in subsection (1) for its money                 

                                                                                

11  transmission services business.                                             

                                                                                

12      (3) At the time of the filing of an application and at all                  

                                                                                

13  times after a license is issued, an applicant shall be registered           

                                                                                

14  or qualified to do business in this state.                                  

                                                                                

15      (4) An applicant shall include with an application for a                    

                                                                                

16  license under this act a nonrefundable application fee                      

                                                                                

17  established by the commissioner under section 15.                           

                                                                                

18      (5) An applicant shall include with an application for a                    

                                                                                

19  license under this act a surety bond that meets all of the                  

                                                                                

20  following:                                                                  

                                                                                

21      (a) Is issued by a bonding company or insurance company                     

                                                                                

22  authorized to do business in this state and expires no earlier              

                                                                                

23  than the date the license expires.                                          

                                                                                

24      (b) Is in a principal amount of $1,500,000.00.                              

                                                                                

25      (c) Is in a form satisfactory to the commissioner, is payable               

                                                                                

26  to the commissioner for the benefit of any individuals who are              

                                                                                

27  Michigan residents and who are creditors or claimants of the                


                                                                                

1   applicant and its authorized delegates through purchase of a                

                                                                                

2   payment instrument from the applicant or an authorized delegate             

                                                                                

3   located in this state, and secures the faithful performance of              

                                                                                

4   the obligations of the applicant and its authorized delegates               

                                                                                

5   with respect to the receipt of money in connection with the                 

                                                                                

6   conduct of its money transmission services business.                        

                                                                                

7       (6) The aggregate liability of a surety under a bond issued                 

                                                                                

8   for purposes of subsection (5) shall not exceed the principal               

                                                                                

9   amount of the bond.                                                         

                                                                                

10      Sec. 14.  (1) When the commissioner receives a completed                    

                                                                                

11  application for a license under this act, the commissioner shall            

                                                                                

12  investigate the financial condition and responsibility, financial           

                                                                                

13  and business experience, character, and general fitness of the              

                                                                                

14  applicant and each shareholder, if any, and control person of the           

                                                                                

15  applicant.  The commissioner may conduct an on-site investigation           

                                                                                

16  of the applicant.                                                           

                                                                                

17      (2) When the commissioner determines that an application for                

                                                                                

18  a license under this act is complete, the commissioner shall                

                                                                                

19  promptly notify the applicant in writing of the date on which he            

                                                                                

20  or she determined that the application was complete and shall               

                                                                                

21  approve or deny the application within 120 days after that date.            

                                                                                

22  Subject to subsection (5), if the commissioner does not approve             

                                                                                

23  or deny an application within that 120-day period, the                      

                                                                                

24  commissioner shall issue the license.                                       

                                                                                

25      (3) The commissioner shall issue a license to an applicant                  

                                                                                

26  under this act if the commissioner determines all of the                    

                                                                                

27  following:                                                                  


                                                                                

1       (a) That the applicant has complied with sections 12, 13, and               

                                                                                

2   16.                                                                         

                                                                                

3       (b) That the financial condition and responsibility,                        

                                                                                

4   financial and business experience, character, and general fitness           

                                                                                

5   of the applicant and the experience, character, and general                 

                                                                                

6   fitness of each control person and any shareholders of the                  

                                                                                

7   applicant meet the requirements of this act.                                

                                                                                

8       (c) That it is in the interest of the public to permit the                  

                                                                                

9   applicant to engage in providing money transmission services in             

                                                                                

10  this state.                                                                 

                                                                                

11      (d) That the applicant has paid the license fee under                       

                                                                                

12  subsection (4).                                                             

                                                                                

13      (4) If an application for a license is approved under this                  

                                                                                

14  section, the licensee shall pay a license fee in an amount                  

                                                                                

15  established by the commissioner under section 15 within 30 days             

                                                                                

16  after the date of approval.                                                 

                                                                                

17      (5) The commissioner may for good cause extend the 120-day                  

                                                                                

18  time period described in subsection (2).                                    

                                                                                

19      (6) An applicant whose application is denied by the                         

                                                                                

20  commissioner under this act may appeal within 30 days after the             

                                                                                

21  date of the notice of the denial and request a hearing on the               

                                                                                

22  denial.                                                                     

                                                                                

23      Sec. 15.  (1) By December 31 of each year, the commissioner                 

                                                                                

24  shall establish a schedule of fees to be paid by applicants and             

                                                                                

25  licensees during the next calendar year.  In establishing license           

                                                                                

26  fees, the commissioner shall consider each licensee's business              

                                                                                

27  volume and number of locations and any other business factors he            


                                                                                

1   or she considers reasonable in order to generate funds sufficient           

                                                                                

2   to pay, but not to exceed, the office's reasonably anticipated              

                                                                                

3   costs of administering this act.                                            

                                                                                

4       (2) A license issued under this act expires on December 31 of               

                                                                                

5   each year unless earlier suspended, surrendered, or revoked under           

                                                                                

6   this act.  A licensee may renew a license by filing an                      

                                                                                

7   application for a license renewal, in the form and medium                   

                                                                                

8   prescribed by the commissioner, and paying the license fee for              

                                                                                

9   the renewal year, on or before the December 1 preceding the                 

                                                                                

10  renewal year.  The commissioner shall not renew a license if the            

                                                                                

11  license fee for the renewal term is not paid.                               

                                                                                

12      Sec. 16.  (1) In addition to any fees established by the                    

                                                                                

13  commissioner, a licensee shall pay the actual travel, lodging,              

                                                                                

14  and meal expenses incurred by any agency employee who travels               

                                                                                

15  outside of this state to examine the records of the licensee or             

                                                                                

16  investigate the licensee.                                                   

                                                                                

17      (2) If any fees or fines provided for in this act are not                   

                                                                                

18  paid when required, the commissioner may maintain an action                 

                                                                                

19  against the licensee for the recovery of the fees or fines,                 

                                                                                

20  interest, costs, and reasonable legal fees.                                 

                                                                                

21      (3) The fees and civil and administrative fines collected                   

                                                                                

22  under this act shall be paid into the state treasury to the                 

                                                                                

23  credit of the agency and used only for the operation of the                 

                                                                                

24  agency.                                                                     

                                                                                

25      Sec. 21.  The commissioner may conduct an examination or                    

                                                                                

26  investigation of a licensee or any of its authorized delegates.             

                                                                                

27  Except as provided in section 27, the commissioner and the agency           


                                                                                

1   shall not disclose information obtained in an examination or                

                                                                                

2   investigation.                                                              

                                                                                

3       Sec. 22.  (1) The commissioner may conduct an on-site                       

                                                                                

4   examination or investigation of records maintained under section            

                                                                                

5   25, including a joint examination or investigation conducted with           

                                                                                

6   representatives of other departments or agencies of this state, 1           

                                                                                

7   or more agencies of another state, or of the federal government.            

                                                                                

8       (2) The commissioner may accept an examination or                           

                                                                                

9   investigation report of a department or agency of this state or             

                                                                                

10  of another state or of the federal government or a report                   

                                                                                

11  prepared by a certified public accountant instead of conducting             

                                                                                

12  an examination or investigation.                                            

                                                                                

13      (3) A joint examination or investigation or an acceptance of                

                                                                                

14  an examination or investigation report under this section does              

                                                                                

15  not preclude the commissioner from conducting his or her own                

                                                                                

16  examination or investigation.                                               

                                                                                

17      (4) The report of a joint investigation or an examination                   

                                                                                

18  report accepted by the commissioner under this section is an                

                                                                                

19  official report of the commissioner for all purposes.                       

                                                                                

20      Sec. 23.  (1) If there is a change in any information                       

                                                                                

21  provided in a licensee's initial or renewal application, the                

                                                                                

22  licensee shall file the changed information with the commissioner           

                                                                                

23  before the change occurs, as prescribed by the commissioner.                

                                                                                

24      (2) A licensee shall file with the commissioner within 45                   

                                                                                

25  days after the end of each fiscal quarter a current list of each            

                                                                                

26  authorized delegate, control person, and location in this state             

                                                                                

27  where the licensee or an authorized delegate of the licensee                


                                                                                

1   provides money transmission services.  The licensee shall include           

                                                                                

2   the name and street address of each location and authorized                 

                                                                                

3   delegate in the filing.                                                     

                                                                                

4       (3) A licensee shall file a report with the agency within 1                 

                                                                                

5   business day after the licensee has reason to know of the                   

                                                                                

6   occurrence of any of the following events:                                  

                                                                                

7       (a) The filing of a petition by or against the licensee under               

                                                                                

8   the bankruptcy code, 11 USC 101 to 1330, for bankruptcy or                  

                                                                                

9   reorganization.                                                             

                                                                                

10      (b) The filing of a petition by or against the licensee for                 

                                                                                

11  receivership, the commencement of any other judicial or                     

                                                                                

12  administrative proceeding for the licensee's dissolution or                 

                                                                                

13  reorganization, or the making of a general assignment for the               

                                                                                

14  benefit of its creditors.                                                   

                                                                                

15      (c) The commencement of a proceeding to revoke or suspend a                 

                                                                                

16  license of the licensee in this state, another state, or a                  

                                                                                

17  country in which the licensee engages in business or is                     

                                                                                

18  licensed.                                                                   

                                                                                

19      (d) A charge or conviction of the licensee or of an executive               

                                                                                

20  officer, manager, director, or control person of the licensee for           

                                                                                

21  a felony.                                                                   

                                                                                

22      (e) A charge or conviction of an authorized delegate for a                  

                                                                                

23  felony.                                                                     

                                                                                

24      Sec. 24.  (1) If there is a proposed change of control of a                 

                                                                                

25  licensee, the licensee shall do all of the following:                       

                                                                                

26      (a) Give the commissioner written notice of a proposed change               

                                                                                

27  of control 30 days or more before the proposed change of                    


                                                                                

1   control.                                                                    

                                                                                

2       (b) Request approval of the proposed change of control.                     

                                                                                

3       (c) Pay a nonrefundable fee with the notice, in an amount                   

                                                                                

4   prescribed by the commissioner.                                             

                                                                                

5       (2) After review of a request for approval under subsection                 

                                                                                

6   (1), the commissioner may require the licensee to provide                   

                                                                                

7   additional information concerning each proposed control person of           

                                                                                

8   the licensee.  However, the commissioner shall only require that            

                                                                                

9   the licensee provide additional information of the same type                

                                                                                

10  required of the licensee or any control person of the licensee as           

                                                                                

11  part of the licensee's original license or renewal application.             

                                                                                

12      (3) The commissioner shall approve a request for change of                  

                                                                                

13  control under subsection (1) if, after investigation, the                   

                                                                                

14  commissioner determines that the person or group of persons                 

                                                                                

15  requesting approval has the experience, character, and general              

                                                                                

16  fitness to operate the licensee in a lawful and proper manner and           

                                                                                

17  that the public interest will not be jeopardized by the change of           

                                                                                

18  control.                                                                    

                                                                                

19      (4) Subsection (1) does not apply to a public offering of                   

                                                                                

20  securities.                                                                 

                                                                                

21      Sec. 25.  (1) A licensee or any person subject to this act                  

                                                                                

22  shall maintain all of the following records for at least 3                  

                                                                                

23  years:                                                                      

                                                                                

24      (a) A record of each payment instrument from the date it was                

                                                                                

25  created.                                                                    

                                                                                

26      (b) A general ledger posted at least monthly containing all                 

                                                                                

27  asset, liability, capital, income, and expense accounts.                    


                                                                                

1       (c) Bank statements and bank reconciliation records.                        

                                                                                

2       (d) Records of outstanding payment instruments.                             

                                                                                

3       (e) Records of each payment instrument paid within the 3-year               

                                                                                

4   period.                                                                     

                                                                                

5       (f) A list of the last known names and addresses of all of                  

                                                                                

6   the licensee's authorized delegates.                                        

                                                                                

7       (g) Any other records the commissioner reasonably requires.                 

                                                                                

8       (2) The records described in subsection (1) may be stored on                

                                                                                

9   any tangible medium or in any electronic or other medium that is            

                                                                                

10  immediately retrievable in perceivable form.                                

                                                                                

11      (3) A licensee or other person may maintain the records                     

                                                                                

12  described in subsection (1) outside of this state if they are               

                                                                                

13  made accessible to the commissioner.                                        

                                                                                

14      Sec. 26.  (1) If a licensee or authorized delegate files a                  

                                                                                

15  suspicious activity report with an agency of the federal                    

                                                                                

16  government, the licensee or authorized delegate shall also,                 

                                                                                

17  within 24 hours, file a copy of the suspicious activity report              

                                                                                

18  with the department of state police.                                        

                                                                                

19      (2) A licensee or authorized delegate may file the                          

                                                                                

20  suspicious activity report with the department of state police              

                                                                                

21  under subsection (1) in any manner allowed by federal law or                

                                                                                

22  regulation or in any other manner acceptable to the department of           

                                                                                

23  state police.                                                               

                                                                                

24      (3) Except for a violation of 31 USC 5318(g), a licensee or                 

                                                                                

25  authorized delegate or a director, officer, employee, or agent of           

                                                                                

26  the licensee or authorized delegate is not liable in any civil or           

                                                                                

27  governmental action for filing a copy of a suspicious activity              


                                                                                

1   report under this section or failing to notify a customer or any            

                                                                                

2   other person of the filing.                                                 

                                                                                

3       Sec. 27.  (1) The commissioner, each former commissioner,                   

                                                                                

4   and each current and former deputy, agent, and employee of the              

                                                                                

5   agency shall keep secret all facts and information obtained in              

                                                                                

6   the course of their duties, unless that person is required under            

                                                                                

7   law to report on, take official action concerning, or testify in            

                                                                                

8   any proceedings regarding a licensee or the activities of a                 

                                                                                

9   licensee.                                                                   

                                                                                

10      (2) This section does not apply to, and does not prohibit                   

                                                                                

11  the furnishing of information or documents to, any federal,                 

                                                                                

12  foreign, or out-of-state regulatory agency with jurisdiction over           

                                                                                

13  a licensee and is not applicable to any disclosure made in the              

                                                                                

14  public interest by the commissioner, at his or her discretion.              

                                                                                

15      Sec. 31.  (1) A licensee shall maintain at all times                        

                                                                                

16  permissible investments that have a market value computed in                

                                                                                

17  accordance with generally accepted accounting principles of not             

                                                                                

18  less than the aggregate amount of all of its outstanding payment            

                                                                                

19  instruments issued or sold and money transmitted by the licensee            

                                                                                

20  or its authorized delegates.                                                

                                                                                

21      (2) The commissioner may limit the extent to which a type of                

                                                                                

22  investment within a class of permissible investments is                     

                                                                                

23  considered a permissible investment by any licensee, except for             

                                                                                

24  money and certificates of deposit issued by a depository                    

                                                                                

25  financial institution.  The commissioner by order or declaratory            

                                                                                

26  ruling may allow other types of investments that the commissioner           

                                                                                

27  determines to have a safety substantially equivalent to other               


                                                                                

1   permissible investments.                                                    

                                                                                

2       (3) Even if commingled with other assets of a licensee,                     

                                                                                

3   permissible investments are held in trust for the benefit of the            

                                                                                

4   purchasers and holders of the licensee's outstanding payment                

                                                                                

5   instruments in the event of bankruptcy or receivership of the               

                                                                                

6   licensee.                                                                   

                                                                                

7       (4) As used in this section, "permissible investments" means                

                                                                                

8   the investments described in section 32 or allowed by the                   

                                                                                

9   commissioner under subsection (2).                                          

                                                                                

10      Sec. 32.  (1) Except to the extent otherwise limited by the                 

                                                                                

11  commissioner under section 31(2), each of the following                     

                                                                                

12  investments is permissible under section 31:                                

                                                                                

13      (a) Cash, a certificate of deposit, or a senior debt                        

                                                                                

14  obligation of a federally insured depository financial                      

                                                                                

15  institution.                                                                

                                                                                

16      (b) A banker's acceptance or bill of exchange that is                       

                                                                                

17  eligible for purchase upon endorsement by a member bank of the              

                                                                                

18  federal reserve system and is eligible for purchase by a federal            

                                                                                

19  reserve bank.                                                               

                                                                                

20      (c) An investment bearing a rating of 1 of the 3 highest                    

                                                                                

21  grades as defined by a nationally recognized organization that              

                                                                                

22  rates securities.                                                           

                                                                                

23      (d) An investment security that is an obligation of the                     

                                                                                

24  United States or a department, agency, or instrumentality of the            

                                                                                

25  United States; an investment in an obligation that is guaranteed            

                                                                                

26  fully as to principal and interest by the United States; or an              

                                                                                

27  investment in an obligation of a state or a governmental                    


                                                                                

1   subdivision, agency, or instrumentality of a state.                         

                                                                                

2       (e) A receivable that is payable to a licensee from its                     

                                                                                

3   authorized delegate, in the ordinary course of business, pursuant           

                                                                                

4   to contracts that are not past due or doubtful of collection, if            

                                                                                

5   the aggregate amount of receivables under this subdivision does             

                                                                                

6   not exceed 20% of the total permissible investments of a licensee           

                                                                                

7   and the licensee does not hold at 1 time receivables under this             

                                                                                

8   subdivision in any 1 person aggregating more than 10% of the                

                                                                                

9   licensee's total permissible investments.                                   

                                                                                

10      (f) A share or a certificate issued by an open-end                          

                                                                                

11  management investment company that is registered with the United            

                                                                                

12  States securities and exchange commission under the investment              

                                                                                

13  company act of 1940, 15 USC 80a-1 to 80a-64, and whose portfolio            

                                                                                

14  is restricted by the management company's investment policy to              

                                                                                

15  investments specified in subdivisions (a) to (d).                           

                                                                                

16      (2) Subject to subsection (3), the following investments are                

                                                                                

17  permissible under section 31, but only to the extent specified:             

                                                                                

18      (a) An interest-bearing bill, note, bond, or debenture of a                 

                                                                                

19  person whose equity shares are traded on a national securities              

                                                                                

20  exchange or on a national over-the-counter market, if the                   

                                                                                

21  aggregate of investments under this subdivision does not exceed             

                                                                                

22  20% of the total permissible investments of a licensee and the              

                                                                                

23  licensee does not at 1 time hold investments under this                     

                                                                                

24  subdivision in any 1 person aggregating more than 10% of the                

                                                                                

25  licensee's total permissible investments.                                   

                                                                                

26      (b) A share of a person traded on a national securities                     

                                                                                

27  exchange or a national over-the-counter market or a share or a              


                                                                                

1   certificate issued by an open-end management investment company             

                                                                                

2   that is registered with the United States securities and exchange           

                                                                                

3   commission under the investment company act of 1940, 15 USC 80a-1           

                                                                                

4   to 80a-64, and whose portfolio is restricted by the management              

                                                                                

5   company's investment policy to shares of a person traded on a               

                                                                                

6   national securities exchange or a national over-the-counter                 

                                                                                

7   market, if the aggregate of investments under this subdivision              

                                                                                

8   does not exceed 20% of the total permissible investments of a               

                                                                                

9   licensee and the licensee does not at 1 time hold investments in            

                                                                                

10  any 1 person aggregating more than 10% of the licensee's total              

                                                                                

11  permissible investments.                                                    

                                                                                

12      (c) A demand-borrowing agreement made to a corporation or a                 

                                                                                

13  subsidiary of a corporation whose securities are traded on a                

                                                                                

14  national securities exchange, if the aggregate of the amount of             

                                                                                

15  principal and interest outstanding under demand-borrowing                   

                                                                                

16  agreements under this subdivision does not exceed 20% of the                

                                                                                

17  total permissible investments of a licensee and the licensee does           

                                                                                

18  not at 1 time hold principal and interest outstanding under                 

                                                                                

19  demand-borrowing agreements under this subdivision with any 1               

                                                                                

20  person aggregating more than 10% of the licensee's total                    

                                                                                

21  permissible investments.                                                    

                                                                                

22      (d) Any other investment the commissioner designates by                     

                                                                                

23  order or declaratory ruling, to the extent specified by the                 

                                                                                

24  commissioner.                                                               

                                                                                

25      (3) The aggregate of investments under subsection (2) may                   

                                                                                

26  not exceed 50% of the total permissible investments of a licensee           

                                                                                

27  calculated under section 31.                                                


                                                                                

1       Sec. 33.  (1) An agreement between a licensee and an                        

                                                                                

2   authorized delegate shall be in writing and require the                     

                                                                                

3   authorized delegate to operate in compliance with this act and              

                                                                                

4   other applicable law.  The licensee shall furnish in writing to             

                                                                                

5   each authorized delegate policies and procedures sufficient for             

                                                                                

6   compliance with this act and other applicable law.                          

                                                                                

7       (2) An authorized delegate shall remit all money owing to                   

                                                                                

8   the licensee in accordance with the terms of the agreement                  

                                                                                

9   between the licensee and the authorized delegate.                           

                                                                                

10      (3) If a license is suspended or revoked, the commissioner                  

                                                                                

11  shall notify the licensee and order the licensee to send a notice           

                                                                                

12  to its authorized delegates directing them to cease providing               

                                                                                

13  money transmission services on behalf of the licensee, and the              

                                                                                

14  authorized delegate shall immediately cease providing money                 

                                                                                

15  transmission services as an authorized delegate of the licensee.            

                                                                                

16      (4) An authorized delegate shall not provide money                          

                                                                                

17  transmission services outside the scope of activity permissible             

                                                                                

18  under the agreement between the authorized delegate and the                 

                                                                                

19  licensee, except activity in which the authorized delegate is               

                                                                                

20  otherwise authorized to engage.  An authorized delegate of a                

                                                                                

21  licensee holds all money received from providing money                      

                                                                                

22  transmission services, reduced by any fees owed to the authorized           

                                                                                

23  delegate by the licensee, in escrow for the benefit of the                  

                                                                                

24  licensee.                                                                   

                                                                                

25      (5) As used in this section, "remit" means to make direct                   

                                                                                

26  payments of money to a licensee or its representative authorized            

                                                                                

27  to receive money or to deposit money in a depository financial              


                                                                                

1   institution in an account specified by the licensee.                        

                                                                                

2       Sec. 34.  (1) An authorized delegate shall not make any                     

                                                                                

3   fraudulent or false statement or misrepresentation to a customer            

                                                                                

4   or licensee or to the commissioner.                                         

                                                                                

5       (2) An authorized delegate shall perform money transmission                 

                                                                                

6   services lawfully and in accordance with the licensee's operating           

                                                                                

7   policies and procedures provided to the authorized delegate.                

                                                                                

8       (3) All funds received by an authorized delegate from the                   

                                                                                

9   sale of a payment instrument, less fees, shall be held in escrow            

                                                                                

10  for the licensee from the time the funds are received by the                

                                                                                

11  authorized delegate until the time the funds are remitted to the            

                                                                                

12  licensee.                                                                   

                                                                                

13      (4) If an authorized delegate commingles any of the funds                   

                                                                                

14  received with any other funds or property owned or controlled by            

                                                                                

15  the authorized delegate, all commingled funds and other property            

                                                                                

16  are held in escrow for the licensee in an amount equal to the               

                                                                                

17  amount of the funds due the licensee.                                       

                                                                                

18      (5) An authorized delegate shall report to the licensee the                 

                                                                                

19  theft or loss of a payment instrument within 24 hours after the             

                                                                                

20  theft or loss.                                                              

                                                                                

21      Sec. 41.  (1) The commissioner may deny, suspend, not renew,                

                                                                                

22  or revoke a license, place a licensee in receivership, or order a           

                                                                                

23  licensee to revoke the designation of an authorized delegate if             

                                                                                

24  any of the following occur:                                                 

                                                                                

25      (a) The licensee violates this act, a rule promulgated under                

                                                                                

26  this act, an order or declaratory ruling issued under this act,             

                                                                                

27  or any applicable state or federal law.                                     


                                                                                

1       (b) The licensee does not grant access to its books and                     

                                                                                

2   records during the course of an examination or investigation by             

                                                                                

3   the commissioner.                                                           

                                                                                

4       (c) The licensee engages in fraud, intentional                              

                                                                                

5   misrepresentation, or gross negligence.                                     

                                                                                

6       (d) An authorized delegate of the licensee is convicted of a                

                                                                                

7   violation of a state or federal anti-money-laundering statute or            

                                                                                

8   violates a rule promulgated or an order or ruling issued under              

                                                                                

9   this act, as a result of the licensee's knowing or willful                  

                                                                                

10  misconduct.                                                                 

                                                                                

11      (e) The experience, character, or general fitness of the                    

                                                                                

12  licensee, authorized delegate, or control person indicates that             

                                                                                

13  it is not in the public interest to permit the person to provide            

                                                                                

14  money transmission services.                                                

                                                                                

15      (f) Subject to subsection (2), the licensee engages in an                   

                                                                                

16  unsafe or unsound practice.                                                 

                                                                                

17      (g) The licensee fails to maintain the minimum net worth                    

                                                                                

18  required under section 13(1) or is insolvent, suspends payment of           

                                                                                

19  its obligations, or makes a general assignment for the benefit of           

                                                                                

20  its creditors.                                                              

                                                                                

21      (h) The licensee does not remove an authorized delegate                     

                                                                                

22  after the commissioner issues and serves upon the licensee an               

                                                                                

23  order that includes a finding that the authorized delegate has              

                                                                                

24  violated this act.                                                          

                                                                                

25      (2) In determining whether a licensee is engaging in an                     

                                                                                

26  unsafe or unsound practice, the commissioner may consider the               

                                                                                

27  size and condition of the licensee's money transmission services            


                                                                                

1   business, the magnitude of the loss, the gravity of the violation           

                                                                                

2   of this act, the previous conduct of the person involved, and               

                                                                                

3   other factors the commissioner considers relevant.                          

                                                                                

4       Sec. 42.  (1) A person that intentionally makes a false                     

                                                                                

5   statement, misrepresentation, or false certification in any                 

                                                                                

6   record or document filed or required to be maintained under this            

                                                                                

7   act or that intentionally makes a false entry or omits a material           

                                                                                

8   entry in a record is guilty of a felony punishable by                       

                                                                                

9   imprisonment for not more than 5 years or a fine of not more than           

                                                                                

10  $100,000.00, or both.                                                       

                                                                                

11      (2) A person that engages in criminal fraud in the conduct                  

                                                                                

12  of its money transmission services business is guilty of a felony           

                                                                                

13  punishable by imprisonment for not more than 5 years or a fine of           

                                                                                

14  not more than $100,000.00, or both.                                         

                                                                                

15      (3) A person that knowingly engages in an activity for which                

                                                                                

16  a license is required under this act, is not licensed under this            

                                                                                

17  act, and receives more than $500.00 in compensation within a                

                                                                                

18  30-day period from that activity is guilty of a misdemeanor                 

                                                                                

19  punishable by imprisonment for not more than 93 days or a fine of           

                                                                                

20  not more than $500.00, or both.  A court shall order a person               

                                                                                

21  convicted of violating subsection (1) or (2) to pay restitution             

                                                                                

22  as provided in section 1a of chapter IX of the code of criminal             

                                                                                

23  procedure, 1927 PA 175, MCL 769.1a, and the crime victim's rights           

                                                                                

24  act, 1985 PA 87, MCL 780.751 to 780.834.                                    

                                                                                

25      Sec. 43.  (1) After conducting an investigation or                          

                                                                                

26  examination, the commissioner may issue an order summarily                  

                                                                                

27  suspending a license under section 92 of the administrative                 


                                                                                

1   procedures act of 1969, 1969 PA 306, MCL 24.292, based on an                

                                                                                

2   affidavit by a person familiar with the facts set forth in the              

                                                                                

3   affidavit stating that, on information and belief, an imminent              

                                                                                

4   threat of financial loss or imminent threat to the public welfare           

                                                                                

5   exists.                                                                     

                                                                                

6       (2) If the commissioner issues a summary suspension order                   

                                                                                

7   under section 92 of the administrative procedures act of 1969,              

                                                                                

8   1969 PA 306, MCL 24.292, an administrative law hearings examiner            

                                                                                

9   shall grant a request to dissolve a summary suspension order                

                                                                                

10  unless the examiner finds that an imminent threat of financial              

                                                                                

11  loss or imminent threat to the public welfare exists that                   

                                                                                

12  requires an emergency action and continuation of the summary                

                                                                                

13  suspension order.                                                           

                                                                                

14      (3) The record created at a hearing on a summary suspension                 

                                                                                

15  is part of the record of the complaint at any subsequent hearing            

                                                                                

16  in a contested case.                                                        

                                                                                

17      Sec. 44.  (1) If in the opinion of the commissioner a                       

                                                                                

18  licensee is, has, or is about to engage in a practice that poses            

                                                                                

19  a threat of financial loss or threat to the public welfare or is,           

                                                                                

20  has, or is about to violate a law, rule, or order, the                      

                                                                                

21  commissioner may issue and serve on the licensee a cease and                

                                                                                

22  desist order under this section.                                            

                                                                                

23      (2) A cease and desist order issued under this section shall                

                                                                                

24  contain a statement of the facts constituting the alleged                   

                                                                                

25  practice or violation and shall fix a time and place for a                  

                                                                                

26  hearing to determine if the commissioner should issue an order to           

                                                                                

27  cease and desist against the licensee.                                      


                                                                                

1       (3) A licensee may consent to issuance of a cease and desist                

                                                                                

2   order under this section.  A licensee also consents to the                  

                                                                                

3   issuance of the cease and desist order if the licensee or a duly            

                                                                                

4   authorized representative of the licensee fails to appear at a              

                                                                                

5   hearing described in subsection (2).                                        

                                                                                

6       (4) If a licensee consents under subsection (3), or if the                  

                                                                                

7   commissioner finds based on the record made at the hearing that             

                                                                                

8   the practice or violation specified in the order is established,            

                                                                                

9   the cease and desist order becomes final.  The order may require            

                                                                                

10  the licensee and its officers, directors, members, partners,                

                                                                                

11  trustees, employees, agents, or control persons to cease and                

                                                                                

12  desist from the practice or violation and to take affirmative               

                                                                                

13  action to correct the conditions resulting from the practice or             

                                                                                

14  violation.                                                                  

                                                                                

15      (5) Except as provided in subsection (6) or to the extent it                

                                                                                

16  is stayed, modified, terminated, or set aside by the commissioner           

                                                                                

17  or a court, a cease and desist order is effective on the date of            

                                                                                

18  service.                                                                    

                                                                                

19      (6) A cease and desist order issued with a licensee's                       

                                                                                

20  consent is effective at the time specified in the order and                 

                                                                                

21  remains effective and enforceable as provided in the order.                 

                                                                                

22      Sec. 45.  The commissioner may promulgate rules under the                   

                                                                                

23  administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to           

                                                                                

24  24.328, that he or she considers necessary to implement and                 

                                                                                

25  enforce this act.                                                           

                                                                                

26      Sec. 46.  The commissioner may assess a civil fine against a                

                                                                                

27  person that violates this act, a rule promulgated or an order or            


                                                                                

1   ruling issued by the commissioner under this act, or any other              

                                                                                

2   applicable state or federal law in an amount that does not exceed           

                                                                                

3   $10,000.00 per day for each day the violation continues, plus               

                                                                                

4   this state's costs and expenses for the investigation and                   

                                                                                

5   prosecution of the matter, including reasonable attorney fees.              

                                                                                

6       Sec. 47.  (1) If in the opinion of the commissioner a person                

                                                                                

7   has engaged in fraud or has been convicted of a criminal                    

                                                                                

8   violation involving money laundering, the commissioner may serve            

                                                                                

9   upon that person a written notice of intention to prohibit that             

                                                                                

10  person from being employed by, an agent of, or a control person             

                                                                                

11  of a licensee under this act, or a licensee or registrant under a           

                                                                                

12  financial licensing act.  As used in this subsection, "fraud"               

                                                                                

13  includes actionable fraud, actual or constructive fraud, criminal           

                                                                                

14  fraud, extrinsic or intrinsic fraud, fraud in the execution, in             

                                                                                

15  the inducement, in fact, or in law, or any other form of fraud.             

                                                                                

16      (2) A notice issued under subsection (1) shall contain a                    

                                                                                

17  statement of the facts supporting the prohibition and, except as            

                                                                                

18  provided under subsection (7), set a time and date for a hearing,           

                                                                                

19  within 60 days after the date of the notice.  If the person does            

                                                                                

20  not appear at the hearing, he or she consents to the issuance of            

                                                                                

21  an order in accordance with the notice.                                     

                                                                                

22      (3) If, after a hearing held under subsection (2), the                      

                                                                                

23  commissioner finds that any of the grounds specified in the                 

                                                                                

24  notice have been established, the commissioner may issue an order           

                                                                                

25  of suspension or prohibition from being a licensee or registrant            

                                                                                

26  or from being employed by, an agent of, or a control person of              

                                                                                

27  any licensee under this act or a licensee or registrant under any           


                                                                                

1   financial licensing act.                                                    

                                                                                

2       (4) An order issued under subsection (2) or (3) is effective                

                                                                                

3   when served on the person subject to the order.  The commissioner           

                                                                                

4   shall also serve a copy of the order upon the licensee of which             

                                                                                

5   the person is an employee, agent, or control person.  The order             

                                                                                

6   remains in effect until it is stayed, modified, terminated, or              

                                                                                

7   set aside by the commissioner or a reviewing court.                         

                                                                                

8       (5) After 5 years from the date of an order issued under                    

                                                                                

9   subsection (2) or (3), the person subject to the order may apply            

                                                                                

10  to the commissioner to terminate the order.                                 

                                                                                

11      (6) If the commissioner considers that a person served a                    

                                                                                

12  notice under subsection (1) poses an imminent threat of financial           

                                                                                

13  loss to purchasers of payment instruments from a licensee, the              

                                                                                

14  commissioner may serve upon the person an order of suspension               

                                                                                

15  from being employed by, an agent of, or a control person of any             

                                                                                

16  licensee.  The suspension is effective on the date the order is             

                                                                                

17  issued and, unless stayed by a court, remains in effect pending             

                                                                                

18  the completion of a review as provided under this section and               

                                                                                

19  until the commissioner has dismissed the charges specified in the           

                                                                                

20  order.                                                                      

                                                                                

21      (7) Unless otherwise agreed to by the commissioner and the                  

                                                                                

22  person served with an order issued under subsection (6), the                

                                                                                

23  commissioner shall hold the hearing required under subsection (2)           

                                                                                

24  to review a suspension not earlier than 5 days or later than 20             

                                                                                

25  days after the date of the notice.                                          

                                                                                

26      (8) If a person is convicted of a felony involving fraud,                   

                                                                                

27  dishonesty, breach of trust, or money laundering, the                       


                                                                                

1   commissioner may issue an order suspending or prohibiting that              

                                                                                

2   person from being a licensee and from being employed by, an agent           

                                                                                

3   of, or a control person of any licensee under this act or a                 

                                                                                

4   licensee or registrant under a financial licensing act.  After 5            

                                                                                

5   years from the date of the order, the person subject to the order           

                                                                                

6   may apply to the commissioner to terminate the order.                       

                                                                                

7       (9) The commissioner shall mail a copy of any notice or                     

                                                                                

8   order issued under this section to the licensee of which the                

                                                                                

9   person subject to the notice or order is an employee, agent, or             

                                                                                

10  control person.                                                             

                                                                                

11      Enacting section 1.  The sale of checks act, 1969 PA 136,                   

                                                                                

12  MCL 487.901 to 487.916, is repealed effective January 1, 2006.              

                                                                                

13      Enacting section 2.  This act takes effect 90 days after the                

                                                                                

14  date it is enacted.