(1) The following
investments are permissible under section 11-110-1003:
(a) Cash, including demand deposits, savings deposits, and money in such
accounts held for the benefit of the licensee's customers in a federally insured
depository financial institution, and cash equivalents, including ACH items in transit
to the licensee and ACH items or international wires in transit to a payee, cash in
transit via armored car, cash in smart safes, cash in licensee-owned locations, debit
card or credit card-funded transmission receivables owed by a bank, or money
market mutual funds rated AAA by S&P Global Ratings or the equivalent from any
eligible rating service;
(b) Certificates of deposit or senior debt obligations of an insured depository
institution, as defined in section 3 of the Federal Deposit Insurance Act, 12 U.S.C.
sec. 1813, as amended, or as defined under the Federal Credit Union Act, 12 U.S.C.
sec. 1781, as amended;
(c) An obligation of the United States or a commission, agency, or
instrumentality of the United States; an obligation that is guaranteed fully as to
principal and interest by the United States; or an obligation of a state or a
governmental subdivision, agency, or instrumentality of a state; or
(d) The full drawable amount of an irrevocable standby letter of credit for
which the stated beneficiary is the banking board that stipulates that the
beneficiary need only draw a sight draft under the letter of credit and present it to
obtain money up to the letter of credit amount within seven days after presentation
of the items required by subsection (2)(c) of this section.
(2) (a) The letter of credit described in subsection (1)(d) of this section must:
(I) Be issued by:
(A) A federally insured depository financial institution;
(B) A foreign bank that is authorized under federal law to maintain a federal
agency or federal branch office in a state or states; or
(C) A foreign bank that bears an eligible rating, or whose parent company
bears an eligible rating; that is regulated, supervised, and examined by federal or
state authorities having regulatory authority over banks, credit unions, and trust
companies; and that is authorized under state law to maintain a branch in a state;
(II) Be irrevocable, be unconditional, and indicate that the letter of credit is
not subject to any condition or qualifications outside of the letter of credit;
(III) Not contain reference to any other agreements, documents, or entities or
otherwise provide for any security interest in the licensee; and
(IV) Contain an issue date and expiration date, and expressly provide for
automatic extension, without a written amendment, for an additional period of one
year after the present and each future expiration date, unless the issuer of the
letter of credit notifies the banking board in writing by certified or registered mail
or courier mail or other receipted means, at least sixty days prior to any expiration
date, that the irrevocable letter of credit will not be extended.
(b) In the event of a notice of expiration or nonextension of a letter of credit
issued under subsection (2)(a)(IV) of this section, the licensee is required to
demonstrate to the satisfaction of the banking board, at least fifteen days prior to
expiration, that the licensee maintains and will maintain permissible investments in
accordance with section 11-110-1003 (1) upon the expiration of the letter of credit. If
the licensee is not able to do so, the board may draw on the letter of credit in an
amount up to the amount necessary to meet the licensee's requirements to
maintain permissible investments in accordance with section 11-110-1003 (1). A draw
on the letter of credit by the board shall be offset against the licensee's
outstanding money transmission obligations. The drawn money shall be held in trust
by the board or the board's designated agent, to the extent authorized by law, as
agent for the benefit of the purchasers and holders of the licensee's outstanding
money transmission obligations.
(c) The letter of credit must provide that the issuer of the letter of credit will
honor, at sight, a presentation made by the beneficiary to the issuer of the following
documents on or prior to the expiration date of the letter of credit:
(I) The original letter of credit, including any amendments; and
(II) A written statement from the beneficiary stating that any of the following
events have occurred:
(A) The filing of a petition by or against the licensee under the United States
bankruptcy code, 11 U.S.C. secs. 101 to 110, as amended, for bankruptcy or
reorganization;
(B) The filing of a petition by or against the licensee for receivership or the
commencement of any other judicial or administrative proceeding for its dissolution
or reorganization;
(C) The seizure of assets of a licensee by a banking board pursuant to an
emergency order issued in accordance with applicable law, on the basis of an
action, violation, or condition that has caused or is likely to cause the insolvency of
the licensee; or
(D) The beneficiary has received notice of expiration or nonextension of a
letter of credit, and the licensee failed to demonstrate to the satisfaction of the
beneficiary that the licensee will maintain permissible investments in accordance
with section 11-110-1003 (1) upon the expiration or nonextension of the letter of
credit.
(d) The banking board may designate an agent to serve on the board's behalf
as beneficiary to a letter of credit so long as the agent and letter of credit meet
requirements established by the board. The board's agent may serve as agent for
multiple licensing authorities for a single irrevocable letter of credit if the proceeds
of the drawable amount for the purposes of subsection (1)(d) of this section are
assigned to the board.
(e) The banking board is authorized and encouraged to participate in
multistate licensing processes designed to facilitate the issuance and
administration of letters of credit, including but not limited to services provided by
NMLS and the State Regulatory Registry, LLC.
(3) Unless permitted by the banking board by rule or by order to exceed the
limits as set forth in this subsection (3), the following investments are permissible
under section 11-110-1003, to the extent specified:
(a) (I) Except as provided in subsection (3)(a)(II) of this section, receivables
that are payable to a licensee from the licensee's authorized delegates in the
ordinary course of business that are less than seven days old, up to fifty percent of
the aggregate value of the licensee's total permissible investments.
(II) Of the receivables permissible under subsection (3)(a)(I) of this section,
receivables that are payable to a licensee from a single authorized delegate in the
ordinary course of business must not exceed ten percent of the aggregate value of
the licensee's total permissible investments.
(b) The following investments, up to twenty percent per category and
combined up to fifty percent of the aggregate value of the licensee's total
permissible investments:
(I) A short-term investment of up to six months bearing an eligible rating;
(II) Commercial paper bearing an eligible rating;
(III) A bill, note, bond, or debenture bearing an eligible rating;
(IV) United States tri-party repurchase agreements, collateralized at one
hundred percent or more, with United States government or agency securities,
municipal bonds, or other securities bearing an eligible rating;
(V) Money market mutual funds rated less than AAA and equal to or higher
than A- by SP Global Ratings or the equivalent from any other eligible rating
service; and
(VI) A mutual fund or other investment fund composed solely and exclusively
of one or more permissible investments listed in subsections (1)(a) to (1)(c) of this
section; and
(c) Cash, including demand deposits, savings deposits, and cash in such
accounts held for the benefit of the licensee's customers at foreign depository
institutions, up to ten percent of the aggregate value of the licensee's total
permissible investments if the licensee has received a satisfactory rating in the
licensee's most recent examination and if the foreign depository institution:
(I) Has an eligible rating;
(II) Is registered under the federal Foreign Account Tax Compliance Act,
Pub.L. 111-47;
(III) Is not located in any country subject to sanctions from the office of
foreign assets control; and
(IV) Is not located in a high-risk or noncooperative jurisdiction as designated
by the international Financial Action Task Force.