§ 11-110-201 — Definitions - rules

As used in this article 110, unless the context
otherwise requires:

(1) Acting in concert means persons knowingly acting together with a
common goal of jointly acquiring control of a licensee, whether or not pursuant to
an express agreement.

(2) Authorized delegate means a person a licensee designates to engage in
money transmission on behalf of the licensee.

(3) Average daily money transmission liability means the amount of a
licensee's outstanding money transmission obligations in this state at the end of
each day in a given period of time, added together and divided by the total number
of days in the given period of time. For purposes of calculating average daily money
transmission liability under this article 110 for any licensee required to do so, the
given period of time is the quarters ending March 31, June 30, September 30, and
December 31.

(4) Banking board or board means the banking board created in section
11-102-103.

(5) Bank secrecy act means the federal Bank Secrecy Act, 31 U.S.C. sec.
5311 et seq., as amended, and its implementing regulations.

(6) Closed loop stored value means stored value that is redeemable by an
issuer only for goods or services provided by the issuer or its affiliate or franchisees
of the issuer or its affiliate, except to the extent required by applicable law to be
redeemable in cash for its cash value.

(7) Commissioner means the state bank commissioner appointed and
serving pursuant to section 11-102-101 (2).

(8) (a) Control means the power to:

(I) Vote, directly or indirectly, at least twenty-five percent of the outstanding
voting shares or voting interests of a licensee or person in control of a licensee;

(II) Elect or appoint a majority of key individuals or executive officers,
managers, directors, trustees, or other individuals exercising managerial authority
of a person in control of a licensee; or

(III) Exercise, directly or indirectly, a controlling influence over the
management or policies of a licensee or person in control of a licensee.

(b) Rebuttable presumption of control. (I) A person is presumed to exercise
a controlling influence when the person holds the power to vote, directly or
indirectly, at least ten percent of the outstanding voting shares or voting interests
of a licensee or person in control of a licensee.

(II) A person presumed to exercise a controlling influence as described in
this subsection (8) may rebut the presumption of control if the person is a passive
investor.

(c) For purposes of determining the percentage of a person controlled by
any other person, the person's interest shall be aggregated with the interest of any
other immediate family member, including the person's spouse, parents, children,
siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers-
and sisters-in-law and any other person who shares such person's home.

(9) Division means the division of banking created in section 11-102-101.

(10) Eligible rating means a credit rating of any of the three highest rating
categories provided by an eligible rating service, whereby each category may
include rating category modifiers such as plus or minus for S&P Global Ratings
or the equivalent for any other eligible rating service. Long-term credit ratings are
deemed eligible if the rating is equal to A- or higher by S&P Global Ratings or the
equivalent from any other eligible rating service. Short-term credit ratings are
deemed eligible if the rating is equal to or higher than A-2 or SP-2 by S&P
Global Ratings or the equivalent from any other eligible rating service. In the event
that ratings differ among eligible rating services, the highest rating applies when
determining whether a security bears an eligible rating.

(11) Eligible rating service means any nationally recognized statistical
rating organization, or NRSRO, as defined by the United States securities and
exchange commission, and any other organization designated by the banking board
by rule or order.

(12) Federally insured depository financial institution means a bank, credit
union, savings and loan association, trust company, savings association, savings
bank, industrial bank, or industrial loan company organized under the laws of the
United States or any state of the United States, when such bank, credit union,
savings and loan association, trust company, savings association, savings bank,
industrial bank, or industrial loan company has federally insured deposits.

(13) Individual means a natural person.

(14) (a) In this state means at a physical location within this state for a
transaction requested in person.

(b) For a transaction requested electronically or by phone, the provider of
money transmission shall determine if the person requesting the transaction is in
this state by relying on other information provided by the person regarding the
location of the individual's residential address or a business entity's principal place
of business or other physical address location and any records associated with the
person that the provider of money transmission may have that indicate such
location, including but not limited to an address associated with an account.

(15) Key individual means any individual ultimately responsible for
establishing or directing policies and procedures of a licensee, such as an executive
officer, manager, director, or trustee.

(16) Licensee means a person licensed under this article 110.

(17) Material litigation means litigation that, according to United States
generally accepted accounting principles, is significant to a person's financial
health and would be required to be disclosed in the person's annual audited
financial statements or report to shareholders or similar records.

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

(19) (a) Money means a medium of exchange that is authorized or adopted
by the United States or a foreign government.

(b) Money includes a monetary unit of account established by an
intergovernmental organization or by agreement between two or more
governments.

(20) (a) Money transmission means any of the following:

(I) Selling or issuing payment instruments to a person located in this state;

(II) Selling or issuing stored value to a person located in this state; or

(III) Receiving money for transmission from a person located in this state.

(b) Money transmission includes payroll processing services.

(c) Money transmission does not include the sole provision of online or
telecommunications services or network access.

(21) MSB accredited state means a state agency that is accredited by the
Conference of State Bank Supervisors and the Money Transmitter Regulators
Association for money transmission licensing and supervision.

(22) Multistate licensing process means any agreement entered into by
and among state regulators relating to coordinated processing of applications for
money transmission licenses, applications for the acquisition of control of a
licensee, control determinations, or notice and information requirements for a
change of key individuals.

(23) NMLS means the Nationwide Multistate Licensing System and
Registry developed by the Conference of State Bank Supervisors and the American
Association of Residential Mortgage Regulators and owned and operated by the
State Regulatory Registry, LLC, or any successor or affiliated entity, for the
licensing and registration of persons in financial services industries.

(24) (a) Outstanding money transmission obligation means, as established
and extinguished in accordance with applicable state law:

(I) Any payment instrument or stored value issued or sold by a licensee to a
person located in the United States or reported as sold by an authorized delegate
of the licensee to a person that is located in the United States that has not yet been
paid or refunded by or for the licensee or escheated in accordance with applicable
abandoned property laws; or

(II) Any money received for transmission by a licensee or an authorized
delegate of the licensee in the United States from a person located in the United
States that has not been received by the payee or refunded to the sender or
escheated in accordance with applicable abandoned property laws.

(b) As used in this subsection (24), in the United States means, to the
extent applicable, a person in any state, territory, or possession of the United
States; the District of Columbia; the Commonwealth of Puerto Rico; or a United
States military installation that is located in a foreign country.

(25) Passive investor means a person that:

(a) Does not have the power to elect a majority of key individuals or
executive officers, managers, directors, trustees, or other persons exercising
managerial authority of a person in control of a licensee;

(b) Is not employed by and does not have any managerial duties of the
licensee or person in control of a licensee;

(c) Does not have the power to exercise, directly or indirectly, a controlling
influence over the management or policies of a licensee or person in control of a
licensee; and

(d) Either:

(I) Attests to subsections (25)(a) to (25)(c) of this section in a form and in a
medium prescribed by the banking board by rule; or

(II) Commits to the passivity characteristics of subsections (25)(a) to (25)(c)
of this section in a written document.

(26) (a) Payment instrument means a written or electronic check, draft,
money order, traveler's check, or other written or electronic instrument for the
transmission or payment of money or monetary value, whether or not negotiable.

(b) Payment instrument does not include stored value or any instrument
that:

(I) Is redeemable by the issuer only for goods or services provided by the
issuer or its affiliate or franchisees of the issuer or their affiliates, except to the
extent required by applicable law to be redeemable in cash for its cash value; or

(II) Is not sold to the public but issued and distributed as part of a loyalty,
rewards, or promotional program.

(27) (a) Payroll processing services means receiving money for
transmission pursuant to a contract with a person to deliver wages or salaries,
make payment of payroll taxes to state and federal agencies, make payments
relating to employee benefit plans, or make distributions of other authorized
deductions from wages or salaries.

(b) Payroll processing services does not include:

(I) An employer performing payroll processing services on its own behalf or
on behalf of its affiliate or a professional employer organization subject to
regulation under other applicable state law; or

(II) A person appointed as an agent of an employer for purposes of providing
payroll processing services for which the agent would otherwise need to be
licensed, so long as all of the following apply:

(A) There is a written agreement between the employer and the agent that
directs the agent to provide payroll processing services on the employer's behalf;

(B) The employer holds the agent out to employees and other payees as
providing payroll processing services on the employer's behalf; and

(C) The employer's obligation to a payee, including an employee or other
party entitled to receive money via the payroll processing services provided by the
agent, is not extinguished if the agent fails to remit the money to the payee.

(28) Person means any individual, general partnership, limited partnership,
limited liability company, corporation, trust, association, joint stock corporation, or
other corporate entity identified by the banking board.

(29) Receiving money for transmission or money received for
transmission means receiving money or monetary value in the United States for
transmission within or outside the United States by electronic or other means.

(30) (a) Stored value means monetary value that represents a claim against
the issuer evidenced by an electronic or digital record and that is intended and
accepted for use as a means of redemption for money or monetary value or
payment for goods or services. Stored value includes but is not limited to prepaid
access as defined by 31 CFR 1010.100.

(b) Notwithstanding subsection (30)(a) of this section, stored value does
not include a payment instrument or closed loop stored value or stored value not
sold to the public but issued and distributed as part of a loyalty, rewards, or
promotional program.

(31) Tangible net worth means the aggregate assets of a licensee
excluding all intangible assets, less liabilities, as determined in accordance with
United States generally accepted accounting principles.

Legislative History

Source: L. 2025: Entire article R&RE, (HB 25-1201), ch. 91, p. 376, � 1, effective August 6.