§ 4 — License required; consistent licensing between commonwealth and other states; application for license; information requirements for certain individuals; issuance of license; renewal of license; maintenance of license; reporting of business and operations

Massachusetts § 4

• Jurisdiction: Massachusetts
• Part I: ADMINISTRATION OF THE GOVERNMENT
• Title XXII: CORPORATIONS
• Ch. 169B: REGULATION OF MONEY TRANSMISSION

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[ Text of section added by 2024, 312, Sec. 3 effective January 1, 2026. See 2024, 312, Sec. 6.]Section 4. (a)(1) A person shall not engage in the business of money transmission or advertise, solicit or hold itself out as providing money transmission unless the person is licensed under this chapter.(2) This subsection shall not apply to:(i) a person that is an authorized delegate of a person licensed under this chapter acting within the scope of authority conferred by a written contract with the licensee; or(ii) a person that is exempt pursuant to subsection (a) of section 2 and does not engage in money transmission outside the scope of such exemption.(3) A license issued under subsection (e) is not transferable or assignable.(b)(1) To establish consistent licensing between the commonwealth and other states, the commissioner may: (i) implement all licensing provisions of this chapter in a manner that is consistent with other states that have adopted laws that are consistent with this chapter or multistate licensing processes; and (ii) participate in nationwide protocols for licensing cooperation and coordination among state regulators to the extent that such protocols are consistent with this chapter.(2) For the purposes of administering this chapter, the commissioner may establish relationships or contracts with NMLS or other entities designated by NMLS to enable the commissioner to: (i) collect and maintain records; (ii) coordinate multistate licensing processes and supervision processes; (iii) process fees; and (iv) facilitate communication between the division and licensees or other persons subject to this chapter.(3) The commissioner may participate in a multistate licensing process and the NMLS for the sharing of regulatory information and for the application, by electronic or other means, and licensing of persons engaged in money transmission. The commissioner may establish requirements for participation by an applicant in the NMLS that vary from the provisions of this chapter. The applicant shall pay directly to the NMLS any additional fee relating to participation in such multistate licensing system.(4) The commissioner may utilize NMLS forms, processes and functionalities in accordance with this chapter. If NMLS does not provide functionality, forms or processes for a provision of this chapter, the commissioner may implement the requirements in a manner that facilitates uniformity with respect to licensing, supervision, reporting and regulation of licensees that are licensed in multiple jurisdictions.(5) For the purpose of participating in the NMLS, the commissioner may waive or modify, in whole or in part, by rule, regulation or order, requirements or establish new requirements as reasonably necessary to participate in the NMLS.(c)(1) The application for a license shall be in a form prescribed by the commissioner and shall contain the name and address or addresses where the business of the applicant is located and if the applicant is a partnership, association, corporation or other form of business organization, the names and addresses of each member, director and principal officer thereof. The application shall also include a description of the activities of the applicant, in such detail and for such periods as the commissioner may require and such further information as the commissioner may require.(2) An application for a license shall be accompanied by payment of an investigation fee and a license fee. The investigation and license fees shall be determined annually by the secretary of administration and finance under section 3B of chapter 7.(d)(1) An individual in control of a licensee or applicant, an individual that seeks to acquire control of a licensee and a key individual shall furnish to the commissioner through NMLS:(i) the individual's fingerprints for submission to the Federal Bureau of Investigation and the commissioner for purposes of a national criminal history background check unless the individual currently resides outside of the United States and has resided outside of the United States for the preceding 10 years; and(ii) personal history and experience in a form and in a medium prescribed by the commissioner, to obtain: (A) an independent credit report from a consumer reporting agency unless the individual does not have a Social Security number, in which case, this requirement shall be waived; (B) information related to any criminal convictions or pending charges; and (C) information related to any regulatory or administrative action and any civil litigation involving claims of fraud, misrepresentation, conversion, mismanagement of funds, breach of fiduciary duty or breach of contract.(2)(A) If the individual has resided outside of the United States at any time in the preceding 10 years, the individual shall provide an investigative background report prepared by an independent search firm that shall, at a minimum: (i) demonstrate that it has sufficient knowledge and resources and employs accepted and reasonable methodologies to conduct the research of the background report; and (ii) not be affiliated with or have an interest in the individual it is researching.(B) At a minimum, the investigative background report shall be written in English and shall contain:(i) if available in the individual's current jurisdiction of residency, a comprehensive credit report, or any equivalent information obtained or generated by the independent search firm to accomplish such report, including a search of the court data in the countries, provinces, states, cities, towns and contiguous areas where the individual resided and worked;(ii) criminal records information for the past 10 years, including, but not limited to, felonies, misdemeanors or similar convictions for violations of law in the countries, provinces, states, cities, towns and contiguous areas where the individual resided and worked;(iii) employment history;(iv) media history, including an electronic search of national and local publications, wire services and business applications; and(v) financial services-related regulatory history, including, but not limited to, money transmission, securities, banking, insurance and mortgage-related industries.(3) The commissioner may, as part of an investigation or examination of a licensee, require a background investigation by means of state criminal history record checks by the department of criminal justice information services pursuant to section 172 of chapter 6 on a manager of a location from which an authorized delegate engages in money transmission.(e)(1) When an application for an original license under this chapter appears to include all the items and addresses all of the matters that are required, the application shall be considered complete and the commissioner shall promptly notify the applicant in writing of the date on which the application is determined to be complete.(2) A determination by the commissioner that an application is complete and is accepted for processing shall mean only that the application, on its face, appears to include all of the items, including the criminal background check response from the Federal Bureau of Investigation, and address all of the matters that are required, and shall not be considered an assessment of the substance of the application or of the sufficiency of the information provided.(3) When an application is filed and considered complete under this subsection, the commissioner shall investigate the applicant's financial condition and responsibility, financial and business experience, character and general fitness. The commissioner may conduct an on-site investigation of the applicant, the reasonable cost of which the applicant shall pay. The commissioner shall issue a license to an applicant under this subsection if the commissioner finds that: (i) the applicant has complied with subsection (c) and subsection (d); and (ii) the financial condition and responsibility, financial and business experience, competence, character, and general fitness of the applicant, and the competence, experience, character and general fitness of the key individuals and persons in control of the applicant indicate that it is in the public interest to permit the applicant to engage in money transmission.(4) The commissioner may accept the results of an investigation conducted by another state regulatory agency for the purpose of paragraph (3) if a licensee avails itself of or is otherwise subject to the multistate licensing process.(5) The commissioner shall issue a formal written notice of the denial of a license application within 30 days of the decision to deny the application. The commissioner shall set forth in the notice of denial the specific reasons for the denial of the application. An applicant whose application is denied by the commissioner under this paragraph may appeal pursuant to the procedures set forth in chapter 30A.(6) The initial license term shall begin on the day the application is approved. The license shall expire on December 31 of the year in which the license term began, unless the initial license date is between November 1 and December 31, in which instance the initial license term shall run through December 31 of the following year.(f)(1) A license may be renewed upon the filing of a renewal application in such form and containing all such information as the commissioner may prescribe.(2) An annual renewal fee to be determined annually by the secretary of administration and finance under the provisions of section 3B of chapter 7 shall be paid upon submission of the renewal application.(3) The renewal term shall be for a period of 1 year and shall begin on January 1 of each year after the initial license term and shall expire on December 31 of the year the renewal term begins.(g)(1) If a licensee does not continue to meet the qualifications or satisfy the requirements that apply to an applicant for a new money transmission license, the commissioner may suspend or revoke the licensee's license in accordance with the procedures established by this chapter or chapter 30A.(2) An applicant for a money transmission license shall demonstrate that it meets or will meet, and a money transmission licensee shall at all times meet, the requirements in subsections (a) to (c), inclusive, of section 9.(h) A licensee shall annually, not later than a date to be determined by the commissioner, file a report with the commissioner containing such information as the commissioner may require concerning the business and operations during the preceding calendar year. A licensee neglecting to file such report or failing to amend the same within 15 days of notice from the commissioner directing the same shall, unless such neglect or failure is due to justifiable cause and not due to willful neglect, pay to the commonwealth $50 for each day during which such neglect or failure continues.