In this subtitle the following words have the meanings indicated. “Accelerated mortgage payment service” means the service of receiving funds from a mortgagor for the purpose of making mortgage payments to a mortgagee on behalf of the mortgagor in order to exceed the regularly scheduled minimum payment obligation under the terms of the mortgage. “Accelerated mortgage payment service” does not include the collection by a mortgagee of accelerated payments from the mortgagee’s own mortgagors. “Authorized delegate” means a person who is authorized by a licensee to engage in the business of money transmission under a licensed name at any location other than a licensed location. “Bill payer service” means the service of receiving funds from an obligor for the purpose of paying the obligor’s bills, invoices, mortgages, or accounts. “Bill payer service” does not include the service described in paragraph (1) of this subsection that is provided by a nonprofit organization that is exempt from taxation under § 501(c)(3) of the Internal Revenue Code. “Control” means: If the licensee is a corporation: The direct or indirect ownership of, or the right to control, 25% or more of the voting shares of the licensee; or The ability to elect a majority of the directors or otherwise effect a change in policy of the licensee; and If the licensee is a person other than a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the licensee, whether through ownership, by contract, or otherwise. “Control person” means a person who has the power, directly or indirectly, to direct the management or policies of a money transmitter, whether through ownership of securities, by contract, or otherwise. “Control person” includes a person who: Is a general partner, an officer, or a director of a money transmitter, or a person who occupies a similar position or performs a similar function; Directly or indirectly has the right to vote 10% or more of a class of voting securities, or has the power to sell or direct the sale of 10% or more of a class of voting securities, of a money transmitter; or In the case of a partnership, a limited partnership, a limited liability partnership, a limited liability company, or any other business entity: Has the right to receive on liquidation or dissolution of a money transmitter 10% or more of the capital of a money transmitter; or Has contributed 10% or more of the capital of a money transmitter. “Currency” has the meaning stated in 31 C.F.R. § 1010.100(m). “Deposit in lieu of a surety bond” means an investment in: Cash; Unless found by the Commissioner to be unacceptable, a certificate of deposit or other debt obligation, except a capital note, of a State–chartered or federally chartered financial institution, other–state bank, or foreign bank that: Is located in this State or maintains a branch in this State; and Is authorized to maintain deposit or share accounts; Unless found by the Commissioner to be unacceptable: Obligations of or guaranteed by the United States, its departments, agencies, or instrumentalities, or obligations of any state, territory, or municipality or any political subdivision of any state, territory, or municipality; Any investment securities, money market mutual funds, interest–bearing bills or notes, debentures, or stock traded on any national securities exchange or on a national over–the–counter market bearing a rating of one of the three highest grades as defined by a nationally recognized organization that rates such securities; and Any demand borrowing agreement or agreements in an amount or aggregate amount which does not exceed 10% of the net worth of the company liable for payment under the agreement or agreements as shown on financial statements certified by a certified public accountant acceptable to the Commissioner, provided that the company is a corporation or a subsidiary of a corporation whose capital stock is listed on a national exchange and is not a licensee or authorized delegate of a licensee under this subtitle; or Any other investment that the Commissioner approves. “Executive officer” means a president, vice president, senior officer responsible for business operations, chief financial officer, or any other individual who performs similar functions. “License” means a license issued in any form by the Commissioner under this subtitle to engage in the business of money transmission, including as provided for through NMLS. “Licensed location” means any location listed by the licensee in NMLS in accordance with this subtitle. “Licensed location” includes a self–service financial kiosk. “Licensed location” does not include an authorized delegate. “Licensed name” means: The licensee’s legal name; and Any trade name used by the licensee in accordance with § 2–121 of this article. “Licensee” means a person licensed under this subtitle to engage in the business of money transmission. “Material litigation” means litigation that according to generally accepted accounting principles: Is deemed significant to an applicant’s or licensee’s financial health; and Would be required to be referenced in the applicant’s or licensee’s annual audited financial statements, report to shareholders, or similar document. “Monetary value” means a medium of exchange whether or not redeemable in money. “Money transmission” means engaging in the business of selling or issuing payment instruments or prepaid access or receiving currency, funds, or other value that substitutes for currency and transferring currency, funds, or other value that substitutes for currency to another person or a location within or outside the United States by any means, including electronically, through the Internet, through a mobile application, through a network of persons, or through an informal value transfer system. “Money transmission” includes any other activity that the Commissioner identifies as money transmission by regulation. “Money transmitter” means a person that engages in money transmission that is required to be licensed under this subtitle, whether or not the person maintains a license. “Money transmitter” includes: A bill payer service; and An accelerated mortgage payment service. “Money transmitter” does not include a person designated as an agent of a payor for the purpose of providing payroll processing services for which the agent would otherwise need to be licensed under this subtitle, if: There is written agreement between the payor and the agent that directs the agent to provide payroll processing services on the payor’s behalf; The payor holds the agent out to employees and other payees as providing payroll processing services on the payor’s behalf; and The payor’s obligation to a payee, including an employee or another party entitled to receive funds via the payroll processing services provided by the agent, is not extinguished if the agent fails to remit the funds to the payee. “Outstanding money transmission” means: With respect to a payment instrument or prepaid access, a payment instrument or prepaid access, that has been sold or issued in the United States directly by a licensee or an authorized delegate of a licensee that has been reported as not yet paid by or for the licensee; and With respect to money received for transmission, currency, funds, or other value that substitutes for currency received by a licensee or an authorized delegate of a licensee that has been received but not yet paid to the beneficiary. “Payment instrument” means any electronic or written check, draft, money order, traveler’s check, or other electronic or written instrument or order for the transmission or payment of money, sold or issued to one or more persons, whether or not the instrument is negotiable. “Payment instrument” does not include any credit card voucher, letter of credit, or tangible object redeemable by the issuer in goods or services. “Permissible investment” means: Cash; Unless found by the Commissioner to be unacceptable, a certificate of deposit or other debt obligation, except a capital note, of a State–chartered or federally chartered financial institution, other–state bank, or foreign bank that: Is located in this State or maintains a branch in this State; and Is authorized to maintain deposit or share accounts; Unless found by the Commissioner to be unacceptable: Obligations of or guaranteed by the United States, its departments, agencies, or instrumentalities, or obligations of any state, territory, or municipality or any political subdivision of any state, territory, or municipality; Any investment securities, money market mutual fund, interest–bearing bills or notes, debentures or stock traded on any national securities exchange or on a national over–the–counter market bearing a rating of one of the three highest grades as defined by a nationally recognized organization that rates such securities; and Any demand borrowing agreement or agreements in an amount or aggregate amount which does not exceed 10% of the net worth of the company liable for payment under the agreement or agreements as shown on financial statements certified by a certified public accountant acceptable to the Commissioner, provided that the company is a corporation or a subsidiary of a corporation whose capital stock is listed on a national exchange and is not a licensee or authorized delegate of a licensee under this subtitle; Receivables that are due to a licensee from its authorized delegates under a contract described in § 12–413 of this subtitle that are not past due or doubtful of collection; or Any other investment that the Commissioner approves. “Prepaid access” means access to funds or the value of funds that have been paid in advance and can be retrieved or transferred at some point in the future through an electronic device or vehicle including: A card; A code; An electronic serial number; A mobile identification; or A personal identification. “Prepaid access” does not include access to funds or the value of funds that may be redeemed only in the issuer’s goods or services. “Self–service financial kiosk” means a stand–alone automated platform through which a consumer may obtain money transmission services. “Surety device” means: A surety bond; or A deposit in lieu of a surety bond. “Unique identifier” means a number or another identifier assigned by NMLS.

The provisions of this subtitle do not apply to: Any banking institution; Any other-state bank; Any national banking association or savings bank; Any credit union; Any savings and loan association; The United States government or any of its departments, agencies, or instrumentalities; An accredited institution of higher education, as defined under § 10-101 of the Education Article; The sale of payment instruments by any person on behalf of any other person who is exempted by this subsection, if the payment instruments were received from the other person under a trust receipt for the specific purpose of sale; The provision of electronic transfer of government benefits for any federal, state, or county governmental agency as defined in Federal Reserve Board Regulation E, by a contractor for and on behalf of the United States or any of its departments, agencies, or instrumentalities, or any state or any political subdivision of any state; or Any authorized delegate of a licensee, acting within the scope of authority conferred by a written contract as described in § 12-413 of this subtitle. Any person who is exempted by this section nevertheless may apply for and, if qualified, receive a license.

To carry out the provisions of this subtitle, the Commissioner may: Adopt rules and regulations; Enter into cooperative and information sharing agreements with any federal or State agency having supervisory responsibility over the business of money transmission; and Provide any federal or State agency having supervisory responsibility over money transmission with any documents or other information.

All revenue received for the licensing and assessment of money transmitters under this subtitle and any other fee, examination assessment, or revenue received by the Commissioner under this subtitle shall be: Credited to the Non–Depository Special Fund established under § 2–120 of this article; and Used in accordance with § 2–120(d) of this article. Notwithstanding subsection (a) of this section, the Commissioner shall pay all fines and penalties collected by the Commissioner under this subtitle into the General Fund of the State. Subject to § 2–120(h) of this article, the Commissioner may impose an annual assessment on any licensee under this subtitle.

A person may not engage in the business of money transmission if that person, or the person with whom that person engages in the business of money transmission, is located in the State unless that person: Is licensed by the Commissioner; Is an authorized delegate of a licensee under whose name the business of money transmission occurs; or Is a person exempted from licensing under this subtitle or §§ 10–14A–03 and 10–14B–03 of the State Government Article. Each licensee or license applicant shall obtain and maintain a valid unique identifier issued by NMLS on forming an account with NMLS. An applicant for an initial license or a license renewal shall apply for the license or renewal through NMLS.

To qualify for a license, an applicant shall satisfy the Commissioner that the applicant: Is of good moral character and has sufficient financial responsibility, business experience, and general fitness to: Engage in the business of money transmission; Warrant the belief that the business of money transmission will be conducted lawfully, honestly, fairly, and efficiently; and Command the confidence of the public; Will keep at all times the permissible investments required under § 12–418 of this subtitle; Has a tangible net worth computed according to generally accepted accounting principles of at least $150,000, plus an additional net worth of $10,000 for each licensed location or authorized delegate, up to a maximum of $500,000 as provided in subsection (b) of this section; and Has at least 3 years of experience in the business of money transmission or other related financial services business under the following conditions: If the applicant is a sole proprietor, the applicant shall have the required experience; If the applicant is a joint venture or partnership, at least one of the coventurers or general partners shall have the required experience; and If the applicant is any other type of business, at least one of the principal officers or members shall have the required experience. The Commissioner may require a net worth of up to $500,000, subject to consideration of the following: The nature and volume of the business or proposed business of the applicant; The amount, nature, quality, and liquidity of the assets of the applicant; The amount and nature of the liabilities, including contingent liabilities, of the applicant; The history of, and prospects for, the applicant to earn and retain income; The quality of the operations of the applicant; The quality of the management of the applicant; The nature and quality of the person that has control of the applicant; and Any other factor the Commissioner deems relevant.

To apply for a license, an applicant shall: Complete, sign, and submit to the Commissioner an application made under oath in the form, and in accordance with the process, that the Commissioner requires; and Provide all information that the Commissioner requests. The applicant shall comply with all conditions and provisions of the application for a license. An applicant shall provide: The applicant’s legal name and any trade name used by the applicant in accordance with § 2–121 of this article; The address of the principal executive office of the applicant; The address of each additional location, if any, that: The general public may reasonably view as a location that engages in the business of money transmission, including any location that investigates customer complaints or directly communicates with customers verbally, electronically, or in writing; Houses any core operational infrastructure or technology systems; Conducts any core management, information security and technology, risk and compliance, or finance functions; or Is otherwise required to be listed in NMLS by regulation the Commissioner adopts under this subtitle; and If the licensee operates a self–service financial kiosk, the following information for each self–service financial kiosk: Unique identifying information for the self–service financial kiosk, such as the manufacturer name, model number, serial number, or asset tag; If the licensee intends to operate the self–service financial kiosk from any fixed location for more than 30 days in a calendar year, each physical address where the self–service financial kiosk will be operated; and If the licensee intends to operate the self–service financial kiosk at any location for 30 days or less in a calendar year, the geographic area where the licensee intends to operate the self–service financial kiosk; The name, business address, and nature of the business of each authorized delegate to be appointed by the applicant; The most recent unconsolidated financial statement of the applicant that shall: Be prepared in accordance with generally accepted accounting principles applied on a consistent basis; Be a certified opinion audit prepared by an independent certified public accountant; Include a schedule of all permissible investments, if any, of the applicant; and Be no older than 12 months before the date of the application; The name, address, and telephone number of the applicant’s resident agent in the State; A history of material litigation against the applicant, if any, for the past 3 years; and Any other information that the Commissioner reasonably requires. An applicant that is a business entity shall provide: Certified copies of the applicant’s certificate of incorporation, articles of incorporation, or articles of organization, or other instrument incorporating or forming the applicant, as amended, corrected, or supplemented; and The bylaws, operating agreement, or other equivalent internal governance documents, as amended or supplemented. An applicant shall provide a certificate of good standing from the state in which the applicant is incorporated or organized and a certificate of good standing from the State Department of Assessments and Taxation. With the application, the applicant shall pay to the Commissioner: A nonrefundable investigation fee of $1,000; and A nonrefundable license fee of $2,000. In addition to the license fee required under subsection (e) of this section, an applicant for an initial license shall pay to NMLS the fee that NMLS imposes in connection with processing the application. With the application, the applicant shall file evidence of a surety device with the Commissioner as provided in § 12–412 of this subtitle.

This section does not apply to any corporation the securities of which are exempt from registration under § 11–601(8) or (12) of the Corporations and Associations Article or any wholly owned subsidiary of the corporation. In connection with an initial application for a license under § 12–407 of this subtitle, and at any other time that the Commissioner requests, an applicant or licensee shall provide to NMLS information concerning the applicant’s identity, including: Fingerprints for submission to the Federal Bureau of Investigation, and any other governmental agency or entity authorized to receive this information for a state, a national, or an international criminal history background check; In the case of a sole proprietorship, personal history and experience in a form prescribed by NMLS, including the submission of authorization for NMLS and the Commissioner to obtain: An independent credit report from a consumer reporting agency described in the federal Fair Credit Reporting Act, 15 U.S.C. § 1681a(p); and Information related to any administrative, civil, or criminal findings by any governmental jurisdiction; and In the case of a corporation or another business entity: Business history in a form prescribed by NMLS, including: The submission of a business credit report for the applicant that is no older than 3 months before the date of the application; and Information related to any administrative, civil, or criminal findings by any governmental jurisdiction; and For each control person, personal history in a form prescribed by NMLS. Subject to § 12–408.1 of this subtitle, to implement this subtitle, the Commissioner may use NMLS as a channeling agent to request information from and distribute information to the Department of Justice, any other governmental agency with subject matter jurisdiction, and any other state licensing entity that has money transmitters licensed or registered with NMLS. An applicant or a licensee who is required to provide fingerprints under subsection (b) of this section shall pay the processing or other fees required by the Federal Bureau of Investigation and NMLS. The Commissioner may request from the Federal Bureau of Investigation or NMLS, as applicable, for each person who is required to provide fingerprints under subsection (b) of this section: The state, national, or international criminal history records of the person; and A printed statement listing any conviction or other disposition of, and any plea of guilty or nolo contendere to, any criminal charge; An update of the initial criminal history records check or criminal history background check of the person; and A revised statement listing any conviction or other disposition of, and any plea of guilty or nolo contendere to, any criminal charge occurring after the date of the initial criminal history records check or criminal history background check; and An acknowledged receipt of the application for a criminal history records check or criminal history background check of the person. If the applicant or licensee is a corporation or another business entity, the fingerprinting and criminal history records check requirements under subsection (b) of this section shall apply to an executive officer, a general partner, or a managing member of, or an individual serving in a similar capacity with respect to, the corporation or other business entity, as requested by the Commissioner.

The requirements under any federal law and Title 4, Subtitles 1 through 5 of the General Provisions Article regarding the privacy or confidentiality of information or material provided to NMLS, and any privilege arising under federal or state law, including the rules of any federal or state court with respect to that information or material, shall continue to apply to that information or material after the information or material has been disclosed to NMLS. The information and material may be shared with all state and federal regulatory officials having oversight authority over the money transmission industry, including the Financial Crimes Enforcement Network, without the loss of privilege or the loss of confidentiality protections provided by federal law or Title 4, Subtitles 1 through 5 of the General Provisions Article. The Commissioner may enter into information–sharing agreements with other governmental agencies, the Conference of State Bank Supervisors, or other associations representing governmental agencies, including the Financial Crimes Enforcement Network. Information or material that is subject to a privilege or confidentiality under subsection (a) of this section may not be subject to: Disclosure under any federal or state law governing the disclosure to the public of information held by an officer or agency of the federal government or a state that has received the information or material; or Subpoena, discovery, or admission into evidence, in any private civil action or administrative process, unless with respect to any privilege held by NMLS, the person to whom the information or material pertains waives, in whole or in part, that privilege. Any provisions of Title 4, Subtitles 1 through 5 of the General Provisions Article relating to the disclosure of any information or material described in subsection (a) of this section that are inconsistent with subsection (a) of this section shall be superseded by the requirements of this section. This section does not apply to information or material relating to publicly adjudicated disciplinary and enforcement actions against a money transmitter or its authorized delegate that is included in NMLS and designated for access by the public.

After the filing of a complete application, the Commissioner shall investigate the financial condition and responsibility, financial and business experience, character, and general fitness of the applicant. Unless the Commissioner notifies the applicant that a different time period is necessary, the Commissioner shall approve or deny each application for a license within 60 days after the date a complete application is filed. The applicant may by written request to the Commissioner withdraw the application at any time before the issuance of the license. The Commissioner shall issue a license to any applicant who meets the requirements of this subtitle. If an applicant does not meet the requirements of this subtitle, the Commissioner shall: Notify the applicant immediately of this fact; Subject to the hearing provisions of § 12–428 of this subtitle, deny the application; Return the surety device filed under § 12–407 of this subtitle; and Keep the license fee and the investigation fee. Within 30 days after the Commissioner denies an application, the Commissioner shall state the reasons for the denial in writing and mail them to the address listed in the application.

Information in NMLS associated with a license approved by the Commissioner under this subtitle shall include the following: The licensee’s legal name and any trade name used by the licensee in accordance with § 2–121 of this article; The address of the licensee’s principal executive office; The address of each additional location, if any, where the licensee does business and that: The general public may reasonably view as a location that offers money transmission services, including any location that investigates customer complaints or directly communicates with customers verbally, electronically, or in writing; Houses any core operational infrastructure or technology systems; Conducts any core management, information security and technology, risk and compliance, or finance functions; or Is otherwise required to be listed in NMLS by regulation the Commissioner adopts under this subtitle; and The information required by § 12–407(b)(2)(iii) of this subtitle for each self–service financial kiosk, if any, of the licensee. A licensee shall maintain and update the information in NMLS associated with the licensee’s license to reflect accurately at all times the information required by subsection (a) of this section. The unique identifier assigned by NMLS to a licensee shall constitute the licensee’s license number. A license authorizes the licensee to do business under the license at any licensed location, under any licensed name and, for each self–service financial kiosk, the address or geographic area listed for the self–service financial kiosk in NMLS, or as otherwise authorized by the Commissioner through regulation. A license may not be transferred or assigned. Each licensee shall conspicuously post, in 48 point or larger type, at each licensed location the following information: The licensee’s unique identifier; and A statement advising consumers of the availability of the NMLS Consumer Access website to verify the licensing status of the licensee. Each authorized delegate, at each location open to the public, shall conspicuously post, in at least 48 point type, the following information: A notice stating, “the Commissioner of Financial Regulation for the State of Maryland will accept all questions or complaints regarding this authorized delegate of (name of licensee and unique identifier) at (address of Commissioner), phone (toll–free phone number of the Commissioner)”; and A statement advising consumers of the availability of the NMLS Consumer Access website to verify the licensing status of the licensee. Each licensee shall conspicuously display the following information on the licensee’s website, any mobile application through which the services are offered, the outside of the self–service financial kiosk, any software application accessible to the public and used for money transmission services, and profile page within each social media platform the licensee uses: The licensee’s unique identifier; A link to the NMLS Consumer Access website; and A notice stating, “The Commissioner of Financial Regulation for the State of Maryland will accept all questions or complaints from Maryland residents regarding (name of licensee and unique identifier) at (address of Commissioner), phone (toll–free phone number of the Commissioner)”. A licensee is not required to post the information required in subsection (f)(1) of this section at a licensed location if the licensed location is not a self–service financial kiosk and the licensee does not regularly grant access to that licensed location to members of the general public.

Subject to any regulations the Commissioner adopts in connection with the transition to NMLS, an initial license term shall: Begin on the day the license is issued; and Expire on December 31 of the year: The license is issued, if the license is issued before November 1; or Succeeding the year that the license is issued, if the license is issued on or after November 1. On or after November 1 of each year, a license may be renewed for a 1–year term, if the licensee: Otherwise is entitled to be licensed; Files evidence of a surety device required under § 12–412 of this subtitle; Pays to the Commissioner a nonrefundable renewal fee of $2,000; and Submits to the Commissioner: A renewal application in the form and in accordance with the process that the Commissioner requires; A financial statement that complies with the requirements of § 12–407(b)(4) of this subtitle; and Any other information that the Commissioner reasonably requires to determine that the renewal applicant continues to be eligible to be licensed. In addition to the license renewal fee required under subsection (b)(3) of this section, an applicant for a license renewal shall pay to NMLS the fee that NMLS imposes in connection with the renewal application.

In this section the following words have the meanings indicated. “Average daily money transmission liability” means the amount of the applicant’s or licensee’s outstanding money transmission obligations in the State at the end of each day in a given quarter, added together and divided by the total number of days in that quarter. “Trust company” has the meaning stated in § 1–101 of the Estates and Trusts Article. With an application for a new license, an applicant shall file a surety bond with the Commissioner. The bond shall run to the Commissioner, as obligee, for the benefit of: The State; and Any individual who has been damaged by a violation of State law or regulation governing the business of money transmission committed by a licensee or an authorized delegate of a licensee. The bond shall be: In the amount required under subsection (d) of this section; Issued by a surety company that: Is authorized to do business in the State; and Holds a certificate of authority issued by the Maryland Insurance Commissioner; and Conditioned that the licensee and any authorized delegate of the licensee shall: Comply with all State and federal laws and regulations governing the business of money transmission; and Fulfill all obligations to all parties to a money transmission. The liability of the surety: Shall be continuous; May not be aggregated or cumulative, whether or not the bond is renewed, continued, replaced, or modified; May not be determined by adding together the penal sum of the bond, or any part of the penal sum of the bond, in existence at any two or more points in time; Shall be considered to be one continuous obligation, regardless of increases or decreases in the penal sum of the bond; May not be affected by: The insolvency or bankruptcy of the licensee; Any misrepresentation, breach of warranty, failure to pay a premium, or any other act or omission of the licensee; or The suspension of the licensee’s license; May not require an administrative enforcement action by the Commissioner as a prerequisite to liability; and Shall continue for 3 years after the later of the date on which: The bond is canceled; or The licensee, for any reason, ceases to be licensed. A bond may be canceled by the surety or the licensee by giving notice of cancellation to the Commissioner. Notice under subparagraph (i) of this paragraph shall: Be in writing; and Be sent by certified mail, return receipt requested. A cancellation of a bond under this paragraph is not effective until 90 days after receipt of a notice of cancellation by the Commissioner. A claim against the bond may be filed with the surety by: A claimant; or The Commissioner for the benefit of a claimant or the State. If the amount of claims under a bond exceeds the amount of the bond, the surety: Shall pay the amount of the bond to the Commissioner for pro rata distribution to claimants; and Is relieved of liability under the bond. If the penal amount of a bond is reduced by payment of a claim or judgment, the licensee shall file a new or additional bond with the Commissioner. The Commissioner may permit a bond to be reduced or eliminated if the amount of the licensee’s payment instruments outstanding in the State are reduced. A deposit in lieu of a surety bond made to satisfy the provisions of subsection (b) of this section shall: Have a market value equal to the amount required under subsection (d) of this section; and Be held by the Commissioner to secure the same obligations as are required to be secured by a surety bond under subsection (b) of this section. At any time, a licensee may exchange investments for other investments that meet the requirements of this subsection. The Commissioner may sell or transfer investments and distribute the proceeds on the same basis as provided for claims against a surety bond under paragraph (b)(2) of this section. As long as a licensee is solvent, the licensee is entitled to receive any interest or dividends earned by the investments. The Commissioner may place the investments in the custody of any qualified trust company in this State. The licensee shall pay the compensation of this custodian. The amount of the surety bond under subsection (b) of this section or the deposit in lieu of a surety bond under subsection (c) of this section shall be the greater of: $150,000; or 100% of the applicant’s average daily money transmission liability in the State calculated for the most recently completed quarter, up to a maximum of $2,000,000. The quarters for calculating the average daily money transmission liability under paragraph (1) of this subsection for any licensee required to do so shall be the quarters ending March 31, June 30, September 30, and December 31. If the penal amount of a surety bond or a deposit in lieu of a surety bond is reduced by a payment of a claim or judgment, the licensee shall file with the Commissioner evidence of any new or additional surety bond or deposit in lieu of a surety bond in the amount that the Commissioner sets. If the Commissioner at any time believes that the surety bond or the deposit in lieu of a surety bond is insufficient, exhausted, or otherwise unsatisfactory, the Commissioner may require evidence of an additional surety bond or deposit in lieu of a surety bond to be filed by the licensee. Within 30 days after the Commissioner makes a written demand for the new surety bond or deposit in lieu of a surety bond, the licensee shall file the evidence of the new surety bond or deposit in lieu of a surety bond. A penalty imposed against a licensee under § 2–115(b) of this article or § 12–426(e)(2) of this subtitle may be collected and paid from the proceeds of a surety bond or a deposit in lieu of a surety bond required under this section.

Each authorized delegate that a licensee appoints under a license is the designated agent of the licensee for all purposes in connection with the licensee’s business under that license. Each licensee under this subtitle is liable for the payment of all money transmissions by the licensee, in whatever form, directly or through an authorized delegate. Each authorized delegate that a licensee appoints under a license shall be authorized by an express written contract, which shall provide: That the licensee appoints the person as its authorized delegate with authority to engage in the business of money transmission on behalf of the licensee; That neither the licensee nor the authorized delegate may authorize subagents or subdelegates without written consent of the Commissioner; That the authorized delegate is subject to supervision, examination, and regulation by the Commissioner; and That the authorized delegate will operate in full compliance with all applicable laws and regulations. The licensee shall provide to each authorized delegate a written copy of the licensee’s operating policies and procedures, which shall be updated on a reasonable periodic basis. Copies of all contracts required under this section shall be made available to the Commissioner, upon request.

In this section the following words have the meanings indicated. “Agent” includes an authorized delegate, a subagent, and a subdelegate of a licensee. “Elder adult” has the meaning stated in § 1–306 of this article. “Financial abuse” has the meaning stated in § 1–306 of this article. “Financial exploitation” has the meaning stated in § 1–306 of this article. This section does not apply to a licensee or an agent that: Engages in the business of money transmission solely through the Internet; or Engages in: Selling or issuing stored value devices, traveler’s checks, or money orders, or providing bill payer services; or Any combination of selling or issuing stored value devices, traveler’s checks, or money orders, or providing bill payer services; and Does not engage in any other business regulated under this subtitle. On or before April 1 of each year, a licensee shall provide to each agent, through which it engages in the business of money transmission, training materials on how to: Recognize financial abuse and financial exploitation of an elder adult; and Respond appropriately if the agent suspects that the agent is being asked to engage in the business of money transmission for a fraudulent transaction in which an elder adult is the victim of financial abuse or financial exploitation. A licensee shall provide the training materials required under subsection (c) of this section to each newly appointed agent within 1 month after appointment of the agent. A licensee shall include a clear, concise, and conspicuous fraud warning on all transmittal forms used by an individual to send money to another individual. The fraud warning shall include a toll–free telephone number for individuals to call to report fraud or suspected fraud. A licensee shall monitor the activities of its agents relating to transmittals by individuals. A licensee shall allow an individual to voluntarily be disqualified from sending money transmissions from or receiving money transmissions in the State. A licensee may require an individual to provide written notice of the individual’s disqualification to the licensee at the address on the licensee’s license. Unless extended under paragraph (2) of this subsection or terminated under paragraph (3) of this subsection, a disqualification is effective until January 1 of the year following the year in which notice of the individual’s disqualification is given to the licensee. Before a disqualification becomes ineffective, an individual may extend the disqualification by giving written notice of the extension to the licensee at the address on the licensee’s license. An extension of a disqualification under subparagraph (i) of this paragraph is effective until January 1 of the year following the year in which notice of the extension is given to the licensee. An individual may terminate a disqualification at any time by giving written notice of the termination to the licensee at the address on the licensee’s license.

An authorized delegate may not make any fraudulent or false statement or misrepresentation to a licensee or to the Commissioner. All money transmission services conducted by an authorized delegate shall be conducted strictly in accordance with the licensee’s operating policies and procedures provided to the authorized delegate. An authorized delegate shall remit all funds owed to the licensee in accordance with the terms of the contract between the licensee and the authorized delegate. All funds received by an authorized delegate from money transmission services, less fees, shall constitute trust funds belonging to the licensee from the time the funds are received by the authorized delegate until the time when the funds are remitted to the licensee. If an authorized delegate commingles any of the funds received with any other funds or property owned or controlled by the authorized delegate, all commingled funds and other property shall be impressed with a trust in favor of the licensee in an amount equal to the amount of the funds due the licensee. An authorized delegate shall report to the licensee the theft or loss of a payment instrument within 24 hours after the theft or loss.

A licensee may not add, delete, or modify a location required to be listed in NMLS under § 12–410(a)(2), (3), or (4) of this subtitle unless: The licensee provides to the Commissioner, through NMLS and in accordance with any regulations adopted by the Commissioner, notice of the addition, deletion, or modification; The addition, deletion, or modification of the location is recorded with the information associated with the licensee’s license in NMLS; and The addition, deletion, or modification of the location otherwise complies with this subtitle. The licensee may not do business at a location or in a geographic area required to be listed in NMLS by § 12–410(a)(2), (3), or (4) of this subtitle until the location or geographic area is recorded with the information associated with the licensee’s license in NMLS. A licensee may not undergo a change in control unless the licensee: Notifies the Commissioner through NMLS of the proposed change; Makes a request through NMLS that the Commissioner approve the proposed change; Provides any information the Commissioner may require under paragraph (3) of this subsection; and Receives the approval of the Commissioner through NMLS. Within 60 days after receiving a request for approval of a proposed change in control, the Commissioner may require the licensee to provide any information deemed necessary to determine whether a new application is required because of the proposed change in control. The Commissioner shall approve or deny a request for approval of a proposed change in control: Within 60 days after the date the Commissioner receives the request; or If the Commissioner requests information from the licensee under paragraph (2) of this subsection, within 60 days after the date the information is received by the Commissioner. If the Commissioner does not deny a request for approval of a proposed change in control as provided under paragraph (3) of this subsection, the request shall be deemed approved. In addition to any sanctions that may be imposed by the Commissioner under this subtitle, a licensee who fails to provide in a timely manner the notice required under subsection (a)(1) or (b)(1) of this section shall: For each failure, pay to the Commissioner a penalty in the amount of $500; and For a licensee who fails to provide the notice required under subsection (b)(1) of this section in a timely manner, file with the Commissioner an application for a new license, together with all appropriate application and investigation fees.

A licensee shall submit to NMLS a call report once each quarter on the date, in the form, and containing the information that NMLS requires. Within 15 days after the occurrence of any of the following events, a licensee shall file a written report with the Commissioner describing the event and its expected impact on the licensee’s activities in the State: The filing for bankruptcy or reorganization by the licensee; The institution of revocation or suspension proceedings against the licensee by any state or governmental authority with regard to the licensee’s money transmission activities in any state; Any felony indictment or conviction of the licensee or any of its officers or directors related to money transmission activities; The commencement of any civil action by a buyer or holder of a payment instrument or person for whom or to whom money is transmitted against a licensee; and The filing of any material litigation against the licensee. The written report required under paragraph (1) of this subsection shall be submitted to the Commissioner through NMLS. A licensee shall submit to NMLS the Uniform Authorized Agent Reporting once each quarter on the date that NMLS requires. A licensee promptly shall file with the Commissioner any demand borrowing agreement or agreements into which the licensee may enter as a permissible investment or a deposit in lieu of a surety bond.

A licensee shall comply with all federal and State laws and regulations concerning the business of money transmission, money laundering, and abandoned property.

Subject to paragraph (2) of this subsection, a licensee shall have at all times permissible investments having an aggregate market value, calculated in accordance with generally accepted accounting principles, of not less than the aggregate face amount of all outstanding money transmissions conducted by the licensee in the United States. The requirement imposed under paragraph (1) of this subsection may be waived by the Commissioner if the dollar volume of a licensee’s outstanding money transmissions does not exceed the surety device filed in accordance with § 12–412 of this subtitle. Except as provided in paragraph (2) of this subsection, a licensee shall require each authorized delegate, within 48 hours after the next regular business day after the authorized delegate receives the proceeds from a money transmission, to remit the proceeds to the licensee or the licensee’s authorized representative, or deposit the proceeds in the licensee’s account with a financial institution. A licensee shall require each authorized delegate who sells prepaid access, within 5 business days after the next regular business day after the authorized delegate receives the proceeds from the sale of prepaid access, to: Remit the proceeds to the licensee or the licensee’s authorized representative; or Deposit the proceeds in the licensee’s account with a financial institution. Deposit by the authorized delegate in an account with a financial institution of funds in advance of money transmissions, but in an amount not less than the amount that the authorized delegate would normally receive from money transmissions, constitutes compliance with this section.

The original buyer of a payment instrument may request a duplicate of the instrument if the request is: In writing; and If required by the licensee, accompanied by: An affidavit that gives the reason for the request and states the facts relating to the loss of or other failure to produce the original payment instrument; and A personal indemnity bond or, if the total amount of the payment instruments for which a duplicate is requested is $150 or more, a lost instrument corporate bond instead of a personal indemnity bond. Each licensee shall issue or refuse to issue a duplicate payment instrument within 30 days after a request for the duplicate is made under this section.

Except as permitted by § 17-308.1 of the Commercial Law Article, a licensee or its authorized delegate may charge a service fee, not to exceed $5, to any original buyer who redeems an unused payment instrument.

If the Commissioner finds that the books, records, and accounting procedures of a licensee are not adequate to enable the Commissioner to determine whether the licensee is in compliance with this subtitle, the Commissioner may require the licensee to have a certified public accountant audit the licensee for any period of time the Commissioner considers necessary or adopt standard, recognized accounting and bookkeeping procedures and records for this purpose.

A licensee may surrender a license through NMLS in accordance with the process that the Commissioner requires. The statement shall provide a listing, by identifying number, face amount, and place of issue, of all outstanding money transmissions, and the reasons for the license surrender. The surrender of a license does not: Affect any civil or criminal liability of the licensee for acts committed before the license is surrendered; Affect the surety device filed by the licensee; or Entitle the licensee to the return of any part of any fee.

To discover any violations of this subtitle or to obtain any information required by this subtitle, the Commissioner at any time may investigate the business of: Any licensee; Any person who is engaged or participating in the business of money transmission, whether as authorized delegate, principal, agent, or otherwise; and Any other person who the Commissioner has cause to believe is violating this subtitle or any regulation adopted under this subtitle whether that person claims to be within or beyond the scope of this subtitle. For the purposes of this section, the Commissioner: Shall be given access to the place of business, books, papers, records, safes, and vaults of the person under investigation; and May summon and examine under oath any person whose testimony the Commissioner requires. If a person fails to comply with a subpoena or summons of the Commissioner under this subtitle or to testify concerning any matter about which the person may be interrogated under this subtitle, the Commissioner may file a petition for enforcement with the circuit court for any county. On petition by the Commissioner, the court may order the person to attend and testify or produce evidence.

The Commissioner may conduct an examination of a licensee or an authorized delegate with not less than 7 business days’ prior notice. With good cause, the Commissioner may conduct an examination of a licensee or an authorized delegate with no prior notice. The licensee shall pay all reasonably incurred costs of an examination conducted under this section, including a per–day fee set by the Commissioner for each of the Commissioner’s employees engaged in the examination. Any examination may be conducted in conjunction with an examination performed by a representative of a responsible supervisory agency of another state. The Commissioner, in lieu of an examination, may accept the examination report of a responsible supervisory agency of another state, or a report prepared by an independent accounting firm. A report accepted under paragraph (1) of this subsection is considered for all purposes as an official report of the Commissioner. The Commissioner may: Examine all books, accounts, and records the Commissioner determines are necessary to conduct a complete examination; and Examine under oath any officer, director, or employee of the licensee, or any other individual who may provide information on behalf of the licensee.

Each licensee shall make and preserve the following books, accounts, and records for a period of at least 3 years: A record of each money transmission conducted; A general ledger containing all assets, liability, capital, income, and expense accounts, which general ledger shall be posted at least monthly; Settlement sheets received from each authorized delegate; Bank statements and bank reconciliation records; Records of outstanding money transmissions; Records of each money transmission conducted within the 3–year period; A list of the names and addresses of all the licensee’s authorized delegates, past and present; and A list of the dates that the training materials required under § 12–413.1 of this subtitle were provided to the licensee’s authorized delegates, agents, and subdelegates. A licensee shall retain the records required under this section in: Original form; or Photographic, electronic, or other similar form. A licensee may retain the records required under this section at any location, provided that the licensee: Notifies the Commissioner in writing of the location of the records; and Makes the records available at a place of business for which a license has been issued, as agreed by the Commissioner and the licensee, within 7 days after a written request for examination by the Commissioner.

Subject to the hearing provisions of § 12-428 of this subtitle, the Commissioner may suspend or revoke the license of any licensee if: The licensee or any owner, director, officer, member, coventurer, partner, stockholder, employee, or agent of the licensee: Makes any material misstatement in an application for a license; Conducts the business of money transmission in an unsafe or unsound manner; Refuses to permit the Commissioner to make an examination authorized under this subtitle; Willfully fails to make a report required under this subtitle; Is convicted under the laws of the United States or any state of a felony or a misdemeanor that is directly related to the fitness and qualification of the person to engage in the business of money transmission; In connection with any money transmission transaction: Commits a fraud; Engages in an illegal or dishonest activity; or Misrepresents or fails to disclose a material fact to a governmental agency; Violates any provision of this subtitle or any regulation adopted under this subtitle, or any other law regulating the business of money transmission; or Otherwise demonstrates unworthiness, bad faith, dishonesty, or any other quality that indicates that the business of the licensee has not been or will not be conducted honestly, fairly, equitably, and efficiently; or The licensee: Has inadequate net worth and the licensee, after 10 days’ written notice from the Commissioner, fails to take steps that the Commissioner deems necessary to remedy the deficiency; Becomes insolvent; Has suspended payment of its obligations, made an assignment for the benefit of its creditors, or admitted its inability to pay its debts as they become due; or Has applied for an adjudication of bankruptcy, reorganization, arrangement, or other relief under any bankruptcy proceeding. In determining whether a license should be suspended or revoked for a reason identified in subsection (a)(1)(v) of this section, the Commissioner shall consider: The nature of the crime; The relationship of the crime to the activities authorized by the license; With respect to a felony, the relevance of the conviction to the fitness and qualification of the licensee to engage in the business of money transmission; The length of time since the conviction; and The behavior and activities of the licensee since the conviction. Subject to the hearing provisions of § 12-428 of this subtitle, the Commissioner may issue an order to the licensee to terminate its relationship with an authorized delegate if the Commissioner finds that: The authorized delegate or a director, officer, employee, or person that has control of the authorized delegate: Has violated any provision of this subtitle or any regulation adopted or order issued under this subtitle; Has engaged or participated in an unsafe or unsound act with respect to the business of money transmission; Has made or caused to be made in any application or report filed with the Commissioner or in a proceeding before the Commissioner, a statement which was at the time and in the circumstances under which it was made, false or misleading with respect to a material fact, or has omitted to state in an application or report a material fact which is required to be stated; or Has failed to cooperate with an examination or investigation by the Commissioner authorized by this subtitle; or The competence, experience, integrity, financial condition, or overall moral character of the authorized delegate, or a director, officer, employee, or person that has control of the authorized delegate, indicates that it would not be in the interest of the public to permit the person to engage in the business of money transmission. The authorized delegate about whom an order is issued under this section may apply to the Commissioner to modify or rescind the order. The Commissioner may not grant an application filed under paragraph (1) of this subsection unless the Commissioner finds that: It is in the public interest to modify or rescind the order; and It is reasonable to believe that the authorized delegate, if and when permitted to resume acting as an authorized delegate of a licensee, will comply with all applicable provisions of this subtitle and any regulation adopted or order issued under this subtitle. The Commissioner may enforce the provisions of this subtitle by issuing an order: To cease and desist and to take affirmative action from the violation and any further similar violations; and Requiring the violator to take affirmative action to correct the violation including the restitution of money or property to any person aggrieved by the violation. If a violator fails to comply with an order issued under paragraph (1) of this subsection, the Commissioner may impose a civil penalty not exceeding: $10,000 for the first violation; and $25,000 for each subsequent violation from which the violator failed to cease and desist or for which the violator failed to take affirmative action. The Commissioner may file a petition in the circuit court for any county seeking enforcement of an order issued under this section. In determining the amount of financial penalty to be imposed under subsection (e) of this section, the Commissioner shall consider the following: The seriousness of the violation; The good faith of the violator; The violator’s history of previous violations; The deleterious effect of the violation on the public; The assets of the violator; and Any other factors relevant to the determination of the financial penalty.

A money transmitter is subject to the enforcement provisions of §§ 2–114 through 2–116 of this article if the money transmitter: Is not licensed under this subtitle; or Is not an authorized delegate of a licensee.

Before the Commissioner denies an application for a license under § 12-409 of this subtitle or takes any action under § 12-426 of this subtitle, the Commissioner shall give the applicant or licensee an opportunity for a hearing. Notice of the hearing shall be given and the hearing shall be held in accordance with the Administrative Procedure Act. For a hearing on the proposed suspension or revocation of a license, the hearing notice to be given to the licensee shall be sent by registered or certified mail at least 15 days before the hearing to the place of business stated in the license.

The State’s Attorney for the county in which the violation occurs or the Attorney General may prosecute any violation of this subtitle.

Any person who knowingly and willfully violates any provision of this subtitle is guilty of a felony and on conviction is subject to a fine not exceeding $1,000 for the first violation and not exceeding $5,000 for each subsequent violation or imprisonment not exceeding 5 years or both.

Notwithstanding Title 4, Subtitles 1 through 5 of the General Provisions Article, and subject to § 12–408.1 of this subtitle, the Commissioner shall report adjudicated enforcement actions against a money transmitter or its authorized delegate and other relevant information to NMLS. The Commissioner shall adopt regulations establishing a process by which a licensee or an applicant for a license may challenge information entered by the Commissioner into NMLS. The Commissioner may submit to NMLS information regarding enforcement actions against money transmitters who are not licensees or authorized delegates.

This subtitle may be cited as the Maryland Money Transmission Act.