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H0075...........................................................by BUSINESS
MONEY TRANSMITTERS - Amends existing law relating to the Idaho Money
Transmitters Act to revise the director of the Department of Finance's
authority to conduct examinations and investigations; to require that
additional reports be maintained; to provide that out-of-state records must
be made accessible to the director on seven days' written notice; to
provide that the director may release information under certain conditions;
to delete language providing that the director may release information
without prior notice to a law enforcement agency in connection with a
criminal referral; to provide for notice and opportunity for hearing for
purposes of the suspension or revocation of licenses; and to revise the
grounds upon which a license may be suspended or revoked.
01/28 House intro - 1st rdg - to printing
01/31 Rpt prt - to Bus
02/24 Rpt out - rec d/p - to 2nd rdg
02/25 2nd rdg - to 3rd rdg
03/03 3rd rdg - PASSED - 46-21-3
AYES -- Anderson, Barraclough, Bastian, Bell, Bilbao, Black, Block,
Boe, Bolz, Bradford, Cannon, Chadderdon, Collins, Deal, Denney,
Edmunson, Field(18), Field(23), Garrett, Henbest, Henderson, Jaquet,
Jones, LeFavour, Martinez, Miller, Mitchell, Nonini, Pasley-Stuart,
Pence, Raybould, Ring, Ringo, Rusche, Rydalch, Sayler, Shepherd(2),
Shirley, Skippen, Smith(30), Smylie, Snodgrass, Stevenson, Trail,
Wills, Mr. Speaker
NAYS -- Andrus, Barrett, Bayer, Bedke, Clark, Ellsworth, Hart,
Harwood, Kemp, Lake, Mathews, McGeachin, McKague, Moyle, Nielsen,
Roberts, Sali, Schaefer, Shepherd(8), Smith(24), Wood
Absent and excused -- Crow, Eskridge, Loertscher
Floor Sponsor - Snodgrass
Title apvd - to Senate
03/04 Senate intro - 1st rdg - to Com/HuRes
03/11 Rpt out - rec d/p - to 2nd rdg
03/14 2nd rdg - to 3rd rdg
03/15 3rd rdg - PASSED - 32-2-0, 1 vacancy
AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett,
Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis,
Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough, Langhorst,
Little, Lodge, Malepeai, Marley, McGee, McKenzie, Pearce, Richardson,
Schroeder, Stegner, Stennett, Werk
NAYS -- Sweet, Williams
Absent and excused -- (District 21 seat vacant)
Floor Sponsor - Compton
Title apvd - to House
03/16 To enrol
03/17 Rpt enrol - Sp signed
03/18 Pres signed
03/21 To Governor
03/23 Governor signed
Session Law Chapter 142
Effective: 07/01/05
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature First Regular Session - 2005
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 75
BY BUSINESS COMMITTEE
1 AN ACT
2 RELATING TO THE IDAHO MONEY TRANSMITTERS ACT; AMENDING SECTION 26-2914, IDAHO
3 CODE, TO REVISE THE DIRECTOR'S AUTHORITY TO CONDUCT EXAMINATIONS AND
4 INVESTIGATIONS; AMENDING SECTION 26-2915, IDAHO CODE, TO REQUIRE THAT
5 ADDITIONAL REPORTS BE MAINTAINED AND TO PROVIDE THAT RECORDS MUST BE MADE
6 ACCESSIBLE TO THE DIRECTOR ON SEVEN DAYS' WRITTEN NOTICE IF THE RECORDS
7 ARE MAINTAINED OUT OF STATE; AMENDING SECTION 26-2916, IDAHO CODE, TO
8 REVISE CONDITIONS FOR THE RELEASE OF INFORMATION, TO DELETE LANGUAGE PRO-
9 VIDING THAT THE DIRECTOR MAY RELEASE INFORMATION WITHOUT PRIOR NOTICE TO A
10 LAW ENFORCEMENT AGENCY IN CONNECTION WITH A CRIMINAL REFERRAL AND TO MAKE
11 A TECHNICAL CHANGE; AND AMENDING SECTION 26-2917, IDAHO CODE, TO PROVIDE
12 FOR NOTICE AND OPPORTUNITY FOR HEARING FOR PURPOSES OF THE SUSPENSION OR
13 REVOCATION OF LICENSES, TO REVISE THE GROUNDS UPON WHICH A LICENSE MAY BE
14 SUSPENDED OR REVOKED AND TO MAKE A TECHNICAL CHANGE.
15 Be It Enacted by the Legislature of the State of Idaho:
16 SECTION 1. That Section 26-2914, Idaho Code, be, and the same is hereby
17 amended to read as follows:
18 26-2914. AUTHORITY TO CONDUCT EXAMINATIONS AND INVESTIGATIONS. (1) The
19 For the purpose of discovering violations of this chapter or rules adopted
20 under this chapter, discovering unsafe and unsound practices, or securing
21 information lawfully required under this chapter, the director may conduct
22 examinations of a licensee at any time, either personally or by designee,
23 investigate or examine the business and wherever located, the books, accounts,
24 records, papers, documents, files and other information used in the business
25 of every applicant, licensee or its authorized representatives, and of every
26 person who is engaged in the business of providing money transmission ser-
27 vices, whether the person acts or claims to act under or without the authority
28 of this chapter. For these purposes, the director or designated representative
29 shall have free access to the offices and places of business, books, accounts,
30 papers, documents, other information, records, files, safes and vaults of all
31 such persons. The director or the director's designee may require the atten-
32 dance of and examine under oath all persons whose testimony may be required
33 about the business or the subject matter of any investigation, examination or
34 hearing and may require such person to produce books, accounts, papers, docu-
35 ments, records, files and any other information the director or designated
36 person declares is relevant to the inquiry. The director may require the pro-
37 duction of original books, accounts, papers, documents, records, files and
38 other information; may require that such original books, accounts, papers,
39 documents, records, files and other information be copied; or may make copies
40 himself or herself or by designee of such original books, accounts, papers,
41 documents, records, files or other information. The director or designated
42 person may issue a subpoena or subpoena duces tecum requiring attendance or
43 compelling production of the books, accounts, papers, documents, records,
2
1 files or other information. Should the director conclude that an on-site exam-
2 ination of a licensee is necessary, the licensee, subject to the provisions of
3 subsection (32) of this section, shall pay all the actual costs of such exami-
4 nation. If the director determines, based on the licensee's financial state-
5 ments and past history of operations in the state, that an on-site examination
6 is unnecessary, the on-site examination may be conducted in conjunction with
7 examinations to be performed by representatives of agencies of another state
8 or states. The director, in lieu of an on-site examination, may accept the
9 examination report of an agency of another state, or a report prepared by an
10 independent accounting firm, and reports so accepted are considered for all
11 purposes as an official report of the director.
12 (2) The director may request financial data from a licensee in addition
13 to that required in section 26-2907, Idaho Code, or conduct an on-site exami-
14 nation of any authorized representative or location of a license within this
15 state without prior notice to the authorized representative or licensee if the
16 director has a reasonable basis to believe that the licensee or authorized
17 representative is in violation of the provisions of this chapter.
18 (3) In the case of refusal to obey a subpoena issued to any person, any
19 court of competent jurisdiction, upon application by the director, may issue
20 to that person an order requiring him to appear before the director or his
21 designee to produce documentary evidence if so ordered or to give evidence
22 relating to the matter under investigation or in question. Any failure to obey
23 such order of the court may be punished by the court as a contempt of court.
24 When the director examines a licensee or an authorized representative within
25 this state, the licensee or authorized representative shall pay all the actual
26 costs of such examination, up to a maximum of one thousand dollars ($1,000).
27 SECTION 2. That Section 26-2915, Idaho Code, be, and the same is hereby
28 amended to read as follows:
29 26-2915. MAINTENANCE OF RECORDS. (1) Each licensee shall make, keep, and
30 preserve the following books, accounts and other records for a period of three
31 (3) years:
32 (a) A record or records of payment instruments sold;
33 (b) A general ledger containing all asset, liability, capital, income and
34 expense accounts, which general ledger shall be posted at least monthly;
35 (c) Settlement sheets, if received from authorized representatives;
36 (d) Bank statements and bank reconciliation records;
37 (e) Records of outstanding payment instruments;
38 (f) Records of each payment instrument paid within the three (3) year
39 period; and
40 (g) A list of the names and addresses of all of the licensee's authorized
41 representatives, as well as copies of each authorized representative's
42 contract; and
43 (h) All reports required by federal currency reporting, recordkeeping,
44 and suspicious transaction reporting requirements as set forth in 31
45 U.S.C. sec. 5311, 31 CFR part 103 (2000), and other federal and state laws
46 pertaining to money laundering.
47 (2) Maintenance of such documents as are required in this section in a
48 photographic or other similar form shall constitute compliance with the provi-
49 sions of this section.
50 (3) Records may be maintained at a location other than at a location
51 within this state so long as they are made accessible to the director on fif-
52 teen seven (157) days' written notice.
3
1 SECTION 3. That Section 26-2916, Idaho Code, be, and the same is hereby
2 amended to read as follows:
3 26-2916. CONFIDENTIALITY OF DATA SUBMITTED TO THE DIRECTOR. (1) All
4 information or reports obtained by the director from an applicant, licensee or
5 authorized representative, whether obtained through reports, applications,
6 examinations, audits, investigation, or otherwise including, but not limited
7 to:
8 (a) All information contained in or related to examination, investiga-
9 tion, operating, or condition reports reported by, on behalf of, or for
10 the use of the director; or
11 (b) Financial statements, balance sheets, or authorized representative
12 information;
13 are confidential trade secrets and may not be disclosed or distributed outside
14 the department in accordance with the provisions of section 9-340(4)(a) chap-
15 ter 3, title 9, Idaho Code, by the director or any officer or employee of the
16 department.
17 (2) The director, however, may provide for the release of information to
18 representatives of state or federal agencies who state in writing that they
19 shall maintain the confidentiality of such information or if:
20 (a) The licensee provides consent prior to the release; or
21 (b) Tthe director finds that the release is reasonably necessary for the
22 protection of the public and in the interests of justice, and the licensee
23 has been given prior notice by the director of its intent to release such
24 information.
25 (3) Nothing in this section shall prohibit the director from releasing to
26 the public a list of persons licensed under the provisions of this chapter or
27 to release aggregated financial data on such licensees.
28 (4) The director may release information without prior notice to a law
29 enforcement agency of this state or the United States in connection with a
30 criminal referral made under this chapter or other law.
31 SECTION 4. That Section 26-2917, Idaho Code, be, and the same is hereby
32 amended to read as follows:
33 26-2917. SUSPENSION OR REVOCATION OF LICENSES. After notice and opportu-
34 nity for hearing, the director may suspend or revoke a licensee's license if
35 the director finds that:
36 (1) Any fact or condition exists that, if it had existed at the time when
37 the licensee applied for a license, would have been grounds for denying such
38 application;
39 (2) The licensee's net worth becomes inadequate and the licensee, after
40 ten (10) days' written notice from the director, fails to take such steps as
41 the director deems necessary to remedy such deficiency;
42 (3) The licensee violates any provisions of this chapter or any rule or
43 order of the director under the provisions of this chapter or is convicted of
44 a violation of a state or federal money laundering or terrorism law;
45 (4) The licensee is conducting its business in an unsafe or unsound man-
46 ner;
47 (5) The licensee is insolvent;
48 (6) The licensee has suspended payment of its obligations, has made an
49 assignment for the benefit of its creditors, or has admitted in writing its
50 inability to pay its debts as they become due;
51 (7) The licensee has applied for an adjudication of bankruptcy, reorgani-
52 zation, arrangement or other relief under any bankruptcy;
4
1 (8) The licensee refuses to permit the director to make any examination
2 authorized in this chapter; or
3 (9) The licensee wilfully willfully fails to make any report required in
4 this chapter; or
5 (10) The licensee, any person who exercises any managerial authority over
6 the licensee's activities, or any of its executive officers or other persons
7 in control of the licensee are listed or become listed on the "specially des-
8 ignated nationals and blocked persons" list prepared by the United States
9 department of the treasury as a potential threat to commit terrorist acts or
10 to finance terrorist acts.
STATEMENT OF PURPOSE
RS 14433C1
This bill revises and updates certain provisions of the Idaho Money
Transmitters Act. The proposed amendments relate to the
enforcement and recordkeeping provisions of this law.
Specifically, these amendments give the Director clear authority to
conduct investigations of licensees and sets forth the procedure to
be followed; makes all filings required by other state or federal
authorities related to money laundering required records under this
Act; permits sharing of licensee information, under certain
conditions, with other state and federal agencies without notice to
the licensee; and provides for the suspension or revocation of a
licensee if certain persons associated with the licensee are listed
on the Specially Designated Nationals and Blocked Persons list
prepared by the United States Department of the Treasury as a
potential threat to commit terrorist acts or to finance terrorist
acts.
FISCAL IMPACT
The bill may cause an increased number of licensee examinations to
occur resulting in a slight increase in examination fee revenue.
CONTACT
Name: Marilyn Chastain
Agency: Finance, Dept. of
Phone: 332-8070
Statement of Purpose/Fiscal Impact H 75