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2007 California Financial Code Chapter 14. Transmission Of Money Abroad
CA Codes (fin:1800-1827)
FINANCIAL CODESECTION 1800-1827
1800. (a) It is the intent of the Legislature in enacting this chapter to protect the people of this state from being victimized by unscrupulous practices by persons receiving money for transmission to foreign countries and to establish a minimum level of fiscal responsibility and corporate integrity for all entities engaging in the business of receiving money for transmission to foreign countries without regard to the method of transmission. (b) The Legislature finds and declares that California has a large and diverse population, many of whom are concerned with the financial plight of people remaining in the countries that they left. Many of these people are not familiar with the varied and intricate financial systems of this state and due to language barriers and other obstacles do not have access to entities offering legitimate money transmission services. In an effort to transmit money to their friends and relatives, these persons give their money to persons under the precept that the money or its equivalent will be immediately transmitted to the designated foreign country. The money is frequently misappropriated or never transmitted. The victims of these practices are generally not aware of the law enforcement services available to help them, thus this unlawful conduct goes unreported. 1800.3. (a) No person shall engage in the business of receiving money for the purpose of transmitting the same or its equivalent to foreign countries without first obtaining a license from the commissioner. (b) This chapter shall not apply to any of the following: (1) A commercial bank or industrial bank, the deposits of which are insured by the Federal Deposit Insurance Corporation or its successor, or any foreign (other nation) bank which is licensed under Article 3 (commencing with Section 1750) of Chapter 13.5 or which is authorized under federal law to maintain a federal agency or federal branch office in this state. (2) A trust company licensed pursuant to Section 401 or a national association authorized under federal law to engage in a trust banking business. (3) An association or federal association, as defined in Section 5102 the deposits of which are insured by the Federal Deposit Insurance Corporation or its successor. (4) Any federally or state chartered credit union the member accounts of which are insured or guaranteed as provided in Section 14858. 1800.4. The receipt of money by an incorporated telegraph company, or its agents, for immediate transmission by telegraph to foreign countries shall be exempt from licensure under this chapter until July 1, 1990, provided each of the following conditions is satisfied. (1) The company has applied before February 1, 1990, to the commissioner for licensure under this chapter. (2) The company, and its agents, shall comply with and be subject to all applicable provisions of this chapter. (3) The company directly, or through agents, on or before February 1, 1989, received money for immediate transmission by telegraph to foreign countries. 1800.5. For the purposes of this chapter: (a) (1) "Receiving money for transmission" means receiving money for the purpose of transmitting the same or its equivalent to foreign countries. (2) Except as otherwise provided in paragraph (3), "receiving money for transmission" does not include selling any check, draft, money order, travelers check, or other instrument (whether or not negotiable) for the transmission or payment of money. (3) "Receiving money for transmission" includes the sale by a person, either directly or indirectly through an agent, of any check or draft which: (A) Is drawn by the person; (B) Is drawn on, or is payable through or at, an office of a bank located in a foreign country; (C) Is denominated in a foreign currency; and (D) Is not designated on its face by the term "money order" or "travelers check" or by any substantially similar term. (b) "Transmission money" means money received in this state by a licensee for transmission to a foreign country, or any equivalent into which the money is converted, from the time the money is received for transmission to a foreign country until the time the transmission of the money in accordance with the agreement of the licensee with the customer is completed, or, if the transmission is not completed, until such time as the money is repaid to the customer. (c) "Agent" means any person in this state whom a licensee has appointed as its agent with authority to receive transmission money on behalf of the licensee, provided that the licensee becomes liable for the transmission of the transmission money from the time when the transmission money is received by the person. However, "agent" does not include any officer or employee of the licensee when acting as such at an office of a licensee. (d) "Licensee" means any corporation licensed pursuant to this chapter. (e) For the purposes of Section 1802.2, 1803.5, and 1804 the following terms shall have the following meanings: (1) "Control" has the meaning set forth in Section 700. (2) "Officer" has the meaning set forth in Section 33057. (f) "Branch office" means any office in this state, other than the headquarters office of a licensee or agent, at which the licensee receives money for transmission to a foreign country, either directly or through an agent. 1800.7. (a) As used in this section, "designated person" means any agent, any applicant, the officers, directors, and controlling persons of any applicant or agent, and the directors and officers of the controlling persons of any applicant or agent. (b) For the purposes of Sections 1802.2, 1803.5, and 1804, each of the following applies: (1) The commissioner may, in the absence of the credible evidence to the contrary, presume that designated persons are each of good character and sound financial standing. (2) The commissioner may find that a designated person is not of good character if that person has done any of the following: (A) Been convicted of, or has pleaded nolo contendere to, any crime involving an act of fraud or dishonesty. (B) Consented to or suffered a judgment in any civil action based on conduct involving an act of fraud or dishonesty. (C) Consented to or suffered the suspension or revocation of any professional, occupational, or vocational license based upon conduct involving an act of fraud or dishonesty. (D) Willfully made or caused to be made in any application or report filed with the commissioner or in any proceeding before the commissioner, any statement which was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact, or has willfully omitted to state in any application or report any material fact which was required to be stated therein. (E) Willfully committed any violation of, or has willfully aided, abetted, counseled, commanded, induced, or procured the violation by any other person of, any provision of this division or of any regulation or order issued under this division. (3) Paragraph (2) shall not be deemed to be an exclusive list of grounds upon which the commissioner may find that a designated person is not of good character. 1800.9. The commissioner may impose on any authorization, approval, license, or order issued pursuant to this chapter any conditions that he or she deems reasonable or necessary to the public interest. 1801. (a) Fees shall be paid to, and collected by, the commissioner, as follows: (1) The fee for filing with the commissioner an application for a license is five thousand dollars (,000). (2) The fee for filing with the commissioner an application for approval to acquire control of a licensee is three thousand five hundred dollars (,500). (3) A licensee shall pay to the commissioner annually on or before July 1, a licensee fee of two thousand five hundred dollars (,500). (4) A licensee shall pay to the commissioner annually on or before July 1, one hundred twenty-five dollars (5) for each licensee branch office. (5) A licensee shall pay to the commissioner annually on or before July 1, twenty-five dollars () for each agent headquarter office and each agent branch office. (6) Whenever the commissioner examines a licensee or any agent of a licensee, the licensee shall pay, within 10 days after receipt of a statement from the commissioner, a fee of seventy-five dollars () per hour for each examiner engaged in the examination plus, if it is necessary for any examiner engaged in the examination to travel outside this state, the travel expenses of the examiner. (b) (1) Each fee for filing an application with the commissioner shall be paid at the time the application is filed with the commissioner. (2) No fee for filing an application with the commissioner shall be refundable, regardless of whether the application is approved, denied, or withdrawn. 1801.1. Each fiscal year the commissioner shall levy an assessment on a pro rata basis on those licensees which at any time during the preceding calendar year received transmission money. The total assessment levied on all of those licensees shall be in an amount which, when added to the fees that the commissioner collects during the fiscal year the assessment is levied, is sufficient to meet the expenses of the commissioner in administering this chapter and to provide a reasonable reserve for contingencies. The basis of the apportionment of the assessment among the licensees assessed shall be the proportion that the amount of transmission money received by the licensee bears to the total amount of transmission money received by all licensees as shown by the reports of licensees to the commissioner for the preceding calendar year, as required by Section 1807. The assessment rate shall be fixed from time to time by the commissioner but shall not exceed one dollar () per one thousand dollars (,000) of transmission money received by the licensee. The commissioner shall notify each licensee by mail of the amount levied against it. The licensee shall pay the amount levied within 20 days. If payment is not made to the commissioner within that time, the commissioner shall assess and collect, in addition to the annual assessment, a penalty of 5 percent of the assessment for each month or part thereof that the payment is delinquent. This section shall not become operative until July 1, 1990. 1802. (a) An application for a license shall be in writing, under oath, and in a form prescribed by the commissioner. It shall contain the name and address of the applicant, and of every officer and director thereof. The application shall also contain any other information the commissioner may require. (b) No person other than a corporation may apply for or be issued a license. 1802.2. If the commissioner finds, with respect to an application for a license: (a) That the applicant has adequate capital as specified in Section 1814 to engage in the business of receiving money for transmission and that the financial condition of the applicant is otherwise such that it will be safe and sound for the applicant to engage in the business of receiving money. (b) That the applicant, the directors, and officers of, and any person which controls the applicant, and the directors and officers of any person which controls the applicant, are of good character and sound financial standing. (c) That the applicant is competent to engage in the business of receiving money for transmission. (d) That the applicant's plan for engaging in the business of receiving money for transmission affords reasonable promise of successful operation. (e) That it is reasonable to believe that the applicant, if licensed, will engage in the business of receiving money for transmission and will comply with all applicable provisions of this chapter and of any regulation or order issued under this chapter, the commissioner shall approve the application. If, after notice and a hearing, the commissioner finds otherwise, the commissioner shall deny the application. 1802.6. The license is not transferable or assignable. 1802.7. If the application is approved by the commissioner he or she shall, upon the payment of the license fees, issue and deliver to the applicant a license to engage in business in accordance with this chapter. 1802.8. (a) Before any applicant is issued a license the applicant shall file with the commissioner, in the form required by the commissioner, an irrevocable consent appointing the commissioner to receive service of any lawful process in any noncriminal judicial or administrative proceeding against the person, that person's successor, executor, or administrator, which arises under this chapter or any regulation or order issued under this chapter after the consent has been filed. (b) Service of process after consents have been filed pursuant to this section shall have the same force and validity as if personally served on the person. (c) Service may be made by leaving a copy of the process at any office of the commissioner, but the service is not effective unless (1) the party making the service, who may be the commissioner, immediately sends notice of the service and a copy of the process by registered or certified mail to the party served at his or her last address on file with the commissioner, and (2) an affidavit of compliance with this section by the party making service is filed in the case on or before the return date, if any, or any further time that the court, in the case of a judicial proceeding, or the administrative agency, in the case of an administrative proceeding, allows. (d) Any consent filed pursuant to this section shall be deemed to have appointed the commissioner and any successor from time to time in office. 1803. No licensee shall appoint or continue any person as an agent, unless the licensee and the person have made a written contract which contains each of the following provisions: (a) That the licensee appoints the person as its agent with authority to receive transmission money on behalf of the licensee. (b) That the person make and keep accounts, correspondence, memorandums, papers, books, and other records as the commissioner by regulation or order requires and preserve the records for the time specified by the regulation or order. (c) That all funds, less fees due agents provided for and expressly set forth, received by the person from the receipt of transmission money on behalf of the licensee shall be trust funds owned by and belonging to the person from whom they were received until the time that directions have been given by the licensee or its agents for payment abroad of the remittance and funds provided for the payment. (d) Any other provisions that the commissioner may find to be necessary to carry out the provisions and purposes of this chapter. (e) This section shall not apply to any written contract between a licensee and an agent appointed by the licensee prior to February 1, 1989, unless the commissioner, in his or her sole discretion, determines that compliance with this section is necessary and appropriate. For purpose of this subdivision only, "licensee" means an incorporated telegraph company which existed on February 1, 1989, or any wholly owned incorporated subsidiary of that telegraph company. 1803.1. (a) No licensee shall appoint any person as an agent unless it has conducted a review of the proposed agent's fitness to act as an agent and has determined that the proposed agent and any persons who control the proposed agent are of good character and sound financial standing. (b) A licensee shall maintain records of this review for each agent while the agent is receiving transmission money on behalf of the licensee, and for three years after the relationship with the agent has terminated. 1803.2. (a) Each licensee shall be liable as a principal for the transmission of the transmission money from the time when the transmission money is received by the agent. (b) Each licensee shall exercise reasonable supervision over its agents to ensure compliance with applicable laws, rules, and regulations with respect to receiving transmission money. 1803.3. (a) If, after notice and a hearing, the commissioner finds that an agent of a licensee or any director, officer, employee, or controlling person of that agent, or director, officer, or employee of that controlling person satisfies any of the factors set forth in paragraphs (1) to (7), inclusive, the commissioner may issue an order suspending or barring that agent from continuing to be or becoming an agent of any licensee during the period for which that order is in effect: (1) Violated any provision of this chapter or any regulation or order issued under this chapter. (2) Engaged or participated in any unsafe or unsound act with respect to the business of receiving transmission money. (3) Is an agent of a licensee who, because of its operations and financial condition, is not competent to supervise and monitor the agent. (4) Is not of good character or of sound financial standing. (5) Is not competent to engage in the business of receiving money for transmission. (6) Will not comply with all applicable provisions of this chapter and of any regulation or order issued under this chapter. (7) Has made or caused to be made in any application or report filed with the commissioner or in any proceeding before the commissioner, any statement that was, at the time and in the light of the circumstances under which it was made, false or misleading with respect to any material fact, or has omitted to state in any such application or report any material fact that is required to be stated therein. (b) If applicable, the commissioner may disclose to the licensee criminal history information upon which an order is based. (c) If the commissioner finds that any of the factors set forth in subdivision (a) is true with respect to any agent and that it is necessary for the protection of the public interest, the commissioner may issue an order immediately suspending or barring that agent from continuing to be or becoming an agent of any licensee during the period for which that order is in effect. (d) (1) Within 30 days after an order is issued pursuant to subdivision (c), the licensee or the agent or former agent with respect to whom the order was issued may file with the commissioner an application for a hearing on the order. (2) Within 30 days after the hearing, the commissioner shall affirm, modify, or rescind the order. (3) The right of the licensee or agent or former agent to petition for judicial review of the order shall not be affected by the failure of that person to apply to the commissioner for a hearing on the order pursuant to this subdivision. 1803.4. (a) The licensee or the agent or former agent with respect to whom an order has been issued under Section 1803.3 may apply to the commissioner to modify or rescind the order. The commissioner shall not grant an application to modify or rescind the order unless the commissioner finds that it is in the public interest to do so and the commissioner reasonably believes that person will, if and when that person becomes an agent, comply with all applicable provisions of this chapter and any regulations, rules, and orders issued under this chapter. (b) The right of the licensee or the agent or former agent to petition for judicial review of the order shall not be affected by the failure of that person to apply to the commissioner pursuant to subdivision (a) to modify or rescind the order. 1803.5. (a) Any licensee, having as an agent any person to whom an order has been issued pursuant to Section 1803.3 shall, when that order becomes effective, immediately suspend or terminate that person as an agent. (b) No person, with respect to whom an order issued under Section 1803.3 is in effect, shall become or continue to be an agent of any licensee. 1803.6. An agent of a licensee shall not appoint a subagent to receive transmission money. 1804. (a) No person shall, directly or indirectly, acquire control of a licensee unless the commissioner has first approved in writing of the acquisition of control. An application to acquire control of a licensee shall be in writing, under oath, and in a form prescribed by the commissioner. The application shall contain that information which the commissioner may require. (b) The commissioner shall not approve the application unless the commissioner finds, all of the following: (1) The applicant and the officers and directors of the applicant are of good character and sound financial standing. (2) The applicant is competent to engage in the business of receiving money for transmission. (3) It is reasonable to believe that, if the applicant acquires control of the licensee, the applicant will comply with all applicable provisions of this chapter and any regulation or order issued under this chapter. (4) The applicant's plans, if any, to make any major change in the business, corporate structure, or management of the licensee are not detrimental to the safety and soundness of the licensee. (c) For the purposes of subdivision (b), the commissioner may find an applicant's plan to make major changes in the management of a licensee is detrimental to the licensee if the plan provides for a person who is not of good character to become a director or officer of the licensee. The grounds specified in this subdivision shall not be deemed to be the only grounds upon which the commissioner may find, for the purposes of subdivision (b), that an applicant's plan to make a major change in the management of a licensee is detrimental to the licensee. (d) If it appears to the commissioner that any person is violating or failing to comply with this section, the commissioner may direct the person to comply with this section by an order issued over the commissioner's official seal. (e) Whenever it appears to the commissioner that any person has committed or is about to commit a violation of any provision of this section or of any regulation or order of the commissioner issued pursuant to this section, the commissioner may apply to the superior court for an order enjoining the person from violating or continuing to violate this section or that regulation or order, and for other equitable relief as the nature of the case or interests of the licensee, the controlling person, the creditors or shareholders of the licensee or controlling person or the public may require. (f) The commissioner, may, for good cause, amend, alter, suspend, or revoke any approval of a proposal to acquire control of a licensee issued pursuant to this section. (g) There shall be exempted from the provisions of this section any transaction which the commissioner by regulation or order exempts as not being comprehended within the purposes of this section and the regulation of which he or she finds is not necessary or appropriate in the public interest or for the protection of a licensee or the customers of a licensee. 1807. (a) The commissioner may by order or regulation grant exemptions from this section in cases where the commissioner finds that the requirements of this section are not necessary. (b) Each licensee shall, within 90 days after the end of each fiscal year, or within such extended time as the commissioner may prescribe, file with the commissioner an audit report for the fiscal year. (c) The audit report called for in subdivision (b) shall comply with all of the following provisions: (1) The audit report shall contain such audited financial statements of the licensee for or as of the end of the fiscal year prepared in accordance with generally accepted accounting principles and such other information as the commissioner may require. (2) The audit report shall be based upon an audit of the licensee conducted in accordance with generally accepted auditing standards and such other requirements as the commissioner may prescribe. (3) The audit report shall be prepared by an independent certified public accountant or independent public accountant who is not unsatisfactory to the commissioner. (4) The audit report shall include or be accompanied by a certificate of opinion of the independent certified public accountant or independent public accountant that is satisfactory in form and content to the commissioner. If the certificate or opinion is qualified, the commissioner may order the licensee to take such action as the commissioner may find necessary to enable the independent or certified public accountant or independent public accountant to remove the qualification. (d) Each licensee shall, not more than 45 days after the end of each quarter (except the fourth quarter of its fiscal year), or within a longer period as the commissioner may by regulation or order specify, file with the commissioner a report containing all of the following: (1) Financial statements, including balance sheet, income statement, statement of changes in shareholders' equity, and statement of cashflows, for, or as of the end of, that fiscal quarter, verified by two of the licensee's principal officers. The verification shall state that each of the officers making the verification has a personal knowledge of the matters in the report and that each of them believes that each statement on the report is true. (2) Other information as the commissioner may by regulation or order require. (e) Each licensee, not more than 45 days after the end of each calendar year quarter, shall file with the commissioner a report containing all of the following: (1) The current address of each branch office of the licensee in this state. If a branch office was opened or closed during the calendar year quarter, the date it was opened or closed. If a branch office was relocated during the calendar year quarter, the addresses of the old and new locations and the date of relocation for each new location. (2) The name of each person who acted as an agent of the licensee during the calendar year quarter and the address for each location at which the agent received transmission money. If a person was appointed or terminated as an agent during the calendar year quarter, the date of appointment or termination. If an agent relocated, the addresses for the old and new agent locations and the date of relocation. (3) The total volume of transmission money received in the calendar year quarter, the average daily transmission liability for the quarter, and a schedule of each foreign country to which transmission money was sent along with the total amount of transmission money sent to that foreign country in that calendar year quarter. (4) Other information as the commissioner may by regulation or order require. (f) Each licensee shall file with the commissioner other reports as and when the commissioner may by regulation or order require. 1807.5. (a) Each licensee and each agent of a licensee shall make, keep, and preserve within the United States such books, accounts, and other records in such form, in such manner, and for such time as the commissioner may by regulation or order specify. (b) All references in this chapter to financial statements, balance sheets, income statements, and statements of changes in financial position of a licensee or agent of a licensee mean financial statements, income statements, and statements of cash flows prepared or determined in conformity with generally accepted accounting principles then applicable, fairly presenting in conformity with generally accepted accounting principles the matters which they purport to present. 1808. (a) The commissioner may at any time and from time to time examine the business and any office, within or outside this state, of any licensee or any agent of a licensee in order to ascertain whether that business is being conducted in a lawful manner and whether all moneys received for transmission are properly accounted for. (b) The directors, officers, and employees of a licensee or agent of a licensee being examined by the commissioner shall exhibit to the commissioner, on request, any or all of the licensee's accounts, books, correspondence, memoranda, papers, and other records and shall otherwise facilitate the examination so far as it may be in their power to do so. 1809. (a) (1) Each licensee shall file with the commissioner a certified copy of every receipt form used by it or by its agents for money received for transmission within 10 business days of its first use. No licensee or its agents shall use any receipt, a certified copy of which has not been filed with the commissioner or use a receipt that the commissioner has deemed not to be in compliance pursuant to paragraph (2). (2) If the commissioner determines, within 10 business days of the filing date of a receipt, that the receipt does not comply with the requirements of this section or of Sections 1810.5 and 1815, the commissioner shall notify the licensee in writing that the receipt is not in compliance with those requirements. (b) Notwithstanding subdivision (a), before a new licensee issues its first receipt to a customer, it shall file with the commissioner a certified copy of the receipt forms to be used by it or its agents for money received for transmission. The new licensee shall not use the receipt forms until approved by the commissioner. For purposes of this subdivision, a new licensee is a licensee that has not been previously licensed by the commissioner as a money transmitter. (c) If a receipt is required by this chapter to be in English and another language, the English version of the receipt shall govern any dispute concerning the terms of the receipt. However, any discrepancies between the English version and any other version due to the translation of the receipt from English to another language including errors or ambiguities shall be construed against the licensee or its agent and the licensee or its agent shall be liable for any damages caused by these discrepancies. (d) Any licensee violating the requirements of this section shall be subject to a fine of fifty dollars () for each violation. (e) If any licensee or its agent uses a receipt form, a certified copy of which has not been filed with the commissioner, the licensee shall be liable for the acts of its agents whether or not the licensee authorized the agent to use that form. (f) The receipt form shall comply with the requirements of Sections 1810.5 and 1815. 1810. (a) Every licensee or its agent shall forward all moneys received for transmission to a foreign country or give instructions committing equivalent funds to the person designated by the customer within 10 days after receiving that money, unless otherwise ordered by his or her customer. (b) Whenever a licensee, either directly or indirectly through an agent, receives money for transmission by means of selling a check or draft of the type described in subdivision (b) of Section 1800.5, the purchaser of the instrument shall be deemed to have ordered compliance with subdivision (a), as follows: (1) In case the instrument is payable at a definite time, not later than that definite time. (2) In case the instrument is payable on demand, on or before the next business day. 1810.5. (a) Every licensee or its agent shall refund to the customer within 10 days of receipt of the customer's written request for a refund any and all moneys received for transmission to a foreign country unless any of the following occurs: (1) The funds have been forwarded within 10 days of the date of receipt. (2) Instructions have been given committing an equivalent amount of money to the person designated by the customer within 10 days of the date of the receipt of the funds from the customer. (3) The customer instructs the licensee to transmit the moneys at a time beyond 10 days. If the customer gives instructions as to when the moneys shall be forwarded or transmitted and the moneys have not yet been forwarded or transmitted, the licensee or its agent shall refund the customer's money within 10 days of receipt of the customer' s written request for a refund. (b) A receipt shall be provided by a licensee or its agent to a customer which shall be made available to the customer in English and in the language principally used by that licensee or that agent to advertise, solicit, or negotiate, either orally or in writing, at that office if other than English. The receipt shall either include or have attached a conspicuous statement in English and in the language principally used by the licensee or that agent to advertise, solicit, or negotiate, either orally or in writing at that office if other than English in a size equal to at least 10-point bold type, as follows: RIGHT TO REFUND "You, the customer, are entitled to a refund of the money to be transmitted as the result of this agreement if ______ (name of licensee or its agent) does not forward the money received from you within 10 days of the date of its receipt, or does not give instructions committing an equivalent amount of money to the person designated by you within 10 days of the date of the receipt of the funds from you unless otherwise instructed by you. If your instructions as to when the moneys shall be forwarded or transmitted are not complied with and the money has not yet been forwarded or transmitted you have a right to a refund of your money. If you want a refund, you must mail or deliver your written request to ______ (name of licensee or its agent) at ______ (mailing address of licensee or its agent). If you do not receive your refund, you may be entitled to your money back plus a penalty of up to ,000 and attorney's fees pursuant to Section 1810.5 of the California Financial Code." (c) A cause of action under this section may be brought in small claims court if it does not exceed the jurisdiction of that court, or in any other appropriate court. The customer shall be entitled to recover each of the following: (1) Any and all moneys received for transmission to a foreign county, plus any fees and charges paid by the customer. (2) A penalty in an amount not to exceed one thousand dollars (,000). The court shall award the prevailing party costs and attorney's fees. 1811. (a) As security for the timely and proper delivery of transmission money received by it, each licensee subject to the order of the commissioner, shall deposit and thereafter maintain on deposit with the Treasurer cash in an amount not less than, or securities having a market value not less than, such amount as the commissioner may find and specify as necessary for the protection of transmission money received by such licensee. These securities are subject to the approval of the commissioner and shall consist of interest-bearing bonds, notes, or other obligations of the United States or any agency or instrumentality thereof, or of the State of California, or of any city, county, or city and county, political subdivision or district of the State of California, or which are guaranteed by the United States or the State of California. (b) So long as a licensee which maintains securities on deposit with the Treasurer pursuant to this section is solvent, that licensee shall be entitled to receive any interest paid on such securities. 1812. In lieu of the deposit of cash or securities pursuant to Section 1811, a licensee may deliver to the commissioner the bond of a surety company, in form and written by a company satisfactory to the commissioner, in an amount not less than the amount of the deposit of cash or securities required of the licensee, conditioned upon the timely and proper delivery of all transmission money received by such licensee or its agents for such purpose. The commissioner shall deposit such bond with the Treasurer. 1813. The money and securities deposited with the State Treasurer pursuant to Section 1811 and the proceeds of any bond held by the State Treasurer pursuant to Section 1812 shall constitute a trust fund for the benefit of such persons as shall deliver to any such licensee or its agent money for transmission. Suit to recover on any such bond may be brought by any party aggrieved in a court of competent jurisdiction of any county in which such licensee has an agent. The service of summons on any agent of such licensee shall constitute service upon such licensee. 1814. (a) Each licensee shall at all times maintain tangible shareholders' equity determined to be adequate by the commissioner of at least five hundred thousand dollars (0,000). However, with respect to any licensee licensed as of January 1, 2002, the commissioner may, for good cause and to avoid undue hardship, extend the time within which the licensee is required to satisfy this subdivision. (b) "Tangible shareholders' equity" means shareholders' equity minus intangible assets as determined in accordance with generally accepted accounting principles. 1815. (a) The receipt presented to each customer for each transaction pursuant to subdivision (b) of Section 1810.5 shall clearly state the rate of exchange for the particular transaction, the amount of commission or fees, and the net exchange after all fees and commissions have been deducted. The receipt shall also state the total amount of currency presented by the customer and the total amount to be delivered to the beneficiary designated by the customer. These disclosures shall be in English and in the same language as that principally used by the licensee or any agent of the licensee to advertise, solicit, or negotiate, either orally or in writing, at that office if other than English. (b) All window and exterior signs concerning the rates of exchange shall clearly state in English and in the same language principally used by the licensee or any agent of the licensee to advertise, solicit, or negotiate, either orally or in writing, at that office if other than English, the rate of exchange for exchanging the currency of the United States for foreign currency. All interior signs and all advertising, if rates are quoted, shall clearly state the rates of exchange for exchanging the currency of the United States for foreign currency and shall state all commissions and fees charged on all transactions. (c) At each office of each licensee and each agent, there shall be disclosed in those offices in this state the information specified in subdivision (b) in English and in the same language principally used by the licensee or any agent of the licensee to advertise, solicit, or negotiate, either orally or in writing, with respect to receiving money or its equivalent for transmission to a foreign country at that office. (d) If the customer does not specify at the time the currency is presented to the licensee or its agent the country to which the currency is to be transmitted, the rate of exchange for the transaction is not required to be set forth on the receipt. 1816. All funds, less fees, received by a licensee or its agents for transmission to a foreign country shall constitute trust funds owned by and belonging to the person from whom they were received until such time as directions have been given by the licensee or its agents for payment abroad of the remittance and funds provided for such payment. 1816.1. For purposes of Sections 1816.2 to 1816.8, inclusive, the following definitions shall apply: (a) "Eligible security" means any United States currency eligible security or foreign currency eligible security. (b) "Eligible securities rating service" means any securities rating service that the commissioner has by regulation or order declared to be an eligible securities rating service pursuant to Section 1816.5. (c) "Eligible rating," when used with respect to any security or class of securities and any eligible securities rating service, means any rating assigned to such security or class of securities by such eligible securities rating service which the commissioner has by regulation or order declared to be an eligible rating pursuant to Section 1816.6. (d) "Foreign currency eligible security" means any of the following that is, or is denominated in, a foreign currency and that the commissioner has not by regulation or order declared to be ineligible pursuant to Section 1816.3: (1) Any of the following that is of comparable quality to the United States currency eligible securities specified in paragraphs (1) to (7), inclusive, of subdivision (f): (A) Cash. (B) Any deposit in an office of a bank located in a foreign country. (2) Any other security or class of securities that the commissioner has by regulation or order declared to be eligible securities pursuant to Section 1816.4. (e) "Transmission money" has the same meaning set forth in subdivision (b) of Section 1800.5. (f) "United States currency eligible security" means any of the following that is, or is denominated in, United States currency and that the commissioner has not by regulation or order declared to be ineligible pursuant to Section 1816.3: (1) Cash. (2) Any deposit in an insured bank, an insured savings and loan association, or an insured credit union. (3) Any bond, note, or other obligation which is issued or guaranteed by the United States or by any agency of the United States. (4) Any bond, note, or other obligation that is issued or guaranteed by any state of the United States or by any governmental agency of or within any state of the United States and that is assigned an eligible rating by an eligible securities rating service. (5) Any bankers acceptance that is eligible for discount by a federal reserve bank. (6) Any commercial paper that is assigned an eligible rating by an eligible securities rating service. (7) Any bond, note, or other obligation or preferred stock that is assigned an eligible rating by an eligible securities rating service. (8) Any share of an investment company that is an open-end management company, that is registered under the Investment Company Act of 1940 (12 U.S.C. Sec. 80a-1 et seq.), that holds itself out to investors as a money market fund, and that operates in accordance with all provisions of the Investment Company Act of 1940 and of the regulations of the Securities and Exchange Commission applicable to money market funds, including Section 270.2a-7 of the regulations of the Securities and Exchange Commission (17 C.F.R. 270.2a-7). For purposes of this paragraph and paragraph (9), "investment company," "management company," and "open-end" have the meanings set forth in Sections 3, 4, and 5, respectively, of the Investment Company Act of 1940 (12 U.S.C. Secs. 80a-3, 80a-4, and 80a-5, respectively). (9) Any share of an investment company that is an open-end management company, that is registered under the Investment Company Act of 1940 (12 U.S.C. Sec. 80a-1 et seq.), and that invests exclusively in securities that constitute United States currency eligible securities under this subdivision. (10) Any account due to any licensee from any agent of the licensee on account of the receipt of transmission money by the agent, if the account is current and not past due or otherwise doubtful of collection. (11) Any other security or class of securities that the commissioner has by regulation or order declared to be eligible securities pursuant to Section 1816.4. (g) "Value" means the following: (1) When used with respect to an eligible security owned by a licensee that consists of an account due to the licensee from an agent of the licensee on account of the receipt of transmission money by the agent, net carrying value as determined in conformity with generally accepted accounting principles. However, in computing the value of the account due to the licensee, any amount due on account of the receipt of transmission money by the agent shall be excluded if the time elapsed between the receipt of transmission money and the date of computation exceeds the average time that elapses between the time of receipt of transmission money and the time of payment of transmission money to the beneficiary. (2) The following when used with respect to any other eligible security owned by a licensee: (A) In case the practice and policy of the licensee is to hold eligible securities to maturity, net carrying value as determined in conformity with generally accepted accounting principles. (B) In any other case, market value. 1816.2. (a) For purposes of Sections 1816.3 to 1816.8, inclusive, a licensee shall be deemed to own an eligible security only if the following apply: (1) The licensee owns the eligible security solely and exclusively in its own right, both of record and beneficially. (2) The eligible security is not subject to any pledge, lien, or security interest. (3) The licensee can freely negotiate, assign, or otherwise transfer the eligible security. (b) Notwithstanding subdivision (a), no licensee shall be deemed not to own an eligible security solely on account of any of the following facts, provided that, but for such fact, the licensee would be deemed to own the eligible security under the provisions of subdivision (a): (1) The fact that the eligible security is owned of record by a documented nominee of the licensee or by a securities depository which is licensed under, or exempt from licensing under, Division 14 (commencing with Section 30000). (2) The fact that the licensee has pledged the eligible security with the United States or any state of the United States to secure payment by the licensee of transmission money. (3) The fact that pursuant to Section 1816 the eligible securities are owned beneficially by the persons from whom the licensee received transmission money. 1816.3. If the commissioner finds that any eligible security or class of eligible securities is not of sufficient liquidity or quality to be eligible securities, the commissioner may by regulation or order declare the security or class of securities to be ineligible. 1816.4. If the commissioner finds that any security or class of securities that is not an eligible security is of sufficient liquidity and quality to be an eligible security, the commissioner may by regulation or order declare the security or class of securities to be eligible securities. 1816.5. The commissioner may by regulation or order declare a securities rating service to be an eligible securities rating service if the commissioner finds the following with respect to the securities rating service: (a) It has been continuously engaged in the business of rating securities for a period of not less than three years. (b) It is competent to rate securities and is nationally recognized for rating securities in a competent manner. (c) It publishes its ratings of securities on a nationwide basis. 1816.6. If the commissioner finds that a rating assigned to a class of securities by an eligible securities rating service indicates that the class of securities is of sufficient quality to be eligible securities, the commissioner may by regulation or order declare the rating to be an eligible rating. 1816.7. Each licensee shall at all times own eligible securities having an aggregate value computed in accordance with generally accepted accounting principles of not less than the aggregate amount of all transmission money received by it. 1816.8. (a) In computing for purposes of Section 1816.7 the aggregate value of eligible securities owned by a licensee, all of the following shall be excluded: (1) The value of any eligible security if and to the extent that the value of the eligible security, when combined with the aggregate value of all other eligible securities owned by the licensee that are issued or guaranteed by the same person or by any affiliate of the same person by whom the eligible security is issued or guaranteed, exceeds 10 percent of the aggregate value of all eligible securities owned by the licensee. (2) The portion of the aggregate value of all eligible securities of the type described in paragraph (10) of subdivision (f) of Section 1816.1 that exceeds 20 percent of the aggregate value of all eligible securities. (b) Subdivision (a) shall not require the exclusion of the value of any of the following eligible securities, and each of the following eligible securities shall be exempted from the limitations of subdivision (a): (1) The following United States currency eligible securities: (A) Cash. (B) Any deposit in an insured bank or an insured savings and loan association. (C) Any bond, note, or other obligation for the payment of which the full faith and credit of the United States are pledged. (2) Any eligible security that the commissioner, in view of the financial condition of the obligor or issuer and any other factors as may in the opinion of the commissioner be relevant, finds to be of a quality that exclusion of the value of the eligible security pursuant to subdivision (a) is not necessary for the purposes of this division and that the commissioner by regulation or order exempts from the limitations of subdivision (a). 1817. If it appears to the commissioner that a licensee is violating or failing to comply with any law of this state, the commissioner may direct such licensee to comply with the law by an order issued over his or her official seal, or if it appears to the commissioner that any licensee is conducting its business in an unsafe or injurious manner the commissioner may in like manner direct it to discontinue the unsafe or injurious practices. The order shall require the licensee to show cause before the commissioner at a time and place to be fixed by him or her why the order should not be observed. 1818. If upon any hearing held pursuant to Section 1817 the commissioner finds that the licensee is violating or failing to comply with any law of this state or is conducting its business in an unsafe or injurious manner he or she may make a final order directing it to comply with the law or to discontinue the unsafe or injurious practices. Unless within 10 days after the issuance of such final order its enforcement is restrained in a proceeding brought by the licensee, it shall forthwith comply therewith. 1819. The commissioner may revoke or suspend any license issued pursuant to this chapter, if, after notice and opportunity for hearing, he or she finds any of the following: (a) The licensee has violated any provision of this chapter, any rule or regulation adopted by the commissioner, or any federal or state law that reasonably applies to the conduct of the licensee's money transmission business. (b) Any fact or condition exists which, if it had existed at the time of the original application for the license, would be grounds for denying an application for a license under Section 1802.2. (c) The licensee is conducting its business in an unsafe manner. (d) The licensee has failed to obey a final order issued by the commissioner. 1819.5. (a) If the commissioner finds that any of the factors set forth in Section 1819 is true with respect to any licensee and that it is necessary for the protection of the public interest, the commissioner may issue an order immediately suspending or revoking the licensee's license. (b) (1) Within 30 days after the license is suspended or revoked pursuant to subdivision (a), the licensee may file with the commissioner an application for a hearing on the suspension or revocation. (2) If the commissioner fails to commence a hearing within 15 business days after the application is filed with the commissioner or within a longer period of time agreed to by the licensee, the suspension or revocation shall be deemed rescinded. (3) Within 30 days after the hearing, the commissioner shall affirm, modify, or rescind the suspension or revocation. Otherwise, the suspension or revocation shall be deemed rescinded. (4) The right of the licensee to petition for judicial review of the suspension or revocation, shall not be affected by the failure of the licensee to apply to the commissioner for a hearing on the suspension or revocation pursuant to this subdivision. 1820. Every order, decision, or other official act of the commissioner is subject to review in accordance with law. 1821. Whenever it appears to the commissioner that a licensee has done or is doing any of the acts specified in subdivisions (a) to (g), inclusive, the commissioner may take possession of the property and business of the licensee and retain possession until the licensee resumes business or its affairs are finally liquidated. The licensee, with the consent of the commissioner, may resume business upon those conditions as the commissioner may prescribe. (a) The licensee has violated any federal or state law or any rule or regulation that reasonably applies to the conduct of the business of the licensee. (b) The licensee is conducting its business in an unsafe or unauthorized manner. (c) The licensee refuses to submit its books, papers, and affairs to the inspection of the commissioner. (d) The licensee or any officer of a licensee refuses to be examined upon oath touching the concerns of the licensee. (e) The licensee has suspended payment of its obligations. (f) The licensee is in a condition that it is unsound, unsafe, or inexpedient for it to transact business. (g) The licensee neglects or refuses to observe any order of the commissioner made pursuant to Section 1818 unless the enforcement of the order is restrained in a proceeding brought by the licensee. 1822. Whenever the commissioner has taken possession of the property and business of any licensee, such licensee, within 10 days after such taking, if it deems itself aggrieved thereby, may apply to the superior court in the county in which the head office of such licensee is located to enjoin further proceedings. The court, after citing the commissioner to show cause why further proceedings should not be enjoined and after a hearing and a determination of the facts upon the merits may dismiss such application or enjoin the commissioner from further proceedings and direct him or her to surrender the property and business to such licensee. 1823. Every person who violates or fails to comply with this chapter, or who, without complying with this chapter, represents that he or she is authorized to receive, or who solicits or receives, money or the equivalent for transmission to a foreign country, shall upon conviction be fined not more than fifty thousand dollars (,000) or shall be imprisoned in the state prison, or in a county jail for not more than one year, or be punished by both the fine and imprisonment. 1824. An appeal may be taken from the judgment of the court by the commissioner or by the licensee in the manner provided by law for appeals from the judgment of a superior court to the court of appeal. 1825. When the commissioner takes possession of the property or business of any licensee for the purpose of liquidation or conservation, the commissioner shall liquidate or conserve the property or business pursuant to Chapter 17 of this division. 1826. Any person who violates this chapter shall be liable to the people of the State of California in an action brought by the commissioner for a civil penalty not to exceed one thousand dollars (,000) for each violation or, in the case of a continuing violation, one thousand dollars (,000) for each day or part thereof during which the violation continues. 1827. (a) No agent of a licensee who has actual notice that the commissioner has suspended or revoked the license of a licensee or that the commissioner has issued an order taking possession of the property and business of the licensee, shall receive any transmission money on behalf of the licensee. (b) If any agent of a licensee, after first having actual notice that the commissioner has suspended or revoked the license of a licensee or that the commissioner has issued an order taking possession of the property and business of the licensee, receives any transmission money on behalf of the licensee, the agent shall be jointly and severally liable with the licensee for the timely and proper delivery of transmission money received by the agent of the licensee.
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