2020 California Code
Financial Code - FIN
DIVISION 1.2 - MONEY TRANSMISSION ACT
CHAPTER 3 - Licenses
Section 2040.
(a) An applicant shall possess, and a licensee shall maintain at all times, tangible shareholder’s equity of two hundred fifty thousand dollars ($250,000) to five hundred thousand dollars ($500,000), depending on estimated or actual transaction volume, as determined by the commissioner based on the factors described in subdivision (c).
(b) The commissioner may increase the amount of net worth required of an applicant or licensee if the commissioner determines, with respect to the applicant or licensee, that a higher net worth is necessary to achieve the purposes of this division based on the factors described in subdivision (c).
(c) When making a determination pursuant to subdivision (a) or (b), the commissioner shall consider the following factors:
(1) The nature and volume of the projected or established business.
(2) The number of locations at or through which money transmission is or will be conducted.
(3) The amount, nature, quality, and liquidity of its assets.
(4) The amount and nature of its liabilities.
(5) The history of its operations and prospects for earning and retaining income.
(6) The quality of its operations.
(7) The quality of its management.
(8) The nature and quality of its principals.
(9) The nature and quality of the persons in control.
(10) The history of its compliance with applicable state and federal law.
(11) Any other factor the commissioner considers relevant.
(d) The commissioner at any time may require a licensee to write down any asset held by it to a valuation that will represent its then fair market value. Any receivable or debt due to a licensee that is past due and unpaid for the period of one year shall be charged off, unless it is well secured or is in process of collection.
(e) The aggregate value of a licensee’s accounts receivable, excluding money transmission receivables, loans or extensions of credit to any one person, or that person’s affiliates, cannot exceed 50 percent of the licensee’s tangible shareholders’ equity without the advanced written approval of the commissioner. Whenever such amount equals or exceeds 20 percent of the licensee’s tangible shareholders’ equity, the licensee shall maintain records evidencing such amount and any security or other source of payment for the amount owed, and such other records as the commissioner may require by order or regulation.
(f) The commissioner shall adopt regulations to carry out and implement the factors described in subdivision (c).
(Amended by Stats. 2013, Ch. 533, Sec. 4. (AB 786) Effective January 1, 2014.)
