2019 Connecticut General Statutes
Title 36a - The Banking Law of Connecticut
Chapter 668 - Nondepository Financial Institutions
Section 36a-607 - (Formerly Sec. 36-543). Conduct of business authorized by delegate. Prohibited practices. Deadline to remit value received for transmission.

(a) A licensee may conduct its business at one or more locations within this state as follows:

(1) The business may be conducted by the licensee or through or by means of such authorized delegates as the licensee may periodically designate or appoint. The licensee shall notify the commissioner of all authorized delegates that act on its behalf. An authorized delegate may not engage in the business of money transmission in this state on behalf of a licensee through or by means of any person who is not an authorized delegate of the licensee.

(2) No license under sections 36a-595 to 36a-612, inclusive, shall be required of any authorized delegate.

(3) Each authorized delegate shall, from the moment of receipt, hold the proceeds of a sale or delivery of a licensee’s money transmissions in this state in trust for the benefit of such licensee.

(4) A licensee shall be liable for the loss caused to any purchaser or holder of the licensee’s payment instruments or stored value sold in this state by the failure of an authorized delegate to forward to the licensee the amount due from the proceeds of a sale or delivery of the licensee’s payment instruments or stored value, or money or monetary value received for transmission.

(5) The licensee shall enter into a contract with each of its authorized delegates that requires the authorized delegate to operate in full compliance with sections 36a-595 to 36a-612, inclusive, and provides that appointment of the authorized delegate is not effective during any period when the license of the licensee has been suspended. The licensee shall provide each authorized delegate with policies and procedures sufficient to ensure compliance with sections 36a-595 to 36a-612, inclusive.

(6) An authorized delegate shall remit all money owing to the licensee in accordance with the terms of the contract between the licensee and the authorized delegate.

(7) An authorized delegate shall not provide money transmission services in this state outside the scope of activity permissible under the contract between the authorized delegate and the licensee.

(b) For purposes of subsection (a) of this section, “licensee” means any person that has obtained a license from the commissioner as provided in section 36a-600.

(c) No person who is required to be licensed and who is subject to the provisions of sections 36a-595 to 36a-612, inclusive, and no control person shall, directly or indirectly: (1) Employ any scheme, device or artifice to defraud or mislead any person in connection with a money transmission; (2) engage in any unfair or deceptive practice toward any person in connection with a money transmission; (3) obtain property by fraud or misrepresentation; (4) fail to comply with the provisions of sections 36a-595 to 36a-612, inclusive, or the rules or regulations adopted under said sections, or fail to comply with any other state or federal law, including the rules and regulations thereunder; (5) make, in any manner, any false or deceptive statement or representation in connection with a money transmission or engage in bait and switch advertising; (6) negligently make any false statement or knowingly and wilfully make any omission of material fact in connection with any information or reports filed with a governmental agency or the system, or in connection with any investigation conducted by the commissioner or another governmental agency; (7) fail to truthfully account for moneys belonging to a party to a money transmission transaction; (8) fail to perform any written agreement with any party to a money transmission transaction; (9) fail to comply with any demand or requirement made by the commissioner under and within the authority of sections 36a-595 to 36a-612, inclusive; and (10) fail to establish, enforce and maintain policies and procedures for supervising employees, agents and office operations that are reasonably designed to achieve compliance with applicable money transmission laws and regulations.

(d) Each licensee shall remit any money or monetary value received for transmission by the licensee or its authorized delegates to the person designated by the purchaser of such transmission not later than seven calendar days from the date of receipt of such money or monetary value from the purchaser unless otherwise directed by the purchaser.

(P.A. 81-264, S. 14; P.A. 92-12, S. 98; P.A. 01-56, S. 14; P.A. 03-61, S. 5; P.A. 07-91, S. 11; P.A. 09-208, S. 19; P.A. 13-253, S. 14; P.A. 17-233, S. 21.)

History: P.A. 92-12 redesignated Subdivs.; Sec. 36-543 transferred to Sec. 36a-607 in 1995; P.A. 01-56 amended Subdivs. (3) and (4) by changing “Connecticut instruments” to “Connecticut payment instruments” and amended Subdiv. (4) by adding language re money transmission; P.A. 03-61 designated existing provisions as Subsec. (a) and added Subsec. (b) providing that licensee includes entity or person exempt under Sec. 36a-609; P.A. 07-91 amended Subsec. (a)(4) to insert reference to “monetary value”; P.A. 09-208 amended Subsec. (a) by prohibiting agent of a licensee from engaging in the business of issuing Connecticut payment instruments or of money transmission on behalf of a licensee through or by means of a subagent in Subdiv. (1), by deleting references to subagents in Subdivs. (1) to (4) and making a conforming change in Subdiv. (3), and by adding Subdivs. (5) to (7) re contracts between licensees and their agents and amended Subsec. (b) by redefining “licensee”; P.A. 13-253 amended Subsec. (a) by changing references to agent to references to authorized delegate, requiring notification of authorized delegates acting on licensee’s behalf, deleting reference to issuing Connecticut payment instruments, adding requirement that money transmission occur in this state and changing “subagent” to “any person who is not an authorized delegate of the licensee” in Subdiv. (1), adding reference to Secs. 36a-611 and 36a-612 and changing “agent of a licensee” to “authorized delegate” in Subdiv. (2), changing “agent of a licensee” to “authorized delegate” and “Connecticut payment instruments” to “money transmissions in this state” in Subdiv. (3), deleting “Connecticut”, adding “or stored value sold in this state” and changing “agent of the licensee” to “authorized delegate” in Subdiv. (4), changing references to agent to references to authorized delegate and adding references to Secs. 36a-611 and 36a-612 in Subdiv. (5), and changing references to agent to references to authorized delegate in Subdivs. (6) and (7), and amended Subsec. (b) by deleting reference to any entity or person exempt under Sec. 36a-609 and making a technical change; P.A. 17-233 added Subsec. (c) re acts by persons required to be licensed and subject to provisions of Secs. 36a-595 to 36a-612 and control persons, and added Subsec. (d) re licensees to remit money or monetary value received for transmission not later than seven calendar days from date of receipt.