2020 Connecticut General Statutes
Title 36a - The Banking Law of Connecticut
Chapter 668 - Nondepository Financial Institutions
Section 36a-598. (Formerly Sec. 36-533) - Application. Criminal history records check. Abandonment of application. Required system filing or notice to commissioner. License not assignable or transferable. Use of name. Automatic suspension.

(a) Each application for an initial or renewal license required under sections 36a-595 to 36a-612, inclusive, shall be made and processed on the system pursuant to section 36a-24b, in the form prescribed by the commissioner. Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purposes of sections 36a-595 to 36a-612, inclusive. The applicant shall, at a minimum, furnish to the system information concerning the identity of the applicant, any control person of the applicant, the qualified individual and any branch manager responsible for the actions of the licensee, including, but not limited to, information related to such person's personal history and experience and any administrative, civil or criminal findings by any governmental jurisdiction. As part of an application, the commissioner may, (1) in accordance with section 29-17a, conduct a state or national criminal history records check of the applicant, any control person of the applicant, the qualified individual and any branch manager, and, (2) in accordance with section 36a-24b, (A) require the submission of fingerprints of any such person to the Federal Bureau of Investigation or other state, national or international criminal databases, and (B) investigate the financial condition of any such person and require authorization from any such person for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a, as amended from time to time. An application for an initial license shall also include:

(i) A copy of the applicant's audited financial statements for the most recent fiscal year. If the applicant is a wholly-owned subsidiary of another corporation, the applicant shall include the most recent audited consolidated annual financial statements of the parent corporation or the applicant's most recent audited consolidated annual financial statement, and the most recent audited unconsolidated financial statement of the applicant, including its balance sheet and receipts and disbursements for the preceding year. If the applicant is publicly traded, the applicant shall include a copy of the most recent 10-K report that such applicant filed with the Securities Exchange Commission or, if the applicant is a wholly-owned subsidiary of a publicly traded company, a copy of the parent company's most recent 10-K report that was filed with the Securities and Exchange Commission. If the applicant or parent company of a wholly-owned subsidiary applicant is publicly traded on a foreign exchange, the applicant shall include a copy of documentation similar to the 10-K report that was filed with the applicable securities regulator;

(ii) A list of the applicant's permissible investments, the book and market values of such investments, and the dollar amount of the applicant's aggregate outstanding money transmissions (I) as of the date of the financial statement filed in accordance with clause (i) of this subparagraph; and (II) as of a date no earlier than thirty business days prior to the filing of the application;

(iii) (I) The surety bond required by subsection (a) of section 36a-602, if applicable;

(II) A list of the investments maintained in accordance with subsection (d) of section 36a-602, if applicable, and the book and market values of any such investments as of the date of the financial statement filed in accordance with clause (i) of this subparagraph; and as of a date no earlier than thirty business days prior to the filing of the application;

(iv) A statement describing the type of money transmission business that will be conducted by the applicant in this state and whether such money transmission will include the transmission of monetary value in the form of virtual currency;

(v) The name and address of any financial institution used by the applicant for its money transmission business in this state;

(vi) For each authorized delegate, a sample of the contract evidencing the proposed arrangement between the applicant and the authorized delegate; and

(vii) Any other information the commissioner may require.

(b) The commissioner may deem an application for a license to engage in the business of money transmission in this state abandoned if the applicant fails to respond to any request for information required under sections 36a-595 to 36a-612, inclusive, or any regulations adopted pursuant to said sections. The commissioner shall notify the applicant on the system that if the applicant fails to submit such information not later than sixty days after such request, the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license under sections 36a-595 to 36a-612, inclusive.

(c) Except as otherwise specified in subsections (d) and (e) of this section, each applicant, licensee, control person and qualified individual shall file with the system any change in the information most recently submitted to the system by such licensee, control person or qualified individual in connection with the application or license, or, if the information cannot be filed on the system, notify the commissioner, in writing, of such change in the information not later than fifteen days after the date the applicant, licensee, control person or qualified individual has reason to know of such change.

(d) (1) A money transmission license shall not be transferable or assignable. Any change in any control person of the licensee, except a change of a director, general partner or executive officer that is not the result of an acquisition or a change of control of the licensee, shall be the subject of an advance change notice filed on the system at least thirty days prior to the effective date of such change and no such change shall occur without the commissioner's approval.

(2) No licensee may use any name other than its legal name or a fictitious name approved by the commissioner, provided such licensee may not use its legal name if the commissioner disapproves use of such name. No licensee shall use any name or address other than the name and address specified on the license issued by the commissioner. A licensee may change the name of the licensee or the address of the office specified on the most recent filing with the system if, at least thirty calendar days prior to such change, the licensee files such change with the system and provides a bond rider, endorsement or addendum, as applicable, to the surety bond on file with the commissioner that reflects the new name or address, and the commissioner does not disapprove such change, in writing, or request further information within such thirty-day period.

(3) The commissioner may automatically suspend any license for a violation of this subsection. After a license has been automatically suspended pursuant to this subsection, the commissioner shall (A) give the licensee notice of the automatic suspension, pending proceedings for revocation of or refusal to renew the license pursuant to section 36a-608 and an opportunity for a hearing in accordance with section 36a-51, and (B) require the licensee to take or refrain from taking action as the commissioner deems necessary to effectuate the purpose of this section.

(e) A licensee shall file with the system or, if the information cannot be filed on the system, provide a written notice to the commissioner not later than one business day after the licensee has reason to know of the occurrence of any of the following events:

(1) The filing of a petition by or against the licensee under the United States Bankruptcy Code for bankruptcy or reorganization or the filing of a petition under the United States Bankruptcy Code for bankruptcy or reorganization by any control person, qualified individual or authorized delegate of the licensee;

(2) The filing of a petition by or against the licensee for receivership, the commencement of any other judicial or administrative proceeding for its dissolution or reorganization, or the making of a general assignment for the benefit of its creditors;

(3) The commencement of a proceeding to revoke or suspend its license to engage in money transmission in another state or a foreign country, or other formal or informal regulatory action by any governmental agency against the licensee or any control person, qualified individual or authorized delegate of the licensee and the reasons therefor;

(4) The commencement of any action by the Attorney General or the attorney general of any other state against the licensee or any control person, qualified individual or authorized delegate of the licensee and the reasons therefor;

(5) The cancellation or other impairment of the licensee's bond or other security, including notice of claims filed against the licensee's bond or other security;

(6) A conviction or indictment of the licensee or of any control person or qualified individual of the licensee for a misdemeanor involving the money transmission business or a felony; or

(7) A conviction or indictment of an authorized delegate for a misdemeanor involving the money transmission business or a felony.

(P.A. 81-264, S. 4; P.A. 92-12, S. 97; P.A. 94-122, S. 277, 340; P.A. 98-192, S. 4; P.A. 01-56, S. 5; P.A. 03-19, S. 84; P.A. 04-14, S. 4; P.A. 05-46, S. 11; P.A. 08-119, S. 11; P.A. 09-208, S. 15; P.A. 11-216, S. 35; P.A. 13-253, S. 4; P.A. 15-53, S. 6; P.A. 17-233, S. 19; P.A. 18-173, S. 51.)

History: P.A. 92-12 redesignated Subsecs. and Subdivs.; P.A. 94-122 made technical changes, effective January 1, 1995; Sec. 36-533 transferred to Sec. 36a-598 in 1995; P.A. 98-192 amended Subdiv. (9) by adding reference to electronic payment instrument and making conforming changes; P.A. 01-56 amended Subdiv. (5) by changing 20% stock ownership threshold to 10% ownership of securities and required name and addresses of persons holding securities, added new Subdiv. (8) re history of material litigation and criminal convictions, renumbered existing Subdivs. (8) to (10) as Subdivs. (9) to (11), added language re money transmission in Subdivs. (3) and (10) and made technical and conforming changes throughout; P.A. 03-19 made a technical change in Subdiv. (10), effective May 12, 2003; P.A. 04-14 designated existing provisions as Subsec. (a), and amended same by inserting in Subdivs. (5) and (8) new Subpara. (D) re managers, if applicant is a limited liability company, inserting reference to “managers” in Subdiv. (5), and making technical changes in Subdivs. (7)(A) and (9)(B), and inserted new Subsec. (b) requiring applicant or licensee to notify commissioner of any change in information provided; P.A. 05-46 added Subsec. (c) to prohibit licensee from changing the name specified on license unless licensee files application, pays name change fee specified in Sec. 36a-599(a) and receives approval of commissioner; P.A. 08-119 amended Subsec. (a) to make a technical change and to replace “managers” with “members” in Subdivs. (5)(D) and (8)(D); P.A. 09-208 amended Subsec. (a) by deleting provision in Subdiv. (5) requiring applicants to submit sufficient information to commissioner as commissioner deems necessary to make the findings required under Sec. 36a-600, adding new Subdiv. (9) requiring applicants to submit information concerning criminal convictions, redesignating existing Subdiv. (9) as Subdiv. (10), deleting Subpara. (C) therein re commissioner to defer compliance, redesignating existing Subdivs. (10) and (11) as Subdivs. (11) and (12), and making conforming and technical changes, and added Subsec. (d) requiring licensee to provide written notice to commissioner upon the occurrence of events listed in Subdivs. (1) to (7); P.A. 11-216 amended Subsec. (a)(9) to delete provision re ten-year period re history of criminal convictions, added new Subsec. (b) authorizing commissioner to conduct state and national criminal history records check of applicant and each partner, director, trustee, principal officer, member and shareholder owning at least 10% of each class of securities of applicant and re abandonment of application, and redesignated existing Subsecs. (b) to (d) as Subsecs. (c) to (e); P.A. 13-253 amended Subsec. (a) by adding reference to Secs. 36a-611 and 36a-612, by changing “branches, subsidiaries, affiliates and agents” to “locations and authorized delegates” and adding provision requiring that money transmission occur in this state in Subdiv. (3), by adding provision re a copy of audited financial statements for the most recent fiscal year and, if a wholly-owned subsidiary, the most recent audited consolidated annual financial statements of the parent corporation or most recent audited consolidated annual financial statement of the applicant, deleting requirement that financial statements be prepared by an independent certified public accountant, and adding provision re a 10-K report for publicly traded applicants or a report similar to a 10-K if publicly traded on a foreign exchange in Subdiv. (6), by changing “payment instruments” to “money transmissions” in Subdiv. (7), by adding definition of “material litigation” in Subdiv. (8), by replacing former provision with provision requiring a statement describing the type of money transmission business to be conducted in the state in Subdiv. (11), by adding new Subdivs. (12) and (13) re name and address of financial institution used and sample of contract, and by redesignating existing Subdiv. (12) as Subdiv. (14), amended Subsec. (b) by adding provision requiring that money transmission occur in this state and adding references to Secs. 36a-611 and 36a-612, amended Subsec. (c) by deleting “promptly” and adding provision re notification to occur not later than 15 days after the applicant or licensee has reason to know of the change, amended Subsec. (e) by adding “or indictment” in Subdivs. (6) and (7), deleting reference to Connecticut payment instruments in Subdiv. (6) and changing “agent” to “authorized delegate” and adding “misdemeanor involving the money transmission business” in Subdiv. (7), and made technical changes; P.A. 15-53 amended Subsec. (a)(11) by adding provision re applicant to indicate on application whether money transmission business will include transmitting monetary value in form of virtual currency; P.A. 17-233 amended Subsec. (a) by deleting Subdiv. (8) re history of material litigation and by redesignating existing Subdivs. (9) to (14) as Subdivs. (8) to (13); P.A. 18-173 substantially amended Subsec. (a) including by deleting former Subdivs. (1) to (5), adding provisions re processing of application for license on system, adding new Subdivs. (1) and (2) re commissioner's authority to conduct criminal history records check, require submission of fingerprints and investigate financial condition of person, redesignating Subdivs. (6) and (7) as new Subdivs. (5)(i) and (ii), deleting Subdiv. (8), and redesignating Subdivs. (9) to (13) as Subdivs. (5)(iii) to (viii), amended Subsec. (b) by deleting provision re commissioner's authority to conduct criminal history records check, and replacing provision re commissioner to notify applicant in writing with provision re commissioner to notify applicant on system, substantially amended Subsec. (c) including by adding references to control person and qualified individual, replacing provision re notification to commissioner in writing with provision re filing with system, and adding provision re filing change in information on system or notifying commissioner of change in writing, amended Subsec. (d) by deleting provisions re licensee's change to name specified on license, adding Subdivs. (1) to (3) re money transmission license not transferable or assignable and change in control person to be subject of advance change notice filed on system, licensee's use of name and address specified on license and change of licensee's name or address, and commissioner's automatic suspension of license, respectively, amended Subsec. (e) by adding reference to filing with system, adding provision re filing petition under U.S. Bankruptcy Code in Subdiv. (1), adding references to control person, qualified individual or authorized delegate of licensee in Subdivs. (3) and (4), replacing references to partner, director, trustee, principal officer, member or shareholder with references to control person or qualified individual in Subdiv. (6), and made technical and conforming changes.