N.Y. Comp. Codes R. & Regs. tit. 3 § 406.4

Current through Register Vol. 46, No. 45, November 2, 2024

Section 406.4 - Agents and subagents of money transmitters

(a) Each licensee must submit to the superintendent as of the close of business on December 31, 1989 a written description of the licensee's general procedures by which it intends to enter into agency contracts to engage in money transmission in this State. This description must include the licensee's policies and procedures and other details regarding the following matters:

(1) a brief summary of the proposed money transmission activities to be engaged in by the agents and subagents and a description of how money is to be transferred to the beneficiaries and an undertaking by the licensee to assume responsibility for consumer losses incurred through an agent's unauthorized activities or as a result of violations of any laws or regulations; and

(2) the number of agents and subagents and projected sales volume for travelers checks, money orders and all other transmission instruments sold; and

(3) the procedures for agent and subagent selection including the method of ascertaining the agent's and subagent's credit standing; and

(4) the procedures that agents and subagents shall follow relating to:

(i) recordkeeping;

(ii) safeguarding travelers checks, money orders and all other instruments or orders for the transmission or payment of money;

(iii) remittance of proceeds of sales of travelers checks, money orders and all other instruments or orders for transmission or for payment of money sold to the public (i.e., time within which such proceeds are required to be remitted to the licensee, and remittance procedures);

(iv) reporting procedures to be followed by agents and subagents when reporting to the licensee the sale of travelers checks, money orders and all other instruments or orders for the transmission or payment of money sold to the public including but not limited to the time within which such sales are to be reported to the licensee, and procedures for reporting such sales; and

(5) copies of any documentation which the licensee will require its agents and subagents to furnish the public in connection with the money transmission activities including but not limited to samples of travelers checks, money orders and all other instruments or orders for the transmission or payment of money sold, including forms and receipts; and

(6) procedures for distributing policies and procedures pertaining to agents and subagents and licensee's program to assure agent's and subagent's compliance; and

(7) compensation arrangement with agent and subagent; and

(8) bonding and insurance of agents and subagents; and

(9) the licensee's policy relating to loans to and investment in agents and subagents except loans and investments made by a regulated financial institution in the ordinary course of its business; and

(10) in the case of money transmissions other than by sale of money orders and travelers checks, the names and addresses of correspondents used to make delivery of money to beneficiaries; and

(11) such other information, and documentation as the superintendent may require.

Such information is to be provided within 45 days of December 31, 1989 and at such other times as the superintendent may require.

(b) In addition, each licensee shall submit to the superintendent as of the close of business on December 31, 1989 the following information:

(1) a listing in alphabetical order of its agents and subagents in this State showing their full names and addresses and licensee assigned identification number(s) if grouped by the category of transmission activity the licensee has authorized the agent and subagent to conduct on its behalf; and

(2) a specimen copy of the agency contract between the licensee and its agents and subagents including all attachments, amendments and supplements. Such information is to be provided within 45 days of December 31, 1989 and at such other times as the superintendent may require.

(c) Upon any change in any material aspect of a licensee's policies and procedures, including but not limited to the items enumerated under paragraphs (a)(3) through (11) of this section, the licensee shall file with the superintendent a written description of the change within 10 days of implementation.

(d)

(1) Every agent and subagent, other than a bank, which is engaged in money transmission, except one engaged exclusively in the sale or issuance of travelers checks and/or money orders, shall post and at all times display in full public view, at both its principal office and at each branch office in this State a sign or signs in the English language and in any other predominant language spoken by its customers. Each sign shall be no less than 20 inches wide and 12 inches high with letters at least one-half inch in height prominently indicating the following:

(i) name, address and telephone number of the principal office of the agent and subagent and the type of money transmission activity which the agent and subagent has been authorized to conduct by the licensee; and

(ii) name and address of the licensee; and a telephone number established by the licensee to answer questions and register complaints; and

(iii) that the licensee is licensed and regulated by the New York State Banking Department and that unresolved consumer complaints may be mailed to the New York State Banking Department, Consumer Services Division, as set forth in section 1.1 of Supervisory Policy G 1 of this Title.

(2) Every agent or subagents, other than a bank, which is engaged in money transmission, except one engaged exclusively in the sale or issuance of travelers checks and/or money orders, shall be provided by the licensee with a notice no less than four inches by six inches to publicly display on the agent's and subagent's front window or entrance door containing the following information:

(i) the name of the licensee; and

(ii) the statement that the licensee is "Licensed as a Money Transmitter by the Banking Department of the State of New York"; and

(iii) its designation of the agent to act in such capacity.

(e) A receipt, or other evidence of acceptance of funds shall be given to every person who utilizes an agent and subagent of a licensee to transfer money. The receipt issued by the agent and subagent of the licensee shall contain the information required in section 406.3(f) of this Part and the following information:

(1) that the licensee is liable for the nondelivery or delayed delivery;

(2) the refund policy of the licensee;

(3) the dollar amount of transmission; and

(4) the fee charged.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 406.4