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Florida amends money service businesses provisions to define “control persons”
On May 26, the Florida governor signed HB 389, which amends provisions related to money service businesses and related licensing requirements. The bill, among other things, replaces the term “officers” with “control person” and expands the definition of “control person” to designate the type of individuals that may be considered to control a licensee. As a result of this amendment, the bill sets forth and clarifies various requirements related to the vetting and reporting of control persons, as opposed to officers generally, going forward. The law is effective October 1.
Arizona passes money transmitter licensure legislation
On May 20, the Arizona governor signed SB 1580, which revises provisions related to money transmitters. The bill, among other things, provides that “a person may not engage in the business of money transmission or advertise, solicit or hold itself out as providing money transmission unless the person is licensed." The provision does not apply to “a person that is an authorized delegate of a person licensed under this article that is acting within the scope of authority conferred by a written contract with the licensee,” and to exempt persons provided the person “does not engage in money transmission outside the scope of the exemption.” The bill also creates provisions related to consistent licensure, application for licensure, and information requirements for certain individuals.
Florida amends consumer finance loan provisions
On May 20, the Florida governor signed SB 546, which amends certain provisions related to the making of consumer finance loans. The provisions allow persons applying for a license to make and collect loans under the Florida Consumer Finance Act (FCFA) “to provide certain documents in lieu of evidence of liquid assets,” including a surety bond, certificate of deposit, or irrevocable letter of credit. The bill also prohibits licensees from charging borrowers a prepayment penalty for paying all or part of a loan’s principle before the payment due date. Additionally, provisions related to the grounds for denying a license or taking disciplinary action for certain violations for the FCFA are modified to include “[f]ailure to maintain liquid assets of at least $25,000 or a surety bond, certificate of deposit, or letter of credit in the amount required by s. 516.05(10) at all times for the operation of business at a licensed location or proposed location.” SB 546 takes effect October 1.
Oklahoma establishes telephone solicitation restrictions
On May 20, the Oklahoma governor signed HB 3168, which establishes the Telephone Solicitation Act of 2022. The bill, among other things, prohibits (i) certain sales calls without the prior express written consent of the called party; (ii) commercial telephone sellers or salespersons from using certain technology to conceal their true identity; and (iii) commercial telephone sellers or salespersons from using automated dialing or recorded messages to make certain commercial telephone solicitation phone calls. The bill also establishes a time frame during which a commercial telephone seller or salesperson may make commercial solicitation phone calls. The bill is effective November 1.
Connecticut amends banking statutes
On May 17, the Connecticut governor signed S.B. 268, which makes various revisions to state banking statutes. Among other things, the bill establishes that a money transmission license is not transferable or assignable, but a licensee may be acquired under certain circumstances. The bill also establishes that the commissioner cannot approve a state-bank’s loan production office to be established unless the commissioner has considered the out-of-state bank's record of compliance. Additionally, the bill establishes certain definitions, including the meaning of “control”, “control person,” “key individual,” and “passive investor.” The bill is effective October 1.
Florida amends MSB provisions to define “control persons”
On May 12, the Florida governor signed HB 273, which amends provisions related to money services business activities. The bill, among other things, revises provisions related to prohibited activities without a license and other requirements for written contracts between a money transmitter or payment instrument seller and an authorized vendor, and provides requirements for a money transmitter that receives virtual currency, among other things. The bill also establishes that “each money transmitter that receives virtual currency, either directly or through an authorized vendor, for the purpose of transmitting such virtual currency from one person to another location or person must at all times, until the transmission obligation is completed, hold virtual currency of the same type and amount owed or obligated to the other location or person.” The bill is effective January 1, 2023.
Illinois amendments address confidentiality of customer financial records
On May 13, the Illinois governor signed SB 3971, which makes various amendments to Illinois Banking Act and Savings Bank Act provisions concerning the confidentiality of customer financial records. Among other things, the Act provides that a bank must disclose financial records “only after the bank sends a copy of the subpoena, summons, warrant, citation to discover assets, or court order,” to the person establishing the relationship with the bank if living (or the person’s representative otherwise), at the person’s last known address. Further, such requests must be sent through a third-party commercial carrier or courier, with delivery charge fully prepaid, by hand or by electronic delivery at an email address on file with the bank (provided the person has consented to electronic delivery).
The Act also stipulates that a bank retain customer financial records “in a manner consistent with prudent business practices and in accordance with this Act and applicable State or Federal laws, rules, and regulations.” A bank may also destroy records (with reasonable precautions taken to ensure the confidentiality of the information contained in the records) except where a retention period is required by law. The Act is effective immediately.
Connecticut becomes fifth state to enact comprehensive privacy legislation
On May 10, the Connecticut governor signed SB 6, establishing a framework for controlling and processing consumers’ personal data in the state. Connecticut is now the fifth state in the nation to enact comprehensive consumer privacy measures, following California, Colorado, Virginia, and Utah (covered by Buckley Special Alerts here and here and InfoBytes here and here). As previously covered by InfoBytes, Connecticut consumers will have the right to, among other things, (i) confirm whether their personal data is being processed and access their data; (ii) correct inaccuracies; (iii) delete their data; (iv) obtain a copy of personal data processed by a controller; and (v) opt out of the processing of their data for targeted advertising, the sale of their data, or profiling to assist solely automated decisions. The Act also outlines data controller responsibilities, including a requirement that controllers must respond to consumers’ requests free of charge within 45 days unless extenuating circumstances arise. The Act also limits the collection of personal data “to what is adequate, relevant and reasonably necessary in relation to the purposes for which such data is processed, as disclosed to the consumer,” and requires controllers to implement data security protection practices “appropriate to the volume and nature of the personal data at issue” and conduct data protection assessments for processing activities that present a heightened risk of harm to consumers. While the Act explicitly prohibits its use as a basis for a private right of action, it does grant the state attorney general exclusive authority to enforce the law. Additionally, upon discovering a potential violation of the Act, the attorney general must give the controller or processor written notice and 60 days to cure the alleged violation before the attorney general can file suit. The Act takes effect July 1, 2023.
Georgia updates license exemption provisions
On May 2, the Georgia governor signed HB 891, which updates provisions related to licensing exemptions. The bill establishes that, starting on July 1, in addition to all other fees, license fees, fines, or other charges now or hereafter levied or assessed on the licensee, there is a fee of 0.125 percent of the gross loan amount. Further, such per loan fee becomes due on the making of any such loan, including, but not limited to, the closing of a loan, the renewal or refinancing of a loan, or a modification of a loan which results in the execution of a new or amended loan agreement. Additionally, the bill clarifies that the Department of Banking and Finance can issue cease and desist orders to persons that are not licensed. The bill also establishes that an individual cannot engage in the business of making installment loans or acting as an installment lender in Georgia unless that person is licensed. Among other things, the bill also makes conforming changes, provides definitions, and repeals conflicting laws.
Georgia amends mortgage lender/broker licensing provisions
On May 2, the Georgia governor signed SB 470, which amends state provisions related to mortgage lender and broker licensing. Among other things, the act: (i) defines a “covered employee” as “any employee of a mortgage lender or mortgage broker who is involved in residential mortgage loan related activities for property located in Georgia,” including but not limited to, “a mortgage loan originator, processor, or underwriter, or other employee who has access to residential mortgage loan origination, processing, or underwriting information”; (ii) adds “covered employee” to the list of persons for whom the Department of Banking and Finance may not issue a license or must revoke a license due to a felony conviction; and (iii) authorizes the Department to obtain conviction data with respect to a “covered employee.” The act is effective immediately.