2023 Indiana Code › Title 28. Financial Institutions › Article 8. Financial Services › Chapter 4.1. Money Transmission Modernization Act › 28-8-4.1-801. Authorized Delegate; Required Contract; Contents; Notice of Action Taken Against License; Money Held in Trust for Benefit of Licensee; Subdelegates Prohibited

Effective 1-1-2024.
Sec. 801. (a) As used in this section, "remit" means to:
(1) make direct payments of money to a licensee or its representative authorized to receive money; or
(2) deposit money in a bank in an account specified by the licensee.
(b) Before conducting business through an authorized delegate or allowing a person to act as an authorized delegate on its behalf, a licensee must:
(1) adopt, and update as necessary, written policies and procedures reasonably designed to ensure that the licensee's authorized delegates comply with applicable state and federal law;
(2) enter into a written contract that complies with subsection (d); and
(3) conduct a reasonable risk based background investigation sufficient for the licensee to determine whether the authorized delegate has complied and will likely comply with applicable state and federal law.
(c) An authorized delegate must operate in full compliance with this chapter.
(d) The written contract required by subsection (b)(2) must be signed by the licensee and the authorized delegate and, at a minimum, must do the following:
(1) Appoint the person signing the contract as the licensee's authorized delegate with the authority to conduct money transmission on behalf of the licensee.
(2) Set forth:
(A) the nature and scope of the relationship between the licensee and the authorized delegate; and
(B) the respective rights and responsibilities of the parties.
(3) Require the authorized delegate to agree to fully comply with all applicable state and federal laws, rules, and regulations pertaining to money transmission, including this chapter and regulations implementing this chapter, and relevant provisions of the Bank Secrecy Act and the USA Patriot Act of 2001 (P.L. 107-56).
(4) Require the authorized delegate to remit and handle money and monetary value in accordance with the terms of the contract between the licensee and the authorized delegate.
(5) Impose a trust on money and monetary value, net of fees, received for money transmission, for the benefit of the licensee.
(6) Require the authorized delegate to prepare and maintain records as required by this chapter or regulations implementing this chapter, or as reasonably requested by the director.
(7) Include an acknowledgment that the authorized delegate consents to examination or investigation by the director.
(8) State that the licensee is subject to regulation by the department and that, as part of that regulation, the department may suspend or revoke an authorized delegate designation or require the licensee to terminate an authorized delegate designation.
(9) Include an acknowledgment of the authorized delegate's receipt of the written policies and procedures required under subsection (b)(1).
(e) If a licensee's license is suspended, revoked, surrendered, or expired, the licensee must, not later than five (5) business days after receiving notice of the action taken, provide documentation to the director that the licensee has notified all of the licensee's applicable authorized delegates, whose names are in a record filed with the director, of the suspension, revocation, surrender, or expiration of the license. Upon suspension, revocation, surrender, or expiration of a license, applicable authorized delegates shall immediately cease to provide money transmission as an authorized delegate of the licensee.
(f) An authorized delegate of a licensee holds in trust for the benefit of the licensee all money, net of fees, received from money transmission. If an authorized delegate commingles any funds received from money transmission with any other funds or property owned or controlled by the authorized delegate, all commingled funds and other property are considered held in trust in favor of the licensee in an amount equal to the amount of money, net of fees, received from money transmission.
(g) An authorized delegate may not use a subdelegate to conduct money transmission on behalf of a licensee.
As added by P.L.198-2023, SEC.4.