Code of Maryland Regulations › Title 09 - MARYLAND DEPARTMENT OF LABOR › Subtitle 03 - COMMISSIONER OF FINANCIAL REGULATION › Chapter 09.03.14 - Money Transmitters › Section 09.03.14.01 - Definitions

Current through Register Vol. 51, No. 14, July 12, 2024
A. In this chapter,
				the following terms have the meanings indicated.
B. Terms Defined.
(1) "Acting in concert" means persons
				knowingly acting together with a common goal of jointly acquiring control of a
				licensee whether or not pursuant to an express agreement.
(2) "Authorized delegate" has the meaning
				stated in Financial Institutions Article, §
										12-401,
				Annotated Code of Maryland.
(3)
				"Bank Secrecy Act" means the Bank Secrecy Act,
				31 U.S.C. §
											5311, et seq. and its implementing
				regulations, as amended and recodified from time to time.
(4) "Closed loop stored value" means stored
				value that is redeemable by the issuer only for goods or services provided by
				the issuer or its affiliate or franchisees of the issuer or its affiliate,
				except to the extent required by applicable law to be redeemable in cash for
				its cash value.
(5) "Control"
				means:
(a) The power to vote, directly or
				indirectly, at least 25 percent of the outstanding voting shares or voting
				interests of a licensee or person in control of a licensee;
(b) The power to elect or appoint a majority
				of key individuals or executive officers, managers, directors, trustees, or
				other persons exercising managerial authority of a person in control of a
				licensee; or
(c) The power to
				exercise, directly or indirectly, a controlling influence over the management
				or policies of a licensee or person in control of a licensee.
(6) "Corporate governance" means
				the management structure of the licensee and the processes by which the
				business is managed, including the corporate controls, rules, policies,
				processes, and practices used to oversee and manage the institution.
(7) "Eligible rating" means a credit rating
				of any of the three highest rating categories provided by an eligible rating
				service, whereby each category may include rating category modifiers such as
				"plus" or "minus" for S&P, or the equivalent for any other eligible rating
				service.
(8) "Eligible rating
				service" means any Nationally Recognized Statistical Rating Organization
				(NRSRO) as defined by the U.S. Securities and Exchange Commission, and any
				other organization designated by the Commissioner.
(9) "External audit" means the formal report
				prepared by an independent certified public accountant expressing an opinion on
				whether the financial statements are presented fairly, in all material aspects,
				in accordance with the applicable financial reporting framework, and is
				inclusive of an evaluation of the adequacy of a company's internal control
				structure.
(10) "Federally insured
				depository financial institution" means a bank, credit union, savings and loan
				association, trust company, savings association, savings bank, industrial bank,
				or industrial loan company organized under the laws of the United States or any
				state of the United States, if that bank, credit union, savings and loan
				association, trust company, savings association, savings bank, industrial bank,
				or industrial loan company has federally insured deposits.
(11) "In this State" means:
(a) For a transaction requested in person, at
				a physical location within Maryland; and
(b) For a transaction requested
				electronically or by phone, the provider of money transmission may determine if
				the person requesting the transaction is "in this State" by relying on other
				information provided by the person regarding the location of the individual's
				residential address or a business entity's principal place of business or other
				physical address location, and any records associated with the person that the
				provider of money transmission may have that indicate that location, including
				but not limited to an address associated with an account.
(12) "Individual" means a natural
				person.
(13) "Internal audit" means
				the internal independent and objective assurance and consulting activity
				performed to evaluate and improve the effectiveness of a licensee's operations,
				risk management, internal controls, and governance processes.
(14) "Key individual" means any individual
				ultimately responsible for establishing or directing policies and procedures of
				the licensee, such as an executive officer, manager, director, or
				trustee.
(15) "Licensee" has the
				meaning stated in Financial Institutions Article, §
										12-401,
				Annotated Code of Maryland.
(16)
				"Maryland Money Transmission Act" means Financial Institutions Article, Title
				12, Subtitle 4, Annotated Code of Maryland.
(17) "Material litigation" has the meaning
				stated in Financial Institutions Article, §
										12-401,
				Annotated Code of Maryland.
(18)
				"Monetary value" means a medium of exchange, whether or not redeemable in
				money.
(19) Money Transmission.
(a) "Money transmission" has the meaning
				stated in Financial Institutions Article, §
											12-401,
				Annotated Code of Maryland.
(b)
				"Money transmission" includes a payroll processing service.
(20) "MSB accredited state" means a state
				agency that is accredited by the Conference of State Bank Supervisors and Money
				Transmitter Regulators Association for money transmission licensing and
				supervision.
(21) "Multistate
				licensing process" means any agreement entered into by and among state
				regulators relating to coordinated processing of applications for money
				transmission licenses, applications for the acquisition of control of a
				licensee, control determinations, or notice and information requirements for a
				change of key individuals.
(22)
				"NMLS" has the meaning stated in Financial Institutions Article, §
										1-101,
				Annotated Code of Maryland.
(23)
				"Outstanding money transmission obligations" has the meaning assigned to the
				term "outstanding money transmission" in Financial Institutions Article, §
										12-401,
				Annotated Code of Maryland.
(24)
				"Passive investor" means a person that:
(a)
				Does not have the power to elect a majority of key individuals or executive
				officers, managers, directors, trustees, or other persons exercising managerial
				authority of a person in control of a licensee;
(b) Is not employed by and does not have any
				managerial duties of the licensee or person in control of a licensee;
(c) Does not have the power to exercise,
				directly or indirectly, a controlling influence over the management or policies
				of a licensee or person in control of a licensee; and
(d) Either:
(i) Attests to §B(24)(a)-(c) of this
				regulation, in a form and in a medium prescribed by the Commissioner;
				or
(ii) Commits to the passivity
				characteristics of §B(24)(a)-(c) of this regulation in a written
				document.
(25)
				Payment Instrument.
(a) "Payment instrument"
				has the meaning stated in Financial Institutions Article, §
											12-401,
				Annotated Code of Maryland.
(b)
				"Payment instrument" does not include prepaid access or any instrument that is:
(i) Redeemable by the issuer only for goods
				or services provided by the issuer or its affiliate or franchisees of the
				issuer or its affiliate, except to the extent required by applicable law to be
				redeemable in cash for its cash value; or
(ii) Not sold to the public but issued and
				distributed as part of a loyalty, rewards, or promotional program.
(26) Payroll Processing
				Services.
(a) "Payroll processing services"
				means receiving money for transmission pursuant to a contract with a person to
				deliver wages or salaries, make payment of payroll taxes to state and federal
				agencies, make payments relating to employee benefit plans, or make
				distributions of other authorized deductions from wages or salaries.
(b) "Payroll processing services" does not
				include an employer performing payroll processing services on its own behalf or
				on behalf of its affiliate.
(27) "Person" has the meaning stated in
				Financial Institutions Article, §
										1-101,
				Annotated Code of Maryland.
(28)
				Prepaid Access.
(a) "Prepaid access" has the
				meaning stated in Financial Institutions Article, §
											12-401,
				Annotated Code of Maryland.
(b)
				"Prepaid access" includes, but is not limited to, "prepaid access" as defined
				by 31 CFR §
												1010.100, as amended or recodified from time
				to time.
(c) Prepaid access does
				not include a payment instrument or closed loop stored value, or stored value
				not sold to the public but issued and distributed as part of a loyalty,
				rewards, or promotional program.
(29) "Receiving money for transmission" or
				"money received for transmission" means receiving money or monetary value in
				the United States for transmission within or outside the United States by
				electronic or other means.
(30)
				"Risk management program" means the policies, procedures, and internal controls
				designed to identify, measure, monitor and mitigate risk.
(31) "Tangible net worth" means the aggregate
				assets of a licensee, excluding all intangible assets, less liabilities, as
				determined in accordance with United States generally accepted accounting
				principles.