Business License Listing Ga by xlq89369

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									      GEORGIA DEPARTMENT OF
       BANKING AND FINANCE

Money Service Businesses: An Overview
  and Bank Secrecy Act/Anti-Money
   Laundering Issues for Financial
             Institutions

                          Corporate Division
                     2990 Brandywine Road, Suite 200
                       Atlanta, Georgia 30341-5565

      Carol Webb, Director of Corporate Affairs / Strategic Initiatives
            Phone: (770) 986-1386        Fax: (770) 986-1655
                     E-mail: webbc@dbf.state.ga.us
                                                                          Version 6/2004
            PURPOSE OF THIS
             PRESENTATION
   Discusses Responsibilities of the Department
    Regarding Licensing and Supervision of Check
    Cashers, Sale of Check and Money Order Companies,
    and Money Transmitters – commonly referred to as
    Money Service Businesses (MSBs).

   Discusses How Financial Institutions can Assist the
    Department through their Assessment of Risk and
    Enhanced Due Diligence Activities.
          Corporate Division

The Corporate Division’s primary responsibilities
are:
  Application & Registration Processing
  Licensing & Supervision of Check Cashers, Sale of
   Check and Money Order Companies, and Money
   Transmitters
     Georgia Laws & Department
     Regulations Governing MSBs

   O.C.G.A., Title 7, Chapter 1, Article 4 – Sale of Checks
    or Money Orders

   O.C.G.A., Title 7, Chapter 1, Article 4A – Cashing
    Checks, Drafts, or Money Orders for Consideration

   Chapter 80-3-1 of the Department’s Rules and
    Regulations
    Money Service Businesses
           (MSBs)

MSBs the Department regulates under Georgia
Laws & Regulations:
 Check Cashers
 Issuers and Sellers of Checks, Money Orders and
  Other Payment Instruments
 Transmitters of Money or Monetary Value
   Money Service Businesses
          (MSBs)

MSBs under BSA that the Department does not
regulate:
 Currency Exchange / Currency Dealing

 Stored Value (certain exceptions may apply)
    Money Service Businesses
           (MSBs)
A licensee under Article 4 or 4a, that is by definition an
MSB under federal law, shall comply with the federal
registration requirements for such businesses and shall
provide the Department with evidence of such registration.

Georgia requires that all licensees under Article 4 or 4a of
Title 7, O.C.G.A. comply with the recordkeeping
requirements, the necessity for a compliance program,
currency transaction reporting, and suspicious activity
reporting of the Bank Secrecy Act and its regulations,
provided they are required to do so by the Act.
         Money Service Businesses
                (MSBs)

Check Cashers:
 As used in the law, a “check casher” is defined as an
  individual, partnership, association, or corporation
  engaged in cashing checks, money orders, or other
  drafts for a fee.
           Check Cashers

Classes / Categories of Check Cashers:
 Exempt       (Statutory Exempt)
 Registrants (Qualifying Exempt Registrant)
 Full Service (Full Service Licensee)
          Statutory Exempt
NO license or registration is required if ALL of the
following conditions are met:

   Checks are only cashed incidental to the purchase of
   goods or services.
   The fee charged is no more than the greater of 2% of the
   face amount of the check, draft, or money order or $2.00.
   Gross income from cashing checks does not exceed
   $25,000 per annum per business location.
   The check cashing service is not advertised, announced or
   otherwise promoted as a service.
   Qualifying Registration
A business may qualify for an exempt registration if
ALL of the following conditions are met:
  The fee charged for cashing a check does not exceed the
  greater of 2% of the face amount of the check, draft, or money
  order or $2.00.

  The aggregate gross income from check cashing activities,
  when not incidental to the retail sale if goods, will not exceed
  $12,000 in the fiscal year.

  The check cashing service is not advertised, announced or
  otherwise promoted as a service.
   Additional Information
Those qualifying for exemption or
registration are still subject to certain
provisions of OCGA Article 4A of Chapter 7-1
and are considered to be “licensees” for the
purposes of determining compliance:
  OCGA Section 7-1-704: Authority to Examine.
  OCGA Section 7-1-705: Posting of check cashing
  fees charged and other check cashing
  procedures.
  Minimum books and records requirements as
  prescribed in Regulation 80-3-1-.02-(5).
      Full Service License
A Full Service License is required if ANY of the
following conditions are met:
  The fee charged to cash checks exceeds the greater of 2% of the
  face amount of the check, draft, or money order or $2.00.
  Aggregate gross income from check cashing activities not
  incidental to the retail sale of goods exceeds $12,000 per year.
  Aggregate gross income from check cashing activities incidental
  to the retail sale of goods exceeds $25,000 per year per business
  location.
  The check cashing service is advertised, announced, or
  otherwise promoted as a service separate and apart from the
  retail sale of goods.
      Full Service Licensees
OCGA Section 7-1-706 limits the fee charged by
licensees for cashing any check to the higher of $5.00 or:
  Three percent (3%) of the face amount of public assistance
  checks issued by a state agency, federal government agency, or
  the Social Security Administration;

  Ten percent (10%) of the face amount of personal checks
  drawn by individuals against their personal account or money
  orders;

  Five percent (5%) of the face amount of all other checks.
    Licensees & Registrants
Must meet certain standards and requirements in order to
be licensed/registered with the Department:
  File Application & Pay Appropriate Fee
   Background Check is Performed as Part of the Application
    Process – Fingerprint Cards, if necessary.
   No Felony convictions involving moral turpitude – acts viewed as
    being inherently immoral - (e.g. breach of trust of former
    employer, theft by taking, racketeering, etc.)
  License / Registration is valid for 1 year…
   Unless Revoked, Suspended, or Surrendered before Expiration.
Examination of Check Cashers
The Department is authorized to examine check cashers and
charge a fee for such exam.
We may also examine companies that are claiming exemption
to be sure they do not require a license.
We may investigate unlicensed companies and issue Cease &
Desist (C&D) orders to licensed and unlicensed companies.
We are authorized by statute to revoke or suspend an existing
license or registration.
There are fines and fees allowed by Regulation that may be
charged for failure to comply with certain laws, regulations,
standards, or policies.
Civil Penalties for Violation of
          Article 4A
Unlicensed person who violates a C&D order shall be
liable for a civil penalty not to exceed $1,000.00.
Each day the violation continues shall constitute a
separate offense.

Any person, partnership, association, or corporation
and the several members, officers, directors, agents,
and employees thereof who shall violate any of the
provisions of this article shall be guilty of a
misdemeanor and shall be punishable by
imprisonment for not more than one year or by a fine
of not more than $500.00, or by both such fine and
imprisonment.
Companies Licensed Under Article 4 –
Sale of Checks or Money Orders Act

Licensees under Article 4 include:
  Seller or Issuer of Checks, Money Orders, or any other
  instrument, order, or device for the payment or
  transmission of money or monetary value
  Money Transmitters
    Effective July 1, 2003, Article 4 was revised to provide for
    licensing of money transmitters.
    Department began licensing these companies in October
    2003, after allowing a 90-day grace period.
    Those Exempt from Licensing
           Requirements

The United States or a department, agency, or
instrumentality thereof;
The United States Postal Service;
A state, county, city, or any other governmental agency
or governmental subdivision of a State;
The authorized agent of a licensee; or
A bank or trust company, credit union, international
banking corporation, savings bank organized under the
laws of a State or the United States.
    Licensing Requirements
Sale of Check License:
  A license for the sale of checks or money orders shall
  also qualify as a license to engage in the business of
  money transmission.
  This is primarily due to the fact that the licensing
  requirements and qualifications are greater for a sale of
  check license.
  Application process is similar to check cashers: application
  is filed along with application/processing fee, background
  checks are done (and fingerprint cards, if necessary).
     Licensing Requirements
Sale of Check License (continued):
  As a minimum requirement to establish financial responsibility,
  must exhibit tangible net worth (TNW) in accordance with GAAP
  > or = 5% of total assets or $5,000,000 whichever is less. Minimum
  TNW of $100,000 to be entitled to a license.

As an Alternative to the 5% NW Requirement:
  May have a surety bond issued by a bonding company or
  insurance company authorized to do business in this state
  and approved by the Department.
  May provide deposits in lieu of the surety bond, based upon
  principal amount or market value of those assets, whichever is
  lower.
Companies Licensed Under Article 4 –
Sale of Checks or Money Orders Act

  “Money transmission” means:
  Engaging in the business of receiving money
  for transmission or transmitting money within
  the United States or to locations abroad by any
  and all means including, but not limited to, an
  order, wire, facsimile, or electronic transfer.

See Department brochures on this subject at:
http://www.gadbf.org/consumer_dbf.html#MTs
    Licensing Requirements
Money Transmitter License:
  A money transmitter licensee MAY NOT engage in
  the sale or issuance of checks as principal.
  This is due to the fact that the licensing requirements and
  qualifications are greater for a sale of check license.

  Application and application process are the same as Sale
  of Check.
    Licensing Requirements
Money Transmitter License (continued):
  As a minimum requirement to establish financial
  responsibility, must have a corporate surety bond.
  Bond Requirement: $50,000.00, plus $5,000.00 for
  each additional location up to a maximum
  aggregate of $250,000.00.
  Additional coverage may be required if outstanding
  orders to transmit exceed $250,000.00. If required, the
  additional coverage shall be limited to $1,250,000.00 or
  orders outstanding in Georgia for the preceding year,
  whichever is less.
  Examination of Sale of Check
Companies & Money Transmitters
The Department is authorized to examine sale of check
companies and money transmitters and charge a fee for
such exam.

We may investigate unlicensed companies and issue C&D
orders to licensed and unlicensed companies.

We are authorized by statute to revoke or suspend an
existing license or registration.
  Civil Penalties for Violation of
             Article 4
Licensed or unlicensed person who violates a C&D shall
be liable for a civil penalty not to exceed $1,000.00. Each
day the violation continues shall constitute a separate
offense.
The following acts constitute felonies under O.C.G.A.
Section 7-1-845:
 Engaging in selling or issuing of checks without a license.
 Failure of agent or agent’s employee to remit proceeds to
  the licensee within five business days from the date of such
  sale or issuance.

   Upon conviction under this Code section such person
   or corporation shall be punished by imprisonment for
   not less than one nor more than five years or fined
   Coordination with Federal
         Authorities
The Department has an Agreement with IRS to
coordinate on exams and/or other issues involving
compliance with BSA and/or the U.S. Patriot Act.

The Department cooperates and coordinates with other
federal agencies and law enforcement to investigate
unlicensed companies or companies that may be
involved in money laundering or other criminal acts.
      Bank Secrecy Act (BSA)
           Compliance
State law requires that money service businesses comply
with Federal laws concerning large currency transaction
reporting (CTR) and other BSA requirements such as
suspicious activity reporting (SAR).

Federal agencies are given authority over BSA and anti-
money laundering requirements for MSBs.
While we rely on these agencies for the ultimate
“policing” of these federal laws and regulations, we fully
support BSA and AML efforts and include a review of
federal law in our examination of money service
businesses.
       How You Can Help….
Due to staffing limitations, the Department relies a
great deal on the industry and third parties to
report potentially unlicensed companies.

Perform Assessment of Risk and Enhanced Due
Diligence/Know Your Customer Activities
  MSBs have been viewed as “high risk” accounts

Report potential unlicensed companies to the
Department’s Corporate Division
  Enhanced Due Diligence / Know
    Your Customer Principals
Financial Institutions should be:
    Performing a risk assessment of customers, products,
    services, locations, etc.
    Identifying each customer & beneficiaries
    Obtaining acceptable documentation
    Determining each customer’s normal and expected
    transactions
    Documenting the source of funds
    Monitoring customer transactions/activity
    Reporting suspicious activity
Assessing High Risk Accounts
Identification
Account opening
Through subsequent monitoring
Through notification from others

High risk status can change
May initially be lower risk and activity
 changes or increases/vice-versa
          Customer Assessment
Management should determine:
  Whether the business is in compliance with state or federal laws
  requiring licensing, registration, and/or approval.
  – Business License (city or county)
  – License/Registration from DBF (An agent of a sale of check company
    or a money transmitter should be able to provide a copy of their agent
    certificate to prove that they are an agent of an existing licensee)
  – MSB Registration with FinCEN

Management should inquire about:
  The types and amounts of currencies or instruments handled,
  and whether any additional services are offered.
  The targeted customer base.
  Whether international transfers are anticipated in the normal
  course of business, and what countries may be involved.
 Customer Assessment (continued)
Other Verification/Assessment of Business Accounts:
  Look at sources of funds
  Evidence of legal status
  Request a copy of the MSB’s anti-money laundering policies and
  procedures (where applicable)
  Third-party references and information from verification services
  Follow-up calls to business

  For large commercial accounts, obtain:
    Financial statements
    Description of customer’s principal line of business
    Listing of major suppliers, customers, and geographic locations
    Description of business’s primary trade area & whether international transactions are
     expected
    Description of business operation, i.e. retail vs. wholesale, and the anticipated volume
     of cash deposits & withdrawals.
    Expected amounts and origin/destination of incoming/outgoing wire transfers
       Other Informational Resources
FinCEN’s website for MSBs:                    http://www.msb.gov/
Using this website will help you learn more
about MSBs and the BSA requirements that
apply.


Search for licensees on the                   http://www.gadbf.org/other_institutions.html#MSB
Department’s website:
The information provided is limited. If you
do not find the company you are looking
for, please contact the Corporate Division.


OCC Advisory Letter 2004-7:                   http://www.occ.treas.gov/ftp/advisory/2004-7.doc
Bank Secrecy Act/Anti-Money Laundering:
Guidance on Money Services Business
Customers


BSA Regulatory /Guidance on                   http://www.fincen.gov/reg_guidance.html
FinCEN’s website:
 Questions About This
    Presentation?
Contact Carol Webb by:
E-mail - webbc@dbf.state.ga.us   or
Phone - (770) 986-1386
 CORPORATE DIVISION CONTACTS

To Report Unlicensed Check Cashers:
Susan Nelson - nelson@dbf.state.ga.us        - (770) 986-1652


To Report Unlicensed Check Sellers or Money
Transmitters:
Tervenia Mitchiner - tervenia@dbf.state.ga.us              - (770) 986-1639


                     Department’s website: www.gadbf.org

								
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