06RS SB123


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SB 123 (BR 1391) - T. Buford

     AN ACT relating to financial services.
     Establish KRS Chapter 366A, to be cited as the Kentucky Money Transmitters Act of 2006, and create new sections of KRS Chapter 366A to: define terms; require persons engaged in the business of money transmission to be licensed on or after October 1, 2006; authorize the executive director of the Office of Financial Institutions to prescribe the licensing form containing listed information; require each licensee to have a net worth of no less than $500,000 at all times; require a surety bond or similar security in the amount of at least $500,000 for each licensee, subject to increase to $5 million at the discretion of the executive director based upon the applicant's financial condition and other criteria; require each licensee to maintain permissible investments, as defined, that have a market value computed in accordance with generally accepted accounting principles equal to the aggregate amount of all outstanding payment instruments; require a nonrefundable license application fee of $500 if made on or before March 31, and $250 if made after March 31, with the license to remain in force through September 30 of the year the license if issued, and authorize the executive director to assess a reasonable fee for agents of licensees by administrative regulation; require the executive director to investigate each applicant and determine if the applicant meets the requirements of this chapter, approve or deny an application, place a licensee on probation, deny or refuse to renew the designation of an agent, and any person aggrieved by such action of the executive director may file an application for appeal of the executive director's denial; require an annual renewal fee of $500 no later than September 20 of each year, to be accompanied by a written renewal report as prescribed by the executive director; require a licensee to file a written report with the executive director within 15 business days of the occurrence of listed events; require a licensee to notify the executive director in writing of a proposed change of control with a written request for approval of the acquisition, accompanied by a fee of $100 and proof of that after investigation the executive director may approve or disapprove the change of control; authorize the executive director to conduct an examination or investigation, with or without prior notice, of a licensee or any of its agents, which may be conducted jointly with the federal or another state government; require each licensee to make, keep, and preserve specified books, records, and accounts for a period of 5 years, including retention in electronic format, and require that records located out of state shall be accessible to the executive director upon 7 business days notice; require every licensee and its agents to file all reports set forth in the federal Bank Secrecy Act pertaining to money laundering and provide that filing with the appropriate federal agency shall be deemed compliance with this requirement; provide that documents, materials, reports or other information in the possession or control of the executive director are confidential, privileged, and not subject to the Open Records Act, but provide that the executive director may share information in his possession with other federal, state and international regulatory agencies or law enforcement agencies, and the Money Transmitter Regulators Association, may enter into agreements for sharing such information with other jurisdictions, may disclose a list of persons licensed under this chapter and may disclose any order issued against a licensee, its agents, or responsible individuals of the licensee, but specify that sharing of information shall not compromise the confidentiality requirement; require licensees to enter into express written contracts with any agent or agents; require agents to adhere to a specified code of conduct; authorize the executive director to issue a written order to suspend or revoke a license for specified violations of this chapter, valid for a period of 3 years, with the right to an appeal for an administrative hearing with the executive director; authorize the executive director to issue a written order to suspend or revoke an agent's license for specified violations of this chapter, valid for a period of 3 years, with the right to an appeal for an administrative hearing with the executive director; authorize the executive director to issue a cease and desist order for violation of this chapter or regulations promulgated pursuant to this chapter if the person fails to show cause why the order should not be issued and allow the executive director to petition the Franklin Circuit Court or any court of competent jurisdiction for issuance of an injunction or other appropriate relief for violation of this chapter; authorize the executive director to enter an emergency order suspending, limiting, or restricting a licensee's or agent's license without prior notice or hearing if there is a threat of immediate or irreparable harm to the public health, safety or welfare including conviction of a felony involving theft, fraud or breach of trust, indictment or conviction under the USA PATRIOT Act of 2001, suspension or revocation of a license in another state or country, listing of a licensee or its agent on the blocked persons list prepared by the United States Department of the Treasury or Department of State as a potential terrorist threat, or for insolvency or bankruptcy, subject to appeal by the licensee or agent; authorize the executive director to levy a civil penalty of $1,000 to $5,000 per day per violation of this chapter or regulation promulgated pursuant to this chapter; authorize the executive order to enter into a consent order with a person to resolve a matter arising under this chapter; authorize the executive director to stay, suspend, or postpone the effective date of an order issued under this chapter; permit a person aggrieved by an order of the executive director under this chapter to file an application for an administrative hearing, with appeal as a matter of right to the Franklin Circuit Court; authorize any person aggrieved by conduct of a licensee or an agent under this chapter to file a complaint with the executive director who shall investigate the complaint and may take corrective action; prohibit knowingly filing any record containing a false statement, misrepresentation or false certification subject to prosecution as a Class D felony and prohibit knowingly engaging in activity for which a license is required under this chapter, subject to prosecution as a Class C felony; require that all administrative proceedings under this chapter comply with KRS Chapter 13 B; authorize the Office of Financial Institutions to exercise all state administrative functions relating to regulation, supervision and licensing of money transmitters; require licensees and agents to comply with all applicable federal and state laws; provide that a license issued under KRS Chapter 366 shall expire at midnight on September 30, 2006 and all licensees must seek renewal pursuant to this chapter; establish that the intent of the General Assembly is to ensure safe and sound money transmission and ensure that the business of money transmission is not used for criminal purposes, to protect the public interest; repeal KRS 366.010, 366.020, 366.023, 366.030, 366.040, 366.050, 366.060, 366.070, 366.080, 366.090, 366.100, 366.110, 366.120, 366.140, 366.150 and 366.990; provide that an emergency exists and this Act shall take effect upon signature of the Governor; and require the Reviser of Statutes to renumber KRS Chapters 287, 288, 290, 291, 292, 294,366, 366A, and 368 as subtitles to a single KRS Chapter entitled the "Kentucky Financial Services Code"; and, require the Reviser of Statutes to renumber KRS 287.011, 287.012, 287.013, 287.020 and 287.025 as part of a separate subtitle of the code created by this Act.


     SCS - Retain original provision with technical changes; delete inclusion of KRS Chapter 292 from the newly created financial services chapter.

     SCA (1/Title, T. Buford) - Make title amendment.

     SFA (1, T. Buford) - Make technical corrections.

     HFA (1, K. Upchurch) - Create a new section of KRS Chapter 288 to permit a consumer loan licensee to charge an acquisition charge not in excess of 8 percent of the principal loan on loans of not less than $100 and not more than $1,000 plus an installment account handling charge based on the amount of the loan; restrict the term of such loan to not less than 3 months nor more than 15 months; provide for a refund or credit to the borrower a part of the installment handling charge if the loan is prepaid in full; specify the only other charges that may be made on such loans; prohibit loan charges under this section from being imposed on a borrower who has one or more loans outstanding with the same licensee or affiliated licensee; require a loan under this section to provide for repayment in substantially equal monthly installments; amend KRS 288.533 to permit a consumer loan company to collect a credit investigations charge of $1.50 rather than $1.00 for each $50 of the principal amount of the loan; repeal KRS 288.590 which requires an annual report by consumer loan licensees.

     HFA (2/P, R. Wilkey) - Attach provisions of HB 320/GA.

     HFA (3/Title, R. Wilkey) - Make title amendment.

     HFA (4/Title, R. Wilkey) - Make title amendment.

     Jan 26-introduced in Senate
     Jan 30-to Banking and Insurance (S)
     Feb 24-reported favorably, 1st reading, to Consent Calendar with Committee Substitute, committee amendment (1-title)
     Feb 27-2nd reading, to Rules
     Mar 1-posted for passage in the Consent Orders of the Day for Thursday, March 2, 2006; floor amendment (1) filed to Committee Substitute
     Mar 2-taken from the Consent Orders of the Day, placed in the Regular Orders of the Day; 3rd reading, passed 38-0 with Committee Substitute, committee amendment (1-title), floor amendment (1)
     Mar 3-received in House
     Mar 6-to Banking and Insurance (H)
     Mar 8-posted in committee
     Mar 10-floor amendment (1) filed
     Mar 17-reported favorably, 1st reading, to Calendar
     Mar 20-2nd reading, to Rules
     Mar 21-posted for passage in the Regular Orders of the Day for Wednesday, March 22, 2006
     Mar 22-floor amendments (2) and (3-title) filed
     Mar 23-floor amendment (4-title) filed
     Mar 24-3rd reading, passed 94-0 with floor amendments (2) and (4-title) ; received in Senate
     Apr 10-posted for passage for concurrence in House floor amendments (2) and (4-title) ; passed over and retained for concurrence in House Amendments
     Apr 11-Senate concurred in House floor amendments (2) and (4-title) ; passed 36-0
     Apr 12-enrolled, signed by each presiding officer; delivered to Governor
     Apr 24-signed by Governor (Acts ch. 247)

Vote History

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