Business locations; use of authorized agents

(a) As authorized by this Code section, a licensee may conduct its business through designated authorized agents at one or more locations in this state, so long as such locations have been included in the licensee’s application and reports as required by Code Section 7-1-683 and subsection (d) of Code Section 7-1-686. The department may refuse within 30 days after application, for cause, to approve a licensee’s designation of an authorized agent. In such cases the authorized agent shall have the same procedural rights as are provided in this article for the denial of an application for a license. No additional license other than that obtained by the licensee shall be required of any authorized agent of a licensee. An authorized agent of a licensee shall transmit money only at the location designated in the written notice provided to the department. (b) Licensees desiring to conduct licensed activities through authorized agents shall enter into a written contract with the authorized agent. The contract shall authorize the agent to operate only pursuant to the terms of the contract and shall specifically designate the authorized activities that the agent may engage in on behalf of the licensee. Upon request of the department, a licensee shall provide the department with a copy of the executed written contract between the licensee and its authorized agent. (c) Upon the department receiving written notice from the licensee designating an authorized agent, the authorized agent shall be: (1) Required to operate in full compliance with this article, the rules and regulations promulgated under this article, and any applicable order issued by the commissioner; (2) Required to timely remit all money legally due to the licensee in accordance with the terms of the written contract between the licensee and the authorized agent; (3) Prohibited from utilizing subagents to carry out its responsibilities; (4) Subject to examination and investigation by the department as set forth in this article, including, but not limited to, the requirements of Code Section 7-1-689; (5) Subject to administrative actions, including, but not limited to, the revocation or suspension of its authorization to act as an authorized agent, a cease and desist order, and the imposition of fines; and (6) Required to comply with applicable state and federal law. (d) If a license is suspended, revoked, surrendered, or expired, the 398 7-1-683.1 FINANCIAL INSTITUTIONS 7-1-683.2 licensee shall, within five business days, provide documentation to the department demonstrating that the licensee has notified all applicable authorized agents whose names are on record with the department of the suspension, revocation, surrender, or expiration of the license. Upon suspension, revocation, surrender, or expiration of a license, applicable authorized agents shall immediately cease to provide money transmission in this state as an authorized agent of the licensee. History. Code 1981, § 7-1-683.1, enacted by Ga. L. 2014, p. 251, § 1/HB 982; Ga. L. 2015, p. 5, § 7/HB 90; Ga. L. 2023, p. 651, § 22/HB 55, effective July 1, 2023. Amendments. The 2023 amendment, effective July 1, 2023, deleted “sell payment instru- ments or” following “licensee shall” in the last sentence of subsection (a) and added subsection (d). 7-1-683.2. Minimum tangible net worth; bonding; permissible investments. (a)(1) Each applicant and licensee shall maintain, as a continuing requirement of licensure, a minimum tangible net worth, which shall be the greater of $100,000.00 or the amount calculated pursuant to the following formula: (A) Three percent of total assets for the first $100 million; (B) Two percent of additional assets over $100 million up to $1 billion; and (C) Half a percent of additional assets over $1 billion. (2) The department may, pursuant to rules and regulations, establish a process for an applicant or licensee to obtain a waiver in whole or in part of the minimum tangible net worth requirement for good cause shown. (b)(1) An applicant shall provide with its application a corporate surety bond issued by a bonding company or insurance company authorized to do business in this state and approved by the department. The bond for money transmitters shall be in the principal sum of $250,000.00. (2) Notwithstanding paragraph (1) of this subsection, the department may require an applicant or a licensee to provide additional coverage for the adequate protection of payment instrument holders if the average daily money transmission liability of a licensee exceeds the current bond amount or the department determines that additional coverage is necessary in order to satisfy the department that the provisions of subsection (b) of Code Section 7-1-684 are fulfilled. A licensee’s level of average daily money transmission liability shall 399 7-1-683.2 BANKING AND FINANCE 7-1-683.2 be determined by the portion of the licensee’s financial reports dealing with transactions originating in Georgia which shall be submitted to the department as set forth in its rules and regulations. However, under no circumstances shall the additional bond coverage required by the department exceed $2 million. (3) The bond shall be in a form satisfactory to the department and shall run to the State of Georgia for the benefit of the department or any payment instrument holders against the licensee or its agents. The condition of the bond shall require the licensee to pay any and all moneys for the benefit of any person damaged by noncompliance of a licensee or its agent with this article, with the rules and regulations enacted pursuant to this article, or with any condition of the bond or to pay any and all moneys that may become due and owing any creditor of or claimant against the licensee arising out of the licensee’s money transmission in this state, whether through its own acts or the acts of an agent. Damage payments due under the bond include moneys owed to the department for fees, fines, or penalties. In no event shall the aggregate liability of the surety exceed the principal sum of the face amount of the bond. Claimants against the licensee may bring an action directly on the surety bond. (c)(1) Each applicant and licensee shall maintain at all times permissible investments that have a market value computed in accordance with generally accepted accounting principles applicable in the United States of not less than the aggregate amount of all of its outstanding money transmission obligations. (2) The types of investments that are permissible shall be established by the rules and regulations of the department. The department may limit the extent to which a specific investment maintained by a licensee within a class of permissible investments may be considered a permissible investment. (3) Permissible investments, even if commingled with other assets of the licensee, shall be held in trust for the benefit of the purchasers and holders of the licensee’s outstanding money transmission obligations in the event of insolvency, the filing of a petition by or against the licensee under the United States Bankruptcy Code, the filing of a petition by or against the licensee for receivership, the commencement of any other judicial or administrative proceeding for its dissolution or reorganization, or in the event of an action by a creditor against the licensee who is not a beneficiary of this statutory trust. No permissible investment impressed with a trust pursuant to this paragraph shall be subject to attachment, levy of execution, or sequestration by order of any court, except for a beneficiary of this statutory trust. (4) Permissible investments held in trust pursuant to paragraph 400 7-1-683.2 FINANCIAL INSTITUTIONS 7-1-683.3 (3) of this subsection for the benefit of the purchasers and holders of the licensee’s outstanding money transmission obligations are deemed held in trust for the benefit of such persons on a pro rata and equitable basis in accordance with statutes pursuant to which permissible investments are required to be held in this state, and other states, as applicable. Any statutory trust established pursuant to this Code section shall be terminated upon extinguishment of all of the licensee’s outstanding money transmission obligations. History. Code 1981, § 7-1-683.2, enacted by Ga. L. 2014, p. 251, § 1/HB 982; Ga. L. 2023, p. 651, § 23/HB 55, effective July 1, 2023. Amendments. The 2023 amendment, effective July 1, 2023, rewrote this Code section.