The Laws Of Money

[Peppin Kishore]

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Money laundering is the process of making illegally-gained proceeds (i.e. "dirty money") appear legal (i.e. "clean"). Typically, it involves three steps: placement, layering and integration. First, the illegitimate funds are furtively introduced into the legitimate financial system. Then, the money is moved around to create confusion, sometimes by wiring or transferring through numerous accounts. Finally, it is integrated into the financial system through additional transactions until the "dirty money" appears "clean." Money laundering can facilitate crimes such as drug trafficking and terrorism, and can adversely impact the global economy.

In its mission to "safeguard the financial system from the abuses of financial crime, including terrorist financing, money laundering and other illicit activity," the Financial Crimes Enforcement Network acts as the designated administrator of the Bank Secrecy Act (BSA). The BSA was established in 1970 and has become one of the most important tools in the fight against money laundering. Since then, numerous other laws have enhanced and amended the BSA to provide law enforcement and regulatory agencies with the most effective tools to combat money laundering. An index of anti-money laundering laws since 1970 with their respective requirements and goals are listed below in chronological order.

The Money Transmitter Division of DFPI licenses and regulates money transmitters, which includes issuers of payment instruments (money orders), travelers checks and stored value. The California money transmission laws are found in the California Financial Code, Division 1.2, commencing with section 2000.

The DFPI uses the Nationwide Multistate Licensing System and Registry (NMLS) to manage money transmitter licenses. Through NMLS, companies will have the option to apply for, or amend, its license conveniently and safely online.

Prospective applicants for a new money transmitter license or an acquisition of control should review and understand the laws and regulations that govern money transmission in California. Applicants should then arrange for a pre-filing meeting with the Money Transmitter Division staff. The prospective applicant should contact MT.Inq...@dfpi.ca.gov to arrange for a copy of pre-filing materials and make an appointment. Prospective applicants whose business relates to crypto assets should contact the DFPI Crypto Unit at cry...@dfpi.ca.gov.

Applications may be filed via the NMLS, instructions for which can be found on the New Application Checklist for new license applications and the Amendment Checklist for acquisition of control applications.

DFPI Portfolio Managers are available to confer with you to discuss questions in advance of conducting a pre-filing meeting or filing an application. However, no application will be decided in advance of filing. You may contact DFPI Portfolio Management via MT.Inq...@dfpi.ca.gov. If you are a prospective applicant whose business relates to crypto assets, please contact the DFPI Crypto Unit at cry...@dfpi.ca.gov.

Please note that other Georgia laws, as well as federal laws and regulations, may apply to the activities of money transmitters. Access to the entire Georgia Code is provided by LexisNexis from the Georgia General Assembly's website. Go to the Official Code of Georgia (O.C.G.A.). **Please note that the O.C.G.A. is provided by the State of Georgia from the Georgia General Assembly's website, so you will be leaving the Department's website if you click on the link to O.C.G.A. above.

Please note that other Georgia laws, as well as federal laws and regulations, may apply to the activities of check cashers. Access to the entire Georgia Code is provided by LexisNexis from the Georgia General Assembly's website. Go to the Official Code of Georgia (O.C.G.A.). **Please note that the O.C.G.A. is provided by the State of Georgia from the Georgia General Assembly's website, so you will be leaving the Department's website if you click on the link to O.C.G.A. above.

The above links will redirect you to the Georgia Secretary of State's website. The Rules and Regulations of the State of Georgia is a compilation of the rules and regulations of state agencies that have been filed with the Office of Secretary of State pursuant the Georgia Administrative Procedures Act, O.C.G.A. 50-13-1 et seq. Rules published on the Secretary of State's website also contain the Administrative History for Chapter 80, as well as the history of each Rule, which gives the date on which the Rule was originally filed and its effective date, as well as the date on which any amendment or repeal was filed and its effective date.

DFS allows Money Transmitters to use the Nationwide Multistate Licensing System and Registry (NMLS) to manage license applications and ongoing regulation. DFS also utilizes the NMLS Uniform Authorized Agent Reporting (UAAR) functionality to fulfill agent reporting requirements.

To access NMLS for the first time, you must complete a Company Account Request Form and identify a Primary Account Administrator and a Secondary Account Administrator. This form can be submitted online through the NMLS website in the Getting Started section. This form needs to be submitted only once per company, regardless of the number of NMLS participating states in which you are licensed.

Within three days of completing and submitting the Company Account Request Form, the Primary Account Administrator will receive NMLS login information. The Primary Account Administrator will have full rights to access the system, submit information to this agency and other participating state regulators, and set up other company users in the system. Instructions and tutorials on how to access and use the system are also available in the NMLS Resource Center.

Each company holding a DFS Money Transmitter License who wishes to manage their license on NMLS must create a company record in the system. To gain access to NMLS, the applicant must submit a form requesting an NMLS account.

To submit an application and ensure your application is received, acknowledged as complete, and processed, please follow the instructions on the DFS Money Transmitter Checklists. No application shall be deemed to be complete until the Department has received all required information, documents, and fees.

Note: If the applicant has already submitted Forms MU1 and MU2 through NMLS for another state, the applicant does not need to re-enter the company record into NMLS. However, the applicant is required to provide jurisdiction-specific information to support its New York State application.

These requirements are for changes in certain individuals of licensees whose licenses are not managed on NMLS. For those managed on NMLS, visit the NMLS section website for New York State and navigate to Company Licenses and Amendment under the pertinent industry type, and look under Change in Control on the Amendment Checklist.

For matters related to Budget Planners, Check Cashers, Licensed Lenders, Money Transmitters, Premium Finance Agencies, and Sales Finance Companies, submit the documents as directed by the DFS Portfolio Manager assigned to your institution.

*Background Investigation Reports are usually required only for individuals of licensed check cashers and money transmitters. However, Background Investigation Reports may also be required for other officers, directors, stockholders, owners, and control persons of any licensee as determined by the Superintendent in her sole discretion.

Financial Condition: This evaluation considers balance sheet composition including the level of permissible investments or assets to cover outstanding payment instruments; the level and quality of capital to absorb losses or to support growth; the quantity and quality of earnings including trends and stability; prospects and plans for growth, as well as past experience in managing growth; and access to other sources of capital including support provided by an affiliate or parent company.

The OCC prescribes regulations, conducts supervisory activities and, when necessary, takes enforcement actions to ensure that national banks have the necessary controls in place and provide the requisite notices to law enforcement to deter and detect money laundering, terrorist financing and other criminal acts and the misuse of our nation's financial institutions.

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