The Vermont Statutes Online

Title 8: Banking and Insurance

Chapter 079: Money Services

• Subchapter 001: General Provisions

• § 2500. Definitions

  As used in this chapter:

  (1) “Authorized delegate” means a person located in this State that a licensee designates to provide money services on behalf of the licensee.

  (2) “Check cashing” means receiving at least $500.00 compensation within a 30-day period for taking payment instruments or prepaid access, other than traveler’s checks, in exchange for money, payment instruments, or prepaid access delivered to the person delivering the payment instrument or prepaid access at the time and place of delivery without any agreement specifying when the person taking the payment instrument will present it for collection.

  (3) “Currency exchange” means receipt of revenues equal to or greater than five percent of total revenues from the exchange of money of one government for money of another government.

  (4) “Limited station” means private premises where a check casher is authorized to engage in check cashing for not more than two days of each week solely for the employees of the particular employer or group of employers specified in the check casher license application.

  (5) “Mobile location” means a vehicle or a movable facility where check cashing occurs.

  (6) “Monetary value” means a medium of exchange, whether or not redeemable in money.

  (7) “Money” means a medium of exchange that is authorized or adopted by the United States or a foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more governments.

  (8) “Money services” means money transmission, check cashing, or currency exchange.

  (9) “Money transmission” means to engage in the business of selling or issuing payment instruments, selling or issuing prepaid access, or receiving money or monetary value for transmission to a location within or outside the United States.

  (10) “Outstanding,” with respect to a payment instrument, means issued or sold by or for the licensee and which has been reported as sold but not yet paid by or for the licensee.

  (11) “Payment instrument” means a check, draft, money order, traveler’s check, or other instrument for the transmission or payment of money or monetary value, whether or not negotiable. The term does not include a credit card voucher, letter of credit, or instrument that is redeemable by the issuer in goods or services.

  (12) “Prepaid access” means funds or monetary value represented in digital electronic format, including virtual currency, whether or not specially encrypted, that are stored or capable of storage on electronic media and are retrievable and transferable electronically.

  (13) “Virtual currency” means a digital representation of value that:

  (A) can be a medium of exchange, a unit of account, or a store of value;

  (B) has an equivalent value in money or acts as a substitute for money;

  (C) may be centralized or decentralized; and

  (D) can be exchanged for money or other convertible virtual currency. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2009, No. 137 (Adj. Sess.), § 1b; 2011, No. 78 (Adj. Sess.), § 14, eff. April 2, 2012; 2017, No. 22, § 11, eff. May 4, 2017; 2019, No. 20, § 40.)

• § 2501. Exclusions

  (a) This chapter does not apply to:

  (1) the United States or a department, agency, or instrumentality thereof;

  (2) the sale or issuance of payment instruments or prepaid access, or money transmission, by the U.S. Postal Service or by a contractor on behalf of the U.S. Postal Service;

  (3) a state, county, city, or any other governmental agency or governmental subdivision within a state;

  (4) a financial institution as defined in subdivision 11101(32) of this title, a financial institution holding company as defined in subdivision 11101(33) of this title, a credit union, an office of an international banking corporation, a branch of a foreign bank, a corporation organized pursuant to the Bank Services Company Act, an independent trust company organized under chapter 77 of this title or an entity organized under the laws of another state that is regulated by its home state in an equivalent manner to an independent trust company, or a corporation organized under the Edge Act under the laws of a state or the United States if the person does not issue, sell, or provide payment instruments or prepaid access through an authorized delegate that is not such a person;

  (5) electronic funds transfer of governmental benefits for a federal, state, or governmental agency by a contractor on behalf of the United States or a department, agency, or instrumentality thereof, or a state or governmental subdivision, agency, or instrumentality thereof;

  (6) a board of trade designated as a contract market under the Commodity Exchange Act or a person that, in the ordinary course of business, provides clearance and settlement services for a board of trade to the extent of its operation as or for such a board of trade;

  (7) a registered futures commission merchant under the federal commodities laws to the extent of its operation as such a merchant;

  (8) a person that provides clearance or settlement services pursuant to a registration as a clearing agency or an exemption from such registration granted under the federal securities laws to the extent of its operation as such a provider;

  (9) a person:

  (A) operating a payment system that provides processing, clearing, or settlement services, between or among persons excluded by this section or licensees, in connection with wire transfers, credit card transactions, debit card transactions, prepaid access transactions, automated clearing house transfers, or similar funds transfers to the extent of its operation as such;

  (B) that is a contracted service provider of an entity in subsection (4) of this section that provides processing, clearing, or settlement services in connection with wire transfers, credit card transactions, debit card transactions, prepaid access transactions, automated clearinghouse transfers, or similar funds transfers; or

  (C) that facilitates payment for goods or services, not including money transmission itself, or bill payment through a clearance and settlement process using institutions regulated under the Bank Secrecy Act pursuant to a written contract with the payee and either payment to the person facilitating the payment processing satisfies the payor’s obligation to the payee or that obligation is otherwise extinguished;

  (10) a person registered as a securities broker-dealer under federal or state securities laws to the extent of its operation as such a broker-dealer;

  (11) the sale or issuance of prepaid access by a school to its students and employees;

  (12) a seller of goods or services that cashes payment instruments incidental to or independent of a sale and does not charge for cashing the payment instrument in excess of $1.00 per instrument; or

  (13) a debt adjuster licensed pursuant to chapter 133 of this title when engaged in the business of debt adjustment.

  (b) The Commissioner may issue an order exempting any person from this chapter when such person is performing services for the benefit of the United States or a department, agency, or instrumentality thereof, or for the benefit of any state, county, city, or any other governmental agency or governmental subdivision within a state. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2001, No. 143 (Adj. Sess.), § 59, eff. June 21, 2002; 2005, No. 36, § 1, eff. June 1, 2005; 2017, No. 22, § 12, eff. May 4, 2017; 2019, No. 20, § 41.)

• § 2502. License required

  (a) A person shall not engage in money transmission without:

  (1) obtaining a license under subchapter 2 of this chapter; or

  (2) being an authorized delegate of a person licensed under subchapter 2 of this chapter.

  (b) A person shall not engage in check cashing or currency exchange without:

  (1) obtaining a license under subchapter 3 of this chapter;

  (2) obtaining a license for money transmission under subchapter 2 of this chapter; or

  (3) being an authorized delegate of a person licensed under subchapter 2 of this chapter.

  (c) A person not licensed under this chapter or not an authorized delegate of a licensee is engaged in providing money services if the person advertises those services, solicits to provide those services, or holds itself out as providing those services.

  (d) A license is not transferable or assignable.

  (e) A licensee shall file with the Commissioner any name proposed to be used in connection with a money service business or location pursuant to this chapter. The Commissioner shall not approve a proposed name if the Commissioner determines that the name may be misleading or likely to confuse the public, or deceptively similar to any name in use in this State.

  (f) A licensee shall register each remote access unit, commonly referred to as a “kiosk,” where a consumer may access money transmission services, including buying or selling virtual currency. Each kiosk is subject to the disclosure requirements established in section 10302 of this title. If a kiosk is owned by a person other than the licensee and the owner charges an additional fee to the consumer for access to the licensee’s services, the owner is also subject to the disclosure requirements of chapter 200 of this title. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2021, No. 139 (Adj. Sess.), § 7, eff. May 27, 2022.)

• Subchapter 002: Money Transmission Licenses

• § 2505. License required

  A person licensed under this subchapter or that is an authorized delegate of a person licensed under this subchapter may engage in money transmission and may also engage in check cashing or currency exchange without obtaining a separate license under subchapter 3 of this chapter. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002.)

• § 2506. Application for license; additional information

  (a) In addition to the information required by section 2102 of this title, an application for a license under this subchapter shall state or contain:

  (1) a description of any money services previously provided by the applicant and the money services that the applicant seeks to provide in this State;

  (2) a list of the applicant’s proposed authorized delegates, and the locations in this State where the applicant and its authorized delegates propose to engage in money transmission or provide other money services;

  (3) a list of other states in which the applicant is licensed to engage in money transmission or provide other money services and information concerning any bankruptcy or receivership proceedings affecting the licensee;

  (4) a sample form of contract for authorized delegates, if applicable, and a sample form of payment instrument or instrument upon which prepaid access is recorded if applicable;

  (5) the name and address of any financial institution through which the applicant’s payment instruments and prepaid access obligations will be paid; and

  (6) a description of the source of money and credit to be used by the applicant to provide money services

  (b) The Commissioner may waive one or more requirements of this section or permit an applicant to submit substituted information in lieu of the required information. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2009, No. 134 (Adj. Sess.), § 20; 2011, No. 78 (Adj. Sess.), § 15, eff. April 2, 2012; 2019, No. 20, § 42.)

• § 2507. Security

  (a) Except as otherwise provided in subsection (b) of this section, the following rules apply:

  (1) A surety bond, letter of credit, or other similar security acceptable to the Commissioner of not less than $100,000.00 shall accompany an application for a license.

  (2) If an applicant proposes to provide money services at more than one location through authorized delegates or otherwise, the amount of the security shall be increased by $10,000.00 per location, not exceeding a total of $500,000.00.

  (b) The Commissioner may increase the amount of security required to a maximum of $2,000,000.00 based upon the financial condition of a licensee, as evidenced by reduction of net worth, financial losses, or other relevant criteria.

  (c) Security shall be in a form satisfactory to the Commissioner, and payable to the State for use of the State and for the benefit of any claimant against the licensee and its authorized delegates to secure the faithful performance of the obligations of the licensee and its authorized delegates with respect to money transmission.

  (d) The aggregate liability on a surety bond may not exceed the principal sum of the bond. A claimant against a licensee or its authorized delegate may maintain an action directly against the bond, or the Commissioner may maintain an action on behalf of the claimant against the bond. The power vested in the Commissioner by this subsection shall be in addition to any other powers of the Commissioner under this chapter.

  (e) A surety bond shall cover claims effective for as long as the Commissioner specifies, but for at least five years after the licensee ceases to provide money services in this State. However, the Commissioner may permit the amount of security to be reduced or eliminated before the expiration of that time to the extent the amount of the licensee’s payment instruments or prepaid access obligations outstanding in this State is reduced. The Commissioner may permit a licensee to substitute another form of security acceptable to the Commissioner for the security effective at the time the licensee ceases to provide money services in this State.

  (f) In lieu of the security prescribed in this section, an applicant for a license or a licensee may provide security in a form otherwise permitted by the Commissioner. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2019, No. 20, § 43.)

• § 2508. Repealed. 2019, No. 20, § 44.

• § 2509. Repealed. 2019, No. 20, § 45.

• § 2510. Net worth

  A licensee under this subchapter shall maintain a net worth of at least $100,000.00, determined in accordance with generally accepted accounting principles. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002.)

• § 2511. Activities of money transmitters; receipts and refunds

  (a) Every money transmitter licensee and its authorized delegates shall provide a receipt to the customer that clearly states the name, address, and telephone number of the licensee; the amount of money presented for transmission; and the total of any fees charged by the licensee.

  (1) If the rate of exchange for a money transmission to be paid in the currency of another country is fixed by the licensee for that transaction at the time the money transmission is initiated, then the receipt provided to the customer shall disclose the rate of exchange for that transaction, and the duration, if any, for the payment to be made at the fixed rate of exchange so specified.

  (2) If the rate of exchange for a money transmission to be paid in the currency of another country is not fixed at the time the money transmission is sent, the receipt provided to the customer shall disclose that the rate of exchange for the transaction will be set at the time the recipient of the money transmission picks up the funds in the foreign country.

  (3) As used in this section, “fees” does not include revenue that a licensee or its authorized delegate generates, in connection with a money transmission, in the conversion of the money of one government into the money of another government.

  (b) Every money transmitter licensee and its authorized delegates shall refund to the customer within 10 days of receipt of a written request for a refund all monies received for transmittal unless any of the following occurs:

  (1) Prior to receipt of the written request for a refund, the monies have been transmitted and delivered to the person designated by the customer.

  (2) Prior to receipt of a written request for a refund, instructions have been given committing an equivalent amount of money to the person designated by the customer.

  (3) The licensee or its authorized delegate has reason to believe that a crime has occurred, is occurring, or may potentially occur as a result of transmitting the money as requested by the customer or refunding the money as requested by the customer.

  (4) The licensee is otherwise barred by law from making a refund. (Added 2017, No. 22, § 13.)

• Subchapter 003: Check Cashing and Currency Exchange

• § 2515. Check cashing and currency exchange licenses required

  (a) A person licensed under this subchapter may engage in check cashing and currency exchange.

  (b) A person licensed under subchapter 2 of this chapter may engage in check cashing and currency exchange without first obtaining a separate license under this subchapter.

  (c) An authorized delegate of a person licensed under subchapter 2 of this chapter may engage in check cashing and currency exchange without first obtaining a license under this subchapter if such money services are within the scope of activity permissible under the contract between the authorized delegate and the licensee. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002.)

• § 2516. Application for license; additional information

  In addition to the information required by section 2102 of this title, an application for a license under this subchapter shall state or contain:

  (1) the complete addresses of locations in this State where the applicant proposes to engage in check cashing or currency exchange, including all limited stations and mobile locations; and

  (2) a description of the source of money and credit to be used by the applicant to engage in check cashing services and currency exchange. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2011, No. 78 (Adj. Sess.), § 16, eff. April 2, 2012; 2019, No. 20, § 46.)

• § 2517. Repealed. 2019, No. 20, § 47.

• § 2518. Repealed. 2019, No. 20, § 48.

• § 2519. Activities of check cashers and currency exchanges

  (a) Check cashing.

  (1) A licensee, in every location conducting business under a license issued pursuant to this chapter, shall conspicuously post and at all times display a notice stating all fees charged. A licensee shall file with the Commissioner a statement of the fees charged at every location licensed for services offered there.

  (2) Before a licensee shall deposit, with any financial institution, a payment instrument that is cashed by a licensee, each such item shall be endorsed with the actual name under which such licensee is doing business. Additionally, the words “Licensed Check Cashing Business” must be written legibly or stamped immediately after or below the name of the endorser.

  (3) A licensee shall comply with all applicable federal statutes governing currency transaction reporting.

  (4) A licensee may not alter or delete any information on any payment instrument cashed.

  (5) A licensee shall issue a receipt for each check cashing transaction upon request. The receipt shall include, among other matters the licensee may desire to include, the amount of the payment instrument and the total fee charged.

  (6) A licensee shall not impose any fee or other charge for bad checks other than as expressly permitted under the provisions of 9 V.S.A. §§ 2311 and 2312.

  (7) Within 10 business days after being advised by the payor financial institution that a payment instrument has been altered, forged, stolen, obtained through fraudulent or illegal means, negotiated without proper legal authority, or represents the proceeds of illegal activity, the licensee shall notify the police department in the city or town where the payment instrument was cashed. If a payment instrument is returned to the licensee by the payor financial institution for any of the aforementioned reasons, the licensee may not release or destroy the payment instrument without the consent of the city or town police department, or other investigative law enforcement authority.

  (8) No licensee shall issue coupons, gift certificates, or tokens to be used in lieu of money when cashing a payment instrument.

  (9) No licensee shall require the customer to receive payment by a method which causes the customer to pay additional or further fees and charges to the licensee or other person, and no licensee shall charge or receive any other charges or fees in addition to the fees listed in this chapter.

  (10) A licensee shall pay to every customer tendering a payment instrument to be cashed the entire face amount of such instrument in cash, less any charges permitted by this section, on the same date upon which such instrument is presented to the licensee.

  (11) A licensee is prohibited from requiring that a customer cash two or more separate checks in a manner to avoid the limitations on the fees as set forth in this section.

  (12) No check casher shall:

  (A) charge check cashing fees, except as otherwise provided in this chapter, in excess of five percent of the face amount of the payment instrument or $5.00, whichever is greater;

  (B) charge check cashing fees in excess of three percent of the face amount of the payment instrument, or $2.00, whichever is greater, if such payment instrument is the payment of any kind of state public assistance or federal Social Security benefit, if the customer cashing the payment instrument is the named payee of such payment instrument; or

  (C) charge check cashing fees for personal checks or money orders in excess of 10 percent of the face amount of the personal check or money order or $5.00, whichever is less.

  (13) No licensee shall agree to hold a payment instrument for later deposit. No licensee shall cash or advance any money on a postdated payment instrument.

  (14) Licensees may charge a customer with a one-time membership fee not to exceed $10.00.

  (b) Currency exchange:

  (1) The rate of exchange and fees charged by a licensee for rendering currency exchange services shall be prominently displayed to the public at each business location.

  (2) Licensees shall provide each customer with a written receipt sufficient to identify the transaction, the licensee, the rate of exchange, the fees charged and the amount of currency exchanged. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002.)

• Subchapter 004: Authorized Delegates

• § 2525. Relationship between licensee and authorized delegate

  (a) In this subchapter, “remit” means to make direct payments of money to a licensee or its representative authorized to receive the money, or to deposit money in a depository institution within the meaning of subdivision 11101(24) of this title, in an account specified by the licensee.

  (b) A contract between a licensee and an authorized delegate shall require the authorized delegate to operate in full compliance with this chapter. The licensee shall furnish in a record to each authorized delegate policies and procedures sufficient to permit compliance with this chapter.

  (c) An authorized delegate shall remit all money owing to the licensee in accordance with the terms of the contract between the licensee and the authorized delegate.

  (d) If a license is suspended, revoked, or nonrenewed, the Commissioner shall notify all authorized delegates of the licensee whose names are in a record filed with the Commissioner of the suspension, revocation, or nonrenewal. After notice is sent or publication is made, an authorized delegate shall immediately cease to provide money services as a delegate of the licensee.

  (e) An authorized delegate may not provide money services outside the scope of activity permissible under the contract between the authorized delegate and the licensee, except for activity in which the authorized delegate is otherwise licensed or authorized to engage.

  (f) An authorized delegate of a licensee holds in trust for the benefit of the licensee all money less fees earned from money transmission.

  (g) A person shall not provide money services on behalf of a person not licensed under this chapter. A person that engages in any money services activity under this chapter shall be subject to the provisions of this chapter to the same extent as if the person were a licensee under this chapter.

  (h) A person may not be an authorized delegate of another authorized delegate. An authorized delegate must enter into a contract directly with a licensee. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2009, No. 134 (Adj. Sess.), § 22.)

• Subchapter 005: Examinations; Reports; Records

• § 2530. Examinations

  The Commissioner shall examine the affairs, business, and records of each licensee under this chapter as often as the Commissioner deems necessary to carry out the purposes of this part. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2011, No. 78 (Adj. Sess.), § 17, eff. April 2, 2012; 2019, No. 20, § 49.)

• § 2531. Repealed. 2019, No. 20, § 50.

• § 2532. Repealed. 2019, No. 20, § 51.

• § 2532a. Change of authorized delegates; change of location

  A licensee shall notify the Commissioner in writing within 30 days of any change in the list of authorized delegates or locations in this State where the licensee or an authorized delegate of the licensee provides money services, including limited stations and mobile locations. Such notice shall state the name and street address of each authorized delegate or of each location removed or added to the licensee’s list. Upon any such change, the licensee shall provide sufficient evidence that it is in compliance with section 2507 of this title. The licensee shall submit with the notice a nonrefundable fee of $25.00 for each new authorized delegate location and for each change in location. There is no fee to remove authorized delegates or to remove locations. (Added 2009, No. 134 (Adj. Sess.), § 24.)

• § 2533. Repealed. 2019, No. 20, § 52.

• § 2534. Records

  In addition to the records required by section 2119 of this title, a licensee shall maintain records for determining the licensee’s compliance with this chapter. A licensee shall maintain its records for at least five years, which records shall include:

  (1) a record of each payment instrument or prepaid access obligation sold;

  (2) a general ledger posted at least monthly containing all asset, liability, capital, income, and expense accounts;

  (3) bank statements and bank reconciliation records;

  (4) records of outstanding payment instruments and prepaid access obligations;

  (5) records of each payment instrument and prepaid access obligation paid within the five-year period;

  (6) a list of the last known names and addresses of all of the licensee’s authorized delegates; and

  (7) any other records the Commissioner requires by rule. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2019, No. 20, § 53.)

• § 2535. Money laundering reports

  (a) A licensee and an authorized delegate shall file with the Commissioner copies of all reports required by federal currency reporting, record keeping, and suspicious transaction reporting requirements as set forth in 31 U.S.C. § 5311, 31 C.F.R. Part 103, and other federal and State laws pertaining to money laundering.

  (b) The timely filing of a complete and accurate report required under subsection (a) of this section with the appropriate federal agency is compliance with the requirements of subsection (a) of this section, unless the Commissioner notifies the licensee that reports of this type are not being regularly and comprehensively transmitted by the federal agency to the Commissioner. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002.)

• Subchapter 006: Permissible Investments

• § 2540. Maintenance of permissible investments

  (a) A licensee shall maintain at all times permissible investments that have a market value computed in accordance with generally accepted accounting principles of not less than the aggregate amount of all of its outstanding payment instruments and prepaid access obligations issued or sold and money transmitted by the licensee or its authorized delegates.

  (b) The Commissioner, with respect to any licensee, may limit the extent to which a type of investment within a class of permissible investments may be considered a permissible investment, except for money and certificates of deposit issued by a depository institution within the meaning of subdivision 11101(24) of this title. The Commissioner, by rule, may prescribe or by order allow other types of investments that the Commissioner determines to have a safety substantially equivalent to other permissible investments.

  (c) Permissible investments, even if commingled with other assets of the licensee, are held in trust for the benefit of the purchasers and holders of the licensee’s outstanding payment instruments and prepaid access obligations in the event of bankruptcy or receivership of the licensee. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2019, No. 20, § 54.)

• § 2541. Types of permissible investments

  (a) Except to the extent otherwise limited by the Commissioner pursuant to section 2540 of this title, the following investments are permissible under section 2540 of this title:

  (1) cash, a certificate of deposit, or a senior debt obligation of a depositary institution within the meaning of subdivision 11101(24) of this title;

  (2) a banker’s acceptance or bill of exchange that is eligible for purchase upon endorsement by a member bank of the Federal Reserve System and is eligible for purchase by a Federal Reserve Bank;

  (3) an investment bearing a rating of one of the three highest grades, as defined by a nationally recognized organization that rates securities;

  (4) an investment security that is an obligation of the United States or a department, agency, or instrumentality thereof; an investment in an obligation that is guaranteed fully as to principal and interest by the United States; or an investment in an obligation of a state or a governmental subdivision, agency, or instrumentality thereof;

  (5) receivables that are payable to a licensee from its authorized delegates, in the ordinary course of business, pursuant to contracts that are not past due or doubtful of collection, if the aggregate amount of investments in receivables under this subdivision does not exceed 20 percent of the total permissible investments of a licensee and the licensee does not have at one time investments in receivables under this subdivision in any one person aggregating more than 10 percent of the licensee’s total permissible investments;

  (6) a share or a certificate issued by an open-end management investment company that is registered with the U.S. Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.), and whose portfolio is restricted by the management company’s investment policy to investments specified in subdivisions (1) through (4) of this subsection; and

  (7) virtual currency owned by the licensee, but only to the extent of outstanding transmission obligations received by the licensee in identical denomination of virtual currency.

  (b) The following investments are permissible under section 2540 of this title, but only to the extent specified:

  (1) an interest-bearing bill, note, bond, or debenture of a person whose equity shares are traded on a national securities exchange or on a national over-the-counter market, if the aggregate of investments under this subdivision do not exceed 20 percent of the total permissible investments of a licensee and the licensee does not at one time have investments under this subdivision in any one person aggregating more than 10 percent of the licensee’s total permissible investments;

  (2) a share of a person traded on a national securities exchange or a national over-the-counter market or a share or a certificate issued by an open-end management investment company that is registered with the U.S. Securities and Exchange Commission under the Investment Company Act of 1940, and whose portfolio is restricted by the management company’s investment policy to shares of a person traded on a national securities exchange or a national over-the-counter market, if the aggregate of investments under this subdivision does not exceed 20 percent of the total permissible investments of a licensee and the licensee does not at one time have investments under this subdivision in any one person aggregating more than 10 percent of the licensee’s total permissible investments;

  (3) a demand-borrowing agreement made to a corporation or a subsidiary of a corporation whose securities are traded on a national securities exchange, if the aggregate of the amount of principal and interest outstanding under demand-borrowing agreements under this subdivision does not exceed 20 percent of the total permissible investments of a licensee and the licensee does not at one time have principal and interest outstanding under demand-borrowing agreements under this subdivision with any one person aggregating more than 10 percent of the licensee’s total permissible investments; and

  (4) any other investment the Commissioner determines to be permissible, to the extent specified by the Commissioner.

  (c) The aggregate of investments under subsection (b) of this section may not exceed 50 percent of the total permissible investments of a licensee calculated in accordance with section 2540 of this title. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2017, No. 22, § 16, eff. May 4, 2017.)

• Subchapter 007: Enforcement

• § 2545. Repealed. 2019, No. 20, § 55.

• § 2546. Termination or suspension of authorized delegate activity

  (a) Section 2110 of this title applies to authorized delegates.

  (b) The Commissioner may issue an order suspending or barring any authorized delegate or any responsible individual, director, officer, member, manager, partner, or person in control of such authorized delegate from continuing to be or becoming an authorized delegate of any licensee during the period for which such order is in effect, or may order that an authorized delegate cease and desist in any specified conduct.

  (c) Upon issuance of a suspension or bar order, the licensee shall terminate its relationship with such authorized delegate according to the terms of the order. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2019, No. 20, § 56.)

• § 2547. Repealed. 2019, No. 20, § 57.

• § 2548. Repealed. 2019, No. 20, § 58.

• § 2549. Repealed. 2019, No. 20, § 59.

• § 2550. Repealed. 2019, No. 20, § 60.

• § 2551. Repealed. 2019, No. 20, § 61.

• Subchapter 008: Conservation, Liquidation, and Insolvency

• § 2555. Conservation, liquidation, and insolvency

  To the extent applicable, the provisions of subchapters 2, 3, and 5 of chapter 209 of this title, excluding sections 19207, 19208, 19210, 19306, and 19307 of this title, shall apply to the conservation, liquidation, and insolvency of any licensee under this chapter. Such licensee shall be treated as a financial institution for the purposes of application of those subchapters. If an impaired or insolvent licensee is or becomes a debtor in bankruptcy or the subject of a bankruptcy proceeding under federal law, the Commissioner shall be relieved of any obligation otherwise imposed under this section and subchapters 2, 3, and 5 of chapter 209 of this title, and shall relinquish control of the assets and estate of such debtor to the duly appointed trustee in bankruptcy or the debtor in possession, as the case may be. (Added 2001, No. 55, § 1, eff. Jan. 1, 2002.)

• Subchapter 009: Nationwide Licensing System

• § 2560. Repealed. 2019, No. 20, § 61.

• § 2561. Repealed. 2019, No. 20, § 62.