In the spirit of uniformity, MTRA members executed the cooperative interstate examination agreement below for the effective and efficient regulation of money transmitters.
Money Transmitter Regulators Cooperative Agreement
For the purposes of this Agreement:
1. “Enforcement action” means any action taken by the appropriate regulatory authority whether civil, criminal, or administrative, to enforce applicable laws or regulations pursuant to its jurisdiction.
2. “Licensing state” means any state where a money transmitter is licensed.
3. “Lead state supervisor” means the state supervisor that takes a lead responsibility for an assigned money transmitter to the extent contemplated by this agreement.
4. “Money transmitter” means those entities as defined by appropriate state law which sell or issue payment instruments or transmit funds by wire or other means.
5. “Multi-state money transmitter” means a money transmitter that engages in the business of a money transmitter in two or more licensing states.
6. “State supervisor” means the state regulator with jurisdiction over the licensing and regulation of money transmitters.
7. “Supervisory information” means all information and reports compiled or drafted in the ordinary course of supervising and examining a money transmitter.
Section 2.1. Goals.
The purpose of this agreement is to promote a nationwide framework for cooperation and coordination among state money transmitter regulators that have concurrent jurisdiction over a regulated entity in a manner that conserves regulatory resources and minimizes the regulatory burden on supervised entities, consistent with each state attaining its supervisory objectives.
Section 2.2. Responsibilities.
The state supervisors sharing regulatory responsibility for a multi-state money transmitter will request one state supervisor to be the lead state supervisor of each multi-state money transmitter that the state supervisors determine should be supervised pursuant to this Agreement. State supervisors selected as lead state supervisors should indicate as soon as practical whether each assignment is accepted.
The lead state supervisor will act as a primary point of contact to the extent contemplated by this Agreement. The parties recognize that each state supervisor has the responsibility to monitor money transmitters that operate in the state supervisor’s respective state and to ensure that those transmitters are operating in compliance with applicable state law within the state supervisor’s jurisdiction. The lead state supervisor assumes no responsibility for the regulation or activities of multi-state money transmitters outside of the lead state. The lead state supervisor’s role of coordinating regulatory efforts is meant to assist state supervisors in fulfilling their own regulatory responsibilities. Each licensing state recognizes that whatever assistance or information it may receive from this Agreement is meant to benefit the state system as a whole and that each state supervisor remains solely responsible for the decision to rely on such assistance or information and the consequences thereof in that licensing state. Accordingly, to the extent allowed by state law, each licensing state agrees not to institute any type of action, either informal or formal, against a lead state with regard to matters addressed under this Agreement. The parties will cooperate to ensure that their respective material interests, authorities and responsibilities are met.
Section 3.1. Request for Information.
A state supervisor may request from another state supervisor supervisory information regarding a money transmitter that operates or proposes to operate in both states. The request shall be made in writing by the requesting state supervisor or the supervisor’s designee.
A request should be specific as to the documents or information sought. The state supervisor shall limit its use of information obtained under this Agreement to purposes related to its supervisory authority.
Section 3.3. Confidentiality.
Supervisory information shared under this Agreement is confidential unless otherwise specified by the originating authority. To the fullest extent permitted by law, the parties will give the same confidential treatment to information obtained pursuant to this Agreement that is provided by the laws of the originating authority.
Supervisory information shared under this Agreement is the property of the originating authority. It shall not be further disclosed by the recipient without the written permission of the originating authority, which shall apply its state law in determining to authorize such further disclosure. When its regulatory usefulness has ended, supervisory information obtained under this Agreement should be returned or destroyed unless the originating authority directs otherwise, and as permitted by applicable state record retention requirements.
In the event of termination of this Agreement, the signatory state supervisors agree that confidential information received remains confidential and will continue to be protected under the terms of this Agreement.
Section 3.4. Legal Process
On receipt of any legal process or request pursuant to a state’s public information statute compelling record production, a state supervisor shall immediately notify the originating authority. The state supervisor shall use its best efforts in providing the originating authority an opportunity to challenge the release of the information. Lead state and licensing state supervisors shall cooperate in the preparation of any memoranda, request for protective order or pleadings deemed desirable by the originating authority to protect the confidentiality of supervisory information.
Section 4.1. Role of Lead State Supervisors.
To promote a single point of contact, the lead state supervisor shall be responsible for examining or coordinating the examination of all the money transmitters assigned to and accepted by the lead state. The lead state supervisor may, and is encouraged to, request the assistance of other licensing state examiners to assist in a joint examination of a multi-state money transmitter.
The lead state supervisor shall give notice to each relevant and known licensing state supervisor, who is a signatory of this Agreement, of the time and scope of an upcoming examination of a multi-state money transmitter. In determining when to request the assistance of the licensing state supervisors for such examinations, the lead state supervisor shall consider the efficiency of the examination and the interests of the regulatory system. The lead state is encouraged to include in joint examinations as broad a participation of licensing states examiners as is practical. However, any licensing state may perform its own examination concurrent with the lead state’s examination, or in the alternative, at any other time if the licensing state examination cannot be scheduled concurrently with the lead state’s examination.
The lead state supervisor shall designate the examiner-in-charge of such examination. The examiner-in-charge shall designate the responsibilities of each examiner. The examiners shall perform the responsibilities designated and promptly report the findings to the examiner-in-charge in the form requested, together with supporting work papers.
The lead state supervisor shall prepare the examination findings and advise the licensing state supervisors of the findings along with any appropriate recommendations.
Section 4.2. Role of Licensing State Supervisors.
The licensing state supervisors shall provide the lead state supervisor with guidance on the application of licensing state laws and regulations as necessary.
When requested by the lead state supervisor, the licensing state examiners may assist in joint examinations of multi-state money transmitters and participate in discussions with management. Licensing state supervisors may also perform examinations and/or engage in discussions with management concurrent with the lead state or at such other time as it desires if a concurrent examination and/or discussion cannot be scheduled.
The licensing state supervisors may keep copies of examination findings and supporting work papers they create while participating in the lead state supervisor’s examination. Before disclosing any supervisory information, the licensing state supervisors shall immediately notify the lead state supervisor of any legal process or other requests for supervisory information created while participating in the examinations.
To provide the lead state supervisor with the opportunity to challenge the release of such supervisory information, the parties shall proceed in accordance with Section 3.4 of this Agreement.
A licensing state supervisor shall advise the lead state supervisor whenever the licensing state supervisor has reasonable cause to believe an examination of a multi-state money transmitter is necessary. If the lead state supervisor cannot conduct or coordinate the examination in a reasonable time, the licensing state supervisor may conduct the examination. A licensing state supervisor who conducts an examination under this provision shall, to the extent practical, observe the provisions of this Agreement otherwise governing a lead state supervisor conducting an examination.
Section 4.3. Planning and Scheduling.
The lead state supervisor, in consultation with licensing state supervisors, shall schedule its regular examinations of assigned multi-state money transmitters. Each lead state supervisor shall furnish its schedule for examinations to each relevant licensing state supervisor together with the lead state supervisor’s anticipated request for licensing state supervisors’ assistance in conducting the examinations. To the extent permitted by state law, licensing states should inform the lead state of licensing state laws or issues that the lead state may wish to incorporate into the examination or whether such licensing state intends to perform its own examination .
Section 4.4. Efficient Use of State Resources.
If the lead state supervisor determines to involve the licensing state supervisor(s) in an examination, to facilitate efficiencies in the examination the supervisors may enter into separate agreements governing the sharing of resources and compensation for services rendered to the extent permitted by the laws of their respective jurisdictions.
Section 5.1. Lead State Notification and Action.
The lead state supervisor in consultation with licensing state supervisors shall use its best efforts to coordinate, to the degree the lead state deems appropriate, enforcement actions against a multi-state money transmitter. The lead state supervisor shall use its best efforts to notify all relevant licensing state supervisors of any enforcement action, formal or informal, taken against a multi-state money transmitter to the fullest extent permitted by law. If possible, notification by the lead state supervisor will be given in advance of the enforcement action. The lead state and licensing states are encouraged to coordinate enforcement actions to the extent permitted by applicable law and in consideration of the interests of the regulatory system.
Section 5.2. Actions by Licensing State.
Notwithstanding Section 5.1., the licensing state supervisor may, upon reasonable notice to the lead state supervisor, take any enforcement action against a multi-state money transmitter, permitted under licensing state law.
The parties recognize that neither lead nor licensing state supervisors may be empowered to waive provisions of their respective laws directly applicable to multi-state money transmitters. To the extent consistent with lead and licensing state laws, the parties agree to make efforts to apply their respective laws and regulations in a manner that will promote consistency throughout the state system in order to reduce regulatory burden while maintaining effective and efficient regulation and supervision.Return to Top
Section 7.1. Approval Authority.
The licensing state supervisor shall have approval authority over all applications in such licensing state for a money transmitter license or for such other money transmitter activities that may be granted.
Section 8.1. Representations and Warranties.
Consistent with state law, state supervisors may enter into this agreement and shall be deemed to be acting within the scope of the signatory state supervisor’s authority.
Section 8.2 Change in Power or Authority.
Any material change in the authority of any signatory state supervisor to perform this Agreement shall require notice of such change to the other signatory state supervisors.
Section 9.1 Execution.
The terms of this Agreement shall become effective when a state supervisor has executed the original or a counterpart signature page. Additional parties may sign after the initial execution of this document.
As soon as practicable after signing this Agreement, each state supervisor will advise the other signatories of the appropriate officials to contact for purposes of notices and exchanges of information covered by this Agreement and will update such information as appropriate.
Section 9.3. Other Agreements.
This Agreement is not intended to prevent the parties from entering into other agreements with individual parties, other supervisors, or individual money transmitters regarding the subject matter of this Agreement.
Any party to this Agreement may withdraw from the Agreement by giving written notice of withdrawal to all other parties. The withdrawal of any party shall end the participation of the respective signatory state supervisor 90 days after the date of withdrawal unless the remaining parties waive the 90 day notice period.Return to Top
Section 10.1. Waiver.
The waiver by any state supervisor of the performance of any provision of this Agreement shall not invalidate this Agreement, nor shall it be considered a waiver of any other provision.