Money Transmitter - Frequently Asked Questions as of 12/17/14
- What has to be submitted to get a proposed receipt approved?
There are only three items that must be submitted:
A. The proposed receipt including the required "Right to Refund" clause.
B. Translator's Certificate
C. Officer's Certificate
- Does the Translator's Certificate have to be signed by a certified translator?
No. The Translator's Certificate only needs to be signed by a person who is fluent in English and in the other language on the receipt.
- Who may sign the Officer's Certificate?
Any company officer who is in a position to know that the receipt submitted is actually being used by the licensee and its agents may sign the Officer's Certificate. Depending on the corporate structure, the list of acceptable officers includes, but is not limited to, the president, the corporate secretary, the operations officer, the domestic manager of a foreign corporation, or any other senior officer who performs similar corporate functions.
- What are the required parts of a receipt?
California Financial Code section 2103 governs receipts. The receipt must include the following, as applicable. All receipt disclosures must be in a minimum of 8-point font, except for receipts provided via mobile phone or text message.
- Include the name of sender (customer).
- Include the name of beneficiary (recipient).
- The date of the transaction, which is the day the customer funds the money transmission.
- The name of the licensee.
- The amount to be transferred to the designated recipient, in the currency in which the money transmission is funded, using the term “Transfer Amount” or a substantially similar term.
- Any fees and taxes imposed on the money transmission by the licensee or its agent which are payable or have been paid by the sender, in the currency in which the money transmission is funded, using the terms “transfer fees” for fees and “transfer taxes” for taxes, or substantially similar terms.
- The total amount of the transaction, which is the sum of subparagraphs 5 and 6, in the currency in which the money transmission is funded, using the term “total” or a substantially similar term.
- The exchange rate, if any, used by the licensee or its agent for the money transmission, rounded consistently for each currency to no fewer than two decimal places and no more than four decimal places, using the term “exchange rate” or a substantially similar term. See also #6 below.
- For all transmissions, other than transmissions related to e-commerce transactions, the amount that will be received by the designated recipient, in the currency in which the funds will be received, using the term “total to recipient” or a substantially similar term. In situations where the disbursing party in the beneficiary's country charges a fee, and the transmitter requires that a specific disbursing party be used in the transmission, the transmitter shall disclose the amount of any additional fees to the
customer. However, if the customer directs the transmitter to use a specific disbursing party, the transmitter must list the total amount it will deliver to the disbursing party.
For transmissions related to e-commerce transactions, the amount that will be received by the designated recipient before any fees, taxes, or other amounts payable by the designated recipient are deducted, using the term “total to recipient” or a substantially similar term. These fees, taxes, or other amounts shall be disclosed to the designated recipient. The disclosure of fees, taxes, or other amounts payable by the designated recipient, which need not be disclosed to the sender, shall be disclosed as part of a separate written agreement between the licensee and the designated recipient.
- Right to refund statement EXACTLY as worded below with the transmitter's name and address filling in the appropriate spaces. Such statement is not required for e-commerce transactions where the customer sends a payment for goods or services. “E-commerce” means any transaction where the payment for goods or services is initiated via a mobile application or an Internet Web site.
RIGHT TO REFUND
You, the customer, are entitled to a refund of the money to be transmitted as the result of this agreement if ______________________(name of licensee) does not forward the money received from you within 10 days of the date of its receipt, or does not give instructions committing an equivalent amount of money to the person designated by you within 10 days of the date of the receipt of the funds from you unless otherwise instructed by you.
If your instructions as to when the moneys shall be forwarded or transmitted are not complied with and the money has not yet been forwarded or transmitted, you have a right to a refund of your money.
If you want a refund, you must mail or deliver your written request to ________________ (name of licensee) at _____________________(mailing address of licensee). If you do not receive your refund, you may be entitled to your money back plus a penalty of up to $1,000 and attorney's fees pursuant to section 2102 of the California Financial Code.
- What should be the order of the required parts?
The required parts do not need to be listed in a particular order. However, the receipt must be organized so that it is understandable.
- If a transmitter collects, sends, and delivers only U.S. dollars, does it need to include an "exchange rate" on the receipt?
A transmitter may omit an "exchange rate" on the receipt if it collects, sends, and delivers only dollars, subject to the following condition. The receipt must clearly indicate that funds are being collected, sent, and delivered only in dollars. This requirement can be satisfied by preprinting on the receipt "U.S. dollars" or "USD" after each of the following required parts: "Transfer Amount"; "Fees"; "Total "; and "Total to Recipient." Alternatively, an email or other written confirmation may be made to DBO that only U.S. dollars will be involved in the transactions, and that will suffice. See #8.
- Does the "Right to Refund" language need to be on the receipt?
No. The "Right to Refund" statement can be on the receipt or attached to it. The “Right to Refund” statement is not required for receipts for e-commerce transactions where the customer sends a payment for goods or services
- What kinds of changes in an existing approved receipt would necessitate the submission and approval of a new receipt?
Any proposed material change to a receipt must be submitted for Department approval. Examples of material changes include, but are not limited to, the following: changing any language of the required parts; decreasing the font size of any material portions of a receipt; modifying the "Terms and Conditions" of a receipt, if applicable; substantially changing the presentation order of the material elements of the receipt listed under 4, above; or changing other items, such as the licensee, agent and dba matters addressed in numbers 15 and 16, below.
Examples of changes that would not be material and would not require submission to the Department include: changing the background color of a receipt; changing a border; changing a telephone number, changing the name and address of an agent, or moving the agent's name from one area of the receipt to another..
- What is the penalty if a transmitter fails to obtain approval of a receipt it is using?
A transmitter is subject to a fine of fifty dollars ($50) for each unapproved receipt it issues.
- When is a receipt considered "approved"?
The Department will notify a transmitter by letter that its receipt is approved. The date of the approval letter is the date that a receipt is considered approved.
- What languages, beside English, are required to be on a receipt?
A receipt must be provided in English and in the language principally used by the licensee to advertise, solicit, or negotiate (whether orally or in writing). For transactions that do not occur in a branch office, the receipt shall be made in English and in the language principally used by that licensee or that agent to advertise, solicit, or negotiate money transmission, either orally or in writing. In addition to the translations required above, the licensee may include translations of additional languages on the receipt. However, the translation into the other languages must be directly from English. A copy of the receipt with all translations on or attached to it must be submitted to the Department of Business Oversight with an appropriate translator's certificate. The receipt must receive Department of Business Oversight's approval prior to usage.
- Why must receipts list the net exchange amount as well as the total amount presented by the customer? Aren't they the same thing?
The Transfer Amount and the Total amount presented by the customer are two different things. The Transfer Amount refers to the amount of money that is to be transmitted. The Total amount presented includes the Transfer Amount plus all fees, commissions, and other charges.
- Why must receipts list the Total to recipient as well as the Transfer Amount? Aren't they the same thing?
They are not the same thing. The Transfer Amount refers to the amount of money that is transmitted to the disbursing party in the foreign country. However, if the disbursing party charges a fee, then the Total to recipient would be less than the Transfer Amount. See# 4.9, above.
- Is it OK to send an automatic confirmation for online transactions to let the customer know that the order has been received and is in process and then send a standard receipt once the money is transmitted?
An approved electronic receipt must be issued to the customer by email as soon as he or she submits an order online. A generic, automatically generated confirmation email may not be used in lieu of an approved receipt even if an approved receipt is eventually emailed to the customer.
- Is the licensee's name required to be on every receipt, even those issued by an agent of the licensee?
Yes, the licensee's name must be on the face of each receipt issued by the licensee or its agents. In addition, the licensee's name must also be disclosed in the "right to refund" statement that must be physically attached to the receipt, if applicable.
- Does a licensee have to use its own name at each place of business or may it use a dba ("Doing Business As") or fictitious name?
A licensee may use a dba that is different from the licensee's name, but each dba must be registered with the Department of Business Oversight prior to conducting any business under that dba name. See Financial Code section 2041. Furthermore, each receipt issued must clearly identify the licensee on its face. See #15, above.
- Can a DBO money transmitter licensee use a single receipt to meet the disclosure requirements of the California Money Transmission Act and the Consumer Financial Protection Bureau’s Remittance Rule (Regulation E)?
Yes. DBO licensees can use a single receipt for money received for transmission so long as the receipt complies with all of the disclosure requirements set forth in:
- The California Money Transmission Act (Chapter 6, Division 1.2 of the California Financial Code); and
- Regulation E (12 C.F.R. § 1005.31), including but not limited to “grouping,” “proximity,” “prominence and size,” and “segregation” requirements set forth in 12 CFR § 1005.31(c); including the “date available” regarding when funds will be available in the foreign country; and a statement about the rights of the sender regarding the resolution of errors and cancellation. (12 CFR § 1005.31(b)(2)(ii),(iv).). Following is a link to 12 C.F.R. § 1005.31.
If a DBO licensee chooses to modify its existing receipt to include the Regulation E requirements, the licensee must submit its proposed revised receipt for DBO approval.
- The California Money Transmission Act (Chapter 6, Division 1.2 of the California Financial Code); and
- Is a DBO money transmitter licensee required to wait 30 minutes before transferring the funds in order to give the sender an opportunity to cancel pursuant to Regulation E, 12 C.F.R. § 1005.34?
No. A licensee may transmit the funds immediately. The sender can only cancel a transfer if the funds have not yet been picked up or deposited into the beneficiary’s account. Following is an excerpt from 12 C.F.R. § 1005.34: 12 C.F.R. § 1005.34 Procedures for cancellation and refund of remittance transfers.
Sender right of cancellation and refund. Except as provided in § 1005.36(c), a remittance transfer provider shall comply with the requirements of this section with respect to any oral or written request to cancel a remittance transfer from the sender that is received by the provider no later than 30 minutes after the sender makes payment in connection with the remittance transfer if:
- Therequest to cancel enables the provider to identify the sender's name and address or telephone number and the particular transfer to be cancelled; and
- The transferred funds have not been picked up by the designated recipient or deposited into an account of the designated recipient.
If you have any questions about Regulation E or its requirements, please contact the Consumer Financial Protection Bureau regulations staff at (202) 435-7700.
Go to Money Transmitter Division web page.
Remittance Disclosures and Regulation E