04-2
04-2
July 21, 2004
Re: Inapplicability of Transmitters Law –
________
Dear Ms. ________:
This responds to your firm’s letters of May 18, and July 8, 2004.
Your letters request our views on whether your client, ________ (“Company”), is subject to the licensing requirements of Chapter 14 (commencing with Section 1800), Division 1 of the California Financial Code (the “Transmitters Law”).
As discussed below, we do not view the Company’s operations as subject to the Transmitters Law because the activities do not involve the receipt by the Company of “transmission money” as defined in Section 1800.5(b) of the Transmitters Law.
In summary, you represent the activities of the Company “as offering wire transfer service to California residents… by word of mouth and [the Company] will not solicit business in California. …[the Company] will accept wire transfer money in Michigan through the mail but will not be physically present in California.”
Subdivision (a) of Section 1800.3 of the Transmitters Law provides that, “[n]o person shall engage in the business of receiving money for purposes of transmitting the same or its equivalent to foreign countries without first obtaining a license from the Commissioner.” The Company proposes to engage in a business in which it will receive money from California customers for the purpose of transmitting that money or its foreign currency equivalent to foreign countries. Thus, read literally and in isolation, Section 1800.3 could be construed to require the Company to obtain a license to provide its proposed services. However, the scope of Section 1800.3 is not clear on its face.
Where a statute is unclear, the courts have prescribed rules for ascertaining its meaning. “Our analysis starts from the fundamental premise that the objective of statutory interpretation is to ascertain and effectuate legislative intent. (Citations omitted.) In determining intent, we look first to the words themselves. When the language is clear and unambiguous, there is no need for construction. When the language is susceptible to more than one reasonable interpretation, however, we look to a variety of extrinsic aids, including the ostensible objects to be achieved, the evils to be remedied, the legislative history, public policy, contemporaneous administrative construction, and the statutory scheme of which the statute is a part. (Citations omitted.)” People v. Woodhead, 43 Cal.3d 1002, 1007-1008 (1987). “A statute must be construed in the construed in the context of the entire statutory scheme of which it is part, in order to achieve harmony among the parts.” People v. Woodhead, supra 43 Cal 3d at 1009.
Read as a whole, it appears that the Transmitters Law was not intended to apply to a person, such as the Company, who receives money outside of California for the purpose of transmitting it to foreign countries. The operative provisions of the Transmitters Law focus on “transmission money.” Financial Code Section 1800.5(b) defines “transmission money” as follows:
“(b) “Transmission money” means money received in this state by a licensee for transmission to a foreign country….” (Emphasis added.)
The regulatory scheme embodied in the Transmitters Law is predicated on the existence and protection of “transmission money.” For example, Sections 1811 and 1812 require a licensee to post security or a bond for the “timely and proper delivery of transmission money received by it.” (Emphasis added.) Section 1801.1 provides that administration of the Transmitters Law shall be funded by a pro rata assessment on licensees based on the “… proportion of the amount of transmission money received by the licensee bears to the total amount of transmission money received by all licensees….” (Emphasis added.) Sections 1803 and 1803.5 regulate a licensee’s appointment of agents to receive “transmission money” on the licensee’s behalf.
Inasmuch as most of the key provisions of the Transmitters Law are inapplicable to a company that does not receive “transmission money,” it is our view that the licensing provisions of the statute apply only to persons who receive money in California for the purpose of transmitting the same or its equivalent to foreign countries. Your letter indicates that the Company does not receive transmission money in California. Accordingly, in our view, it is not subject to the licensing or other requirements of the Transmitters Law.
If you have any questions regarding this matter, please feel free to contact me.
Very truly yours,
HOWARD GOULD
Commissioner of Financial Institutions
By
KENNETH SAYRE-PETERSON
Senior Counsel
KSP70:pjp
July 8, 2004
John Drews, General Counsel
Department of Financial Institutions
Special Licensees Division
111 Pine Street, Suite 1100
San Francisco, CA 94111
Re: ________ – Opinion and Guidance
Dear Mr. Drews:
I mailed you a letter on May 18, 2004 (“May Letter”) requesting an opinion as to whether the state of California will require ________ (“_______”) to have a California Transmitter of Money Abroad license. To summarize the May Letter, _______ will offer wire transfer service to California residents. _______ will obtain customers by word-of-mouth and will not solicit business in California. ________ will accept wire transfer money in Michigan through the mail but will not be physically present in California.
I have not received a reply to the May Letter from your office. Unless an individual from your office contacts Bonnie L. Beutler at (248) 538-2200 by July 26, 2004, 1 will assume that ________ is authorized to conduct its business as described in the May Letter without a California Transmitter of Money Abroad license. Please contact Bonnie L. Beutler at (248) 538-2200 with questions or to respond to this letter.
Very truly yours,
May 18, 2004
John Drews, General Counsel
Department of Financial Institutions
Special Licensees Division
111 Pine Street, Suite 1100
San Francisco, CA 94111
Re: _________ Opinion and guidance
Dear Mr. Drews:
I represent ________, a Michigan corporation (“________”). ________ is licensed by the state of Michigan to engage in the business of money orders and money wire transfers. At this time, the business activities of ________ are limited to the state of Michigan. One growing service provided by ________ is money wire transfers to foreign countries due to ________’s development of a network of agents in foreign countries. ________ is and shall remain in full compliance with all federal laws including the Patriot Act requirements as applicable to foreign money transfer. ________ has been contacted by California residents requesting use of the services of ________ to send money to friends and families in foreign countries. ________ would like to provide money transfer services to these California residents who have contacted ________ without any solicitation. I request an opinion from your office as to whether the state of California will require ________ to have a California Transmitter of Money Abroad license.
California residents will be given the opportunity to employ ________ to send money to recipients in foreign countries. ________ will take orders for wire transfers over the telephone or through the U.S. Mail from California residents. California residents will be requested to mail orders with payment through the U.S. Mail to ________ in Michigan. ________ will wire transfer funds from Michigan to the designated foreign country and California residents will pay a service charge. ________ will NOT solicit business in California. ________ may, in the future, accept the transfer from California residents to Michigan over the Internet. Please advise on: (1) whether the state of California will require ________ to hold a California Transmitter of Money Abroad license and (2) whether the transfer of funds from California to Michigan over the Internet changes your opinion.
My review of California’s online Legal Precedent System legal opinion letters indicates that entities with similar business activities have not been required to hold a California Transmitter of Money Abroad license. Letter number 99-13, which was dated August 19, 1999, dealt with Inter-Continental Payment Solutions (“Letter”). The Letter stated that California did not require Inter-Continental Payment Solutions to have a California Transmitter of Money Abroad license. The Letter stated that the Transmitters Law only applies to persons who receive money in California for the purpose of transmitting the same or its equivalent to foreign countries. The Letter indicated that an entity that does not receive transmission money in California is not subject to the licensing of the Transmitters Law. This indicates that ________ may likewise conduct its business without a California Transmitter of Money Abroad license because it will receive all funds inside Michigan. Please let me know whether my interpretation of the Letter is correct.
Thank you for your assistance in this matter. Please contact Bonnie Beutler at (248) 538-2200 should you have any questions or to respond to this letter.
Very truly yours,