9-509.   Money transmitter; license; application; networth requirement; deposit of security or bond; conditions; powers and dutiesof state bank commissioner.(a) No person shall engage in the business of selling, issuing ordelivering its payment instrument, check, draft, money order, personalmoney order, bill ofexchange, evidence of indebtedness or other instrument for thetransmission or payment of money or otherwise engage in the business ofmoney transmission with a resident of this state, or, except as provided inK.S.A. 9-510,and amendments thereto, act as agent for another in the transmission ofmoney as a service or for a fee or other consideration,unless such person obtains a license from the commissioner.

      (b)   An application for a license shall be submitted on forms prescribed bythe commissioner. The application shall be accompanied by an application fee asestablished by rules and regulations adopted by the commissioner. In addition,each person submitting an application shall meet the followingrequirements:

      (1)   The net worth of such person shall beat all times not less than $250,000,as shown by an audited financial statement and certifiedtoby an owner, a partner or officer of the corporation or other entity in aform prescribed by the commissioner and filed in thecommissioner's office. The commissioner may require any person to file astatement at any other time upon request;

      (2)   such person shall depositand at all times keep on deposit with the state treasurer,or a bank in this state approved bythe commissioner,cash or securities satisfactory to the commissioner in anamount not less than $200,000.The commissioner may increase the amount of cash or securities required up to amaximum of $500,000 upon the basis of the impaired financial condition of aperson, as evidenced by a reduction in net worth, financial losses or otherrelevant criteria as determined by the commissioner;

      (3)   in lieu of thedeposit of cash or securities required by paragraph (2), such person maygive a surety bond inan amount equal to thatrequired for the deposit of cash or securities, in a form satisfactory tothe commissioner and issued by a company authorized to dobusiness in this state, which bond shallbe payable to the office of the state bank commissioner and be filedwith the commissioner. The deposit of cash or securitiesor surety bond shall be for the protection and benefit of purchasers ofmoney transmission services, purchasers or holders of paymentinstruments furnished by such person or for the protection ofthose for whom such person has agreed to act as agent in the transmission ofmonetary value and to secure the faithful performance ofthe obligations of suchperson in respect to the receipt, handling, transmission and payment ofmonetary value. The aggregate liability of the surety forall breaches of theconditions of the bond shall, in no event, exceed the amount of such bond.The surety on the bond shall have the right to cancel such bond upon giving30 days' notice to the commissioner and thereafter shall berelieved of liability for any breach of condition occurring after theeffective date of the cancellation. The commissioner or anyaggrieved party may enforce claims against such deposit of cash orsecurities or surety bond. So long as the depositing person is not inviolation of this act, such person shall be permitted to receive allinterest and dividends on the deposit and shall have the right tosubstitute other securities satisfactory to the commissioner.Ifthe deposit is made with a bank, any custodial fees shall be paidby such person; and

      (4)   such person shall submit a list to the commissioner of the names andaddresses of other persons who are authorized to act as selling agents fortransactions with Kansas residents.

      (c)   The commissioner shall have theauthority to examine the books andrecords of any person operating in accordance with the provisions of thisact at such person's expense to verify compliance with state andfederal law.

      History:   L. 1967, ch. 73, § 2;L. 1986, ch. 55, § 1;L. 1992, ch. 62, § 1;L. 2006, ch. 113, § 6; July 1.