13-09.1-01. Definitions

13-09.1-01. Definitions For purposes of this chapter, the following definitions shall apply: 1. "Acting in concert" means persons knowingly acting together with a common goal of jointly acquiring control of a licensee whether or not pursuant to an express agreement. 2. "Anti-Money Laundering Act of 2020" is the federal act which amended subchapter II of chapter 53 of title 31 United States Code, the legislative framework commonly referred to as the bank secrecy act or BSA. Anti-money laundering and countering the financing of terrorism has the same meaning as the previously used terminology. 3. "Authorized delegate" means a person a licensee designates to engage in money transmission on behalf of the licensee. 4. "Average daily money transmission liability" means the amount of the licensee's outstanding money transmission obligations in North Dakota at the end of each day in quarters ending March thirty-first, June thirtieth, September thirtieth, and December thirty-first, added together and divided by the total number of days in each quarter. 5. "Closed loop stored value" means stored value that is redeemable by the issuer only for goods or services provided by the issuer or its affiliate or franchisees of the issuer or its affiliate, except to the extent required by applicable law to be redeemable in cash for its cash value. 6. "Commissioner" means the commissioner of the department of financial institutions. 7. "Control" means: a. (1) The power to vote, directly or indirectly, at least twenty-five percent of the outstanding voting shares or voting interests of a licensee or person in control of a licensee; (2) The power to elect or appoint a majority of key individuals or executive officers, managers, directors, trustees, or other persons exercising managerial authority of a person in control of a licensee; or (3) The power to exercise, directly or indirectly, a controlling influence over the management or policies of a licensee or person in control of a licensee. b. Rebuttable presumption of control. (1) A person is presumed to exercise a controlling influence when the person holds the power to vote, directly or indirectly, at least ten percent of the outstanding voting shares or voting interests of a licensee or person in control of a licensee. (2) A person presumed to exercise a controlling influence as defined by subsection 6 can rebut the presumption of control if the person is a passive investor. c. For purposes of determining the percentage of a person controlled by any other person, the person's interest must be aggregated with the interest of any other immediate family member, including the person's spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and any other person who shares the person's home. 8. "Eligible rating" means a credit rating of any of the three highest rating categories provided by an eligible rating service, whereby each category may include rating category modifiers, such as "plus" or "minus" for S&P Global, or the equivalent for any other eligible rating service. Long-term credit ratings are deemed eligible if the rating is equal to A- or higher by S&P Global, or the equivalent from any other eligible rating service. Short-term credit ratings are deemed eligible if the rating is equal to or higher than A-2 or SP-2 by S&P Global, or the equivalent from any other eligible rating service. In the event that ratings differ among eligible rating services, the highest rating applies when determining whether a security bears an eligible rating. 9. "Eligible rating service" means any nationally recognized statistical rating organization as defined by the United States securities and exchange commission, and any other organization designated by the commissioner by rule or order. 10. "Federally insured depository financial institution" means a bank, credit union, savings and loan association, trust company, savings association, savings bank, industrial bank, or industrial loan company organized under the laws of the United States or any state of the United States, when such bank, credit union, savings and loan association, trust company, savings association, savings bank, industrial bank, or industrial loan company has federally insured deposits. 11. "In this state" means at a physical location within North Dakota for a transaction requested in person. For a transaction requested electronically or by phone, the provider of money transmission may determine if the person requesting the transaction is "in this state" by relying on other information provided by the person regarding the location of the individual's residential address or a business entity's principal place of business or other physical address location, and any records associated with the person that the provider of money transmission may have that indicate the location, including an address associated with an account. 12. "Individual" means a natural person. 13. "Key individual" means any individual ultimately responsible for establishing or directing policies and procedures of the licensee, such as an executive officer, manager, director, or trustee. 14. "Licensee" means a person licensed under this chapter. 15. "Material litigation" means litigation, that according to United States generally accepted accounting principles is significant to a person's financial health and would be required to be disclosed in the person's annual audited financial statements, report to shareholders, or similar records. 16. "Monetary value" means a medium of exchange, whether or not redeemable in money. 17. "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. 18. "Money service business accredited state" means a state agency that is accredited by the conference of state bank supervisors and money transmitter regulators association for money transmission licensing and supervision. 19. "Money transmission" means any of the following: a. Selling or issuing payment instruments to a person located in this state. b. Selling or issuing stored value to a person located in this state. c. Receiving money for transmission from a person located in this state. The term includes payroll processing services. The term does not include the provision solely of online or telecommunications services or network access. 20. "Multistate licensing process" means any agreement entered by and among state regulators relating to coordinated processing of applications for money transmission licenses, applications for the acquisition of control of a licensee, control determinations, or notice and information requirements for a change of key individuals. 21. "Nationwide system" means the nationwide multistate licensing system and registry developed by the conference of state bank supervisors and the American association of residential mortgage regulators and owned and operated by the state regulatory registry, LLC, or any successor or affiliated entity, for the licensing and registration of persons in financial services industries. 22. "Outstanding money transmission obligations" means: a. Any payment instrument or stored value issued or sold by the licensee to a person located in the United States or reported as sold by an authorized delegate of the licensee to a person that is located in the United States that has not yet been paid or refunded by or for the licensee, or escheated in accordance with applicable abandoned property laws; or b. Any money received for transmission by the licensee or an authorized delegate in the United States from a person located in the United States that has not been received by the payee or refunded to the sender, or escheated in accordance with applicable abandoned property laws. For purposes of this subsection, "in the United States" includes, to the extent applicable, a person in any state, territory, or possession of the United States; the District of Columbia; the Commonwealth of Puerto Rico; or a United States military installation that is located in a foreign country. 23. "Passive investor" means a person that: a. Does not have the power to elect a majority of key individuals or executive officers, managers, directors, trustees, or other persons exercising managerial authority of a person in control of a licensee; b. Is not employed by and does not have any managerial duties of the licensee or person in control of a licensee; c. Does not have the power to exercise, directly or indirectly, a controlling influence over the management or policies of a licensee or person in control of a licensee; and d. Either: (1) Attests to subdivisions a, b, and c, in a form and in a medium prescribed by the commissioner; or (2) Commits to the passivity characteristics of subdivisions a, b, and c, in a written document. 24. "Payment instrument" means a written or electronic check, draft, money order, traveler's check, or other written or electronic instrument for the transmission or payment of money or monetary value, whether or not negotiable. The term does not include stored value or any instrument that: a. Is redeemable by the issuer only for goods or services provided by the issuer or its affiliate or franchisees of the issuer or its affiliate, except to the extent required by applicable law to be redeemable in cash for its cash value; or b. Not sold to the public but issued and distributed as part of a loyalty, rewards, or promotional program. 25. "Payroll processing services" means receiving money for transmission pursuant to a contract with a person to deliver wages or salaries, make payment of payroll taxes to state and federal agencies, make payments relating to employee benefit plans, or make distributions of other authorized deductions from wages or salaries. The term "payroll processing services" does not include an employer performing payroll processing services on its own behalf or on behalf of its affiliate, or a professional employment organization subject to regulation under applicable state law. 26. "Person" means any individual, general partnership, limited partnership, limited liability company, corporation, trust, association, joint stock corporation, or other corporate entity identified by the commissioner. 27. "Receiving money for transmission" or "money received for transmission" means receiving money or monetary value in the United States for transmission within or outside the United States by electronic or other means. 28. "Stored value" means monetary value representing a claim against the issuer evidenced by an electronic or digital record, which is intended and accepted for use as a means of redemption for money or monetary value, or payment for goods or services. The term includes "prepaid access" as defined by title 31, Code of Federal Regulations, Section 1010.100. The term "stored value" does not include a payment instrument or closed loop stored value, or stored value not sold to the public but issued and distributed as part of a loyalty, rewards, or promotional program. 29. "Tangible net worth" means the aggregate assets of a licensee excluding all intangible assets, less liabilities, as determined in accordance with United States generally accepted accounting principles.