V.S.A. tit. 8, ch. 79, subch. 4 — Authorized Delegates of Money Transmitters | Vermont Statutes Annotated (through the 2026 session) — Vermont

8 V.S.A. § 2525 Relationship between licensee and authorized delegate

2525. Relationship between licensee and authorized delegate (a) As used in this subchapter, “remit” means to make direct payments of money to a licensee or its representative authorized to receive the money, or to deposit the money in an entity identified as exempt under subdivision 2504(7) of this chapter, in an account specified by the licensee. (b) Before a licensee is authorized to conduct business through an authorized delegate or allows a person to act as the licensee’s authorized delegate, the licensee shall: (1) adopt, and update as necessary, written policies and procedures reasonably designed to ensure that the licensee’s authorized delegates comply with applicable state and federal law; (2) enter into a written contract that complies with subsection (d) of this section; and (3) conduct a reasonable risk-based background investigation sufficient for the licensee to determine whether the authorized delegate has complied and will likely comply with applicable state and federal law. (c) An authorized delegate must operate in full compliance with this chapter. (d) The written contract required by subsection (b) of this section must be signed by the licensee and the authorized delegate and, at a minimum, shall: (1) appoint the person signing the contract as the licensee’s authorized delegate with the authority to conduct money transmission on behalf of the licensee; (2) set forth the nature and scope of the relationship between the licensee and the authorized delegate and the respective rights and responsibilities of the parties; (3) require the authorized delegate to agree to fully comply with all applicable state and federal laws, rules, and regulations pertaining to money transmission, including this chapter and rules implementing this chapter, relevant provisions of the Bank Secrecy Act and the USA PATRIOT Act; (4) require the authorized delegate to remit and handle money and monetary value in accordance with the terms of the contract between the licensee and the authorized delegate; (5) impose a trust on money and monetary value net of fees received for money transmission for the benefit of the licensee; (6) require the authorized delegate to prepare and maintain records as required by this chapter or rules implementing this chapter, or as reasonably requested by the Commissioner; (7) acknowledge that the authorized delegate consents to examination or investigation by the Commissioner; (8) state that the licensee is subject to regulation by the Commissioner and that, as part of that regulation, the Commissioner may suspend or revoke an authorized delegate designation or require the licensee to terminate an authorized delegate designation; and (9) acknowledge receipt of the written policies and procedures required under subsection (b) of this section. (e) If the licensee’s license is suspended, revoked, terminated, nonrenewed, surrendered or expired, the licensee must, within five business days, provide documentation to the Commissioner that the licensee has notified all applicable authorized delegates of the licensee whose names are in a record filed with the Commissioner of the suspension, revocation, termination, nonrenewal, surrender, or expiration of a license. Upon suspension, revocation, termination, nonrenewal, or surrender of a license, applicable authorized delegates shall immediately cease to provide money transmission as an authorized delegate of the licensee. (f) An authorized delegate of a licensee holds in trust for the benefit of the licensee all money net of fees received from money transmission. If any authorized delegate commingles any funds received from money transmission with any other funds or property owned or controlled by the authorized delegate, all commingled funds and other property shall be considered held in trust in favor of the licensee in an amount equal to the amount of money net of fees received from money transmission. (g) An authorized delegate shall not use a subdelegate to conduct money transmission on behalf of a licensee. Added 2001, No. 55, § 1, eff. Jan. 1, 2002; amended 2009, No. 134 (Adj. Sess.), § 22; 2023, No. 110 (Adj. Sess.), § 42, eff. July 1, 2024.

8 V.S.A. § 2526 Unauthorized activities

2526. Unauthorized activities A person shall not engage in the business of money transmission on behalf of a person not licensed under subchapter 2 of this chapter or not exempt pursuant to subchapter 1 of this chapter. A person that engages in such activity provides money transmission to the same extent as if the person were a licensee and shall be jointly and severally liable with the unlicensed or nonexempt person. Added 2023, No. 110 (Adj. Sess.), § 42, eff. July 1, 2024.

8 V.S.A. § 2527 Termination or suspension of authorized delegate activity

2527. Termination or suspension of authorized delegate activity (a) The authority granted to the Commissioner over licensees in section 2110 of this title applies equally to authorized delegates. (b) The Commissioner may issue an order suspending or barring any authorized delegate or any key individual or person in control of such authorized delegate from continuing to be or becoming an authorized delegate of any licensee during the period for which such orders are in effect or may order that an authorized delegate cease and desist in any specified conduct. (c) Upon issuance of a suspension or bar order, the licensee shall terminate its relationship with such authorized delegate according to the terms of the order. Added 2023, No. 110 (Adj. Sess.), § 42, eff. July 1, 2024.

8 V.S.A. § 2528 Private actions against authorized delegates

2528. Private actions against authorized delegates (a) Distinct from the Commissioner’s authority over licensees and authorized delegates, any court in this State with jurisdiction over a private civil action brought by a licensee against an authorized delegate shall have the ability to grant appropriate equitable or legal relief, including prohibiting the authorized delegate from directly or indirectly acting as an authorized delegate for any licensee in this State and the payment of restitution, damages, or other monetary relief, if the court finds that an authorized delegate failed to remit money in accordance with the written contract required by subsection 2525(b) of this chapter or as otherwise directed by the licensee or required by law. (b) If the court issues an order prohibiting a person from acting as an authorized delegate for any licensee pursuant to subsection (a) of this section, the licensee that brought the action shall report the order to the Commissioner within 30 days and shall report the order through NMLS within 90 days. Added 2023, No. 110 (Adj. Sess.), § 42, eff. July 1, 2024.