October 26, 2004
Re: [ ]
Dear [ ]
I am writing in response to your request for an opinion as to whether [ ] is required to obtain a license under New York's Banking Law to conduct the business of money transmission with New York residents as described below.
You have explained in correspondence and in telephone conversations that [ ] is a [ ] Corporation licensed by the state of [ ] to engage in the business of money order and money wire transfers. Currently, the business activities of [ ] are limited to the state of [ ]. In particular, [ ] provides money wire transfers to foreign countries through a network of agents in foreign countries. In addition, [ ] has its own brand of money orders that it markets through its agents in [ ].
Residents of several states including New York, California, Arizona and Texas have contacted [ ] office in [ ] seeking to send money to family and friends in Iraq. The out-of-state residents became aware of [ ] services through "word of mouth." [ ] proposes sending applications from its office in [ ], by fax or mail, to New York residents seeking to conduct money transmission transactions for beneficiaries in Iraq. Since [ ] has no physical presence in New York State, New York residents will be instructed to send, by mail, to [ ] in [ ] the completed application together with a check or money order made payable to [ ].
The amount of the checks or money orders will include the amount of money to be transferred plus the fee that [ ] charges for the money transfers. [ ] will deposit the funds received from the New York residents into an account in the name of [ ] located in [ ].
[ ] will then send instructions to [ ] a transfer company in Iraq with one main office and ten branch offices in that country, to pay the beneficiaries of the money transmission transactions located in Iraq. [ ] will make payment on the money transmission transactions to-the designated beneficiaries in accordance with [ ] payment instructions before [ ] receives any reimbursement due from [ ] for the transactions. In this regard, since [ ] also transfers funds to [ ] on behalf of senders in Iraq, [ ] will have to reconcile the accounts between the two companies on a weekly basis. If [ ] is required to make a payment to [ ], the payment will be sent to [ ] bank accounts in Jordan or the United Arab Emirates. [ ] and [ ]will have a verbal agreement with regard to the services that each provides to the other.
While you initially indicated that [ ] was also considering conducting the transfer of funds from New York to [ ] in some way over the Internet, you have informed me that, for the time being, [ ]is not considering this Internet option. Therefore, you are not seeking an opinion as to any Internet activity in this regard.
It is the opinion of the Banking Department that the above-described money transmission activity proposed by [ ] to be conducted with New York State residents for beneficiaries in Iraq does not require a money transmission license under New York's Banking Law. Since, as you have explained, [ ] will have no physical presence in New York State itself or through agents and it will not conduct any money transmission activity in New York State over which the Banking Department could establish jurisdiction, it has been determined that [ ] proposed transactions with New York residents do not constitute the business of money transmission in New York State as contemplated under Article XIII-B of New York's Banking Law.
I trust that this is responsive to your request. Should you have any questions, I can be reached at (212) 709-1650.
Christine R. Cardi
cc: Regina Stone, Deputy Superintendent of Banks