New York State Banking Department
To: Examiner Rudolf L. Roxas
From: Alan M. Weinberg, Assistant Counsel
Date: December 5, 2006
Does Company require a license pursuant to Article XIII-B of the Banking Law to engage in money transmission activities based upon the facts presented?
Company does not require a license to engage in the proposed sales and marketing activities and funds transfer activities described in your memorandum of October 14, 2005 to Sara Kelsey. We base this conclusion on the fact that Company does not receive customer monies in New York State either directly or through any agent, but rather will conduct funds transfers from Canada. We urge you, however, to reconfirm in writing with Company that Company does not intend to open a New York office and that a sales executive in another state will market and promote its products and services to New York clients.
Company is a subsidiary of a Canadian corporation [---]
In addition to the information in your memorandum, Company has submitted extensive materials relating to its plans and products and services. These materials raise a number of questions. First, it is unclear to me why the Company indicates that it has a money transmitter license pending in New York when that is the subject of your inquiry.
Second, there is a question whether the Company has employees or offices in New York and there appears to be conflicting information on this point. Your memo states that the company does not have employees or offices in New York and a sales executive in another state (or Canada) will market and promote its products and services to New York clients. The first statement by the Company in its submission entitled "Response to New York" is that the company does not have employees or offices in New York, and the submission goes on to say that Company does not receive customer monies in New York State, but rather will conduct funds transfers from Canada. This information is contradicted by the information on page 15 of the "Marketing Plan-New York," which states that the Company will have a physical presence in New York; namely, three employees for telesales and sales visits.
Company conducts various money transmission activities in a variety of states and is licensed in a number of such states.
Section 641 of the Banking Law provides in relevant part that "no person shall engage in the business of ... receiving money for transmission or transmitting the same without a license...."
It appears that Company is not conducting the business of money transmission in New York State as that business is contemplated in Section 641 of Article 13-B of New York's Banking Law since Company indicates that it will not accept money for transmission in New York State either directly or through an agent. If the Company will accept money for transmission in New York State either directly or through an agent, please let us know as this would change our conclusion. If the Company will have various sales representatives in New York, but they will not accept money in New York State for transmission, please let us know so that we can reexamine our conclusion. The Department to my knowledge has never interpreted the above statutory language as requiring a license in New York where monies are not actually accepted in this State.
Accordingly, the proposed activities, except as indicated above, are not subject to licensing under Article 13-B of the Banking Law.