| Last Version Text |
<?xml version="1.0" ?>
<ns0:MeasureDoc xmlns:html="http://www.w3.org/1999/xhtml" xmlns:ns0="http://lc.ca.gov/legalservices/schemas/caml.1#" xmlns:ns3="http://www.w3.org/1999/xlink" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" version="1.0" xsi:schemaLocation="http://lc.ca.gov/legalservices/schemas/caml.1# xca.1.xsd">
<ns0:Description>
<ns0:Id>20250SB__050598AMD</ns0:Id>
<ns0:VersionNum>98</ns0:VersionNum>
<ns0:History>
<ns0:Action>
<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2025-02-19</ns0:ActionDate>
</ns0:Action>
<ns0:Action>
<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
<ns0:ActionDate>2025-03-24</ns0:ActionDate>
</ns0:Action>
</ns0:History>
<ns0:LegislativeInfo>
<ns0:SessionYear>2025</ns0:SessionYear>
<ns0:SessionNum>0</ns0:SessionNum>
<ns0:MeasureType>SB</ns0:MeasureType>
<ns0:MeasureNum>505</ns0:MeasureNum>
<ns0:MeasureState>AMD</ns0:MeasureState>
</ns0:LegislativeInfo>
<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Richardson</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Richardson</ns0:Name>
</ns0:Legislator>
</ns0:Authors>
<ns0:Title>An act to add Chapter 10 (commencing with Section 2180) to Division 1.2 of the Financial Code, relating to financial protection.</ns0:Title>
<ns0:RelatingClause>financial protection</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Money Transmission Act: stored value platforms: fraudulently induced transfers.</ns0:Subject>
</ns0:GeneralSubject>
<ns0:DigestText>
<html:p>The Money Transmission Act (MTA) prohibits a person from engaging in the business of money transmission in the state, or from advertising, soliciting, or holding itself out as providing money transmission in the state, unless the person is licensed by the Department of Financial Protection and Innovation under the act. The MTA defines “money transmission” to mean, among other things, selling or issuing stored value to a person located in the state and defines “stored value” to mean monetary value representing a claim against the issuer that is stored on an electronic or digital medium and evidenced by an electronic or digital record and that is intended and accepted for use as a means of redemption for money or monetary value or payment for goods or services. The MTA punishes noncompliance with, among
other things, a civil penalty, license revocation, and, for certain violations, as a felony, as prescribed.</html:p>
<html:p>This bill would require, under the act, an operator of a stored value platform to reimburse a customer for any loss directly caused by a fraudulently induced transfer, as prescribed, and would require an operator of a stored value platform to establish means by which a customer can submit a claim for reimbursement that allow for the customer to communicate a claim through, among other methods, digital communication via the mobile application through which a customer is able to initiate a transfer of stored value on the stored value platform. By expanding the scope of a crime, this bill would impose a state-mandated local program.</html:p>
<html:p>The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.</html:p>
<html:p>This bill would provide that no reimbursement is required by this act for a specified reason.</html:p>
</ns0:DigestText>
<ns0:DigestKey>
<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
<ns0:Appropriation>NO</ns0:Appropriation>
<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
<ns0:LocalProgram>YES</ns0:LocalProgram>
</ns0:DigestKey>
<ns0:MeasureIndicators>
<ns0:ImmediateEffect>NO</ns0:ImmediateEffect>
<ns0:ImmediateEffectFlags>
<ns0:Urgency>NO</ns0:Urgency>
<ns0:TaxLevy>NO</ns0:TaxLevy>
<ns0:Election>NO</ns0:Election>
<ns0:UsualCurrentExpenses>NO</ns0:UsualCurrentExpenses>
<ns0:BudgetBill>NO</ns0:BudgetBill>
<ns0:Prop25TrailerBill>NO</ns0:Prop25TrailerBill>
</ns0:ImmediateEffectFlags>
</ns0:MeasureIndicators>
</ns0:Description>
<ns0:Bill id="bill">
<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
<ns0:BillSection id="id_5091B3F8-A9B5-43FE-978A-6352F5C75B30">
<ns0:Num>SECTION 1.</ns0:Num>
<ns0:ActionLine action="IS_ADDED" ns3:href="urn:caml:codes:FIN:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'1.2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'10.'%5D)" ns3:label="fractionType: LAW_SPREAD||commencingWith: 2180" ns3:type="locator">
Chapter 10 (commencing with Section 2180) is added to Division 1.2 of the
<ns0:DocName>Financial Code</ns0:DocName>
, to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawHeading id="id_B03CEE35-08FA-4DBA-8D3B-E20590D18733" type="CHAPTER">
<ns0:Num>10.</ns0:Num>
<ns0:LawHeadingVersion id="id_14051086-33C6-4B1B-8018-D56985F24A09">
<ns0:LawHeadingText>Fraudulently Induced Transfers</ns0:LawHeadingText>
</ns0:LawHeadingVersion>
<ns0:LawSection id="id_94FED3F3-C408-4BEC-AE5C-5B35A6EADA7B">
<ns0:Num>2180.</ns0:Num>
<ns0:LawSectionVersion id="id_BF59D58A-A24A-454E-B810-76B3CBBE7117">
<ns0:Content>
<html:p>For purposes of this chapter:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
“Fraudulently induced transfer” means a transfer on a stored value platform that was initiated in response to a fraudulent or dishonest course of conduct intended to manipulate, deceive, or persuade a customer into sending stored value to an account outside of the customer’s control.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
“Stored value platform” means a method or service provided by an issuer of stored value that allows a customer of the issuer to send or transfer stored value to another customer of the issuer of stored value.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_1306BA98-198A-46A6-A03E-1B6A32170909">
<ns0:Num>2181.</ns0:Num>
<ns0:LawSectionVersion id="id_FA698E9A-A7C4-4C46-8C63-7D6D820786F0">
<ns0:Content>
<html:p>An operator of a stored value platform shall reimburse a customer for any loss directly caused by a fraudulently induced transfer.</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_FDC4B859-045B-4B01-87E5-F7EA17F19E04">
<ns0:Num>2182.</ns0:Num>
<ns0:LawSectionVersion id="id_150B3507-805B-48D6-85F7-C8D652E3B068">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
An operator of a stored value platform shall establish means by which a customer can submit a claim for reimbursement pursuant to Section 2181 that allow for the customer to communicate a claim through all of the following methods:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Physical mail.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Telephone via the number displayed pursuant to Section 2107.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Email.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Digital communication via the internet website through which a customer is able to initiate a transfer of stored value on the stored value platform.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Digital communication via the mobile application through which a customer is able to initiate a transfer of stored value on the stored value platform.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
An operator of a stored value platform shall clearly and conspicuously disclose on its internet website and mobile application directions explaining the methods of communicating the customer’s claim required by subdivision (a).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The disclosure required by paragraph (1) shall be accessible to a customer without requiring account access credentials.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_83B89062-D3C5-44D8-9AB2-665B74010218">
<ns0:Num>2183.</ns0:Num>
<ns0:LawSectionVersion id="id_48D29451-9D75-45ED-A4BE-037AF59F4C44">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
Upon receiving a claim for reimbursement pursuant to Section 2182, an operator of a stored value platform shall do all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Promptly conduct a reasonable investigation of the oral or written allegation of a fraudulently induced transaction.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Except as provided in Section 2184, complete its investigation with 10 business days.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Report the results of its investigation within three business days after completing its investigation.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Reimburse the loss within one business day after determining that a fraudulently induced
transaction has occurred.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
An operator of a stored value platform shall not require that a customer first provide a police report before initiating an investigation of the claim for reimbursement.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_9BE9256D-6EB1-4BCE-9503-C5E530AC28CA">
<ns0:Num>2184.</ns0:Num>
<ns0:LawSectionVersion id="id_D684B6B6-527B-49A6-B0F7-F299A14E9726">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
If an operator of a stored value platform needs additional information to complete the investigation required under Section 2183, the operator may take up to 45 days to complete its investigation if the operator does the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Provisionally credits the funds to the customer’s account within 10 business days.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Notifies the customer within two days after provisionally crediting the funds of the amount and date of the provisional credit and any additional information the operator requests from the customer.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Gives the customer full use of the provisionally credited funds during the
investigation.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
An operator of a stored value platform who takes up to 45 days to complete its investigation pursuant to this section shall comply with Section 2183.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_F31A46B1-B19D-4964-875C-2E95EB7FDD2F">
<ns0:Num>2185.</ns0:Num>
<ns0:LawSectionVersion id="id_EDCF323D-1C6D-453B-BF5E-5DDC7DCA03F4">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
On or before July 1, 2026, an operator of a stored value platform shall notify its customers of their rights pursuant to this chapter in a notice that is clear, conspicuous, and readily understandable.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
An operator of a stored value platform shall amend the terms and conditions of its contracts or user agreements to provide that the operator will reimburse a customer pursuant to this chapter.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
<ns0:LawSection id="id_D62711FA-08E2-4E17-A852-5F9CCFA6E5AB">
<ns0:Num>2186.</ns0:Num>
<ns0:LawSectionVersion id="id_BF281F03-9B28-4633-982A-A7F11E643C09">
<ns0:Content>
<html:p>In addition to the authorities provided to the commissioner and any remedies available to the commissioner pursuant to this division, the commissioner may order a person who violates this chapter to refund moneys or pay restitution, damages, or other monetary relief to a customer harmed by the violation.</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:LawHeading>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_65EE0B63-BEFF-4AFF-ABF1-DD069D51193F">
<ns0:Num>SEC. 2.</ns0:Num>
<ns0:Content>
<html:p>
No reimbursement is required by this act pursuant to Section 6 of Article XIII
<html:span class="ThinSpace"/>
B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII
<html:span class="ThinSpace"/>
B of the California Constitution.
</html:p>
</ns0:Content>
</ns0:BillSection>
</ns0:Bill>
</ns0:MeasureDoc>
|
| Last Version Text Digest |
The Money Transmission Act (MTA) prohibits a person from engaging in the business of money transmission in the state, or from advertising, soliciting, or holding itself out as providing money transmission in the state, unless the person is licensed by the Department of Financial Protection and Innovation under the act. The MTA defines “money transmission” to mean, among other things, selling or issuing stored value to a person located in the state and defines “stored value” to mean monetary value representing a claim against the issuer that is stored on an electronic or digital medium and evidenced by an electronic or digital record and that is intended and accepted for use as a means of redemption for money or monetary value or payment for goods or services. The MTA punishes noncompliance with, among other things, a civil penalty, license revocation, and, for certain violations, as a felony, as prescribed. |