N.Y. Comp. Codes R. & Regs. tit. 3 § 406.5

Current through Register Vol. 46, No. 18, May 1, 2024

Section 406.5 - Agency contracts

(a) All written contracts between licensees and agents and subagents entered into after the effective date of this Part shall provide the following:

(1) a description of the category or categories of money transmission activity the licensee is authorized to lawfully engage in under its license which it may do through an agent and subagent; and

(2) a prohibition in the licensee's agents and subagents acting on behalf of the consumer as a courier for the transmission of money which activity requires licensing as a money transmitter and a requirement that all money orders sold may not be retained by the agent and subagent but must be given to the purchasers of the instruments for their own delivery to the beneficiary; and

(3) an acknowledgment that the superintendent reserves the right to inspect, with or without prior notice to the licensee or agent and subagent(s), the books and records of agent and subagent(s) of the licensee and that the expenses incurred in making any such inspection shall be borne by the licensee; and

(4) that agents and subagents shall not sell any travelers check, money order or other money transmission instrument in this State unless the name of the licensee shall clearly appear on the face of the instrument and the licensee shall not condition its engagement as obligor under the payment instrument upon the remittance of the proceeds of sale from the agent and subagent; and

(5) that agents and subagents shall not sell any travelers check, money order or other money transmission instrument in this State, unless the agent and subagent has provided the superintendent with a written and irrevocable consent to examine, have access to, and retain copies of all of its books and records, wherever maintained, relating to these activities; and

(6) that agents and subagents in this State are under a duty to act only as authorized under the agency contract and that an agent and subagent who exceeds its authority is subject to cancellation of the agency contract and may result in further disciplinary action against the licensee by the superintendent.

(b) For each contract entered into prior to the effective date of this Part, a rider containing paragraphs (a)(1)-(6) of this section shall be sent by each licensee to each of its agents and subagents in New York within 45 days of the effective date of this Part.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 406.5