SB 202 — An Act amending the act of September 2, 1965 (P.L.490, No.249), referred to as the Money Transmission Business Licensing Law, further providing for title of act and for definitions; providing for short title; and further providing for license required, for exemptions, for qualifications for a license, for fee, financial statement and security, for liability of licensees, for licensee requirements and for agents.

PRIOR PRINTER'S NO.

134 THEPRINTER'S GENERALNO. ASSEMBLY OF PENNSYLVANIA SENATE BILL Session of No.

202474 2025THE INTRODUCEDGENERAL BYASSEMBLY GEBHARD,OF STREET,PENNSYLVANIA PHILLIPS-HILL,SENATE DUSHBILL ANDSession CULVER, JANUARY 29, 2025 REFERRED TO BANKING AND INSURANCE, JANUARY 29, 2025 AN ACT Ameentitled "An act providing for the licensing and regulation of theNo. business of transmitting money or credit for a fee or other consideration by the issuance of money orders, by the sale of checks or by other methods;

202 2025 INTRODUCED BY GEBHARD, STREET, PHILLIPS-HILL, DUSH, CULVER, BAKER, LAUGHLIN, STEFANO AND PENNYCUICK, JANUARY 29, 2025 AS AMENDED ON THIRD CONSIDERATION, MARCH 25, 2025 AN ACT Ameentitled "An act providing for the licensing and regulation of the business of transmitting money or credit for a fee or other consideration by the issuance of money orders, by the sale of checks or by other methods;

The definitions of "agent" and "transmittal instrument" in section 1 of the act are amended and the section is amended by adding a definition DEFINITIONS to read:

<-- Section 1.

* * * "SELF-HOSTED WALLET" MEANS A DIGITAL MEDIUM OR WALLET IN <-- WHICH THE USER HAS DIRECT CONTROL OF THE CONTROLLABLE ELECTRONIC RECORDS AS OUTLINED UNDER 13 PA.C.S.

DIV.

12 (RELATING TO CONTROLLABLE ELECTRONIC RECORDS).

(ii) Is not money, unless the virtual currency was adopted 20250SB0202PN0474 - 2 - or authorized by a domestic or international government as a medium of exchange, whether denominated in cash.

(i) A transaction in which a merchant grants, as part of an affinity or rewards program, value that cannot be taken from or 20250SB0202PN0134 - 2 - exchanged with the merchant for money, bank credit or virtual currency.

(b) This act does not apply to money[money] transmissionTHE orFOLLOWING: virtual currency transmission between business entities in connection with commercial contracts, unless the contracts involve money transmission or virtual currency transmission for personal or household purposes involving individuals.

<-- (1) MONEY transmission or virtual currency transmission 20250SB0202PN0474 - 3 - between business entities in connection with commercial contracts, unless the contracts involve money transmission or virtual currency transmission for personal or household purposes involving individuals.

(2) THE USE OF A SELF-HOSTED WALLET, UNLESS THE INDIVIDUAL <-- WITH CONTROL OF THE CONTROLLABLE ELECTRONIC RECORDS AS OUTLINED UNDER 13 PA.C.S.

DIV.

12 (RELATING TO CONTROLLABLE ELECTRONIC RECORDS) IN THE SELF-HOSTED WALLET TRANSMITS VIRTUAL CURRENCY AS PART OF A THIRD-PARTY SERVICE ON BEHALF OF ANOTHER INDIVIDUAL IN EXCHANGE FOR A FEE OR OTHER CONSIDERATION ASSOCIATED WITH THE TRANSMISSION.

20250SB0202PN0134 - 3 - (1) Banks, bank and trust companies, credit unions, savings banks and [private banks] trust companies organized under the laws of this Commonwealth;

(1) have a tangible net worth of at least five hundred thousand dollars ($500,000) as determined by audited financials prepared in accordance with United States generally accepted 20250SB0202PN0474 - 4 - accounting principles;

* * * (5) does not possess the financial responsibility, character, reputation, integrity and general fitness to command confidence of the public to warrant the belief that the money transmission or virtual currency transmission business will be operated lawfully, honestly, fairly and within the legislative intent of this act and in accordance with the general laws of 20250SB0202PN0134 - 4 - this Commonwealth.

(3) a bond in the penal sum of one million dollars ($1,000,000) executed by a surety company authorized to transact business within the Commonwealth of Pennsylvania [or securities 20250SB0202PN0474 - 5 - as provided in the following subsection].

The condition of the bond shall be that the licensee will comply with and abide by the provisions of this act and the rules and regulations of the department lawfully promulgated under this act and that the licensee will pay to the Commonwealth, to the department or to any other person any moneys that may become due from the licensee to the Commonwealth or to the department or to 20250SB0202PN0134 - 5 - any other person under the provisions of this act or of any transmittal instrument issued by the licensee within this Commonwealth and who were residents of the Commonwealth of Pennsylvania at the time the cause of action arose.

(b.1) If the department, in its discretion, shall determine the bond [or deposit of securities] provided for in clause (3) of subsection (a) is not adequate, the department may, after an examination and a consent agreement or order, require an additional bond in an amount up to the average daily outstanding balance of money received for transmission in this Commonwealth during the thirty days preceding the department's requirement plus an additional ten percent of the amount of the average 20250SB0202PN0474 - 6 - daily outstanding balance subject to the same conditions and the same right of execution provided for in clause (3) of subsection (a).

(1) Operate in a safe and sound manner, ensuring that its practices and the practices of its agents, if applicable, do not 20250SB0202PN0134 - 6 - create the likelihood of material loss, insolvency or dissipation of assets, or otherwise materially prejudice the interest of individuals who use the licensee's services to transmit money or virtual currency.

Licensees who fail to file the required report by the date required by the 20250SB0202PN0474 - 7 - department may be subject to a penalty of one hundred dollars ($100) for each day after the due date until the report is filed.

* * * 20250SB0202PN0134 - 7 - (2) The agent is acting on behalf of the person employing the agent's service for the transmission of money or virtual currency.

20250SB0202PN0474 - 8 - * * * Section 5.

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