Md. Code Regs. 09.03.14.03

Current through Register Vol. 51, No. 25, December 13, 2024

Section 09.03.14.03 - Persons Not Engaging in Money Transmission

A. In accordance with the Maryland Money Transmission Act, the following persons are not engaging in money transmission when engaging in the activities described:

(1) An operator of a payment system when providing processing, clearing, or settlement services, between or among persons exempted under the Maryland Money Transmission Act or licensees, in connection with wire transfers, credit card transactions, debit card transactions, stored-value transactions, automated clearing house transfers, or similar funds transfers.

(2) A person appointed as an agent of a payee when collecting and processing a payment from a payor to the payee for goods or services, other than money transmission itself, provided to the payor by the payee, if:

(a) There exists a written agreement between the payee and the agent directing the agent to collect and process payments from payors on the payee's behalf;

(b) The terms of the written agreement required by §A(2)(a) of this regulation are consistent with a principal's appointment of an agent under Maryland law;

(c) The payee holds the agent out to the public as accepting payments for goods or services on the payee's behalf;

(d) Payment for the goods and services is treated as received by the payee upon receipt by the agent so that the payor's obligation is extinguished and there is no risk of loss to the payor if the agent fails to remit the funds to the payee;

(e) The agent is not serving in an escrow capacity in connection with the transaction;

(f) The agent is not acting as agent to more than one party in the transaction; and

(g) Payment by the agent to the payee occurs promptly and is not conditioned on the occurrence of any future event or performance by any party to the transaction.

(3) A person that acts as an intermediary by processing payments between an entity that has directly incurred an outstanding money transmission obligation to a sender, and the sender's designated recipient, if that the entity:

(a) Is properly licensed or exempt from licensing requirements under the Maryland Money Transmission Act;

(b) Provides a receipt, electronic record, or other written confirmation to the sender identifying the entity as the provider of money transmission in the transaction; and

(c) Bears sole responsibility to satisfy the outstanding money transmission obligation to the sender, including the obligation to make the sender whole in connection with any failure to transmit the funds to the sender's designated recipient.

(4) A person expressly appointed as a third-party service provider to or agent of an entity exempt under the Maryland Money Transmission Act solely to the extent that:

(a) That service provider or agent is acting on behalf of and pursuant to a written agreement with the exempt entity sets forth the specific functions that the service provider or agent is to perform; and

(b) The exempt entity assumes all risk of loss and all legal responsibility for satisfying the outstanding money transmission obligations owed to purchasers and holders of the outstanding money transmission obligations upon receipt of the purchaser's or holder's money or monetary value by the service provider or agent.

B. The Commissioner may require that any person claiming to be either exempt from licensing pursuant to the Maryland Money Transmission Act or engaging in one or more activities not constituting money transmission pursuant to §A of this regulation provide information and documentation to the Commissioner demonstrating that it qualifies for any claimed exemption or is not engaged in activities constituting money transmission.

Md. Code Regs. 09.03.14.03

Regulation .03 adopted effective 50:24 Md. R. 1041, eff. 12/11/2023