BILL ANALYSIS
AB 2789
Page 1
Date of Hearing: April 28, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2789 (Committee on Banking and Finance) - As Amended: April
12, 2010
Policy Committee: Banking and
Finance Vote: 11-1
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill enacts the Money Transmission Act, which consolidates
and modestly expands the regulation of money transmitters,
issuers of traveler checks, and sellers of payment instruments
(money orders). Specifically, the bill:
1)Largely retains current law fee structures and regulatory
provisions affecting these entities.
2)Expands Department of Financial Institutions (DFI) regulation
of money transmitters to include those that only transmit
money domestically. (Currently DFI regulates only those that
transmit money abroad).
3)Provides for DFI regulation of non-bank issuers of stored
value cards (gift cards).
4)Requires money transmitters to post information regarding how
the consumer can file a complaint.
FISCAL EFFECT
According to DFI, this bill will result in minor and absorbable
new costs. It indicates that all money transmitters in
California transmit money abroad and thus are already subject to
DFI regulations, and that the great majority of stored valued
cards are issued by banks, which are exempt from new
regulations.
COMMENTS
AB 2789
Page 2
1)Background . Existing law provides for the regulation and
licensure of persons or entities engaged in the issuance of
payment instruments (money orders), transmittal of money
abroad, and issuance of traveler's checks. These licensing
laws are regulated and administered by DFI.
2)Rationale . The bill is intended to improve the regulation and
licensure of non-bank money service providers. It is a
product of discussions between the regulated industry, DFI and
consumer groups.
A nalysis Prepared by : Brad Williams / APPR. / (916) 319-2081