§1037. Accompanying fee; statement and bonds

A. Each application for license to transmit money or sell checks shall be accompanied by:

(1) An investigation fee of eight hundred dollars plus an additional fee of twenty-five dollars for each location in the state from which the applicant intends to transmit money or sell checks, up to a maximum of six thousand dollars, which shall not be subject to refund but which, if the license is granted, shall constitute the license fee for the first license year or part thereof.

(2) Financial statements certified to as correct by an owner, principal, officer, or director of the applicant for the preceding three calendar or fiscal years and the year in which the application is submitted.

(3) A surety bond by a bonding company or insurance company authorized to do business in Louisiana in the minimum amount of twenty-five thousand dollars, or a higher amount deemed appropriate by the commissioner, based on the applicant's business plan, for the initial year of licensure.

B. The bond required by licensees whose license is being renewed shall be one-half of the checks outstanding, or one percent of annual volume of money transmitted rounded to the nearest thousand, as shown on the annual report of the licensee. However, in no event shall the bond be less than twenty-five thousand dollars or exceed five hundred thousand dollars, except the commissioner may require an additional amount over the five hundred thousand dollars, up to a total maximum amount of one million dollars, after a hearing, based on the licensee's financial condition. The bond for the second and subsequent years of licensing shall be furnished within thirty days from the date the annual report is due.

C. The bond shall be in a form satisfactory to the commissioner and shall run to the office of financial institutions, for the use and benefit of the office of financial institutions and creditors of the licensee or agent for any liability incurred on any money transferred or check issued by the licensee or agent. Persons who have claims against the licensee or his agents may bring suit directly on the bond. The attorney general may bring suit on the bond on behalf of claimants, either in one action or successive actions. The surety shall have the right to cancel the bond upon giving thirty days notice, in writing, to the commissioner. The surety on the bond shall be relieved of liability for any breach of conditions occurring after the cancellation.

D. In lieu of such corporate surety bond or of any portion required by this Section, the applicant may deposit with the commissioner, or in escrow with a federally insured Louisiana depository institution, either state or federally chartered, as such applicant may designate and the commissioner may approve, cash or securities of not less than the amount of the required corporate surety bond, or any portion of it, based upon the principal amount or market value, whichever is lower, consisting of one or more of the following exclusively enumerated unencumbered items:

(1) Cash.

(2) Certificates of deposit.

(3) Interest bearing stocks and bonds acceptable to the commissioner.

(4) Notes, debentures, or other obligations of the United States or any agency or instrumentality thereof, guaranteed by either the United States, the state of Louisiana, a city, parish, town, village, school district, or other political subdivision of this state which has been authorized by the constitution, statute, or ordinance to levy and collect taxes.

E. The cash or securities authorized by Subsection D shall be placed in escrow in a federally insured Louisiana depository institution, either state or federally chartered, as provided for in Subsection D, to secure the same obligations as would the corporate surety bond. The licensee shall be entitled to receive all interest and dividends on the cash or securities placed in escrow. In addition, the depositor shall have the right, subject to the approval of the commissioner, to substitute other securities of the kind or type enumerated in Subsection D for those previously deposited.

F. The depositor shall be required to substitute other or additional cash or securities of the kind or type enumerated in Subsection D when required to do so by written order of the commissioner for good cause shown.

G.(1) In addition to the bonding requirements of this Section, the licensee shall at all times own and have on hand permissible investments in an amount equal to the aggregate face amount of all outstanding checks sold in the United States or amount of money held over twenty-four hours prior to transmission, for which the licensee is liable for payment.

(2) In this Subsection, "permissible investments" means:

(a) Cash.

(b) Notes, debentures, or other obligations of the United States or an agency or instrumentality thereof, guaranteed by either the United States, any state, any city, parish, county, town, village, school district, or other political subdivision of any state, which has been authorized by the constitution, statute, or ordinance to levy and collect taxes.

(c) Any other investments approved by the commissioner.

(3) To prevent unsafe and unsound practices with respect to the required permissible investments, the commissioner may adopt and enforce reasonable rules to implement this Subsection.

Acts 1966, No. 476, §7. Amended by Acts 1972, No. 324, §1; Acts 1988, No. 792, §1; Acts 1989, No. 401, §§1 and 3, eff. June 30, 1989; Acts 1991, No. 812, §1, eff. July 22, 1991; Acts 1992, No. 65, §1, eff. June 4, 1992; Acts 2001, No. 586, §1, eff. June 22, 2001; Acts 2015, No. 319, §1.