Bill Text: IL HB3479 | 2023-2024 | 103rd General Assembly | Engrossed

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Bill Title: Creates the Uniform Money Transmission Modernization Act. Provides that the provisions supersede the Transmitters of Money Act. Sets forth provisions concerning money transmission licenses; acquisition of control; reporting and records; authorized delegates; timely transmission, refunds, and disclosures; prudential standards; and enforcement. Creates the Digital Assets Regulation Act. Provides that the Department of Financial and Professional Regulation shall regulate digital asset business activity in the State. Sets forth provisions concerning customer protections; compliance; licensure; supervision; general restrictions and prohibitions; confidentiality; and rulemaking authority. Amends the Corporate Fiduciary Act to create the Special Purpose Trust Company Authority and Organization Article. Makes conforming changes in the Freedom of Information Act, the Illinois Banking Act, and the Consumer Fraud and Deceptive Business Practices Act. Provides that the Transmitters of Money Act is repealed on January 1, 2025. Makes other changes. Effective immediately, except that the changes to the Transmitters of Money Act take effect January 1, 2025.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Engrossed) 2023-05-02 - Referred to Assignments [HB3479 Detail]

Download: Illinois-2023-HB3479-Engrossed.html

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AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
ARTICLE I. Title & Purpose
Section 1-1. Short title; references. Articles 1 through
12 may be cited as the Uniform Money Transmission
Modernization Act. In Articles 1 through 12, references to
"this Act" mean Articles 1 through 12.
Section 1-2. Purpose.
(a) This Act is designed to replace existing state money
transmission laws currently codified under the Transmitters of
Money Act. It is the intent of the General Assembly that the
provisions of this Act accomplish the following:
(1) ensure states can coordinate in all areas of
regulation, licensing, and supervision to eliminate
unnecessary regulatory burden and more effectively utilize
regulator resources;
(2) protect the public from financial crime;
(3) standardize the types of activities that are
subject to licensing or otherwise exempt from licensing;
and
(4) modernize safety and soundness requirements to

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ensure customer funds are protected in an environment that
supports innovative and competitive business practices.
(b) The provisions of this Act shall be liberally
construed to effectuate its purposes.
ARTICLE II. Definitions
Section 2-1. Definitions. As used in this Act:
"Acting in concert" means persons knowingly acting
together with a common goal of jointly acquiring control of a
licensee whether or not pursuant to an express agreement.
"Authorized delegate" means a person a licensee designates
to engage in money transmission on behalf of the licensee.
"Average daily money transmission liability" means the
amount of the licensee's outstanding money transmission
obligations in this State at the end of each day in a given
period of time, added together, and divided by the total
number of days in the given period of time. For purposes of
calculating average daily money transmission liability under
this Act for any licensee required to do so, the given period
of time shall be the quarters ending March 31, June 30,
September 30, and December 31.
"Bank Secrecy Act" means the Bank Secrecy Act, 31 U.S.C.
5311, et seq. and its implementing rules and regulations, as
amended and recodified from time to time.
"Bill payment service" means the business of transmitting

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money on behalf of an Illinois person for the purposes of
paying the person's bills.
"Closed loop stored value" means stored value that is
redeemable by the issuer only for goods or services provided
by the issuer or its affiliate or franchisees of the issuer or
its affiliate, except to the extent required by applicable law
to be redeemable in cash for its cash value.
"Control" means:
(1)(A) the power to vote, directly or indirectly, at
least 25% of the outstanding voting shares or voting
interests of a licensee or person in control of a
licensee;
(B) the power to elect or appoint a majority of key
individuals or executive officers, managers,
directors, trustees, or other persons exercising
managerial authority of a person in control of a
licensee; or
(C) the power to exercise, directly or indirectly,
a controlling influence over the management or
policies of a licensee or person in control of a
licensee.
(2) Rebuttable Presumption of Control.
(A) A person is presumed to exercise a controlling
influence when the person holds the power to vote,
directly or indirectly, at least 10% of the
outstanding voting shares or voting interests of a

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licensee or person in control of a licensee.
(B) A person presumed to exercise a controlling
influence as defined by this Section can rebut the
presumption of control if the person is a passive
investor.
(3) For purposes of determining the percentage of a
person controlled by any other person, the person's
interest shall be aggregated with the interest of any
other immediate family member, including the person's
spouse, parents, children, siblings, mothers-in-law and
fathers-in-law, sons-in-law and daughters-in-law,
brothers-in-law and sisters-in-law, and any other person
who shares such person's home.
"Department" means the Department of Financial and
Professional Regulation.
"Division" means the Division of Financial Institutions of
the Department of Financial and Professional Regulation.
"Eligible rating" means a credit rating of any of the 3
highest rating categories provided by an eligible rating
service, whereby each category may include rating category
modifiers such as "plus" or "minus" for S&P, or the equivalent
for any other eligible rating service. For purposes of this
definition, long-term credit ratings are deemed eligible if
the rating is equal to "A-" or higher by S&P, or the equivalent
from any other eligible rating service; short-term credit
ratings are deemed eligible if the rating is equal to or higher

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than "A-2" or "SP-2" by S&P, or the equivalent from any other
eligible rating service; if ratings differ among eligible
rating services, the highest rating shall apply when
determining whether a security bears an eligible rating.
"Eligible rating service" means any nationally recognized
statistical rating organization as defined by the U.S.
Securities and Exchange Commission, and any other organization
designated by the Secretary by rule or order.
"Federally insured depository financial institution" means
a bank, credit union, savings and loan association, trust
company, savings association, savings bank, industrial bank,
or industrial loan company organized under the laws of the
United States or any state of the United States, if the bank,
credit union, savings and loan association, trust company,
savings association, savings bank, industrial bank, or
industrial loan company has federally insured deposits.
"In this State" means at a physical location within this
State for a transaction requested in person. For a transaction
requested electronically or by phone, the provider of money
transmission may determine if the person requesting the
transaction is in this State by relying on other information
provided by the person regarding the location of the
individual's residential address or a business entity's
principal place of business or other physical address
location, and any records associated with the person that the
provider of money transmission may have that indicate such

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location, including, but not limited to, an address associated
with an account.
"Individual" means a natural person.
"Key individual" means any individual ultimately
responsible for establishing or directing policies and
procedures of the licensee, such as an executive officer,
manager, director, or trustee.
"Licensee" means a person licensed under this Act.
"Material litigation" means litigation, that according to
United States generally accepted accounting principles, is
significant to a person's financial health and would be
required to be disclosed in the person's annual audited
financial statements, report to shareholders, or similar
records.
"Money" means a medium of exchange that is authorized or
adopted by the United States or a foreign government as part of
its currency and that is customarily used and accepted as a
medium of exchange in the country of issuance. "Money"
includes a monetary unit of account established by an
intergovernmental organization or by agreement between 2 or
more governments.
"Monetary value" means a medium of exchange, whether or
not redeemable in money unless excluded by rule by the
Secretary.
"Money transmission" means any of the following:
(1) Selling or issuing payment instruments to a person

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located in this State.
(2) Selling or issuing stored value to a person
located in this State.
(3) Receiving money for transmission from a person
located in this State or transmitting money in this State.
"Money transmission" includes bill payment services and
payroll processing services. "Money transmission" does not
include the provision solely of online or telecommunications
services or network access.
"MSB accredited state agency" means a state agency that is
accredited by the Conference of State Bank Supervisors and
Money Transmitter Regulators Association for money
transmission licensing and supervision.
"Multistate licensing process" means any agreement entered
into by and among state regulators relating to coordinated
processing of applications for money transmission licenses,
applications for the acquisition of control of a licensee,
control determinations, or notice and information requirements
for a change of key individuals.
"NMLS" means the Nationwide Multistate Licensing System
and Registry developed by the Conference of State Bank
Supervisors and the American Association of Residential
Mortgage Regulators and owned and operated by the State
Regulatory Registry, LLC, or any successor or affiliated
entity, for the licensing and registration of persons in
financial services industries.

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"Outstanding money transmission obligations" means any of
the following:
(1) Any payment instrument or stored value issued or
sold by the licensee to a person located in the United
States or reported as sold by an authorized delegate of
the licensee to a person that is located in the United
States that has not yet been paid or refunded by or for the
licensee or escheated in accordance with applicable
abandoned property laws; or
(2) Any money received for transmission by the
licensee or an authorized delegate in the United States
from a person located in the United States that has not
been received by the payee, refunded to the sender, or
escheated in accordance with applicable abandoned property
laws.
For purposes of this definition, "in the United States"
includes, to the extent applicable, a person in any state,
territory, or possession of the United States; the District of
Columbia; the Commonwealth of Puerto Rico; or a U.S. military
installation that is located in a foreign country.
"Passive investor" means a person that:
(1) does not have the power to elect a majority of key
individuals or executive officers, managers, directors,
trustees, or other persons exercising managerial authority
of a person in control of a licensee;
(2) is not employed by and does not have any

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managerial duties of the licensee or person in control of
a licensee;
(3) does not have the power to exercise, directly or
indirectly, a controlling influence over the management or
policies of a licensee or person in control of a licensee;
and
(4) either:
(A) attests to items (1), (2), and (3), in a form
and in a medium prescribed by the Secretary; or
(B)commits to the passivity characteristics of
items (1), (2), and (3), in a written document.
"Payment instrument" means a written or electronic check,
draft, money order, traveler's check, or other written or
electronic instrument for the transmission or payment of money
or monetary value, whether or not negotiable. "Payment
instrument" does not include stored value or any instrument
that (1) is redeemable by the issuer only for goods or services
provided by the issuer or its affiliate or franchisees of the
issuer or its affiliate, except to the extent required by
applicable law to be redeemable in cash for its cash value; or
(2) not sold to the public but issued and distributed as part
of a loyalty, rewards, or promotional program.
"Payroll processing services" means receiving money for
transmission pursuant to a contract with a person to deliver
wages or salaries, make payment of payroll taxes to State and
federal agencies, make payments relating to employee benefit

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plans, or make distributions of other authorized deductions
from wages or salaries. "Payroll processing services" does not
include an employer performing payroll processing services on
its own behalf or on behalf of its affiliate.
"Person" means any individual, general partnership,
limited partnership, limited liability company, corporation,
trust, association, joint stock corporation, or other
corporate entity identified by the Secretary.
"Receiving money for transmission" or "money received for
transmission" means receiving money or monetary value in the
United States for transmission within or outside the United
States by electronic or other means.
"Secretary" means the Secretary of Financial and
Professional Regulation, the acting Secretary, or a person
authorized by the Secretary.
"Stored value" means monetary value representing a claim
against the issuer evidenced by an electronic or digital
record, and that is intended and accepted for use as a means of
redemption for money or monetary value, or payment for goods
or services. "Stored value" includes, but is not limited to,
"prepaid access" as defined by 31 CFR Section 1010.100, as
amended or recodified from time to time. Notwithstanding the
foregoing, "stored value" does not include a payment
instrument or closed loop stored value, or stored value not
sold to the public but issued and distributed as part of a
loyalty, rewards, or promotional program.

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"Tangible net worth" means the aggregate assets of a
licensee excluding all intangible assets, less liabilities, as
determined in accordance with United States generally accepted
accounting principles.
ARTICLE III. Exemptions
Section 3-1. Exemptions. This Act does not apply to:
(1) An operator of a payment system to the extent that it
provides processing, clearing, or settlement services, between
or among persons exempted by this Section or licensees, in
connection with wire transfers, credit card transactions,
debit card transactions, stored value transactions, automated
clearinghouse transfers, or similar funds transfers.
(2) A person appointed as an agent of a payee to collect
and process 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 payee holds the agent out to the public as
accepting payments for goods or services on the payee's
behalf; and
(C) payment for the goods and services is treated as
received by the payee upon receipt by the agent so that the

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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.
(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 the entity:
(A) is properly licensed or exempt from licensing
requirements under this 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) The United States or a department, agency, or
instrumentality thereof, or its agent.
(5) Money transmission by the United States Postal Service
or by an agent of the United States Postal Service.
(6) A State, county, city, or any other governmental
agency or governmental subdivision or instrumentality of a
State, or its agent.
(7) A federally insured depository financial institution,

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bank holding company, office of an international banking
corporation, foreign bank that establishes a federal branch
pursuant to the International Bank Act, 12 U.S.C. 3102, as
amended or recodified from time to time, corporation organized
pursuant to the Bank Service Corporation Act, 12 U.S.C.
Sections 1861 through 1867, as amended or recodified from time
to time, or corporation organized under the Edge Act, 12
U.S.C. Sections 611 through 633, as amended or recodified from
time to time, under the laws of a state or the United States.
(8) Electronic funds transfer of governmental benefits for
a federal, State, county, or governmental agency by a
contractor on behalf of the United States or a department,
agency, or instrumentality thereof, or on behalf of a State or
governmental subdivision, agency, or instrumentality thereof.
(9) A board of trade designated as a contract market under
the federal Commodity Exchange Act, 7 U.S.C. Sections 1
through 25, as amended or recodified from time to time, or a
person that, in the ordinary course of business, provides
clearance and settlement services for a board of trade to the
extent of its operation as or for such a board.
(10) A registered futures commission merchant under the
federal commodities laws to the extent of its operation as
such a merchant.
(11) A person registered as a securities broker-dealer
under federal or State securities laws to the extent of its
operation as such a broker-dealer.

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(12) An individual employed by a licensee, authorized
delegate, or any person exempted from the licensing
requirements of the Act when acting within the scope of
employment and under the supervision of the licensee,
authorized delegate, or exempted person as an employee and not
as an independent contractor.
(13) A person expressly appointed as a third-party service
provider to or agent of an entity exempt under paragraph (7) or
(16), solely to the extent that:
(A) such service provider or agent is engaging in
money transmission on behalf of and pursuant to a written
agreement with the exempt entity that 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.
(14) Any other person, transaction, or class of persons or
transactions exempted by rule or any other person or
transaction exempted by the Secretary's order on a finding
that the licensing of the person is not necessary to achieve
the purposes of this Act.
(15) Currency exchanges licensed under the Currency

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Exchange Act to the extent of its operation as such a currency
exchange.
(16) An insured depository credit union organized under
the laws of the United States or any state of the United States
with deposits insured by an insurer approved by the credit
union's primary regulator.
(17) A person licensed as a digital asset business under
the Digital Asset Regulation Act to the extent of its
operation as such a digital asset business.
Section 3-2. Authority to require demonstration of
exemption. The Secretary may require that any person or entity
claiming to be exempt from licensing pursuant to Section 3-1
provide information and documentation to the Secretary
demonstrating that it qualifies for any claimed exemption. The
burden of proving the applicability of an exemption is upon
the person claiming the exclusion or exception.
ARTICLE IV. Implementation, Confidentiality, Supervision &
Relationship to Federal Law
Section 4-1. Implementation.
(a) In order to carry out the purposes of this Act, the
Secretary may, subject to the provisions of subsections (a)
and (b) of Section 4-2:
(1) enter into agreements or relationships with other

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government officials or federal and State regulatory
agencies and regulatory associations in order to improve
efficiencies and reduce regulatory burden by standardizing
methods or procedures, and sharing resources, records or
related information obtained under this Act;
(2) use, hire, contract, or employ analytical systems,
methods, or software to examine or investigate any person
subject to this Act.
(3) accept, from other state or federal government
agencies or officials, licensing, examination, or
investigation reports made by such other state or federal
government agencies or officials; and
(4) accept audit reports made by an independent
certified public accountant or other qualified third-party
auditor for an applicant or licensee and incorporate the
audit report in any report of examination or
investigation.
(b) The Department shall have the broad administrative
authority to administer, interpret and enforce this Act, and
adopt rules or regulations implementing this Act and to
recover the cost of administering and enforcing this Act by
imposing and collecting proportionate and equitable fees and
costs associated with applications, examinations,
investigations, and other actions required to achieve the
purpose of this Act. The Department's rulemaking authority
shall include, but not be limited to:

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(1) such rules and regulations in connection with the
activities of licensees as may be necessary and
appropriate for the protection of consumers in this State;
(2) such rules and regulations as may be necessary and
appropriate to define improper or fraudulent business
practices in connection with the activities of licensees;
(3) such rules and regulations as may define the terms
used in this Act and as may be necessary and appropriate to
interpret and implement the provisions of this Act;
(4) such rules and regulations as may be necessary for
the implementation or enforcement of this Act; and
(5) such rules and regulations establishing fees the
Secretary deems necessary to cover the cost of
administration of this Act.
Section 4-2. Confidentiality.
(a) Except as otherwise provided in this Section, all
information or reports obtained by the Secretary from an
applicant, licensee, or authorized delegate, and all
information contained in or related to an examination,
investigation, operating report, or condition report prepared
by, on behalf of, or for the use of the Secretary, or financial
statements, balance sheets, or authorized delegate
information, are confidential and are not subject to
disclosure under the Freedom of Information Act.
(b) The Secretary may disclose information not otherwise

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subject to disclosure under subsection (a) to representatives
of State or federal agencies who promise in a record that they
will maintain the confidentiality of the information or where
the Secretary finds that the release is reasonably necessary
for the protection and interest of the public.
(c) This Section does not prohibit the Secretary from
disclosing to the public a list of all licensees or the
aggregated financial or transactional data concerning those
licensees.
(d) Information contained in the records of the Department
that is not confidential and may be made available to the
public either on the Department's website, upon receipt by the
Department of a written request, or in NMLS shall include:
(1) the name, business address, telephone number, and
unique identifier of a licensee;
(2) the business address of a licensee's registered
agent for service;
(3) the name, business address, and telephone number
of all authorized delegates;
(4) the terms of or a copy of any bond filed by a
licensee, if confidential information, including, but not
limited to, prices and fees, for such bond is redacted;
(5) copies of any final orders of the Department
relating to any violation of this Act or regulations
implementing this Act; and
(e) Imposition of an administrative action under this Act

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is not confidential.
(f) The Secretary, in his or her sole discretion, may
disclose otherwise confidential information when he or she
determines disclosure is in the public interest.
Section 4-3. Supervision.
(a) The Secretary may conduct an examination or
investigation of a licensee or authorized delegate or
otherwise take independent action authorized by this Act or by
a rule adopted or order issued under this Act as reasonably
necessary or appropriate to administer and enforce this Act,
rules and regulations implementing this Act, and other
applicable law, including the Bank Secrecy Act and the USA
PATRIOT ACT. The Secretary may:
(1) conduct an examination either on-site or off-site
as the Secretary may reasonably require;
(2) conduct an examination in conjunction with an
examination conducted by representatives of other state
agencies or agencies of another state or of the federal
government;
(3) accept the examination report of another state
agency or an agency of another state or of the federal
government, or a report prepared by an independent
accounting firm, which on being accepted is considered for
all purposes as an official report of the Secretary; and
(4) summon and examine under oath a key individual or

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employee of a licensee or authorized delegate and require
the person to produce records regarding any matter related
to the condition and business of the licensee or
authorized delegate.
(b) A licensee or authorized delegate shall provide, and
the Secretary shall have full and complete access to, all
records the Secretary may reasonably require to conduct a
complete examination. The records must be provided at the
location and in the format specified by the Secretary,
however, the Secretary may utilize multistate record
production standards and examination procedures when such
standards will reasonably achieve the requirements of this
subsection.
(c) Unless otherwise directed by the Secretary, a licensee
shall pay all costs reasonably incurred in connection with an
examination of the licensee or the licensee's authorized
delegates.
Section 4-4. Networked supervision.
(a) To efficiently and effectively administer and enforce
this Act and to minimize regulatory burden, the Secretary is
authorized and encouraged to participate in multistate
supervisory processes established between states and
coordinated through the Conference of State Bank Supervisors,
Money Transmitter Regulators Association, and affiliates and
successors thereof for all licensees that hold licenses in

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this State and other states. As a participant in multistate
supervision, the Secretary may:
(1) cooperate, coordinate, and share information with
other state and federal regulators in accordance with
Section 4-2;
(2) enter into written cooperation, coordination, or
information-sharing contracts or agreements with
organizations the membership of which is made up of state
or federal governmental agencies; and
(3) cooperate, coordinate, and share information with
organizations the membership of which is made up of state
or federal governmental agencies, if the organizations
agree in writing to maintain the confidentiality and
security of the shared information in accordance with
Section 4-2.
(b) The Secretary may not waive, and nothing in this
Section constitutes a waiver of, the Secretary's authority to
conduct an examination or investigation or otherwise take
independent action authorized by this Act or a rule adopted or
order issued under this Act to enforce compliance with
applicable state or federal law.
(c) A joint examination or investigation, or acceptance of
an examination or investigation report, does not waive an
examination assessment provided for in this Act.
Section 4-5. Relationship to federal law.

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(a) If state money transmission jurisdiction is
conditioned on a federal law, any inconsistencies between a
provision of this Act and the federal law governing money
transmission shall be governed by the applicable federal law
to the extent of the inconsistency.
(b) In the event of any inconsistencies between this Act
and a federal law that governs pursuant to subsection (a), the
Secretary may provide interpretive rule or guidance that:
(1) identifies the inconsistency; and
(2) identifies the appropriate means of compliance
with federal law.
ARTICLE V. Money Transmission Licenses
Section 5-1. License required.
(a) A person may not engage in the business of money
transmission or advertise, solicit, or hold oneself out as
providing money transmission unless the person is licensed
under this Act.
(b) Subsection (a) does not apply to:
(1) A person who is an authorized delegate of a person
licensed under this Act acting within the scope of
authority conferred by a written contract with the
licensee; or
(2) A person who is exempt pursuant to Section 3-1 and
does not engage in money transmission outside the scope of

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such exemption.
(c) A license issued under Section 5-5 is not transferable
or assignable.
Section 5-2. Consistent State licensing.
(a) To establish consistent licensing between this State
and other states, the Secretary is authorized and encouraged
to:
(1) implement all licensing provisions of this Act in
a manner that is consistent with other states that have
adopted this Act or multistate licensing processes; and
(2) participate in nationwide protocols for licensing
cooperation and coordination among state regulators
provided that such protocols are consistent with this Act.
(b) In order to fulfill the purposes of this Act, the
Secretary is authorized and encouraged to establish
relationships or contracts with NMLS or other entities
designated by NMLS to enable the Secretary to:
(1) collect and maintain records;
(2) coordinate multistate licensing processes and
supervision processes;
(3) process fees; and
(4) facilitate communication between this State and
licensees or other persons subject to this Act.
(c) The Secretary is authorized and encouraged to utilize
NMLS for all aspects of licensing in accordance with this Act,

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including, but not limited to, license applications,
applications for acquisitions of control, surety bonds,
reporting, criminal history background checks, credit checks,
fee processing, and examinations.
(d) The Secretary is authorized and encouraged to utilize
NMLS forms, processes, and functionalities in accordance with
this Act. If NMLS does not provide functionality, forms, or
processes for a provision of this Act, the Secretary is
authorized and encouraged to strive to implement the
requirements in a manner that facilitates uniformity with
respect to licensing, supervision, reporting, and regulation
of licensees which are licensed in multiple jurisdictions.
(e) For the purpose of participating in NMLS, the
Secretary is authorized to waive or modify, in whole or in
part, by rule, regulation or order, any or all of the
requirements and to establish new requirements as reasonably
necessary to participate in NMLS.
Section 5-3. Application for license.
(a) Applicants for a license shall apply in a form and in a
medium as prescribed by the Secretary. Each such form shall
contain content as set forth by rule, regulation, instruction
or procedure of the Secretary and may be changed or updated by
the Secretary in accordance with applicable law in order to
carry out the purposes of this Act and maintain consistency
with NMLS licensing standards and practices. The application

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must state or contain, as applicable:
(1) the legal name and residential and business
addresses of the applicant and any fictitious or trade
name used by the applicant in conducting its business;
(2) a list of any criminal convictions of the
applicant and any material litigation in which the
applicant has been involved in the 10-year period
preceding the submission of the application;
(3) a description of any money transmission previously
provided by the applicant and the money transmission that
the applicant seeks to provide in this State;
(4) a list of the applicant's proposed authorized
delegates and the locations in this State where the
applicant and its authorized delegates propose to engage
in money transmission;
(5) a list of other states in which the applicant is
licensed to engage in money transmission and any license
revocations, suspensions, or other disciplinary action
taken against the applicant in another state;
(6) information concerning any bankruptcy or
receivership proceedings affecting the licensee or a
person in control of a licensee;
(7) a sample form of contract for authorized
delegates, if applicable;
(8) a sample form of payment instrument or stored
value, as applicable;

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(9) the name and address of any federally insured
depository financial institution through which the
applicant plans to conduct money transmission; and
(10) any other information the Secretary or NMLS
reasonably requires with respect to the applicant.
(b) If an applicant is a corporation, limited liability
company, partnership, or other legal entity, the applicant
shall also provide:
(1) the date of the applicant's incorporation or
formation and State or country of incorporation or
formation;
(2) if applicable, a certificate of good standing from
the State or country in which the applicant is
incorporated or formed;
(3) a brief description of the structure or
organization of the applicant, including any parents or
subsidiaries of the applicant, and whether any parents or
subsidiaries are publicly traded;
(4) the legal name, any fictitious or trade name, all
business and residential addresses, and the employment, as
applicable, in the 10-year period preceding the submission
of the application of each key individual and person in
control of the applicant;
(5) a list of any criminal convictions and material
litigation in which a person in control of the applicant
that is not an individual has been involved in the 10-year

HB3479 Engrossed - 27 - LRB103 29212 BMS 55599 b
period preceding the submission of the application;
(6) a copy of audited financial statements of the
applicant for the most recent fiscal year and for the
2-year period preceding the submission of the application
or, if determined to be acceptable to the Secretary;
(7) a certified copy of unaudited financial statements
of the applicant for the most recent fiscal quarter;
(8) if the applicant is a publicly traded corporation,
a copy of the most recent report filed with the United
States Securities and Exchange Commission under Section 13
of the federal Securities Exchange Act of 1934, 15 U.S.C.
78m, as amended or recodified from time to time;
(9) if the applicant is a wholly owned subsidiary of:
(A) a corporation publicly traded in the United
States, a copy of audited financial statements for the
parent corporation for the most recent fiscal year or
a copy of the parent corporation's most recent report
filed under Section 13 of the federal Securities
Exchange Act of 1934, 15 U.S.C. 78m, as amended or
recodified from time to time; or
(B) a corporation publicly traded outside the
United States, a copy of similar documentation filed
with the regulator of the parent corporation's
domicile outside the United States;
(10) the name and address of the applicant's
registered agent in this State; and

HB3479 Engrossed - 28 - LRB103 29212 BMS 55599 b
(11) any other information the Secretary reasonably
requires with respect to the applicant.
A nonrefundable application fee must accompany an
application for a license under this Section in accordance
with 38 Ill. Adm. Code 205.35, as amended or recodified from
time to time.
(c) The Secretary may waive one or more requirements of
subsections (a) and (b) or permit an applicant to submit other
information instead of the required information.
Section 5-4. Information requirements for certain
individuals.
(a) Any individual in control of a licensee or applicant,
any individual that seeks to acquire control of a licensee,
and each key individual shall furnish to the Secretary through
NMLS the following items:
(1) The individual's fingerprints for submission to
the Federal Bureau of Investigation and the Secretary for
purposes of a national criminal history background check
unless the person currently resides outside of the United
States and has resided outside of the United States for
the last 10 years.
(2) Personal history and experience in a form and in a
medium prescribed by the Secretary, to obtain the
following:
(A) an independent credit report from a consumer

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reporting agency unless the individual does not have a
social security number, in which case, this
requirement shall be waived;
(B) information related to any criminal
convictions or pending charges; and
(C) information related to any regulatory or
administrative action and any civil litigation
involving claims of fraud, misrepresentation,
conversion, mismanagement of funds, breach of
fiduciary duty, or breach of contract.
(b) If the individual has resided outside of the United
States at any time in the last 10 years, the individual shall
also provide an investigative background report prepared by an
independent search firm that meets the following requirements:
(1) At a minimum, the search firm shall:
(A) demonstrate that it has sufficient knowledge,
resources, and employs accepted and reasonable
methodologies to conduct the research of the
background report; and
(B) not be affiliated with or have an interest
with the individual it is researching.
(2) At a minimum, the investigative background report
shall be written in the English language and shall contain
the following:
(A) if available in the individual's current
jurisdiction of residency, a comprehensive credit

HB3479 Engrossed - 30 - LRB103 29212 BMS 55599 b
report, or any equivalent information obtained or
generated by the independent search firm to accomplish
such report, including a search of the court data in
the countries, provinces, states, cities, towns, and
contiguous areas where the individual resided and
worked;
(B) criminal records information for the past 10
years, including, but not limited to, felonies,
misdemeanors, or similar convictions for violations of
law in the countries, provinces, states, cities,
towns, and contiguous areas where the individual
resided and worked;
(C) employment history;
(D) media history, including an electronic search
of national and local publications, wire services, and
business applications; and
(E) financial services-related regulatory history,
including, but not limited to, money transmission,
securities, banking, insurance, and mortgage related
industries.
Section 5-5. Issuance of license.
(a) When an application for an original license under this
Act appears to include all the items and addresses of all of
the matters that are required, the application is complete and
the Secretary shall promptly notify the applicant in a record

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of the date on which the application is determined to be
complete, and:
(1) unless extended by the Secretary pursuant to the
Secretary's discretion, the Secretary shall approve or
deny the application within 120 days after the completion
date; or
(2) if the application is not approved or denied
within 120 days after the completion date or any extension
thereof:
(A) the application is approved; and
(B) the license takes effect as of the first
business day after expiration of the 120-day period.
(b) A determination by the Secretary that an application
is complete and is accepted for processing means only that the
application, on its face, appears to include all of the items,
including the Criminal Background Check response from the
Federal Bureau of Investigation, and address all of the
matters that are required, and is not an assessment of the
substance of the application or of the sufficiency of the
information provided.
(c) When an application is filed and considered complete
under this Section, the Secretary shall investigate the
applicant's financial condition and responsibility, financial
and business experience, character, and general fitness. The
Secretary may conduct an on-site investigation of the
applicant, the reasonable cost of which the applicant must

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pay. The Secretary shall issue a license to an applicant under
this Section if the Secretary finds that all of the following
conditions have been fulfilled:
(1) the applicant has complied with Sections 5-3 and
5-4; and
(2) the financial condition and responsibility,
financial and business experience, competence, character,
and general fitness of the applicant and the competence,
experience, character, and general fitness of the key
individuals and persons in control of the applicant
indicate that it is in the interest of the public to permit
the applicant to engage in money transmission.
(d) If an applicant avails itself or is otherwise subject
to a multistate licensing process:
(1) the Secretary is authorized and encouraged to
accept the investigation results of a lead investigative
state for the purpose of subsection (c) if the lead
investigative state has sufficient staffing, expertise,
and minimum standards; or
(2) if the Department is a lead investigative state,
the Secretary is authorized and encouraged to investigate
the applicant pursuant to subsection (c) and the
timeframes established by agreement through the multistate
licensing process, however, in no case shall such
timeframe be noncompliant with the application period in
paragraph (1) of subsection (a).

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(e) The Secretary shall issue a formal written notice of
the denial of a license application within 30 days after the
decision to deny the application. The Secretary shall set
forth the specific reasons for the denial of the application
in the notice of denial and serve the applicant, either
personally or by certified mail. Service by certified mail
shall be deemed completed when the notice is deposited into
the U.S. Mail. An applicant whose application is denied by the
Secretary under this Section may submit a written request for
a hearing that shall include the particular reasons why the
applicant believes that the decision to deny the application
was incorrect, within 10 days after service of the notice of
the denial. If an applicant submits a timely request for a
hearing, the Secretary shall schedule a hearing after the
request for a hearing unless otherwise agreed to by the
parties. The Secretary shall conduct hearings pursuant to this
Section and in accordance with 38 Ill. Adm. Code 100, as
amended or recodified from time to time.
(f) The initial license term shall begin on the day that
the application is approved. The license shall expire on
December 31 of the year in which the license term began, unless
the initial license date is between November 1 and December
31, in which instance the initial license term shall run
through December 31 of the following year.
Section 5-6. Renewal of license.

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(a) A license under this Act shall be renewed annually.
(b) An annual renewal fee in accordance with 38 Ill. Adm.
Code 205.35 as amended or recodified from time to time shall be
paid to the Department. The renewal term shall be for a period
of one year and shall begin on January 1 of each year after the
initial license term and shall expire on December 31 of the
year the renewal term begins.
(c) A licensee shall submit a renewal report, in a form and
in a medium prescribed by the Secretary by December 1 of each
year. The form requires any information deemed necessary by
the Secretary to review a renewal application. At a minimum,
the renewal report must state or contain a description of each
material change in information submitted by the licensee in
its original license application which has not been reported
to the Secretary and a statement of the dollar amount and
number of money transmissions and payment instruments sold,
issued, exchanged, or transmitted in this State by the
licensee and its authorized delegate for the past 4 completed
calendar quarters.
(d) The Secretary, in his or her discretion, may grant an
extension of the renewal date.
(e) The Secretary is authorized and encouraged to utilize
NMLS to process license renewals if such functionality is
consistent with this Section.
(f) The Secretary shall issue a formal written notice of
the denial of renewal within 30 days after the decision to deny

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the renewal. The Secretary shall set forth the specific
reasons for denying the renewal in the notice of denial and
serve the licensee, either personally or by certified mail.
Service by certified mail shall be deemed completed when the
notice is deposited into the U.S. Mail. A licensee whose
renewal is denied by the Secretary under this Section may
submit a written request for a hearing that shall include the
particular reasons why the licensee believes that the decision
to deny the renewal was incorrect within 10 days after service
of the notice of the denial. If a licensee submits a timely
request for a hearing, the Secretary shall schedule a hearing
unless otherwise agreed to by the parties. The Secretary shall
conduct hearings pursuant to this Section and in accordance
with 38 Ill. Adm. Code 100, as amended or recodified from time
to time. The expiring license shall be deemed to continue in
force until 10 days after the service of the notice of denial
or, if a timely hearing is requested during that period, until
a final order is entered pursuant to a hearing.
Section 5-7. Maintenance of license.
(a) If a licensee does not continue to meet the
qualifications or satisfy the requirements that apply to an
applicant for a new money transmission license, the Secretary
may suspend or revoke the licensee's license in accordance
with the procedures established by this Act or other
applicable State law for such suspension or revocation.

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(b) An applicant for a money transmission license must
demonstrate that it meets or will meet, and a money
transmission licensee must at all times meet, the requirements
in Article X of this Act.
Section 5-8. Fees.
The expenses of administering this Act, including
investigations and examinations provided for in this Act,
shall be borne by and assessed against entities regulated by
this Act. The Department may establish fees by rule, including
in the following categories:
(1) investigation of licensees and license applicant
fees;
(2) examination fees;
(3) contingent fees; and
(4) such other categories as may be required to
administer this Act.
(b) The Secretary shall charge and collect fees, which
shall be nonrefundable unless otherwise indicated, in
accordance with 38 Ill. Adm. Code 205.35.
(c) All fees currently assessed in accordance with 38 Ill.
Adm. Code 205.35, as amended or recodified from time to time,
shall remain in effect. Except for money required to be
deposited into the TOMA Consumer Protection Fund pursuant to
this Act, all moneys received by the Department shall be
deposited into the Financial Institution Fund. Failure to pay

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any required fee by the due date shall subject the licensee to
a penalty fee of $25 per day and disciplinary action.
Section 5-9. Liability of licensees. A licensee is liable
for the payment of all moneys covered by payment instruments
that it sells or issues in any form in this State through its
authorized delegate and all moneys it receives itself or
through its authorized delegate for transmission by any means
whether or not any instrument is a negotiable instrument under
the laws of this State.
ARTICLE VI. Acquisition of Control and Change of Key
Individual
Section 6-1. Acquisition of control.
(a) Any person, or group of persons acting in concert,
seeking to acquire control of a licensee shall obtain the
written approval of the Secretary before acquiring control. An
individual is not deemed to acquire control of a licensee and
is not subject to this Section when that individual becomes a
key individual in the ordinary course of business.
(b) A person, or group of persons acting in concert,
seeking to acquire control of a licensee shall, in cooperation
with the licensee:
(1) submit an application in a form and in a medium
prescribed by the Secretary; and

HB3479 Engrossed - 38 - LRB103 29212 BMS 55599 b
(2) submit a nonrefundable fee of $1,000 with the
request for approval.
(c) Upon request, the Secretary may permit a licensee or
the person, or group of persons acting in concert, to submit
some or all information required by the Secretary pursuant to
subsection (b) without using NMLS.
(d) The application required by subsection (b) shall
include information required by Section 5-4 for any new key
individuals that have not previously completed the
requirements of Section 5-4 for a licensee.
(e) When an application for acquisition of control under
this Section appears to include all the items and address all
of the matters that are required, the application shall be
considered complete and:
(1) unless extended by the Secretary pursuant to the
Secretary's discretion, the Secretary shall approve or
deny the application within 60 days after the completion
date; or
(2) if the application is not approved or denied
within 60 days after the completion date or any extension
thereof:
(A) the application is approved; and
(B) the person, or group of persons acting in
concert, are not prohibited from acquiring control.
(f) A determination by the Secretary that an application
is complete and is accepted for processing means only that the

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application, on its face, appears to include all of the items
and address all of the matters that are required, and is not an
assessment of the substance of the application or of the
sufficiency of the information provided.
(g) When an application is filed and considered complete
under subsection (e), the Secretary shall investigate the
financial condition and responsibility, financial and business
experience, character, and general fitness of the person, or
group of persons acting in concert, seeking to acquire
control. The Secretary shall approve an acquisition of control
pursuant to this Section if the Secretary finds that all of the
following conditions have been fulfilled:
(1) The requirements of subsections (b) and (d) have
been met, as applicable; and
(2) the financial condition and responsibility,
financial and business experience, competence, character,
and general fitness of the person, or group of persons
acting in concert, seeking to acquire control; and the
competence, experience, character, and general fitness of
the key individuals and persons that would be in control
of the licensee after the acquisition of control indicate
that it is in the interest of the public to permit the
person, or group of persons acting in concert, to control
the licensee.
(h) If an applicant avails itself or is otherwise subject
to a multistate licensing process:

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(1) the Secretary is authorized and encouraged to
accept the investigation results of a lead investigative
state for the purpose of subsection (g) if the lead
investigative state has sufficient staffing, expertise,
and minimum standards; or
(2) if the Department is a lead investigative state,
the Secretary is authorized and encouraged to investigate
the applicant pursuant to subsection (g) and the
timeframes established by agreement through the multistate
licensing process.
(i) The Secretary shall issue a formal written notice of
the denial of an application to acquire control within 30 days
after the decision to deny the application. The Secretary
shall set forth the specific reasons for the denial of the
application in the notice of denial and serve the applicant,
either personally or by certified mail. Service by certified
mail shall be deemed completed when the notice is deposited
into the U.S. mail. An applicant whose application is denied
by the Secretary under this subsection (i) may submit a
written request for hearing which shall include the particular
reasons why the applicant believes that the decision to deny
the application was incorrect, within 10 days after service of
the notice of denial. If an applicant submits a timely request
for a hearing, the Secretary shall schedule a hearing unless
otherwise agreed to by the parties. The Secretary shall
conduct hearings pursuant to this Section and in accordance

HB3479 Engrossed - 41 - LRB103 29212 BMS 55599 b
with 38 Ill. Adm. Code 100, as amended or recodified from time
to time.
(j) The requirements of subsections (a) and (b) do not
apply to any of the following:
(1) a person that acts as a proxy for the sole purpose
of voting at a designated meeting of the shareholders or
holders of voting shares or voting interests of a licensee
or a person in control of a licensee;
(2) a person that acquires control of a licensee by
devise or descent;
(3) a person that acquires control of a licensee as a
personal representative, custodian, guardian,
conservator, or trustee, or as an officer appointed by a
court of competent jurisdiction or by operation of law;
(4) a person that is exempt under subsection (g) of
Section 3-1;
(5) A person that the Secretary determines is not
subject to subsection (a) based on the public interest;
(6) A public offering of securities of a licensee or a
person in control of a licensee; or
(7) An internal reorganization of a person in control
of the licensee where the ultimate person in control of
the licensee remains the same.
(k) Persons in paragraphs (2), (3), (4), (6), and (7) of
subsection (j) in cooperation with the licensee shall notify
the Secretary within 15 days after the acquisition of control.

HB3479 Engrossed - 42 - LRB103 29212 BMS 55599 b
(l) Streamlined acquisition of control.
(1) The requirements of subsections (a) and (b) do not
apply to a person that has complied with and received
approval to engage in money transmission under this Act or
was identified as a person in control in a prior
application filed with and approved by the Secretary or by
an MSB accredited state agency pursuant to a multistate
licensing process, if:
(A) the person has not had a license revoked or
suspended or controlled a licensee that has had a
license revoked or suspended while the person was in
control of the licensee in the previous 5 years;
(B) if the person is a licensee, the person is well
managed and has received at least a satisfactory
rating for compliance at its most recent examination
by an MSB accredited state agency if such rating was
given;
(C) the licensee to be acquired is projected to
meet the requirements of Article X of this Act after
the acquisition of control is completed, and if the
person acquiring control is a licensee, that licensee
is also projected to meet the requirements of Article
X of this Act after the acquisition of control is
completed;
(D) the licensee to be acquired will not implement
any material changes to its business plan as a result

HB3479 Engrossed - 43 - LRB103 29212 BMS 55599 b
of the acquisition of control, and if the person
acquiring control is a licensee, that licensee also
will not implement any material changes to its
business plan as a result of the acquisition of
control; and
(E) the person provides notice of the acquisition
in cooperation with the licensee and attests to this
subsection in a form and in a medium prescribed by the
Secretary.
(2) If the notice is not denied within 30 days after
the date on which the notice was determined to be
complete, the notice is deemed approved.
(m) Before filing an application for approval to acquire
control of a licensee a person may request in writing a
determination from the Secretary as to whether the person
would be considered a person in control of a licensee upon
consummation of a proposed transaction. If the Secretary
determines that the person would not be a person in control of
a licensee, the proposed person and transaction is not subject
to the requirements of subsections (a) and (b).
(n) If a multistate licensing process includes a
determination pursuant to subsection (m) and an applicant
avails itself or is otherwise subject to the multistate
licensing process:
(1) The Secretary is authorized and encouraged to
accept the control determination of a lead investigative

HB3479 Engrossed - 44 - LRB103 29212 BMS 55599 b
state with sufficient staffing, expertise, and minimum
standards for the purpose of subsection (m); or
(2) If the Department is a lead investigative state,
the Secretary is authorized and encouraged to investigate
the applicant pursuant to subsection (m) and the
timeframes established by agreement through the multistate
licensing process.
Section 6-2. Notice and information requirements for a
change of key individuals.
(a) A licensee adding or replacing any key individual
shall:
(1) provide notice in a manner prescribed by the
Secretary within 15 days after the effective date of the
key individual's appointment; and
(2) provide information as required by Section 5-4
within 45 days after the effective date.
(b) The Secretary may issue a formal written notice of
denial of key individual within 90 days after the date on which
the notice provided pursuant to subsection (a) was determined
to be complete if the competence, experience, character, or
integrity of the individual would not be in the best interests
of the public or the customers of the licensee to permit the
individual to be a key individual of such licensee.
(c) The Secretary shall set forth the specific reasons for
the denial in the notice of denial and serve the licensee and

HB3479 Engrossed - 45 - LRB103 29212 BMS 55599 b
the denied individual, either personally, or by certified
mail. Service by certified mail shall be deemed completed when
the notice is deposited into the U.S. Mail. A licensee who has
been denied by the Secretary under this subsection (c) may
submit a written request for hearing which shall include the
particular reasons why the licensee believes that the decision
to deny was incorrect, within 10 days after service of the
notice of the denial. If a licensee submits a timely request
for a hearing, the Secretary shall schedule a hearing after
the request for a hearing unless otherwise agreed to by the
parties. The Secretary shall conduct hearings pursuant to this
Section and in accordance with 38 Ill. Adm. Code 100.
(d) If the notice provided pursuant to subsection (a) is
not denied within 90 days after the date on which the notice
was determined to be complete, or any extension thereof, the
key individual is deemed approved.
(e) If a multistate licensing process includes a key
individual notice review and denial process pursuant to this
Section and the licensee avails itself or is otherwise subject
to the multistate licensing process:
(1) the Secretary is authorized and encouraged to
accept the determination of another state;
(2) if the investigating state has sufficient
staffing, expertise, and minimum standards for the purpose
of this Section; or
(3) if the Department is a lead investigative state,

HB3479 Engrossed - 46 - LRB103 29212 BMS 55599 b
the Secretary is authorized and encouraged to investigate
the applicant pursuant to subsection (b) and the
timeframes established by agreement through the multistate
licensing process.
ARTICLE VII. Reporting and Records
Section 7-1. Report of condition.
(a) Each licensee, under penalty of perjury, shall submit
a report of condition within 45 days of the end of the calendar
quarter, or within any extended time as the Secretary may
prescribe.
(b) The report of condition shall include:
(1) financial information at the licensee level;
(2) nationwide and state-specific money transmission
transaction information in every jurisdiction in the
United States where the licensee is licensed to engage in
money transmission;
(3) permissible investments report;
(4) transaction destination country reporting for
money received for transmission, if applicable; and
(5) any other information the Secretary reasonably
requires with respect to the licensee. The Secretary is
authorized and encouraged to utilize NMLS for the
submission of the report required by subsection (a) and is
authorized to change or update as necessary the

HB3479 Engrossed - 47 - LRB103 29212 BMS 55599 b
requirements of this Section to carry out the purposes of
this Act and maintain consistency with NMLS reporting.
(c) The information required by paragraph (4) of
subsection (b) shall only be included in a report of condition
submitted within 45 days of the end of the fourth calendar
quarter.
Section 7-2. Audited financials.
(a) Each licensee shall, within 90 days after the end of
each fiscal year, or within any extended time as the Secretary
may prescribe, file with the Secretary:
(1) an audited financial statement of the licensee for
the fiscal year prepared in accordance with United States
generally accepted accounting principles; and
(2) any other information as the Secretary may
reasonably require.
(b) The audited financial statements shall be prepared by
an independent certified public accountant or independent
public accountant who is satisfactory to the Secretary;
(c) The audited financial statements shall include or be
accompanied by a certificate of opinion of the independent
certified public accountant or independent public accountant
that is satisfactory in form and content to the Secretary. If
the opinion or certificate is qualified, the licensee must
make a separate report to the Secretary notifying them of the
qualified opinion or certification. If the certificate or

HB3479 Engrossed - 48 - LRB103 29212 BMS 55599 b
opinion is qualified, the Secretary may order the licensee to
take any action as the Secretary may find necessary to enable
the certified public accountant or independent public
accountant to remove the qualification.
Section 7-3. Authorized delegate reporting.
(a) Each licensee shall submit a report of authorized
delegates within 45 days of the end of the calendar quarter.
The Secretary is authorized and encouraged to utilize NMLS for
the submission of the report required by this Section provided
that such functionality is consistent with the requirements of
this Section.
(b) The authorized delegate report shall include, at a
minimum, each authorized delegate's:
(1) company legal name;
(2) taxpayer employer identification number;
(3) principal provider identifier;
(4) physical address;
(5) mailing address;
(6) any business conducted in other states;
(7) any fictitious or trade name;
(8) contact person name, phone number, and email;
(9) start date as licensee's authorized delegate;
(10) end date acting as licensee's authorized
delegate, if applicable;
(11) court orders pursuant to Section 8-3; and

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(12) Any other information the Secretary reasonably
requires with respect to the authorized delegate.
Section 7-4. Reports of certain events.
(a) A licensee shall file a report with the Secretary
within one business day after the licensee has reason to know
of the occurrence of any of the following events:
(1) the filing of a petition by or against the
licensee under the United States Bankruptcy Code, 11
U.S.C. Sections 101 through 110, as amended or recodified
from time to time, for bankruptcy or reorganization;
(2) the filing of a petition by or against the
licensee for receivership, the commencement of any other
judicial or administrative proceeding for its dissolution
or reorganization, or the making of a general assignment
for the benefit of its creditors; or
(3) the commencement of a proceeding to revoke or
suspend its license in a state or country in which the
licensee engages in business or is licensed.
(b) A licensee shall file a report with the Secretary
within 3 business days after the licensee has reason to know of
the occurrence of any of the following events:
(1) a charge or conviction of the licensee or of a key
individual or person in control of the licensee for a
felony; or
(2) a charge or conviction of an authorized delegate

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for a felony.
Section 7-5. Bank Secrecy Act reports. A licensee and an
authorized delegate shall file all reports required by federal
currency reporting, record keeping, and suspicious activity
reporting requirements as set forth in the Bank Secrecy Act
and other federal and State laws pertaining to money
laundering. The timely filing of a complete and accurate
report required under this Section with the appropriate
federal agency is deemed compliant with the requirements of
this Section.
Section 7-6. Records.
(a) Licensee shall maintain the following records, for
determining its compliance with this Act, for at least 3
years:
(1) a record of each outstanding money transmission
obligation sold;
(2) a general ledger posted at least monthly
containing all asset, liability, capital, income, and
expense accounts;
(3) bank statements and bank reconciliation records;
(4) records of outstanding money transmission
obligations;
(5) records of each outstanding money transmission
obligation paid within the 3-year period;

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(6) a list of the last known names and addresses of all
of the licensee's authorized delegates; and
(7) any other records the Secretary reasonably
requires by rule.
(b) The records specified in subsection (a) may be
maintained in electronic or other retrievable form of record.
(c) The records specified in subsection (a) shall be
maintained at the licensee's principal place of business or,
with notice to the Secretary, at another location designated
by the licensee. If the records are maintained outside this
State, the licensee shall make them accessible to the
Secretary on 7 business-days' notice.
(d) All records maintained by the licensee as required in
subsections (a) through (c) are open to inspection by the
Secretary pursuant to subsection (a) of Section 4-3.
(e) A licensee shall require and its authorized sellers
must preserve for at least 3 years all documents relating to
money transmission activities, unless the data embodied in
those documents has been transmitted for recordation by the
licensee.
ARTICLE VIII. Authorized Delegates
Section 8-1. Relationship between licensee and authorized
delegate.
(a) As used in this Section, "remit" means to make direct

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payments of money to a licensee or its representative
authorized to receive money or to deposit money in a bank in an
account specified by the licensee.
(b) Before a licensee is authorized to conduct business
through an authorized delegate or allows a person to act as the
licensee's authorized delegate, the licensee must:
(1) adopt, and update as necessary, written policies
and procedures reasonably designed to ensure that the
licensee's authorized delegates comply with applicable
State and federal law;
(2) enter into a written contract that complies with
subsection (d); and
(3) conduct a reasonable risk-based background
investigation sufficient for the licensee to determine
whether the authorized delegate has complied and will
likely comply with applicable state and federal law.
(c) An authorized delegate must operate in full compliance
with this Act.
(d) The written contract required by subsection (b) must
be signed by the licensee and the authorized delegate and, at a
minimum, must:
(1) expressly appoint the person signing the contract
as the licensee's authorized delegate with the authority
to conduct money transmission on behalf of the licensee;
(2) set forth the nature and scope of the relationship
between the licensee and the authorized delegate and the

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respective rights and responsibilities of the parties;
(3) require the authorized delegate to agree to fully
comply with all applicable State and federal laws, rules,
and regulations pertaining to money transmission,
including this Act and regulations implementing this Act,
relevant provisions of the Bank Secrecy Act, and the USA
PATRIOT ACT;
(4) require the authorized delegate to remit and
handle money and monetary value in accordance with the
terms of the contract between the licensee and the
authorized delegate;
(5) impose a trust on money and monetary value net of
fees received for money transmission for the benefit of
the licensee;
(6) require the authorized delegate to prepare and
maintain records as required by this Act or regulations
implementing this Act, or as reasonably requested by the
Secretary;
(7) acknowledge that the authorized delegate consents
to examination or investigation by the Secretary;
(8) state that the licensee is subject to regulation
by the Secretary and that, as part of that regulation, the
Secretary may suspend or revoke an authorized delegate
designation or require the licensee to terminate an
authorized delegate designation; and
(9) acknowledge receipt of the written policies and

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procedures required under paragraph (1) of subsection (b).
(e) If the licensee's license is suspended, revoked,
surrendered, or expired, the licensee must, within 5 business
days, provide documentation to the Secretary that the licensee
has notified all applicable authorized delegates of the
licensee whose names are in a record filed with the Secretary
of the suspension, revocation, surrender, or expiration of a
license. Upon suspension, revocation, surrender, or expiration
of a license, applicable authorized delegates shall
immediately cease to provide money transmission as an
authorized delegate of the licensee.
(f) An authorized delegate of a licensee holds in trust
for the benefit of the licensee all money net of fees received
from money transmission. If any authorized delegate commingles
any funds received from money transmission with any other
funds or property owned or controlled by the authorized
delegate, all commingled funds and other property shall be
considered held in trust in favor of the licensee in an amount
equal to the amount of money net of fees received from money
transmission.
(g) An authorized delegate may not use a subdelegate to
conduct money transmission on behalf of a licensee.
Section 8-2. Unauthorized activities. A person shall not
engage in the business of money transmission on behalf of a
person not licensed under this Act or not exempt pursuant to

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Article III of this Act. A person that engages in such activity
provides money transmission to the same extent as if the
person were a licensee, and shall be jointly and severally
liable with the unlicensed or nonexempt person.
Section 8-3. Prohibited authorized delegates.
(a) The circuit court in an action brought by a licensee
shall have jurisdiction to grant appropriate equitable or
legal relief, including, without limitation, prohibiting the
authorized delegate from directly or indirectly acting as an
authorized delegate for any licensee in this State and the
payment of restitution, damages or other monetary relief, if
the circuit court finds that an authorized delegate failed to
remit money in accordance with the written contract required
by subsection (b) of Section 8-1 or as otherwise directed by
the licensee or required by law.
(b) If the circuit court issues an order prohibiting a
person from acting as an authorized delegate for any licensee
pursuant to subsection (a), the licensee that brought the
action shall report the order to the Secretary within 30 days
and shall report the order through NMLS within 90 days.
(c) An authorized delegate who holds money in trust for
the benefit of a licensee and knowingly fails to remit more
than $1,000 of such money is guilty of a Class 3 felony.
(d) An authorized delegate who holds money in trust for
the benefit of a licensee and knowingly fails to remit no more

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than $999 of such money is guilty of a Class A misdemeanor.
ARTICLE IX. Timely Transmission, Refunds, and Disclosures
Section 9-1. Timely transmission.
(a) Every licensee shall forward all money received for
transmission in accordance with the terms of the agreement
between the licensee and the sender, which shall be no more
than 3 business days after the receipt of the money to be
transmitted, unless the licensee has a reasonable belief or a
reasonable basis to believe that the sender may be a victim of
fraud or that a crime or violation of law, rule, or regulation
has occurred, is occurring, or may occur.
(b) If a licensee fails to forward money received for
transmission in accordance with this Section, the licensee
must respond to inquiries by the sender with the reason for the
failure unless providing a response would violate a State or
federal law, rule, or regulation.
Section 9-2. Refunds.
(a) This Section does not apply to:
(1) money received for transmission subject to the
federal Remittance Rule, 12 CFR Part 1005, Subpart B, as
amended or recodified from time to time; or
(2) money received for transmission pursuant to a
written agreement between the licensee and payee to

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process payments for goods or services provided by the
payee.
(b) Every licensee shall refund to the sender within 10
days after receipt of the sender's written request for a
refund of any and all money received for transmission unless
any of the following occurs:
(1) the money has been forwarded within 10 days after
the date on which the money was received for transmission;
(2) instructions have been given committing an
equivalent amount of money to the person designated by the
sender within 10 days of the date on which the money was
received for transmission;
(3) the agreement between the licensee and the sender
instructs the licensee to forward the money at a time that
is beyond 10 days after the date on which the money was
received for transmission; if funds have not yet been
forwarded in accordance with the terms of the agreement
between the licensee and the sender, the licensee shall
issue a refund in accordance with the other provisions of
this Section; or
(4) the refund is requested for a transaction that the
licensee has not completed based on a reasonable belief or
a reasonable basis to believe that a crime or violation of
law, rule, or regulation has occurred, is occurring, or
may occur.
(5) the refund request does not enable the licensee

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to:
(A) identify the sender's name and address or
telephone number; or
(B) identify the particular transaction to be
refunded if the sender has multiple transactions
outstanding.
Section 9-3. Receipts.
(a) As used in this Section, "receipt" means a paper
receipt, electronic record, or other written confirmation. For
a transaction conducted in person, the receipt may be provided
electronically if the sender requests or agrees to receive an
electronic receipt. For a transaction conducted electronically
or by phone, a receipt may be provided electronically. All
electronic receipts shall be provided in a retainable form.
(b) Every licensee or its authorized delegate shall
provide the sender a receipt for money received for
transmission.
(1) The receipt shall contain the following
information, as applicable:
(A) the name of the sender;
(B) the name of the designated recipient;
(C) the date of the transaction;
(D) the unique transaction or identification
number;
(E) the name of the licensee, NMLS Unique ID, the

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licensee's business address, and the licensee's
customer service telephone number;
(F) the amount of the transaction in United States
dollars;
(G) any fee charged by the licensee to the sender
for the transaction; and
(H) any taxes collected by the licensee from the
sender for the transaction.
(2) The receipt required by this Section shall be in
English and in the language principally used by the
licensee or authorized delegate to advertise, solicit, or
negotiate, either orally or in writing, for a transaction
conducted in person, electronically or by phone, if other
than English.
(c) This Section does not apply to:
(1) money received for transmission subject to the
federal Remittance Rule, 12 CFR Part 1005, Subpart B, as
amended or recodified from time to time;
(2) money received for transmission pursuant to a
written agreement between the licensee and payee to
process payments for goods or services provided by the
payee;
(3) payroll processing services; or
(4) as authorized in the Secretary's sole discretion.
Section 9-4. Notice. Every licensee or authorized delegate

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shall include on a receipt or disclose on the licensee's
website or mobile application the name and phone number of the
Department and a statement that the licensee's customers can
contact the Department with questions or complaints about the
licensee's money transmission services.
Section 9-5. Disclosures for payroll processing services.
(a) A licensee that provides payroll processing services
shall:
(1) issue reports to clients detailing client payroll
obligations in advance of the payroll funds being deducted
from an account; and
(2) make worker paystubs or an equivalent statement
available to workers.
(b) Subsection (a) does not apply to a licensee providing
payroll processing services where the licensee's client
designates the intended recipients to the licensee and is
responsible for providing the disclosures required by
paragraph (2) of subsection (a).
ARTICLE X. Prudential Standards
Section 10-1. Net worth.
(a) A licensee under this Act shall maintain at all times a
tangible net worth of the greater of $100,000 or 3% of total
assets for the first $100,000,000, 2% of additional assets for

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$100,000,000 to $1,000,000,000, and 0.5% of additional assets
for over $1,000,000,000.
(b) Tangible net worth must be demonstrated at initial
application by the applicant's most recent audited or
unaudited financial statements pursuant to paragraph (6) of
subsection (b) of Section 5-3.
(c) Notwithstanding the provisions of this Section, the
Secretary shall have discretionary authority to exempt, in
part or in whole, from the requirements of this Section any
applicant or licensee.
Section 10-2. Surety bond.
(a) An applicant for a money transmission license must
provide, and a licensee at all times must maintain, security
consisting of a surety bond in a form satisfactory to the
Secretary. The bond shall run to the State of Illinois for the
benefit of any claimant against the applicant or licensee with
respect to the receipt, handling, transmission, and payment of
money by the licensee or authorized delegate in connection
with the licensed operations. A claimant damaged by a breach
of the conditions of a bond shall have a right to action upon
the bond for damages suffered thereby and may bring suit
directly on the bond, or the Secretary may bring suit on behalf
of the claimant.
(b) The amount of the required security shall be the
greater of $1,000,000 or an amount equal to 100% of the

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licensee's average daily money transmission liability in this
State calculated for the most recently completed quarter, up
to a maximum of $2,000,000;
(c) A licensee that maintains a bond in the maximum amount
provided for in subsection (b) is not required to calculate
its average daily money transmission liability in this State
for purposes of this Section.
(d) A licensee may exceed the maximum required bond amount
pursuant to paragraph (5) of subsection (a) of Section 10-4.
(e) After receiving a license, the licensee must maintain
the required bond plus net worth until 3 years after it ceases
to do business in this State unless all outstanding payment
instruments are eliminated or the provisions under the Revised
Uniform Unclaimed Property Act have become operative and are
adhered to by the licensee. Notwithstanding this provision,
however, the amount required to be maintained may be reduced
to the extent that the amount of the licensee's payment
instruments outstanding in this State are reduced.
(f) Instead of a paper surety bond, each licensee and
applicant shall file and maintain an electronic surety bond in
NMLS or in a manner otherwise authorized by the Secretary.
Section 10-3. Maintenance of permissible investments.
(a) A licensee shall maintain at all times permissible
investments that have a market value computed in accordance
with United States generally accepted accounting principles of

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not less than the aggregate amount of all of its outstanding
money transmission obligations.
(b) Except for permissible investments enumerated in
subsection (a) of Section 10-4, the Secretary, with respect to
any licensee, may by rule or order limit the extent to which a
specific investment maintained by a licensee within a class of
permissible investments may be considered a permissible
investment, if the specific investment represents undue risk
to customers, not reflected in the market value of
investments.
(c) Permissible investments, even if commingled with other
assets of the licensee, are held in trust for the benefit of
the purchasers and holders of the licensee's outstanding money
transmission obligations in the event of insolvency, the
filing of a petition by or against the licensee under the
United States Bankruptcy Code, 11 U.S.C. Sections 101 through
110, as amended or recodified from time to time, for
bankruptcy or reorganization, the filing of a petition by or
against the licensee for receivership, the commencement of any
other judicial or administrative proceeding for its
dissolution or reorganization, or in the event of an action by
a creditor against the licensee who is not a beneficiary of
this statutory trust. No permissible investments impressed
with a trust pursuant to this subsection shall be subject to
attachment, levy of execution, or sequestration by order of
any court, except for a beneficiary of this statutory trust.

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(d) Upon the establishment of a statutory trust in
accordance with subsection (c) or when any funds are drawn on a
letter of credit pursuant to paragraph (4) of subsection (a)
of Section 10-4, the Secretary shall notify the applicable
regulator of each state in which the licensee is licensed to
engage in money transmission, if any, of the establishment of
the trust or the funds drawn on the letter of credit, as
applicable. Notice shall be deemed satisfied if performed
pursuant to a multistate agreement or through NMLS. Funds
drawn on a letter of credit, and any other permissible
investments held in trust for the benefit of the purchasers
and holders of the licensee's outstanding money transmission
obligations, are deemed held in trust for the benefit of such
purchasers and holders on a pro rata and equitable basis in
accordance with statutes pursuant to which permissible
investments are required to be held in this State, and other
states, as applicable. Any statutory trust established
hereunder shall be terminated upon extinguishment of all of
the licensee's outstanding money transmission obligations.
(e) The Secretary by rule or by order may allow other types
of investments that the Secretary determines are of sufficient
liquidity and quality to be a permissible investment. The
Secretary is authorized to participate in efforts with other
state regulators to determine that other types of investments
are of sufficient liquidity and quality to be a permissible
investment.

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Section 10-4. Types of permissible investments.
(a) The following investments are permissible under
Section 10-3:
(1) Cash, including demand deposits, savings deposits,
and funds in such accounts held for the benefit of the
licensee's customers in an insured depository financial
institution, and cash equivalents including ACH items in
transit to the licensee and ACH items or international
wires in transit to a payee, cash in transit via armored
car, cash in smart safes, cash in licensee-owned
locations, debit card or credit card-funded transmission
receivables owed by any bank, or money market mutual funds
rated "AAA" by S&P, or the equivalent from any eligible
rating service;
(2) certificates of deposit or senior debt obligations
of an insured depository institution, as defined in
Section 3 of the Federal Deposit Insurance Act, 12 U.S.C.
1813, as amended or recodified from time to time, or as
defined under the federal Credit Union Act, 12 U.S.C.
1781, as amended or recodified from time to time;
(3) an obligation of the United States or a
commission, agency, or instrumentality thereof; an
obligation that is guaranteed fully as to principal and
interest by the United States; or an obligation of a State
or a governmental subdivision, agency, or instrumentality

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thereof;
(4) the full drawable amount of an irrevocable standby
letter of credit for which the stated beneficiary is the
Secretary that stipulates that the beneficiary need only
draw a sight draft under the letter of credit and present
it to obtain funds up to the letter of credit amount within
7 days of presentation of the items required by
subparagraph (C) of this paragraph.
(A) The letter of credit must:
(i) be issued by an insured depository
financial institution, a foreign bank that is
authorized under federal law to maintain a federal
agency or federal branch office in a State or
states, or a foreign bank that is authorized under
State law to maintain a branch in a State that (I)
bears an eligible rating or whose parent company
bears an eligible rating; and (II) is regulated,
supervised, and examined by United States federal
or State authorities having regulatory authority
over banks, credit unions, and trust companies;
(ii) be irrevocable, unconditional, and
indicate that it is not subject to any condition
or qualifications outside of the letter of credit;
(iii) not contain reference to any other
agreements, documents, or entities, or otherwise
provide for any security interest in the licensee;

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and
(iv) contain an issue date and expiration date
and expressly provide for automatic extension,
without a written amendment, for an additional
period of one year from the present or each future
expiration date, unless the issuer of the letter
of credit notifies the Secretary in writing by
certified or registered mail or courier mail or
other receipted means, at least 60 days before any
expiration date, that the irrevocable letter of
credit will not be extended.
(B) If any notice of expiration or nonextension of
a letter of credit issued under subdivision (iv) of
subparagraph (A), the licensee shall be required to
demonstrate to the satisfaction of the Secretary, 15
days before expiration, that the licensee maintains
and will maintain permissible investments in
accordance with subsection (a) of Section 10-3 upon
the expiration of the letter of credit. If the
licensee is not able to do so, the Secretary may draw
on the letter of credit in an amount up to the amount
necessary to meet the licensee's requirements to
maintain permissible investments in accordance with
subsection (a) of Section 10-3. Any such draw shall be
offset against the licensee's outstanding money
transmission obligations. The drawn funds shall be

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held in trust by the Secretary or the Secretary's
designated agent, to the extent authorized by law, as
agent for the benefit of the purchasers and holders of
the licensee's outstanding money transmission
obligations.
(C) The letter of credit shall provide that the
issuer of the letter of credit will honor, at sight, a
presentation made by the beneficiary to the issuer of
the following documents on or before the expiration
date of the letter of credit:
(i) the original letter of credit, including
any amendments; and
(ii) A written statement from the beneficiary
stating that any of the following events have
occurred:
(I) the filing of a petition by or against
the licensee under the United States
Bankruptcy Code, 11 U.S.C. Sections 101
through 110, as amended or recodified from
time to time, for bankruptcy or
reorganization;
(II) the filing of a petition by or
against the licensee for receivership, or the
commencement of any other judicial or
administrative proceeding for its dissolution
or reorganization;

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(III) the seizure of assets of a licensee
by the Secretary pursuant to an emergency
order issued in accordance with applicable
law, on the basis of an action, violation, or
condition that has caused or is likely to
cause the insolvency of the licensee; or
(IV) the beneficiary has received notice
of expiration or nonextension of a letter of
credit and the licensee failed to demonstrate
to the satisfaction of the beneficiary that
the licensee will maintain permissible
investments in accordance with subsection (a)
of Section 10-3 upon the expiration or
nonextension of the letter of credit.
(D) The Secretary may designate an agent to serve
on the Secretary's behalf as beneficiary to a letter
of credit so long as the agent and letter of credit
meet requirements established by the Secretary. The
Secretary's agent may serve as agent for multiple
licensing authorities for a single irrevocable letter
of credit if the proceeds of the drawable amount for
the purposes of this Section are assigned to the
Secretary.
(E) The Secretary is authorized and encouraged to
participate in multistate processes designed to
facilitate the issuance and administration of letters

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of credit, including, but not limited to, services
provided by the NMLS and State Regulatory Registry,
LLC.
(5) 100% of the surety bond or deposit provided for
under Section 10-2 that exceeds the average daily money
transmission liability in this State.
(b) Unless permitted by the Secretary by rule or by order
to exceed the limit as set forth herein, the following
investments are permissible under Section 10-3 to the extent
specified:
(1) receivables that are payable to a licensee from
its authorized delegates in the ordinary course of
business that are less than 7 days old, up to 50% of the
aggregate value of the licensee's total permissible
investments;
(2) of the receivables permissible under paragraph (1)
of this subsection (b), receivables that are payable to a
licensee from a single authorized delegate in the ordinary
course of business may not exceed 10% of the aggregate
value of the licensee's total permissible investments.
(3) the following investments are permissible up to
20% per category and combined up to 50% of the aggregate
value of the licensee's total permissible investments:
(A) a short-term, of up to 6 months, investment
bearing an eligible rating;
(B) commercial paper bearing an eligible rating;

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(C) a bill, note, bond, or debenture bearing an
eligible rating;
(D) U.S. tri-party repurchase agreements
collateralized at 100% or more with U.S. government or
agency securities, municipal bonds, or other
securities bearing an eligible rating;
(E) money market mutual funds rated less than
"AAA" and equal to or higher than "A-" by S&P, or the
equivalent from any other eligible rating service; and
(F) a mutual fund or other investment fund
composed solely and exclusively of one or more
permissible investments listed in paragraphs (1)
through (3) of subsection (a).
(4) cash, including demand deposits, savings deposits,
and funds in such accounts held for the benefit of the
licensee's customers, at foreign depository institutions
are permissible up to 10% of the aggregate value of the
licensee's total permissible investments if the licensee
has received a satisfactory rating in its most recent
examination and the foreign depository institution:
(A) has an eligible rating;
(B) is registered under the Foreign Account Tax
Compliance Act;
(C) is not located in any country subject to
sanctions from the Office of Foreign Asset Control;
and

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(D) is not located in a high-risk or
non-cooperative jurisdiction as designated by the
Financial Action Task Force.
ARTICLE XI. Enforcement
Section 11-1. Prohibited acts and practices for licensees.
It is a violation of this Act for a licensee, or other person
subject to this Act to:
(1) directly or indirectly employ any scheme, device,
or artifice to defraud or mislead any person, including,
but not limited to, engaging in bait and switch
advertising or sales practices;
(2) directly or indirectly engage in any unfair or
deceptive act or practice toward any person, including,
but not limited to, any false or deceptive statement about
fees or other terms of a money transmission or currency
exchange;
(3) directly or indirectly obtain property by fraud or
misrepresentation;
(4) knowingly make, publish, or disseminate any false,
deceptive, or misleading information in the provision of
money services;
(5) knowingly receive or take possession for personal
use of any property of any money services business, other
than in payment for services rendered, and with intent to

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defraud, omit to make, or cause or direct to omit to make,
a full and true entry thereof in the books and accounts of
the business;
(6) make or concur in making any false entry, or omit
or concur in omitting any material entry, in the books or
accounts of the business;
(7) knowingly make or publish to the Director or the
Director's designee, or concur in making or publishing to
the Director or the Director's designee any written
report, exhibit, or statement of its affairs or pecuniary
condition containing any material statement which is
false, or omit or concur in omitting any statement
required by law to be contained therein;
(8) fail to make any report or statement lawfully
required by the Director or other public official.
(9) demonstrate by course of conduct, negligence or
incompetence in performing any act directly or indirectly
relating to licensed activity;
(10) engage in unsafe and unsound practices directly
or indirectly relating to licensed activity; or
(11) fail to comply with the provisions of this Act or
with any lawful order or agreement, rule, or regulations
made or issued under the provisions of this Act.
Section 11-2. Suspension and revocation of licenses.
(a) The Secretary may issue an order to suspend or revoke a

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license of a licensee or order a licensee to revoke the
designation of an authorized delegate if:
(1) the licensee has failed to comply with any
provision of this Act, or any order, decision, finding,
rule, regulation or direction of the Secretary lawfully
made pursuant to the authority of this Act;
(2) the licensee does not cooperate with an
examination or investigation by the Secretary;
(3) the licensee engages in fraud, intentional
misrepresentation, or gross negligence;
(4) an authorized delegate is convicted of a violation
of a State or federal anti-money laundering statute, or
violates a rule adopted or an order issued under this Act,
as a result of the licensee's willful misconduct or
grossly negligent inattention to its legal obligations;
(5) the competence, experience, character, or general
fitness of the licensee, authorized delegate, person in
control of a licensee, key individual, or responsible
person of the authorized delegate indicates that it is not
in the public interest to permit the person to provide
money transmission;
(6) the licensee engages in an unsafe or unsound
practice;
(7) the licensee is insolvent, suspends payment of its
obligations, or makes a general assignment for the benefit
of its creditors;

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(8) the licensee does not remove an authorized
delegate after the Secretary issues and serves upon the
licensee a final order including a finding that the
authorized delegate has violated this Act;
(9) a fact or condition exists that, if it had existed
or had been known at the time the licensee applied for its
license, would have been ground for denying the
application;
(10) the licensee knowingly fails to make a report
required by this Act;
(11) the licensee fails to pay a judgment entered in
favor of a claimant, plaintiff, or credit in an action
arising out of the licensee's business regulated under
this Act within 30 days after the judgment becomes final
or within 30 days after the expiration or termination of a
stay of execution;
(12) the licensee has been convicted under the laws of
this State, another state, or the United States of a
felony or of a crime involving breach of trust or
dishonesty; or
(13) the licensee violates the Illinois Uniform
Revised Unclaimed Property Act.
(b) In determining whether a licensee is engaging in an
unsafe or unsound practice, the Secretary may consider the
size and condition of the licensee's money transmission, the
magnitude of the loss, the gravity of the violation of this

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Act, and the previous conduct of the person involved.
(c) In every case in which a license is suspended or
revoked, the Secretary shall issue a formal written notice of
the suspension or revocation, setting forth the specific
reasons for the suspension or revocation of the license and
serve the licensee, either personally or by certified mail.
Service by certified mail shall be deemed completed when the
notice is deposited into U.S. Mail and the order of suspension
or revocation of a license shall take effect upon service of
the order.
(d) A licensee whose license has been suspended or revoked
by the Secretary under this Section may request a hearing, in
writing, within 10 days after the date of service. If a
licensee submits a timely request for a hearing, the order
shall be stayed until a final administrative order is entered
and the Secretary shall schedule a hearing unless otherwise
agreed to by the parties.
(e) The Secretary shall conduct hearings pursuant to this
Section and in accordance with 38 Ill. Adm. Code 100, as
amended or recodified from time to time.
Section 11-3. Suspension and revocation of authorized
delegates.
(a) The Secretary may issue an order to suspend or revoke
the designation of an authorized delegate, if the Secretary
finds that:

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(1) the authorized delegate has failed to comply with
any provision of this Act or any order, decision, finding,
rule, regulation, or direction of the Secretary lawfully
made pursuant to the authority of this Act;
(2) the authorized delegate does not cooperate with an
examination or investigation by the Secretary;
(3) the authorized delegate engages in fraud,
intentional misrepresentation, or gross negligence;
(4) the authorized delegate is convicted of a
violation of a State or federal anti-money laundering
statute;
(5) the competence, experience, character, or general
fitness of the authorized delegate or a person in control
of the authorized delegate indicates that it is not in the
public interest to permit the authorized delegate to
provide money transmission; or
(6) the authorized delegate engages in an unsafe or
unsound practice.
(b) In determining whether an authorized delegate is
engaging in an unsafe or unsound practice, the Secretary may
consider the size and condition of the authorized delegate's
provision of money transmission, the magnitude of the loss,
the gravity of the violation of this Act or a rule adopted or
order issued under this Act, and the previous conduct of the
authorized delegate.
(c) In every case in which the designation of an

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authorized delegate is suspended or revoked, the Secretary
shall issue a formal written notice of the suspension or
revocation, setting forth the specific reasons for the
suspension or revocation of the designation and serve the
authorized delegate, either personally or by certified mail.
Service by certified mail shall be deemed completed when the
notice is deposited into U.S. Mail and the order of suspension
or revocation of a license shall take effect upon service of
the order.
(d) An authorized delegate whose designation has been
suspended or revoked by the Secretary under this Section may
request a hearing, in writing, within 10 days after the date of
service. If an authorized delegate submits a timely request
for a hearing, the order shall be stayed until a final
administrative order is entered and the Secretary shall
schedule a hearing unless otherwise agreed to by the parties.
(e) The Secretary shall conduct hearings pursuant to this
Section and in accordance with 38 Ill. Adm. Code 100, as
amended or recodified from time to time.
Section 11-4. Orders to cease and desist; civil penalties.
(a) If the Secretary determines that a licensee, an
authorized delegate, or any other person has engaged or is
engaged in practices contrary to this Act, the rules adopted
under this Act, or an order issued under this Act, the
Secretary may issue an order requiring the licensee or

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authorized delegate to cease and desist from the violation.
The order becomes effective upon service of it upon the
licensee or authorized delegate.
(b) The Secretary may issue an order against a licensee to
cease and desist from providing money transmission through an
authorized delegate that is the subject of a separate order by
the Secretary.
(c) The Secretary may, in addition to or without the
issuance of a cease and desist order, assess a penalty of up to
$1,000 against a licensee or other person for each violation
of this Act, the rules adopted under this Act, or an order
issued under this Act as set forth in Section 11-6. The
issuance of an order under this Section shall not be a
prerequisite to the taking of any action by the Secretary
under this Section or any other Section of this Act.
(d) The Secretary shall issue a formal written notice of
the cease and desist order, setting forth the specific reasons
for the order and serve the licensee or the authorized
delegate, either personally or by certified mail. Service by
certified mail shall be deemed completed when the notice is
deposited in United States mail.
Section 11-5. Consent orders; settlements.
(a) The Secretary may enter into a consent order or
settlement agreement at any time with a person to resolve a
matter arising under this Act, the rules adopted under this

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Act, or order issued under this Act. A consent order or
settlement agreement must be signed by the person to whom it is
issued or by the person's authorized representative, and must
indicate agreement with the terms contained in the order. A
consent order or settlement agreement may provide that it does
not constitute an admission by a person that this Act or a rule
adopted or an order issued under this Act has been violated.
(b) Notwithstanding the issuance of a consent order or
settlement agreement, the Secretary may seek civil or criminal
penalties or compromise civil penalties concerning matter
encompassed by the consent order unless the consent order by
its terms expressly precludes the Secretary from doing so.
(c) The Secretary is authorized to compromise, settle, and
collect civil penalties and administrative penalties, as set
by rule, with any person for violations of this Act or of any
rule or order issued or adopted under this Act.
Section 11-6. Criminal penalties. A person who engages in
conduct requiring a license under this Act and fails to obtain
a license from the Secretary or knowingly makes a false
statement, misrepresentation, or false certification in an
application, financial statement, account record, report, or
other document filed or required to be maintained or filed
under this Act or who knowingly makes a false entry or omits a
material entry in a document is guilty of a Class 3 felony.

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Section 11-7. Civil penalties. The Secretary may assess a
civil penalty against a person that violates this Act, a rule
adopted or an order issued under this Act in an amount not to
exceed $1,000 per day for each day the violation is
outstanding, plus this State's costs and expenses for the
investigation and prosecution of the matter, including
reasonable attorney's fees. Each transaction in violation of
this Act or the rules adopted under this Act or issued under
this Act, for each day that a violation continues shall be a
separate offense.
Section 11-8. Unlicensed persons. Any person who, without
the required license, engages in conduct requiring a license
under this Act shall be liable to the Department in an amount
equal to the greater of (1) $5,000 or (2) an amount of money
accepted for transmission plus an amount equal to 3 times the
amount accepted for transmission. The Department shall cause
any funds so recovered to be deposited into the TOMA Consumer
Protection Fund.
Section 11-9. Judicial review. All final administrative
decisions of the Department under this Act are subject to
judicial review under the Administrative Review Law and any
rules adopted under the Administrative Review Law.
ARTICLE XII. Miscellaneous Provisions

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Section 12-1. Uniformity of application and construction.
In applying and construing this Act, consideration must be
given to the need to promote uniformity of the law with respect
to its subject matter among states that enact it.
Section 12-2. Severability. The provisions of this Act are
severable under Section 1.31 of the Statute on Statutes.
Section 12-3. Transition period.
(a) Licensees pursuant to the Transmitters of Money Act in
good standing on the effective date of this Act shall be
licensed under this Act upon the filing of and approval by the
Department of a renewal application in accordance with Section
5-6 and may continue to operate lawfully as a licensee in this
State unless and until their next renewal application after
the effective date is denied by the Department. An authorized
seller of licensee pursuant to the Transmitters of Money Act
in good standing as of the effective date shall become an
authorized delegate of a licensee upon the filing of and
approval by the Department of a renewal application by the
licensee in accordance with Section 5-6 and may continue to
operate lawfully in this State as an authorized delegate of a
licensee unless and until the licensee's next renewal
application after the effective date is denied by the
Department.

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(b) A person licensed in this State to engage in the
business of money transmission and their authorized sellers
shall not be subject to the provisions of this Act, to the
extent that this Act conflicts with the Transmitters of Money
Act or this Act establishes new requirements not imposed under
the Transmitters of Money Act, until the licensee renews its
current license or for 6 months after the effective date of
this Act, whichever is later, so long as they comply with the
Transmitters of Money Act and its implementing rules.
(c) Notwithstanding subsection (a), a licensee shall only
be required to amend its authorized delegate contracts for
contracts entered into or amended after the effective date of
this Act or the completion of any transition period
contemplated under subsection (b). Nothing herein shall be
construed as limiting an authorized delegate's obligations to
operate in full compliance with this Act as required by
subsection (c) of Section 8-1 after the time period set forth
in subsection (b).
(d) A person not required to be licensed pursuant to the
Transmitters of Money Act shall not be required to be licensed
and comply with this Act until January 1, 2025, unless the
Secretary extends the time by rule.
(e) Except as otherwise stated, this Act supersedes the
Transmitters of Money Act.
Section 12-4. TOMA Consumer Protection Fund.

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(a) The special income-earning fund in the State treasury
is known as the TOMA Consumer Protection Fund.
(b) All moneys paid into the fund together with all
accumulated undistributed income thereon shall be held as a
special fund in the State treasury. The fund shall be used
solely for the purpose of providing restitution to consumers
who have suffered monetary loss arising out of a transaction
regulated by this Act.
(c) The fund shall be applied only to restitution when
restitution has been ordered by the Secretary. Restitution
shall not exceed the amount actually lost by the consumer. The
fund shall not be used for the payment of any attorney or other
fees.
(d) The fund shall be subrogated to the amount of the
restitution, and the Secretary shall request the Attorney
General to engage in all reasonable collection steps to
collect restitution from the party responsible for the loss
and reimburse the fund.
(e) Notwithstanding any other provisions of this Section,
the payment of restitution from the fund shall be a matter of
grace and not of right, and no consumer shall have any vested
rights in the fund as a beneficiary or otherwise. Before
seeking restitution from the fund, the consumer or beneficiary
seeking payment of restitution shall apply for restitution on
a form provided by the Secretary. The form shall include any
information the Secretary may reasonably require in order to

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determine that restitution is appropriate.
(f) Notwithstanding any other provision of this Section,
moneys in the TOMA Consumer Protection Fund may be transferred
to the Professions Indirect Cost Fund, as authorized under
Section 2105-300 of the Department of Professional Regulation
Law of the Civil Administrative Code of Illinois.
Article 101. General Provisions
Section 101-1. Short title; references. Articles 101
through 135 may be cited as the Digital Assets Regulation Act.
In Articles 101 through 135, references to "this Act" mean
Articles 101 through 135.
Section 101-5. Definitions.
(a) As used in this Act:
"Affiliate" shall mean any person that controls, is
controlled by, or is under common control with another person.
For purposes of this definition, "control" means the
possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a
person.
"Applicant" means a person that applies for a license
under this Act.
"Bank" means a bank, savings banks, savings and loan
association, savings association, or industrial loan company

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chartered under the laws of this State or any other state or
under the laws of the United States.
"Confidential supervisory information" means information
or documents obtained by employees, agents, or representatives
of the Department in the course of any examination,
investigation, audit, visit, registration, certification,
review, licensing, or any other regulatory or supervisory
activity pursuant to this Act, and any record prepared or
obtained by the Department to the extent that the record
summarizes or contains information derived from any report,
document, or record described in this Act.
"Conflict of interest" means an interest that might
incline a covered person or an individual who is an associated
person of a covered person to make a recommendation that is not
disinterested.
"Corporate fiduciary" shall mean a corporate fiduciary as
defined by Section 1-5.05 of the Corporate Fiduciary Act.
"Covered person" means a licensee or person required to
obtain a license pursuant to this Act.
"Covered exchange" means a covered person that exchanges
or holds itself out as being able to exchange a digital asset
for a resident.
"Credit union" means a credit union chartered under the
laws of this State or any other state or under the laws of the
United States.
"Department" means the Department of Financial and

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Professional Regulation.
"Digital asset" means a digital representation of value
that is used as a medium of exchange, unit of account, or store
of value, and that is not fiat currency, whether or not
denominated in fiat currency. "Digital asset" does not include
either of the following:
(1) A digital representation of value which a merchant
grants, as part of an affinity or rewards program, and
that cannot be taken from or exchanged with the merchant
for fiat currency or a digital asset.
(2) A digital representation of value that is issued
by or on behalf of a game publisher, used solely within a
gaming platform, has no market or application outside of
such gaming platform, and cannot be converted into, or
redeemed for, fiat currency or digital assets.
"Digital asset administration" means controlling,
administering, or issuing a digital asset, whether or not
redeemable for fiat currency or another digital asset.
"Digital asset business activity" means any of the
following:
(1) Exchanging, transferring, or storing a digital
asset.
(2) Engaging in digital asset administration.
(3) Any other business activity involving digital
assets designated by rule by the Department as may be
necessary and appropriate for the protection of residents.

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"Digital asset business activity" does not include the
development and dissemination of software in and of itself.
"Exchange", when used as a verb, means to exchange, buy,
sell, trade, or convert, on behalf of a resident, either of the
following:
(1) A digital asset for fiat currency or one or more
forms of digital assets.
(2) Fiat currency for one or more forms of digital
assets.
"Executive officer" includes, without limitation, an
individual who is a director, officer, manager, managing
member, partner, or trustee, or other functionally equivalent
responsible individual, of a person.
"Federally insured depository institution" shall mean an
insured depository institution as defined by Section 3(c)(2)
of the Federal Deposit Insurance Act, 12 U.S.C. 1813(c)(2), as
amended, or an insured credit union as defined by Section
101(7) of the Federal Credit Union Act, 12 U.S.C. 1752(7), as
amended.
"Fiat currency" means:
(1) money that is authorized or adopted by the United
States or a foreign government as part of its currency and
that is customarily used and accepted as a medium of
exchange in the country of issuance; and
(2) monetary value that is redeemable for such money.
"Insolvent" means any of the following:

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(1) Having generally ceased to pay debts in the
ordinary course of business other than as a result of a
bona fide dispute.
(2) Being unable to pay debts as they become due.
(3) Being insolvent within the meaning of federal
bankruptcy law.
"Licensee" means a person licensed under this Act.
"Person" includes, without limitation, any individual,
corporation, business trust, estate, trust, partnership,
proprietorship, syndicate, limited liability company,
association, joint venture, government, governmental
subsection, agency or instrumentality, public corporation or
joint stock company, or any other organization or legal or
commercial entity.
"Qualified custodian" means a bank, credit union, or trust
company, subject to any rules adopted by the Department.
"Record" means information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and
is retrievable in perceivable form.
"Resident" means any of the following:
(1) A person who is domiciled in this State.
(2) A person who is physically located in this State
for more than 183 days of the previous 365 days.
(3) A person who has a place of business in this State.
(4) A legal representative of a person that is
domiciled in this State.

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"Request for assistance" means all inquiries, complaints,
account disputes, and requests for documentation a covered
person receives from residents.
"Responsible individual" means an individual who has
direct control over, or significant management, policy, or
decision-making authority with respect to, a person's digital
asset business activity in this State.
"Secretary" means the Secretary of Financial and
Professional Regulation and any authorized representative of
the Secretary.
"Service provider" means any person that provides a
material service to a covered person in connection with the
offering or provision by that covered person of a digital
asset business activity in this State, including a person that
either:
(1) Participates in designing, operating, or
maintaining the digital asset business activity.
(2) Processes transactions relating to the digital
asset business activity, other than unknowingly or
incidentally transmitting or processing financial data in
a manner that the data is undifferentiated from other
types of data of the same form as the person transmits or
processes.
"State" means a state of the United States, the District
of Columbia, Puerto Rico, the United States Virgin Islands, or
any territory or insular possession subject to the

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jurisdiction of the United States.
"Store," "storage", and "storing", except in the phrase
"store of value," means to store, hold, or maintain custody or
control of a digital asset on behalf of a resident by a person
other than the resident.
"Transfer" means to transfer or transmit a digital asset
from or on behalf of a resident, including by doing any of the
following:
(1) Crediting the digital asset to the account or
storage of another person.
(2) Moving the digital asset from one account or
storage of a resident to another account or storage of the
same resident.
(3) Relinquishing custody or control of a digital
asset to another person.
"United States dollar equivalent of digital assets" means
the equivalent value of a particular digital asset in United
States dollars shown on a covered exchange regulated in the
United States for a particular date or period specified in
this Act, subject to any rules adopted by the Department.
(b) Whenever the terms "include", "including" or terms of
similar import appear in this Act, unless the context requires
otherwise, such terms shall not be construed to imply the
exclusion of any person, class, or thing not specifically
included.
(c) A reference in this Act to any other law or statute of

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this State, or of any other jurisdiction, means such law or
statute as amended to the effective date of this Act, and
unless the context otherwise requires, as amended thereafter.
Section 101-10. Applicability.
(a) This Act governs the digital asset business activity
of a person doing business in this State or, wherever located,
who engages in or holds itself out as engaging in the activity
with or on behalf of a resident, to the extent not preempted by
federal law and except as otherwise provided in subsection (b)
or (c).
(b) This Act does not apply to the exchange, transfer, or
storage of a digital asset or to digital asset administration
to the extent the Securities Exchange Act of 1934, 15 U.S.C.
78a et seq., or the Illinois Securities Law of 1953 govern the
activity and the activity is actually regulated for the
purpose of investor protection by the U.S. Securities and
Exchange Commission or the Illinois Secretary of State.
(c) This Act does not apply to the following:
(1) The United States, a State, political subdivision
of a State, agency, or instrumentality of federal, State,
or local government, or a foreign government or a
subdivision, department, agency, or instrumentality of a
foreign government.
(2) A federally insured depository institution.
(3) A corporate fiduciary acting as a fiduciary or

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otherwise engaging in fiduciary activities.
(4) A merchant using digital assets solely for the
purchase or sale of goods or services in the ordinary
course of its business.
(5) A person using digital assets solely for the
purchase or sale of goods or services for personal,
family, or household purposes.
Section 101-15. General powers and duties.
(a) The Department shall regulate digital asset business
activity in this State, unless it is exempt pursuant to
Section 101-10. To the extent permissible under federal law,
the Department shall exercise nonexclusive oversight and
enforcement under any federal law applicable to digital asset
business activity.
(b) The functions, powers, and duties conferred upon the
Department by this Act are cumulative to any other functions,
powers, and duties conferred upon the Department by other laws
applicable to digital asset business activity.
(c) The Department shall have the following functions,
powers, and duties in carrying out its responsibilities under
this Act and any other law applicable to digital asset
business activity in this State:
(1) to issue or refuse to issue any license or other
authorization under this Act;
(2) to revoke or suspend for cause any license or

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other authorization under this Act;
(3) to keep records of all licenses or other
authorizations under this Act;
(4) to receive, consider, investigate, and act upon
complaints made by any person relating to any digital
asset business activity in this State;
(5) to prescribe the forms of and receive:
(A) applications for licenses or other
authorizations under this Act; and
(B) all reports and all books and records required
to be made under this Act;
(6) to subpoena documents and witnesses and compel
their attendance and production, to administer oaths, and
to require the production of any books, papers, or other
materials relevant to any inquiry authorized by this Act
or other law applicable to digital asset business activity
in this State;
(7) to issue orders against any person:
(A) if the Secretary has reasonable cause to
believe that an unsafe, unsound, or unlawful practice
has occurred, is occurring, or is about to occur;
(B) if any person has violated, is violating, or
is about to violate any law, rule, or written
agreement with the Secretary; or
(C) for the purpose of administering the
provisions of this Act or other law applicable to

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digital asset business activity and any rule adopted
in accordance with this Act or other law applicable to
digital asset business activity;
(8) to address any inquiries to any covered person, or
the directors, officers, or employees of the covered
person, or the affiliates or service providers of the
covered person, in relation to the covered person's
activities and conditions or any other matter connected
with its affairs, and it shall be the duty of any person so
addressed to promptly reply in writing to those inquiries;
the Secretary may also require reports from any covered
person at any time the Secretary chooses;
(9) to examine the books and records of every covered
person, affiliate, or service provider;
(10) to enforce the provisions of this Act and any
state or federal law applicable to digital asset business
activity;
(11) to levy fees, fines, and civil penalties, charges
for services, and assessments to defray operating
expenses, including direct and indirect costs, of
administering this Act and other laws applicable to
digital asset business activity;
(12) to appoint examiners, supervisors, experts, and
special assistants as needed to effectively and
efficiently administer this Act and other laws applicable
to digital asset business activity;

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(13) to conduct hearings for the purpose of carrying
out the purposes of this Act;
(14) to exercise visitorial power over a covered
person, affiliate, or service provider;
(15) to enter into cooperative agreements with federal
and state regulatory authorities and to accept reports of
examinations from federal and state regulatory
authorities;
(16) to assign on an emergency basis an examiner or
examiners to monitor the affairs of a covered person,
affiliate, or service provider with whatever frequency the
Secretary determines appropriate and to charge the covered
person for reasonable and necessary expenses of the
Secretary if in the opinion of the Secretary an emergency
exists or appears likely to occur;
(17) to impose civil penalties against a covered
person, affiliate, or service provider for failing to
respond to a regulatory request or reporting requirement;
and
(18) to conduct investigations, market surveillance,
and research, studies, and analyses of matters affecting
the interests of users of digital assets;
(19) to take such actions as the Secretary deems
necessary to educate and protect users of digital assets;
(20) to develop and implement initiatives and programs
to promote responsible innovation in digital asset

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business activity; and
(21) to perform any other lawful acts necessary or
desirable to carry out the purposes and provisions of this
Act and other laws applicable to digital asset business
activity.
(d) The Department is authorized and encouraged to share
any information obtained pursuant to this Act or any other law
applicable to digital asset business activity with law
enforcement officials or other regulatory agencies.
Section 101-20. Funds.
(a) All moneys collected or received by the Department
under this Act shall be deposited into the Digital Assets
Regulation Fund, which is hereby created. The amounts
deposited into the Digital Assets Regulation Fund shall be
used for the ordinary and contingent expenses of the
Department in administering this Act and other financial laws;
nothing in this Act shall prevent the continuation of the
practice of paying expenses involving salaries, retirement,
social security, and State-paid insurance of State officers
and employees by appropriation from the General Revenue Fund
or any other fund. Moneys deposited into the Digital Assets
Regulation Fund may be transferred to the Professions Indirect
Cost Fund or any other Department fund.
(b) The expenses of administering this Act, including
investigations and examinations provided for in this Act,

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shall be borne by and assessed against persons regulated by
this Act. The Department may establish fees by rule, including
in the following categories:
(1) investigation of licensees and license applicant
fees;
(2) examination fees;
(3) contingent fees; and
(4) such other categories as may be required to
administer this Act.
Article 105. Customer Protections
Section 105-5. Customer disclosures.
(a) When engaging in digital asset business activity with
a resident, a covered person shall provide to a resident the
customer disclosures required by subsection (b) and any
additional disclosures the Department by rule determines to be
necessary and appropriate for the protection of residents. The
Department may determine by rule the time and form required
for disclosures. A disclosure required by this Section shall
be made separately from any other information provided by the
covered person and in a clear and conspicuous manner in a
record the resident may keep.
(b) Before engaging in digital asset business activity
with a resident, a covered person shall disclose, to the
extent applicable to the digital asset business activity the

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covered person will undertake with the resident, subject to
any rule or order issued by the Department, all of the
following:
(1) A schedule of fees and charges the covered person
may assess, the manner by which fees and charges will be
calculated if they are not set in advance and disclosed,
and the timing of the fees and charges.
(2) Whether the product or service provided by the
covered person is covered by either of the following:
(A) A form of insurance or other guarantee against
loss by an agency of the United States as follows:
(i) Up to the full United States dollar
equivalent of digital assets placed under the
custody or control of, or purchased from, the
covered person as of the date of the placement or
purchase, including the maximum amount provided by
insurance under the Federal Deposit Insurance
Corporation or National Credit Union
Administration or otherwise available from the
Securities Investor Protection Corporation.
(ii) If not provided at the full United States
dollar equivalent of the digital assets placed
under the custody or control of or purchased from
the covered person, the maximum amount of coverage
for each resident expressed in the United States
dollar equivalent of the digital asset.

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(iii) If not applicable to the product or
service provided by the covered person, a clear
and conspicuous statement that the product is not
insured, as applicable, by the Federal Deposit
Insurance Corporation, National Credit Union
Administration, or the Securities Investor
Protection Corporation.
(B)(i) Private insurance against loss or theft,
including cybertheft or theft by other means.
(ii) A covered person shall disclose all
material terms of the insurance policy to the
resident in a manner that allows the resident to
understand the specific insured risks and any
maximum coverage amounts that may result in
partial coverage of the resident's assets.
(3) The irrevocability of a transfer or exchange and
any exception to irrevocability.
(4) A description of all of the following:
(A) The covered person's liability for an
unauthorized, mistaken, or accidental transfer or
exchange.
(B) The resident's responsibility to provide
notice to the covered person of an unauthorized,
mistaken, or accidental transfer or exchange.
(C) The basis for any recovery by the resident
from the covered person in case of an unauthorized,

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mistaken, or accidental transfer or exchange.
(D) General error resolution rights applicable to
an unauthorized, mistaken, or accidental transfer or
exchange.
(E) The method for the resident to update the
resident's contact information with the covered
person.
(5) That the date or time when the transfer or
exchange is made and the resident's account is debited may
differ from the date or time when the resident initiates
the instruction to make the transfer or exchange.
(6) Whether the resident has a right to stop a
preauthorized payment or revoke authorization for a
transfer and the procedure to initiate a stop-payment
order or revoke authorization for a subsequent transfer.
(7) The resident's right to receive a receipt, trade
ticket, or other evidence of the transfer or exchange.
(8) The resident's right to at least 14 days' prior
notice of a change in the covered person's fee schedule,
other terms and conditions that have a material impact on
digital asset business activity with the resident, or the
policies applicable to the resident's account.
(9) That no digital asset is currently recognized as
legal tender by Illinois or the United States.
(10)(A) A list of instances in the past 12 months when
the covered person's service was unavailable to customers

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seeking to engage in digital asset business activity due
to a service outage on the part of the covered person and
the causes of each identified service outage.
(B) As part of the disclosure required by this
paragraph, the covered person may list any steps the
covered person has taken to resolve underlying causes
for those outages.
(c) Except as otherwise provided in subsection (d), at the
conclusion of a digital asset transaction with, or on behalf
of, a resident, a covered person shall provide the resident a
confirmation in a record which contains all of the following:
(1) The name and contact information of the covered
person, including the toll-free telephone number required
under Section 105-20.
(2) The type, value, date, precise time, and amount of
the transaction.
(3) The fee charged for the transaction, including any
charge for conversion of a digital asset to fiat currency
or other digital asset, as well as any indirect charges.
(d) If a covered person discloses that it will provide a
daily confirmation in the initial disclosure under subsection
(c), the covered person may elect to provide a single, daily
confirmation for all transactions with or on behalf of a
resident on that day instead of a per transaction
confirmation.

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Section 105-10. Custody and protection of customer assets.
(a) A covered person that stores, holds, or maintains
custody or control of a digital asset for one or more persons
shall at all times maintain an amount of each type of digital
asset sufficient to satisfy the aggregate entitlements of the
persons to the type of digital asset.
(b) The following provisions apply to a covered person
that stores, holds, or maintains custody or control of a
digital asset for one or more persons:
(1) If a covered person violates subsection (a), the
property interests of the persons in the digital asset are
pro rata property interests in the type of digital asset
to which the persons are entitled without regard to the
time the persons became entitled to the digital asset or
the covered person obtained control of the digital asset.
(2) A digital asset maintained for purposes of
compliance with this Section shall meet all of the
following criteria:
(A) The digital asset shall be held for the
persons entitled to the digital asset.
(B) The digital asset shall not be property of the
covered person.
(C) The digital asset shall not be subject to the
claims of creditors of the covered person.
(3) The Department may, by rule, amend the provisions
of this subsection as may be necessary and appropriate for

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the protection of residents.
(c) The Department may adopt rules applicable to covered
persons related to additional protections of customer assets,
including, but not limited to:
(1) rules requiring that digital assets and funds
controlled by the covered person on behalf of residents be
held in accounts segregated from the covered person's own
digital assets and funds;
(2) rules related to qualified custodians that may
hold such segregated accounts;
(3) rules related to titling of such segregated
accounts;
(4) rules related to audit requirements for customer
assets;
(5) rules requiring compliance with specific
provisions of the Uniform Commercial Code applicable to
digital assets;
(6) rules restricting selling, transferring,
assigning, lending, hypothecating, pledging, or otherwise
using or encumbering customer assets; and
(7) any rules as may be as may be necessary and
appropriate for the protection of residents or necessary
to effectuate the purposes of this Section.
Section 105-15. Covered exchanges.
(a)(1) Except as provided for under paragraph (2) of this

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subsection, a covered exchange, before listing or offering a
digital asset that the covered exchange can exchange on behalf
of a resident, shall certify on a form provided by the
Department that the covered exchange has done the following:
(A) Identified the risk that the digital asset would
be deemed a security by federal or state regulators.
(B) Provided, in writing, full and fair disclosure of
all material facts relating to conflicts of interest that
are associated with the covered exchange and the digital
asset.
(C) Conducted a comprehensive risk assessment designed
to ensure consumers are adequately protected from
cybersecurity risk, risk of malfeasance, including theft,
risks related to code or protocol defects, market-related
risks, including price manipulation and fraud, and any
other material risks.
(D) Established policies and procedures to reevaluate
the appropriateness of the continued listing or offering
of the digital asset, including an evaluation of whether
material changes have occurred.
(E) Established policies and procedures to cease
listing or offering the digital asset, including
notification to affected consumers and counterparties.
(F) Any other requirement designated by rule by the
Department as may be necessary and appropriate for the
protection of residents.

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(2) Certification by a covered exchange shall not be
required for any digital asset approved for listing on or
before January 1, 2023, by the New York Department of
Financial Services pursuant to Part 200 of Title 23 of the New
York Code of Rules and Regulations, if the covered exchange
provides notification to the Department on a form provided by
the Department.
(3) After a finding that a covered exchange has listed or
offered a digital asset without appropriate certification or
after a finding that misrepresentations were made in the
certification process, the Department may require the covered
exchange to cease listing or offering the digital asset and
may take an enforcement action under Section 120-50 of this
Act.
(b)(1) A covered exchange shall make every effort to
execute a resident's request to exchange a digital asset that
the covered exchange receives fully and promptly.
(2) A covered exchange shall use reasonable diligence to
ascertain the best market for a digital asset and exchange it
in that market so that the outcome to the resident is as
favorable as possible under prevailing market conditions.
Compliance with this paragraph shall be determined by factors,
including, but not limited to, all of the following:
(A) The character of the market for the digital asset,
including price and volatility.
(B) The size and type of transaction.

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(C) The number of markets checked.
(D) Accessibility of appropriate pricing.
(E) Any other factor designated by rule by the
Department as may be necessary and appropriate for the
protection of residents.
(3) In a transaction for or with a resident, the covered
exchange shall not interject a third party between the covered
exchange and the best market for the digital asset in a manner
inconsistent with this subsection.
(4) If a covered exchange cannot execute directly with a
market and employs other means in order to ensure an execution
advantageous to the resident, the burden of showing the
acceptable circumstances for doing so is on the covered
exchange.
Section 105-20. Customer service; requests for assistance.
(a) A covered person shall prominently display on its
internet website a toll-free telephone number through which a
resident can contact the covered person for requests for
assistance and receive live customer assistance, subject to
any rules adopted by the Department.
(b) A covered person shall implement reasonable policies
and procedures for accepting, processing, investigating, and
responding to requests for assistance in a timely and
effective manner. Such policies and procedures shall include
all of the following:

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(1) A procedure for resolving disputes between the
covered person and a resident.
(2) A procedure for a resident to report an
unauthorized, mistaken, or accidental digital asset
business activity transaction.
(3) A procedure for a resident to file a complaint
with the covered person and for the resolution of the
complaint in a fair and timely manner with notice to the
resident as soon as reasonably practical of the resolution
and the reasons for the resolution.
(4) Any other procedure designated by rule by the
Department as may be necessary and appropriate for the
protection of residents.
Section 105-25. Collection of compensation. Unless exempt
from licensure under this Act, no person engaged in or
offering to engage in any act or service for which a license
under this Act is required may bring or maintain any action in
any court to collect compensation for the performance of the
licensable services without alleging and proving that he or
she was the holder of a valid license under this Act at all
times during the performance of those services.
Article 110. Compliance
Section 110-5. General requirements.

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(a) Each licensee is required to comply with the
provisions of this Act, any lawful order, rule, or regulation
made or issued under the provisions of this Act, and all
applicable federal and State laws, rules, and regulations.
(b) Each licensee shall designate a qualified individual
or individuals responsible for coordinating and monitoring
compliance with subsection (a).
(c) Each licensee shall maintain, implement, update, and
enforce written compliance policies and procedures, in
accordance with Section 110-10 and subject to any rules
adopted by the Department, which policies and procedures must
be reviewed and approved by the licensee's board of directors
or an equivalent governing body of the licensee.
Section 110-10. Required policies and procedures.
(a) An applicant, before submitting an application, shall
create and a licensee, during licensure, shall maintain,
implement, update, and enforce, written compliance policies
and procedures for all of the following:
(1) A cybersecurity program.
(2) A business continuity program.
(3) A disaster recovery program.
(4) An anti-fraud program.
(5) An anti-money laundering and countering the
financing of terrorism program.
(6) An operational security program.

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(7)(A) A program designed to ensure compliance with
this Act and other laws of this State or federal laws that
are relevant to the digital asset business activity
contemplated by the licensee with or on behalf of
residents and to assist the licensee in achieving the
purposes of other State laws and federal laws if violation
of those laws has a remedy under this Act.
(B) At a minimum, the program described by this
paragraph shall specify the policies and procedures that
the licensee undertakes to minimize the risk that the
licensee facilitates the exchange of unregistered
securities.
(8) A conflict of interest program.
(9) A request for assistance program to comply with
Section 105-20.
(10) Any other compliance program, policy, or
procedure the Department establishes by rule as necessary
for the protection of residents or for the safety and
soundness of the licensee's business or to effectuate the
purposes of this Act.
(b) A policy required by subsection (a) shall be
maintained in a record and designed to be adequate for a
licensee's contemplated digital asset business activity with
or on behalf of residents, considering the circumstances of
all participants and the safe operation of the activity. Any
policy and implementing procedure shall be compatible with

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other policies and the procedures implementing them and not
conflict with policies or procedures applicable to the
licensee under other State law.
(c) A licensee's anti-fraud program shall include, at a
minimum, all of the following:
(1) Identification and assessment of the material
risks of its digital asset business activity related to
fraud, which shall include any form of market manipulation
and insider trading by the licensee, its employees, its
associated persons, or its customers.
(2) Protection against any material risk related to
fraud identified by the Department or the licensee.
(3) Periodic evaluation and revision of the anti-fraud
program, policies, and procedures.
(d) A licensee's anti-money laundering and countering the
financing of terrorism program shall include, at a minimum,
all of the following:
(1) Identification and assessment of the material
risks of its digital asset business activity related to
money laundering and financing of terrorist activity.
(2) Procedures, in accordance with federal law or
guidance published by federal agencies responsible for
enforcing federal law, pertaining to money laundering and
financing of terrorist activity.
(3) Filing reports under the Bank Secrecy Act, 31
U.S.C. 5311 et seq., or Chapter X of Title 31 of the Code

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of Federal Regulations and other federal or State law
pertaining to the prevention or detection of money
laundering or financing of terrorist activity.
(e) A licensee's operational security program shall
include, at a minimum, reasonable and appropriate
administrative, physical, and technical safeguards to protect
the confidentiality, integrity, and availability of any
nonpublic information or digital asset it receives, maintains,
or transmits.
(f)(1) A licensee's cybersecurity program shall include,
at a minimum, all of the following:
(A) Maintaining, updating, and enforcing policies and
procedures designed to protect the confidentiality,
integrity, and availability of the licensee's information
systems and nonpublic information stored on those
information systems.
(B) Implementing and maintaining a written policy or
policies, approved at least annually by an executive
officer or the licensee's board of directors, or an
appropriate committee thereof, or equivalent governing
body, setting forth the licensee's policies and procedures
for the protection of its information systems and
nonpublic information stored on those information systems.
(C) Designating a qualified individual responsible for
overseeing and implementing the licensee's cybersecurity
program and enforcing its cybersecurity policy. The

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individual must have adequate authority to ensure
cybersecurity risks are appropriately managed, including
the ability to direct sufficient resources to implement
and maintain a cybersecurity program. The individual may
be employed by the licensee, one of its affiliates, or a
service provider.
(2) To assist in carrying out this subsection, the
Department may adopt rules to define terms used in this
subsection and to establish specific requirements for the
required cybersecurity program, including, but not limited to,
rules related to:
(A) penetration testing and vulnerability assessment;
(B) audit trails;
(C) access privileges;
(D) application security;
(E) risk assessment;
(F) cybersecurity personnel and intelligence;
(G) affiliates and service providers;
(H) authentication;
(I) data retention;
(J) training and monitoring;
(K) encryption;
(L) incident response;
(M) notice of cybersecurity events; and
(N) any other requirement necessary and appropriate
for the protection of residents or for the safety and

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soundness of the licensee or to effectuate the purposes of
this subsection.
(g) The Department may require a licensee to file with the
Department a copy of any report it makes to a federal or state
authority.
(h) After the policies and procedures required under this
Article are created and approved by the licensee, the licensee
shall engage a qualified individual or individuals with
adequate authority and experience to monitor and implement
each policy and procedure, publicize it as appropriate,
recommend changes as necessary, and enforce it.
Article 115. Licensure
Section 115-5. License required. A person shall not engage
in digital asset business activity, or hold itself out as
being able to engage in digital asset business activity, with
or on behalf of a resident unless the person is licensed in
this State by the Department under this Article, or the person
is exempt from licensure pursuant to Section 101-10.
Section 115-10. Application.
(a) An application for a license under this Act shall meet
all of the following requirements:
(1) The application shall be in a form and medium
prescribed by the Department. The Department may require

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the filing of the application through a multistate
licensing system.
(2) The application shall provide all of the following
information relevant to the applicant's proposed digital
asset business activity:
(A) The legal name of the applicant, any current
or proposed business United States Postal Service
address of the applicant, and any fictitious or trade
name the applicant uses or plans to use in conducting
the applicant's digital asset business activity with
or on behalf of a resident.
(B) The legal name, any former or fictitious name,
and the residential and business United States Postal
Service address of any executive officer and
responsible individual of the applicant and any person
that has control of the applicant.
(C) A description of the current and former
business of the applicant and any affiliate of the
applicant for the 5 years before the application is
submitted, or, if the business has operated for less
than 5 years, for the time the business has operated,
including its products and services, associated
internet website addresses and social media pages,
principal place of business, projected user base, and
specific marketing targets.
(D) A list of all of the following:

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(i) Any digital asset, money service, or money
transmitter license the applicant and any
affiliates hold in another state or from an agency
of the United States.
(ii) The date the licenses described in
subdivision (i) expire.
(iii) Any license revocation, license
suspension, or other disciplinary action taken
against the applicant and any affiliates in any
state or by an agency of the United States and any
license applications rejected by any state or
agency of the United States.
(E) A list of any criminal conviction, deferred
prosecution agreement, and pending criminal proceeding
in any jurisdiction against all of the following:
(i) The applicant.
(ii) Any executive officer of the applicant.
(iii) Any responsible individual of the
applicant.
(iv) Any person that has control over the
applicant.
(v) Any affiliate of the applicant.
(F) A list of any litigation, arbitration, or
administrative proceeding in any jurisdiction in which
the applicant or an executive officer, responsible
individual, or affiliate of the applicant has been a

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party for the 10 years before the application is
submitted determined to be material in accordance with
generally accepted accounting principles and, to the
extent the applicant or such other person would be
required to disclose the litigation, arbitration, or
administrative proceeding in the applicant's or such
other person's audited financial statements, reports
to equity owners, and similar statements or reports.
(G) A list of any bankruptcy or receivership
proceeding in any jurisdiction for the 10 years before
the application is submitted in which any of the
following was a debtor:
(i) The applicant.
(ii) An executive officer of the applicant.
(iii) A responsible individual of the
applicant.
(iv) A person that has control over the
applicant.
(v) An affiliate of the applicant.
(H) The name and United States Postal Service
address of any bank or credit union in which the
applicant and any affiliates plan to deposit funds
obtained by digital asset business activity.
(I) The source of funds and credit to be used by
the applicant and any affiliate to conduct digital
asset business activity with or on behalf of a

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resident.
(J) A current financial statement and other
documentation satisfactory to the Department
demonstrating that the applicant has the capital and
liquidity required by Section 120-5.
(K) The United States Postal Service address and
email address to which communications from the
Department can be sent.
(L) The name, United States Postal Service
address, and email address of the registered agent of
the applicant in this State.
(M) A copy of the certificate, or a detailed
summary acceptable to the Department, of coverage for
any liability, casualty, business interruption, or
cybersecurity insurance policy maintained by the
applicant for itself, an executive officer, a
responsible individual, an affiliate, or the
applicant's users.
(N) If applicable, the date on which and the state
in which the applicant is formed and a copy of a
current certificate of good standing issued by that
state.
(O) If a person has control of the applicant and
the person's equity interests are publicly traded in
the United States, a copy of the audited financial
statement of the person for the most recent fiscal

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year or most recent report of the person filed under
Section 13 of the Securities Exchange Act of 1934, 15
U.S.C. 78m.
(P) If a person has control of the applicant and
the person's equity interests are publicly traded
outside the United States, a copy of the audited
financial statement of the person for the most recent
fiscal year of the person or a copy of the most recent
documentation similar to that required in subparagraph
(N) filed with the foreign regulator in the domicile
of the person.
(Q) If the applicant is a partnership or a
member-managed limited liability company, the names
and United States Postal Service addresses of any
general partner or member.
(R) If the applicant is required to register with
the Financial Crimes Enforcement Network of the United
States Department of the Treasury as a money service
business, evidence of the registration.
(S) A set of fingerprints for each executive
officer and responsible individual of the applicant.
(T) If available, for any executive officer and
responsible individual of the applicant, for the 10
years before the application is submitted, employment
history and history of any investigation of the
individual or legal proceeding to which the individual

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was a party.
(U) The plans through which the applicant will
meet its obligations under Article 110.
(V) Any other information the Department requires
by rule.
(3) The application shall be accompanied by a
nonrefundable fee in the amount determined by the
Department to cover the costs of regulation.
(b)(1) On receipt of a completed application, the
Department shall investigate all of the following:
(A) The financial condition and responsibility of the
applicant and any affiliate of the applicant.
(B) The relevant financial and business experience,
character, and general fitness of the applicant and any
affiliate of the applicant.
(C) The competence, experience, character, and general
fitness of each executive officer and director, each
responsible individual, and any person that has control of
the applicant.
(2) On receipt of a completed application, the Department
may investigate the business premises of an applicant or an
affiliate of the applicant or require the submission of any
other documents or information the Department deems relevant
to the application.
(3) The investigation required by this subsection must
allow the Secretary to issue positive findings stating that

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the financial condition, financial responsibility, competence,
experience, character, and general fitness of the applicant,
each executive officer and director, each responsible
individual, any person that has control of the applicant, and
any affiliate of the applicant are such as to command the
confidence of the community and to warrant belief that the
business will be operated honestly, fairly, and efficiently
within the purpose of this Act; if the Secretary does not so
find, he or she shall not issue the license, and he or she
shall notify the license applicant of the denial.
(c)(1) After completing the investigation required by
subsection (b), the Department shall send the applicant notice
of its decision to approve, conditionally approve, or deny the
application. If the Department does not receive notice from
the applicant that the applicant accepts conditions specified
by the Department within 31 days following the Department's
notice of the conditions, the application shall be deemed
withdrawn.
(2) The Secretary may impose conditions on a license if
the Secretary determines that those conditions are necessary
or appropriate. These conditions shall be imposed in writing
and shall continue in effect for the period prescribed by the
Secretary.
(d) A license issued pursuant to this Act shall take
effect on the later of the following:
(1) The date the Department issues the license.

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(2) The date the licensee provides the security
required by Section 120-5.
(e) In addition to the fee required by paragraph (3) of
subsection (a), an applicant shall pay the costs of the
Department's investigation under subsection (b).
(f) A license issued pursuant to this Act shall remain in
full force and effect until it expires without renewal, is
surrendered by the licensee, or revoked or suspended as
hereinafter provided.
(g)(1) The Department may issue a conditional license to
an applicant who holds or maintains a license to conduct
virtual currency business activity in the State of New York
pursuant to Part 200 of Title 23 of the New York Code of Rules
and Regulations, or a charter as a New York State limited
purpose trust company with approval to conduct virtual
currency business under the New York Banking Law, if the
license or approval was issued no later than January 1, 2023
and the applicant pays all appropriate fees and complies with
the requirements of this Act.
(2) A conditional license issued pursuant to this
subsection shall expire at the earliest of the following:
(A) upon issuance of an unconditional license;
(B) upon denial of a license application;
(C) upon revocation of a license issued pursuant to
Part 200 of Title 23 of the New York Code of Rules and
Regulations.

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Section 115-15. Renewal.
(a) Licenses shall be subject to renewal every year using
a common renewal period as established by the Department by
rule. A licensee may apply for renewal of the license by
submitting a renewal application under subsection (b) and
paying a renewal fee determined by the Department, not to
exceed the reasonable costs of regulation.
(b) A renewal application required by subsection (a) shall
be submitted in a form and medium prescribed by the
Department. The report shall contain all of the following:
(1) Either a copy of the licensee's most recent
reviewed annual financial statement, if the gross revenue
generated by the licensee's digital asset business
activity in this State was not more than $2,000,000 for
the fiscal year ending before the anniversary date of
issuance of its license under this Act, or a copy of the
licensee's most recent audited annual financial statement,
if the licensee's digital asset business activity in this
State amounted to more than $2,000,000, for the fiscal
year ending before the anniversary date.
(2) If a person other than an individual has control
of the licensee, a copy of either of the following:
(A) The person's most recent reviewed annual
financial statement, if the person's gross revenue was
not more than $2,000,000 in the previous fiscal year

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measured as of the anniversary date of issuance of its
license under this Act.
(B) The person's most recent audited consolidated
annual financial statement, if the person's gross
revenue was more than $2,000,000 in the previous
fiscal year measured as of the anniversary date of
issuance of its license under this Act.
(3) A description of any of the following:
(A) Any material change in the financial condition
of the licensee and any affiliate of the licensee.
(B) Any material litigation related to the
licensee's digital asset business activity and
involving the licensee or an executive officer,
responsible individual, or affiliate of the licensee.
(C) Any federal, state, or foreign investigation
involving the licensee or an executive officer,
responsible individual, or affiliate of the licensee.
(D)(i) Any data security breach involving the
licensee.
(ii) A description of a data security breach
pursuant to this subparagraph does not constitute
disclosure or notification of a security breach
for purposes of any other law.
(4) Information or records required by Section 120-25
that the licensee has not reported to the Department.
(5) The number of digital asset business activity

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transactions with or on behalf of residents for the period
since the later of the date the license was issued or the
date the last renewal application was submitted.
(6)(A) The amount of United States dollar equivalent
of digital assets in the custody or control of the
licensee at the end of the last month that ends not later
than 30 days before the date of the renewal report.
(B) The total number of residents for whom the
licensee had custody or control of United States
dollar equivalent of digital assets on that date.
(7) Evidence that the licensee is in compliance with
Section 105-10.
(8) Evidence that the licensee is in compliance with
Section 120-5.
(9) A list of any location where the licensee operates
its digital asset business activity.
(10) Any other information the Department requires by
rule.
(c) If a licensee does not timely comply with subsection
(a), the Department may use enforcement actions provided under
Section 120-50. Notice or hearing is not required for a
suspension or revocation of a license under this Act for
failure to pay a renewal fee or file a renewal application.
(d) Suspension or revocation of a license under this
Section does not invalidate a transfer or exchange of digital
assets for or on behalf of a resident made during the

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suspension or revocation and does not insulate the licensee
from liability under this Act.
(e) For good cause, the Department, in its sole
discretion, may extend a period under this Section.
(f) A licensee that does not comply with this Section
shall cease digital asset business activities with or on
behalf of a resident. A licensee ceasing an activity or
activities regulated by this Act and desiring to no longer be
licensed shall so inform the Department in writing and, at the
same time, convey any license issued and all other symbols or
indicia of licensure. The licensee shall include a plan for
the withdrawal from regulated business, including a timetable
for the disposition of the business, and comply with the
surrender guidelines or requirements of the Department.
(g) A licensee shall pay the reasonable and necessary
costs of the Department's investigation under this Section.
Section 115-20. Nontransferable license. A license under
this Act is not transferable or assignable.
Article 120. Supervision
Section 120-5. Surety bond; capital and liquidity
requirements.
(a)(1)(A) A licensee shall maintain a surety bond or trust
account in United States dollars in a form and amount as

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determined by the Department for the protection of residents
that engage in digital asset business activity with the
licensee.
(B) If a licensee maintains a trust account
pursuant to this Section, that trust account shall be
maintained with a qualified custodian.
(2) Security deposited under this Section shall be for
the benefit of a claim against the licensee on account of
the licensee's digital asset business activity with or on
behalf of a resident.
(3) Security deposited under this Section shall cover
claims for the period the Department specifies by rule and
for an additional period the Department specifies after
the licensee ceases to engage in digital asset business
activity with or on behalf of a resident.
(4) The Department may require the licensee to
increase the amount of security deposited under this
Section, and the licensee shall deposit the additional
security not later than 15 days after the licensee
receives notice in a record of the required increase.
(5) The Department may permit a licensee to substitute
or deposit an alternate form of security satisfactory to
the Department if the licensee at all times complies with
this Section.
(b) In addition to the security required under subsection
(a), a licensee shall maintain at all times capital and

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liquidity, each in an amount and form as the Department
determines is sufficient to ensure the financial integrity of
the licensee and its ongoing operations based on an assessment
of the specific risks applicable to the licensee. In
determining the minimum amount of capital and liquidity that
shall be maintained by a licensee, the Department may consider
factors, including, but not limited to, all of the following:
(1) The composition of the licensee's total assets,
including the position, size, liquidity, risk exposure,
and price volatility of each type of asset.
(2) The composition of the licensee's total
liabilities, including the size and repayment timing of
each type of liability.
(3) The actual and expected volume of the licensee's
digital asset business activity.
(4) The amount of leverage employed by the licensee.
(5) The liquidity position of the licensee.
(6) The financial protection that the licensee
provides pursuant to subsection (a).
(7) The types of entities to be serviced by the
licensee.
(8) The types of products or services to be offered by
the licensee.
(9) Arrangements adopted by the licensee for the
protection of its customers in the event of the licensee's
insolvency.

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(c) A licensee shall hold liquidity required to be
maintained in accordance with this Section in the form of cash
or high-quality liquid assets, as defined by the Department
and in proportions determined by the Department.
(d) The Department may require a licensee to increase the
capital or liquidity required under this Section. A licensee
shall submit evidence satisfactory to the Department that it
has additional capital or liquidity required pursuant to this
subsection not later than 15 days after the licensee receives
notice in a record of the required increase.
Section 120-10. Examination.
(a)(1)(A) The Department may, at any time and from time to
time, examine the business and any office, within or outside
this State, of any covered person, or any agent of a covered
person, in order to ascertain (i) the financial condition of
the covered person, (ii) the safety and soundness of the
conduct of its business, (iii) the policies of its management,
(iv) whether the business is being conducted in a lawful
manner, (v) whether all digital asset business activity is
properly accounted for, and (vi) such other matters as the
Department may determine, including, but not limited to, any
activities of the covered person outside the State if in the
Department's judgment such activities may affect the covered
person's digital asset business activity.
(B) The directors, officers, and employees of a

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covered person, or agent of a covered person, being
examined by the Department shall exhibit to the
Department, on request, any or all of the covered
person's accounts, books, correspondence, memoranda,
papers, and other records and shall otherwise
facilitate the examination so far as it may be in their
power to do so.
(C) The covered person shall permit and assist the
Department to examine an affiliate or service provider
of the covered person when, in the Department's
judgment, it is necessary or advisable to do so.
(2) The Department may examine a covered person, its
affiliate, or service provider pursuant to this paragraph
without prior notice to the covered person, affiliate, or
service provider.
(b) A covered person shall pay the necessary costs of an
examination under this Section.
Section 120-15. Books and records.
(a) A licensee shall maintain, for all digital asset
business activity with or on behalf of a resident for 5 years
after the date of the activity, a record of all of the
following:
(1) Any transaction of the licensee with or on behalf
of the resident or for the licensee's account in this
State, including all of the following:

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(A) The identity of the resident.
(B) The form of the transaction.
(C) The amount, date, and payment instructions
given by the resident.
(D) The account number, name, and United States
Postal Service address of the resident, and, to the
extent feasible, other parties to the transaction.
(2) The aggregate number of transactions and aggregate
value of transactions by the licensee with, or on behalf
of, the resident and for the licensee's account in this
State expressed in United States dollar equivalent of
digital assets for the previous 12 calendar months.
(3) Any transaction in which the licensee exchanged
one form of digital asset for fiat currency or another
form of digital asset with or on behalf of the resident.
(4) A general ledger posted at least monthly that
lists all assets, liabilities, capital, income, and
expenses of the licensee.
(5) Any call report the licensee is required to create
or provide to the Department.
(6) Bank statements and bank reconciliation records
for the licensee and the name, account number, and United
States Postal Service address of any bank or credit union
the licensee uses in the conduct of its digital asset
business activity with or on behalf of the resident.
(7) A report of any dispute with a resident.

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(b) A licensee shall maintain records required by
subsection (a) in a form that enables the Department to
determine whether the licensee is in compliance with this Act,
any court order, and the laws of this State.
(c) If a licensee maintains records outside this State
that pertain to transactions with or on behalf of a resident,
the licensee shall make the records available to the
Department not later than 3 days after request, or, on a
determination of good cause by the Department, in its sole
discretion, at a later time.
(d) All records maintained by a licensee, any affiliate,
or any service provider are subject to inspection by the
Department.
Section 120-20. Regulatory cooperation. The Department may
cooperate, coordinate, jointly examine, consult, and share
records and other information with the appropriate regulatory
agency of another state, a self-regulatory organization,
federal or state regulator of banking or non-depository
institutions, or a regulator of a jurisdiction outside the
United States, concerning the affairs and conduct of a covered
person, affiliate, or service provider in this State.
Section 120-25. Material business changes.
(a) A licensee shall file with the Department a report of
the following, as may be applicable:

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(1) A material change in information in the
application for a license under this Act or the most
recent renewal report of the licensee under this Act.
(2) A material change in the licensee's business for
the conduct of its digital asset business activity with or
on behalf of a resident.
(3) A change of an affiliate, executive officer,
responsible individual, or person in control of the
licensee.
(b) Absent good cause, as determined in the sole
discretion of the Department, a report required by this
Section shall be filed not later than 15 days after the change
described in subsection (a).
Section 120-30. Change in control.
(a) As used in this Section, "proposed person to be in
control" means the person that would control a licensee after
a proposed transaction that would result in a change in
control of the licensee.
(b) The following rules apply in determining whether a
person has control over a licensee:
(1) There is a rebuttable presumption of control if
the person's voting power in the licensee constitutes or
will constitute at least 25% of the total voting power of
the licensee.
(2) There is a rebuttable presumption of control if

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the person's voting power in another person constitutes or
will constitute at least 10% of the total voting power of
the other person and the other person's voting power in
the licensee constitutes at least 25% of the total voting
power of the licensee.
(3) There is no presumption of control solely because
an individual is an executive officer of the licensee.
(c) At least 30 days before a proposed change in control of
a licensee, the proposed person to be in control shall submit
to the Department in a record all of the following:
(1) An application in a form and medium prescribed by
the Department.
(2) The information and records that Section 115-10
would require if the proposed person to be in control
already had control of the licensee.
(3) A license application under Section 115-10 by the
proposed person to be in control.
(d) The Department, in accordance with Section 115-10,
shall approve, approve with conditions, or deny an application
for a change in control of a licensee. The Department, in a
record, shall send notice of its decision to the licensee and
the person that would be in control if the Department had
approved the change in control. If the Department denies the
application, the licensee shall abandon the proposed change in
control or cease digital asset business activity with or on
behalf of residents.

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(e) If the Department applies a condition to approval of a
change in control of a licensee, and the Department does not
receive notice of the applicant's acceptance of the condition
specified by the Department not later than 31 days after the
Department sends notice of the condition, the application is
deemed denied. If the application is deemed denied, the
licensee shall abandon the proposed change in control or cease
digital asset business activity with or on behalf of
residents.
(f) The Department may revoke or modify a determination
under subsection (d), after notice and opportunity to be
heard, if, in its judgment, revocation or modification is
consistent with this Act.
(g) If a change in control of a licensee requires approval
of another regulatory agency, and the action of the other
agency conflicts with that of the Department, the Department
shall confer with the other agency. If the proposed change in
control cannot be completed because the conflict cannot be
resolved, the licensee shall abandon the change in control or
cease digital asset business activity with or on behalf of
residents.
Section 120-35. Mergers.
(a) At least 30 days before a proposed merger or
consolidation of a licensee with another person, the licensee
shall submit all of the following, as applicable, to the

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Department:
(1) An application in a form and medium prescribed by
the Department.
(2) The plan of merger or consolidation in accordance
with subsection (e).
(3) In the case of a licensee, the information
required by Section 115-10 concerning the person that
would be the surviving entity in the proposed merger or
consolidation.
(b) If a proposed merger or consolidation would change the
control of a licensee, the licensee shall comply with Section
120-30 and this Section.
(c) The Department, in accordance with Section 115-10,
shall approve, conditionally approve, or deny an application
for approval of a merger or consolidation of a licensee. The
Department, in a record, shall send notice of its decision to
the licensee and the person that would be the surviving
entity. If the Department denies the application, the licensee
shall abandon the merger or consolidation or cease digital
asset business activity with or on behalf of residents.
(d) The Department may revoke or modify a determination
under paragraph (c), after notice and opportunity to be heard,
if, in its judgment, revocation or modification is consistent
with this Act.
(e) A plan of merger or consolidation of a licensee with
another person shall do all of the following:

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(1) Describe the effect of the proposed transaction on
the licensee's conduct of digital asset business activity
with or on behalf of residents.
(2) Identify each person to be merged or consolidated
and the person that would be the surviving entity.
(3) Describe the terms and conditions of the merger or
consolidation and the mode of carrying it into effect.
(f) If a merger or consolidation of a licensee and another
person requires approval of another regulatory agency, and the
action of the other agency conflicts with that of the
Department, the Department shall confer with the other agency.
If the proposed merger or consolidation cannot be completed
because the conflict cannot be resolved, the licensee shall
abandon the merger or consolidation or cease digital asset
business activity with or on behalf of residents.
(g) The Department may condition approval of an
application under subsection (a). If the Department does not
receive notice from the parties that the parties accept the
Department's condition not later than 31 days after the
Department sends notice in a record of the condition, the
application is deemed denied. If the application is deemed
denied, the licensee shall abandon the merger or consolidation
or cease digital asset business activity with, or on behalf
of, residents.
(h) If a licensee acquires substantially all of the assets
of a person, whether or not the person's license was approved

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by the Department, the transaction is subject to this Section.
Section 120-40. Investigation of complaints. The Secretary
shall be authorized at all times to maintain staff and
facilities adequate to receive, record, and investigate
complaints and inquiries made by any person concerning this
Act and any covered persons, affiliates, and service providers
under this Act. Each such person shall open their books,
records, documents, and offices wherever situated to the
Secretary or his or her appointees as needed to facilitate
such investigations.
Section 120-45. Additional investigation and examination
authority. In addition to any authority allowed under this Act
or other applicable law, the Secretary shall have the
authority to conduct investigations and examinations as
follows:
(1) For purposes of initial licensing, license
renewal, license suspension, license conditioning, license
revocation or termination, or general or specific inquiry
or investigation to determine compliance with this Act,
the Secretary shall have the authority to access, receive,
and use any books, accounts, records, files, documents,
information, or evidence, including, but not limited to,
the following:
(A) criminal, civil, and administrative history

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information, including nonconviction data as specified
in the Criminal Code of 2012;
(B) personal history and experience information,
including independent credit reports obtained from a
consumer reporting agency described in Section 603(p)
of the federal Fair Credit Reporting Act; and
(C) any other documents, information, or evidence
the Secretary deems relevant to the inquiry or
investigation, regardless of the location, possession,
control, or custody of the documents, information, or
evidence.
(2) For the purposes of investigating violations or
complaints arising under this Act or for the purposes of
examination, the Secretary may review, investigate, or
examine any covered person, affiliate, service provider,
individual, or person subject to this Act as often as
necessary in order to carry out the purposes of this Act.
The Secretary may direct, subpoena, or order the
attendance of and examine under oath all persons whose
testimony may be required about the transactions or the
business or subject matter of any such examination or
investigation, and may direct, subpoena, or order the
person to produce books, accounts, records, files, and any
other documents the Secretary deems relevant to the
inquiry.
(3) Each covered person, affiliate, service provider,

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individual, or person subject to this Act shall make
available to the Secretary upon request the books and
records relating to the operations of the licensee,
affiliate, individual, or person subject to this Act. The
Secretary shall have access to those books and records and
interview the officers, principals, employees, independent
contractors, agents, and customers of the covered person,
affiliate, service provider, individual, or person subject
to this Act concerning their business.
(4) Each covered person, affiliate, service provider,
individual, or person subject to this Act shall make or
compile reports or prepare other information as directed
by the Secretary in order to carry out the purposes of this
Section, including, but not limited to:
(A) accounting compilations;
(B) information lists and data concerning
transactions in a format prescribed by the Secretary;
or
(C) other information deemed necessary to carry
out the purposes of this Section.
(5) In making any examination or investigation
authorized by this Act, the Secretary may control access
to any documents and records of the covered person or
person under examination or investigation. The Secretary
may take possession of the documents and records or place
a person in exclusive charge of the documents and records

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in the place where they are usually kept. During the
period of control, no person shall remove or attempt to
remove any of the documents or records, except pursuant to
a court order or with the consent of the Secretary. Unless
the Secretary has reasonable grounds to believe the
documents or records of the covered person or person under
examination or investigation have been or are at risk of
being altered or destroyed for purposes of concealing a
violation of this Act, the covered person or owner of the
documents and records shall have access to the documents
or records as necessary to conduct its ordinary business
affairs.
(6) In order to carry out the purposes of this
Section, the Secretary may:
(A) retain attorneys, accountants, or other
professionals and specialists as examiners, auditors,
or investigators to conduct or assist in the conduct
of examinations or investigations;
(B) enter into agreements or relationships with
other government officials, regulatory associations,
or self-regulatory organizations in order to improve
efficiencies and reduce regulatory burden by sharing
resources, standardized or uniform methods or
procedures, and documents, records, information, or
evidence obtained under this Section;
(C) use, hire, contract, or employ public or

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privately available analytical systems, methods, or
software to examine or investigate the covered person,
affiliate, service provider, individual, or person
subject to this Act;
(D) accept and rely on examination or
investigation reports made by other government
officials, within or outside this State; or
(E) accept audit reports made by an independent
certified public accountant for the covered person,
affiliate, service provider, individual, or person
subject to this Act in the course of that part of the
examination covering the same general subject matter
as the audit and may incorporate the audit report in
the report of the examination, report of
investigation, or other writing of the Secretary.
(7) The authority of this Section shall remain in
effect, whether such a covered person, affiliate, service
provider, individual, or person subject to this Act acts
or claims to act under any licensing or registration law
of this State or claims to act without the authority.
(8) No covered person, affiliate, service provider,
individual, or person subject to investigation or
examination under this Section may knowingly withhold,
abstract, remove, mutilate, destroy, or secrete any books,
records, computer records, or other information.

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Section 120-50. Enforcement actions.
(a) As used in this Article, "enforcement action" means an
action including, but not limited to, all of the following:
(1) Suspending or revoking a license under this Act.
(2) Ordering a person to cease and desist from doing
digital asset business activity with or on behalf of a
resident.
(3) Requesting the court to appoint a receiver for the
assets of a person doing digital asset business activity
with or on behalf of a resident.
(4) Requesting the court to issue temporary,
preliminary, or permanent injunctive relief against a
person doing digital asset business activity with or on
behalf of a resident.
(5) Assessing a civil penalty under Section 120-70.
(6) Recovering on the security under Section 120-5 and
initiating a plan to distribute the proceeds for the
benefit of a resident injured by a violation of this Act,
or law of this State other than this Act that applies to
digital asset business activity with or on behalf of a
resident.
(7) Imposing necessary or appropriate conditions on
the conduct of digital asset business activity with or on
behalf of a resident.
(8) Seeking restitution on behalf of a resident if the
Department shows economic injury due to a violation of

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this Act.
(b) The Department may enter into a consent order with a
person regarding an enforcement action.
(c) This Section does not provide a private right of
action to a resident, provided this Section does not preclude
an action by a resident to enforce rights under Article 105 or
subsection (a) of Section 120-5.
Section 120-55. Violations.
(a) The Department may take an enforcement action against
a covered person or any person otherwise subject to this Act in
any of the following instances:
(1) The covered person or person violates this Act, a
rule adopted or order issued under this Act, or a State or
federal law or regulation that applies to digital asset
business activity of the violator with or on behalf of a
resident.
(2) The covered person or person does not cooperate
with an examination or investigation by the Department,
fails to pay a fee, or fails to submit a report or
documentation.
(3) The covered person or person, in the conduct of
its digital asset business activity with or on behalf of a
resident, engages in any of the following:
(A) An unsafe, unsound, or unlawful act or
practice.

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(B) An unfair, deceptive, or abusive act or
practice.
(C) Fraud, misrepresentation, deceit, or
negligence.
(D) Misappropriation of fiat currency, a digital
asset, or other value.
(4) An agency of the United States or another state
takes an action against the covered person or person that
would constitute an enforcement action if the Department
had taken the action.
(5) The covered person or person is convicted of a
crime related to its digital asset business activity with
or on behalf of a resident or involving fraud or felonious
activity that, as determined by the Department, makes the
covered person or person unsuitable to engage in digital
asset business activity.
(6) Any of the following occurs:
(A) The covered person or person becomes
insolvent.
(B) The covered person or person makes a general
assignment for the benefit of its creditors.
(C) The covered person or person becomes the
debtor, alleged debtor, respondent, or person in a
similar capacity in a case or other proceeding under
any bankruptcy, reorganization, arrangement,
readjustment, insolvency, receivership, dissolution,

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liquidation, or similar law, and does not obtain from
the court, within a reasonable time, confirmation of a
plan or dismissal of the case or proceeding.
(D) The covered person or person applies for, or
permits the appointment of, a receiver, trustee, or
other agent of a court for itself or for a substantial
part of its assets.
(7) The covered person or person makes a
misrepresentation to the Department.
(b) If the Secretary finds, as the result of examination,
investigation, or review of reports submitted by a licensee,
that the business and affairs of a licensee are not being
conducted in accordance with this Act, the Secretary may
notify the licensee of the correction necessary. If a licensee
fails to correct such violations, the Secretary may issue an
order requiring immediate correction and compliance with this
Act and may specify a reasonable date for performance.
Section 120-60. Hearings.
(a) Except as provided in subsection (b), the Department
may take an enforcement action only after notice and
opportunity for a hearing as appropriate in the circumstances.
All hearings provided for in this Act shall be conducted in
accordance with Title 38, Part 100 of the Illinois
Administrative Code, and the Secretary shall have all the
powers granted therein.

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(b)(1)(A) The Department may take an enforcement action,
other than the imposition of a civil penalty under Section
120-70, without notice if the circumstances require action
before notice can be given.
(B) A person subject to an enforcement action
pursuant to this subsection shall have the right to an
expedited post-action hearing by the Department unless
the person has waived the hearing.
(2)(A) The Department may take an enforcement action,
other than the imposition of a civil penalty under Section
120-70, after notice and without a prior hearing if the
circumstances require action before a hearing can be held.
(B) A person subject to an enforcement action
pursuant to this subsection shall have the right to an
expedited post-action hearing by the Department unless
the person has waived the hearing.
(3) The Department may take an enforcement action
after notice and without a hearing if the person subject
to the enforcement action does not timely request a
hearing.
Section 120-65. Hearing rules.
(a) The Department may, in accordance with the Illinois
Administrative Procedure Act, adopt rules to provide for
review within the Department of the Secretary's decisions
affecting the rights of persons or entities under this Act.

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The review shall provide for, at a minimum:
(1) appointment of a hearing officer;
(2) appropriate procedural rules, specific deadlines
for filings, and standards of evidence and of proof; and
(3) provision for apportioning costs among parties to
the appeal.
(b) All final administrative decisions of the Department
under this Act, all amendments and modifications of final
administrative decisions, and any rules adopted by the
Department pursuant to this Act shall be subject to judicial
review pursuant to the provisions of the Administrative Review
Law.
Section 120-70. Civil penalties.
(a) If a person other than a licensee engages in digital
asset business activity with or on behalf of a resident in
violation of this Act, the Department may assess a civil
penalty against the person in an amount not to exceed $100,000
for each day the person is in violation of this Act.
(b) If a person violates a provision of this Act, the
Department may assess a civil penalty in an amount not to
exceed $25,000 for each day of violation or for each act or
omission in violation, except that a fine may be imposed not to
exceed $75,000 for each day of violation or for each act or
omission in violation related to fraud, misrepresentation,
deceit, or negligence.

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(c) A civil penalty under this Section continues to accrue
until the date the violation ceases.
(d) A civil penalty under this Section is cumulative to
any civil penalties enforceable by the Department under any
other law.
Section 120-75. Subpoena power.
(a) The Secretary shall have the power to issue and to
serve subpoenas and subpoenas duces tecum to compel the
attendance of witnesses and the production of all books,
accounts, records, and other documents and materials relevant
to an examination or investigation. The Secretary, or his or
her duly authorized representative, shall have power to
administer oaths and affirmations to any person.
(b) In the event of noncompliance with a subpoena or
subpoena duces tecum issued or caused to be issued by the
Secretary, the Secretary may, through the Attorney General or
the State's Attorney of the county in which the person
subpoenaed resides or has its principal place of business,
petition the circuit court of the county for an order
requiring the subpoenaed person to appear and testify and to
produce such books, accounts, records, and other documents as
are specified in the subpoena duces tecum. The court may grant
injunctive relief restraining the person from advertising,
promoting, soliciting, entering into, offering to enter into,
continuing, or completing any digital asset business activity.

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The court may grant other relief, including, but not limited
to, the restraint, by injunction or appointment of a receiver,
of any transfer, pledge, assignment, or other disposition of
the person's assets or any concealment, alteration,
destruction, or other disposition of books, accounts, records,
or other documents and materials as the court deems
appropriate, until the person has fully complied with the
subpoena or subpoena duces tecum and the Secretary has
completed an investigation or examination.
(c) If it appears to the Secretary that the compliance
with a subpoena or subpoena duces tecum issued or caused to be
issued by the Secretary pursuant to this Section is essential
to an investigation or examination, the Secretary, in addition
to the other remedies provided for in this Act, may, through
the Attorney General or the State's Attorney of the county in
which the subpoenaed person resides or has its principal place
of business, apply for relief to the circuit court of the
county. The court shall thereupon direct the issuance of an
order against the subpoenaed person requiring sufficient bond
conditioned on compliance with the subpoena or subpoena duces
tecum. The court shall cause to be endorsed on the order a
suitable amount of bond or payment pursuant to which the
person named in the order shall be freed, having a due regard
to the nature of the case.
(d) In addition, the Secretary may, through the Attorney
General or the State's Attorney of the applicable county, seek

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a writ of attachment or an equivalent order from the circuit
court having jurisdiction over the person who has refused to
obey a subpoena, who has refused to give testimony, or who has
refused to produce the matters described in the subpoena duces
tecum.
Section 120-80. Civil actions.
(a) The Department may bring a civil action in accordance
with the following:
(1) If a person violates any provision of this Act, a
rule or final order, or condition imposed in writing by
the Department, the Department through the Attorney
General or the State's Attorney of the county in which any
such violation occurs may bring an action in the circuit
court to enjoin the acts or practices or to enforce
compliance with this Act or any rule or order adopted
pursuant to this Act. Upon a proper showing, a permanent
or preliminary injunction, restraining order, or writ of
mandate shall be granted and a receiver, monitor,
conservator, or other designated fiduciary or officer of
the court may be appointed for the defendant or the
defendant's assets, or any other ancillary relief may be
granted as appropriate. A receiver, monitor, conservator,
or other designated fiduciary or officer of the court
appointed by the circuit court pursuant to this Section
may, with the approval of the court, exercise any or all of

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the powers of the defendant's officers, directors,
partners, trustees, or persons who exercise similar powers
and perform similar duties, including the filing of a
petition for bankruptcy. No action at law or in equity may
be maintained by any party against the Secretary, a
receiver, monitor, conservator, or other designated
fiduciary or officer of the court, by reason of their
exercising these powers or performing these duties
pursuant to the order of, or with the approval of, the
circuit court.
(2) The Secretary may include in any action relief
authorized by Section 120-50. The circuit court shall have
jurisdiction to award additional relief.
(3) In any action brought by the Department, the
Department may recover its costs and attorney's fees in
connection with prosecuting the action if the Department
is the prevailing party in the action.
(b) The Attorney General may enforce a violation of
Article 105 as an unlawful practice under the Consumer Fraud
and Deceptive Business Practices Act.
(c) A claim of violation of Article 105 may be asserted in
a civil action. Additionally, a prevailing resident may be
awarded reasonable attorney's fees and court costs.
Article 125. General Restrictions and Prohibitions

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Section 125-5. Restricted stablecoin activities.
(a) As used in this Section:
"Reserve assets" means cash, central bank reserves,
insured deposit accounts, short-term U.S. Treasury securities,
short-term U.S. Treasury reverse repurchase agreements, or
similar high-quality liquid assets, as defined by the
Department and in proportions determined by the Department.
"Nominal redemption value" means the value at which a
digital asset can be readily converted, on demand at the time
of issuance, into United States dollars or any other national
or state currency or a monetary equivalent or otherwise
accepted in payment or to satisfy debts denominated in United
States dollars or any national or state currency.
"Stablecoin" means a digital asset (A) that is denominated
in United States dollars or pegged to the United States dollar
or denominated in or pegged to another national or state
currency and is issued with a fixed nominal redemption value
with the intent of establishing a reasonable expectation or
belief among the general public that the instrument will
retain a nominal redemption value that is so stable as to
render the nominal redemption effectively fixed and (B) that
is not (i) a national or state currency or (ii) a security
issued by an investment company registered under the
Investment Company Act of 1940, 15 U.S.C. 80a et seq.
(b) Subject to any rules adopted by the Department, a
covered person shall not exchange, transfer, or store a

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digital asset or engage in digital asset administration if
that digital asset is a stablecoin unless both of the
following are true:
(1) The issuer of the stablecoin is licensed pursuant
to this Act or is a federally insured depository
institution exempt from licensure under subsection (c) of
Section 101-10.
(2) The issuer of the stablecoin at all times owns
reserve assets having an aggregate market value computed
in accordance with United States generally accepted
accounting principles of not less than the aggregate
amount of all of its outstanding stablecoins issued or
sold.
(c) The Department may adopt rules to establish additional
requirements for issuers of stablecoins, including, but not
limited to, rules related to:
(1) reserve asset requirements;
(2) restrictions on pledging, rehypothecating, or
reusing reserve assets;
(3) redemption requirements; or
(4) any requirement necessary and appropriate for the
protection of residents, safety and soundness, or
financial stability or to effectuate the purposes of this
Section.
Section 125-10. No evasion.

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(a) It shall be unlawful to engage in any device,
subterfuge, or pretense to willfully evade or attempt to evade
the requirements of this Act or any rule or order issued by the
Department hereunder.
(b) Any financial product, service, or transaction that is
willfully structured to evade or attempt to evade the
definitions of digital asset or digital asset business
activity shall be a digital asset or digital asset business
activity, respectively, for purposes of this Act.
Article 130. Additional Procedural Provisions
Section 130-5. Confidential supervisory information.
(a) Confidential supervisory information shall, unless
made a matter of public record, not be subject to disclosure
under the Freedom of Information Act, and shall only be
subject to disclosure pursuant to subpoena or court order as
provided in subsection (e).
(b) All records of communications or summaries of
communications between employees, agents, or representatives
of the Department and employees, agents, or representatives of
other governmental agencies, a provider of any multistate
licensing system, or associations or organizations
representing federal, state, or local law enforcement or
regulatory agencies or providers of any multistate licensing
system, pursuant to any regulatory or supervision activity

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under this Act (1) shall not be subject to disclosure under the
Freedom of Information Act, and (2) to the extent the records
contain confidential supervisory information, shall only be
subject to disclosure pursuant to subpoena or court order as
provided in subsection (e).
(c) All confidential supervisory information received from
other governmental agencies, a multistate licensing system
provider, or associations or organizations consisting of
employees, agents, or representatives of such agencies or
providers, shall not be subject to disclosure under the
Freedom of Information Act, and only subject to disclosure
pursuant to subpoena or court order as provided in subsection
(e).
(d) The sharing of any confidential supervisory
information under this Act with governmental agencies,
providers of any multistate licensing system, or associations
or organizations consisting of employees, agents, or
representatives of such federal, state, or local law
enforcement or regulatory agencies, shall not result in the
loss of privilege arising under federal or state law, or the
loss of confidentiality protections provided by federal law or
state law, and are only subject to disclosure pursuant to
subpoena or court order as provided in subsection (e).
(e) Confidential supervisory information may not be
disclosed to anyone other than the regulated person, law
enforcement officials or other regulatory agencies that have

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an appropriate regulatory interest as determined by the
Secretary, or to a party presenting a lawful subpoena, order,
or other judicial or administrative process to the Secretary.
The Secretary may immediately appeal to the court of
jurisdiction the disclosure of such confidential supervisory
information and seek a stay of the subpoena pending the
outcome of the appeal. Reports required of regulated persons
by the Secretary under this Act and results of examinations
performed by the Secretary under this Act shall be the
property of only the Secretary but may be shared with the
regulated person. Access under this Act to the books and
records of each regulated person shall be limited to the
Secretary and his agents as provided in this Act and to the
regulated person and its authorized agents and designees. No
other person shall have access to the books and records of a
regulated person under this Act. Any person upon whom a demand
for production of confidential supervisory information is
made, whether by subpoena, order, or other judicial or
administrative process, must withhold production of the
confidential supervisory information and must notify the
Secretary of the demand, at which time the Secretary is
authorized to intervene for the purpose of enforcing the
limitations of this Section or seeking the withdrawal or
termination of the attempt to compel production of the
confidential supervisory information. The Secretary may impose
any conditions and limitations on the disclosure of

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confidential supervisory information that are necessary to
protect the confidentiality of such information. Except as
authorized by the Secretary, no person obtaining access to
confidential supervisory information may make a copy of the
confidential supervisory information. The Secretary may
condition a decision to disclose confidential supervisory
information on entry of a protective order by the court or
administrative tribunal presiding in the particular case or on
a written agreement of confidentiality. In a case in which a
protective order or agreement has already been entered between
parties other than the Secretary, the Secretary may
nevertheless condition approval for release of confidential
supervisory information upon the inclusion of additional or
amended provisions in the protective order. The Secretary may
authorize a party who obtained the records for use in one case
to provide them to another party in another case, subject to
any conditions that the Secretary may impose on either or both
parties. The requester shall promptly notify other parties to
a case of the release of confidential supervisory information
obtained and, upon entry of a protective order, shall provide
copies of confidential supervisory information to the other
parties.
(f) The Secretary is authorized to enter agreements or
sharing arrangements with other governmental agencies,
providers of any multistate licensing system, or associations
or organizations representing governmental agencies or

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providers of any multistate licensing system. Notwithstanding
the foregoing, the provisions of this Section shall apply
regardless of the existence of any such agreement or sharing
arrangement.
(g) This Section in no way limits any right, privilege, or
authority that the Department has pursuant to any other
applicable law. This Section does not in any way limit any
privilege arising under federal or state law or other
exemption from disclosure pursuant to the Freedom of
Information Act.
(h) Notwithstanding the foregoing, whenever the Secretary
determines, in his or her sole discretion, that it is in the
public's interest, he or she may publicly disclose information
or documents obtained under this Act, unless otherwise
prohibited by law.
Section 130-10. Additional rulemaking authority.
(a) In addition to such powers and rulemaking authority as
may be prescribed elsewhere in this Act or other financial
laws administered by the Department, the Department is hereby
authorized and empowered to adopt rules consistent with the
purposes of this Act, including, but not limited to:
(1) rules in connection with the activities of covered
persons, affiliates, and service providers as may be
necessary and appropriate for the protection of residents;
(2) rules to define the terms used in this Act and as

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may be necessary and appropriate to interpret and
implement the provisions of this Act;
(3) rules as may be necessary for the administration
and enforcement of this Act;
(4) rules to set and collect fees necessary to
administer and enforce this Act;
(5) rules in connection with the activities of covered
persons, affiliates, and service providers as may be
necessary and appropriate for the safety and soundness of
such covered persons and affiliates and the stability of
the financial system in this State.
(b) The Secretary is hereby authorized and empowered to
make specific rulings, demands, and findings that he or she
deems necessary for the proper conduct of the licensees and
affiliates thereof.
Article 135. Miscellaneous Provisions
Section 135-5. Construction; severability.
(a) The provisions of this Act shall be liberally
construed to effectuate its purposes.
(b) The provisions of this Act are severable under Section
1.31 of the Statute on Statutes.
(c) To the extent that any provision of this Act is
preempted by federal law, the provision shall not apply and
shall not be enforced solely as to the extent of the preemption

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and not as to other circumstances, persons, or applications.
Section 135-10. Transition period.
(a) A covered person engaging in digital asset business
activity without a license under this Act shall not be
considered in violation of Section 115-5 until January 1,
2025.
(b) A covered person engaging in digital asset business
activity shall not be considered in violation of Sections
105-5, 105-10, and 105-20 until January 1, 2024.
(c) A covered exchange shall not be considered in
violation of Section 105-15 until January 1, 2025.
(d) Notwithstanding the foregoing, the Department may
adopt rules pursuant to this Act upon this Act becoming law
with such rules not to take effect earlier than January 1,
2024.
Article 900. Amendatory provisions
Section 900-5. The Freedom of Information Act is amended
by changing Section 7.5 as follows:
(5 ILCS 140/7.5)
Sec. 7.5. Statutory exemptions. To the extent provided for
by the statutes referenced below, the following shall be
exempt from inspection and copying:
(a) All information determined to be confidential

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under Section 4002 of the Technology Advancement and
Development Act.
(b) Library circulation and order records identifying
library users with specific materials under the Library
Records Confidentiality Act.
(c) Applications, related documents, and medical
records received by the Experimental Organ Transplantation
Procedures Board and any and all documents or other
records prepared by the Experimental Organ Transplantation
Procedures Board or its staff relating to applications it
has received.
(d) Information and records held by the Department of
Public Health and its authorized representatives relating
to known or suspected cases of sexually transmissible
disease or any information the disclosure of which is
restricted under the Illinois Sexually Transmissible
Disease Control Act.
(e) Information the disclosure of which is exempted
under Section 30 of the Radon Industry Licensing Act.
(f) Firm performance evaluations under Section 55 of
the Architectural, Engineering, and Land Surveying
Qualifications Based Selection Act.
(g) Information the disclosure of which is restricted
and exempted under Section 50 of the Illinois Prepaid
Tuition Act.
(h) Information the disclosure of which is exempted

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under the State Officials and Employees Ethics Act, and
records of any lawfully created State or local inspector
general's office that would be exempt if created or
obtained by an Executive Inspector General's office under
that Act.
(i) Information contained in a local emergency energy
plan submitted to a municipality in accordance with a
local emergency energy plan ordinance that is adopted
under Section 11-21.5-5 of the Illinois Municipal Code.
(j) Information and data concerning the distribution
of surcharge moneys collected and remitted by carriers
under the Emergency Telephone System Act.
(k) Law enforcement officer identification information
or driver identification information compiled by a law
enforcement agency or the Department of Transportation
under Section 11-212 of the Illinois Vehicle Code.
(l) Records and information provided to a residential
health care facility resident sexual assault and death
review team or the Executive Council under the Abuse
Prevention Review Team Act.
(m) Information provided to the predatory lending
database created pursuant to Article 3 of the Residential
Real Property Disclosure Act, except to the extent
authorized under that Article.
(n) Defense budgets and petitions for certification of
compensation and expenses for court appointed trial

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counsel as provided under Sections 10 and 15 of the
Capital Crimes Litigation Act. This subsection (n) shall
apply until the conclusion of the trial of the case, even
if the prosecution chooses not to pursue the death penalty
prior to trial or sentencing.
(o) Information that is prohibited from being
disclosed under Section 4 of the Illinois Health and
Hazardous Substances Registry Act.
(p) Security portions of system safety program plans,
investigation reports, surveys, schedules, lists, data, or
information compiled, collected, or prepared by or for the
Department of Transportation under Sections 2705-300 and
2705-616 of the Department of Transportation Law of the
Civil Administrative Code of Illinois, the Regional
Transportation Authority under Section 2.11 of the
Regional Transportation Authority Act, or the St. Clair
County Transit District under the Bi-State Transit Safety
Act.
(q) Information prohibited from being disclosed by the
Personnel Record Review Act.
(r) Information prohibited from being disclosed by the
Illinois School Student Records Act.
(s) Information the disclosure of which is restricted
under Section 5-108 of the Public Utilities Act.
(t) All identified or deidentified health information
in the form of health data or medical records contained

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in, stored in, submitted to, transferred by, or released
from the Illinois Health Information Exchange, and
identified or deidentified health information in the form
of health data and medical records of the Illinois Health
Information Exchange in the possession of the Illinois
Health Information Exchange Office due to its
administration of the Illinois Health Information
Exchange. The terms "identified" and "deidentified" shall
be given the same meaning as in the Health Insurance
Portability and Accountability Act of 1996, Public Law
104-191, or any subsequent amendments thereto, and any
regulations promulgated thereunder.
(u) Records and information provided to an independent
team of experts under the Developmental Disability and
Mental Health Safety Act (also known as Brian's Law).
(v) Names and information of people who have applied
for or received Firearm Owner's Identification Cards under
the Firearm Owners Identification Card Act or applied for
or received a concealed carry license under the Firearm
Concealed Carry Act, unless otherwise authorized by the
Firearm Concealed Carry Act; and databases under the
Firearm Concealed Carry Act, records of the Concealed
Carry Licensing Review Board under the Firearm Concealed
Carry Act, and law enforcement agency objections under the
Firearm Concealed Carry Act.
(v-5) Records of the Firearm Owner's Identification

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Card Review Board that are exempted from disclosure under
Section 10 of the Firearm Owners Identification Card Act.
(w) Personally identifiable information which is
exempted from disclosure under subsection (g) of Section
19.1 of the Toll Highway Act.
(x) Information which is exempted from disclosure
under Section 5-1014.3 of the Counties Code or Section
8-11-21 of the Illinois Municipal Code.
(y) Confidential information under the Adult
Protective Services Act and its predecessor enabling
statute, the Elder Abuse and Neglect Act, including
information about the identity and administrative finding
against any caregiver of a verified and substantiated
decision of abuse, neglect, or financial exploitation of
an eligible adult maintained in the Registry established
under Section 7.5 of the Adult Protective Services Act.
(z) Records and information provided to a fatality
review team or the Illinois Fatality Review Team Advisory
Council under Section 15 of the Adult Protective Services
Act.
(aa) Information which is exempted from disclosure
under Section 2.37 of the Wildlife Code.
(bb) Information which is or was prohibited from
disclosure by the Juvenile Court Act of 1987.
(cc) Recordings made under the Law Enforcement
Officer-Worn Body Camera Act, except to the extent

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authorized under that Act.
(dd) Information that is prohibited from being
disclosed under Section 45 of the Condominium and Common
Interest Community Ombudsperson Act.
(ee) Information that is exempted from disclosure
under Section 30.1 of the Pharmacy Practice Act.
(ff) Information that is exempted from disclosure
under the Revised Uniform Unclaimed Property Act.
(gg) Information that is prohibited from being
disclosed under Section 7-603.5 of the Illinois Vehicle
Code.
(hh) Records that are exempt from disclosure under
Section 1A-16.7 of the Election Code.
(ii) Information which is exempted from disclosure
under Section 2505-800 of the Department of Revenue Law of
the Civil Administrative Code of Illinois.
(jj) Information and reports that are required to be
submitted to the Department of Labor by registering day
and temporary labor service agencies but are exempt from
disclosure under subsection (a-1) of Section 45 of the Day
and Temporary Labor Services Act.
(kk) Information prohibited from disclosure under the
Seizure and Forfeiture Reporting Act.
(ll) Information the disclosure of which is restricted
and exempted under Section 5-30.8 of the Illinois Public
Aid Code.

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(mm) Records that are exempt from disclosure under
Section 4.2 of the Crime Victims Compensation Act.
(nn) Information that is exempt from disclosure under
Section 70 of the Higher Education Student Assistance Act.
(oo) Communications, notes, records, and reports
arising out of a peer support counseling session
prohibited from disclosure under the First Responders
Suicide Prevention Act.
(pp) Names and all identifying information relating to
an employee of an emergency services provider or law
enforcement agency under the First Responders Suicide
Prevention Act.
(qq) Information and records held by the Department of
Public Health and its authorized representatives collected
under the Reproductive Health Act.
(rr) Information that is exempt from disclosure under
the Cannabis Regulation and Tax Act.
(ss) Data reported by an employer to the Department of
Human Rights pursuant to Section 2-108 of the Illinois
Human Rights Act.
(tt) Recordings made under the Children's Advocacy
Center Act, except to the extent authorized under that
Act.
(uu) Information that is exempt from disclosure under
Section 50 of the Sexual Assault Evidence Submission Act.
(vv) Information that is exempt from disclosure under

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subsections (f) and (j) of Section 5-36 of the Illinois
Public Aid Code.
(ww) Information that is exempt from disclosure under
Section 16.8 of the State Treasurer Act.
(xx) Information that is exempt from disclosure or
information that shall not be made public under the
Illinois Insurance Code.
(yy) Information prohibited from being disclosed under
the Illinois Educational Labor Relations Act.
(zz) Information prohibited from being disclosed under
the Illinois Public Labor Relations Act.
(aaa) Information prohibited from being disclosed
under Section 1-167 of the Illinois Pension Code.
(bbb) Information that is prohibited from disclosure
by the Illinois Police Training Act and the Illinois State
Police Act.
(ccc) Records exempt from disclosure under Section
2605-304 of the Illinois State Police Law of the Civil
Administrative Code of Illinois.
(ddd) Information prohibited from being disclosed
under Section 35 of the Address Confidentiality for
Victims of Domestic Violence, Sexual Assault, Human
Trafficking, or Stalking Act.
(eee) Information prohibited from being disclosed
under subsection (b) of Section 75 of the Domestic
Violence Fatality Review Act.

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(fff) Images from cameras under the Expressway Camera
Act. This subsection (fff) is inoperative on and after
July 1, 2023.
(ggg) Information prohibited from disclosure under
paragraph (3) of subsection (a) of Section 14 of the Nurse
Agency Licensing Act.
(hhh) Information submitted to the Illinois Department
of State Police in an affidavit or application for an
assault weapon endorsement, assault weapon attachment
endorsement, .50 caliber rifle endorsement, or .50 caliber
cartridge endorsement under the Firearm Owners
Identification Card Act.
(iii) Information prohibited from being disclosed
under Section 4-2 of the Uniform Money Transmission
Modernization Act.
(jjj) Information prohibited from being disclosed
under Section 130-5 of the Digital Assets Regulation Act.
(Source: P.A. 101-13, eff. 6-12-19; 101-27, eff. 6-25-19;
101-81, eff. 7-12-19; 101-221, eff. 1-1-20; 101-236, eff.
1-1-20; 101-375, eff. 8-16-19; 101-377, eff. 8-16-19; 101-452,
eff. 1-1-20; 101-466, eff. 1-1-20; 101-600, eff. 12-6-19;
101-620, eff 12-20-19; 101-649, eff. 7-7-20; 101-652, eff.
1-1-22; 101-656, eff. 3-23-21; 102-36, eff. 6-25-21; 102-237,
eff. 1-1-22; 102-292, eff. 1-1-22; 102-520, eff. 8-20-21;
102-559, eff. 8-20-21; 102-813, eff. 5-13-22; 102-946, eff.
7-1-22; 102-1042, eff. 6-3-22; 102-1116, eff. 1-10-23; revised

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2-13-23.)
Section 900-10. The State Finance Act is amended by adding
Sections 5.990 and 5.991 as follows:
(30 ILCS 105/5.990 new)
Sec. 5.990. The TOMA Consumer Protection Fund.
(30 ILCS 105/5.991 new)
Sec. 5.991. Digital Assets Regulation Fund.
Section 900-15. The Illinois Banking Act is amended by
changing Sections 2 and 30 as follows:
(205 ILCS 5/2) (from Ch. 17, par. 302)
Sec. 2. General definitions. In this Act, unless the
context otherwise requires, the following words and phrases
shall have the following meanings:
"Accommodation party" shall have the meaning ascribed to
that term in Section 3-419 of the Uniform Commercial Code.
"Action" in the sense of a judicial proceeding includes
recoupments, counterclaims, set-off, and any other proceeding
in which rights are determined.
"Affiliate facility" of a bank means a main banking
premises or branch of another commonly owned bank. The main
banking premises or any branch of a bank may be an "affiliate

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facility" with respect to one or more other commonly owned
banks.
"Appropriate federal banking agency" means the Federal
Deposit Insurance Corporation, the Federal Reserve Bank of
Chicago, or the Federal Reserve Bank of St. Louis, as
determined by federal law.
"Bank" means any person doing a banking business whether
subject to the laws of this or any other jurisdiction.
A "banking house", "branch", "branch bank" or "branch
office" shall mean any place of business of a bank at which
deposits are received, checks paid, or loans made, but shall
not include any place at which only records thereof are made,
posted, or kept. A place of business at which deposits are
received, checks paid, or loans made shall not be deemed to be
a branch, branch bank, or branch office if the place of
business is adjacent to and connected with the main banking
premises, or if it is separated from the main banking premises
by not more than an alley; provided always that (i) if the
place of business is separated by an alley from the main
banking premises there is a connection between the two by
public or private way or by subterranean or overhead passage,
and (ii) if the place of business is in a building not wholly
occupied by the bank, the place of business shall not be within
any office or room in which any other business or service of
any kind or nature other than the business of the bank is
conducted or carried on. A place of business at which deposits

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are received, checks paid, or loans made shall not be deemed to
be a branch, branch bank, or branch office (i) of any bank if
the place is a terminal established and maintained in
accordance with paragraph (17) of Section 5 of this Act, or
(ii) of a commonly owned bank by virtue of transactions
conducted at that place on behalf of the other commonly owned
bank under paragraph (23) of Section 5 of this Act if the place
is an affiliate facility with respect to the other bank.
"Branch of an out-of-state bank" means a branch
established or maintained in Illinois by an out-of-state bank
as a result of a merger between an Illinois bank and the
out-of-state bank that occurs on or after May 31, 1997, or any
branch established by the out-of-state bank following the
merger.
"Bylaws" means the bylaws of a bank that are adopted by the
bank's board of directors or shareholders for the regulation
and management of the bank's affairs. If the bank operates as a
limited liability company, however, "bylaws" means the
operating agreement of the bank.
"Call report fee" means the fee to be paid to the
Commissioner by each State bank pursuant to paragraph (a) of
subsection (3) of Section 48 of this Act.
"Capital" includes the aggregate of outstanding capital
stock and preferred stock.
"Cash flow reserve account" means the account within the
books and records of the Commissioner of Banks and Real Estate

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used to record funds designated to maintain a reasonable Bank
and Trust Company Fund operating balance to meet agency
obligations on a timely basis.
"Charter" includes the original charter and all amendments
thereto and articles of merger or consolidation.
"Commissioner" means the Commissioner of Banks and Real
Estate, except that beginning on April 6, 2009 (the effective
date of Public Act 95-1047), all references in this Act to the
Commissioner of Banks and Real Estate are deemed, in
appropriate contexts, to be references to the Secretary of
Financial and Professional Regulation.
"Commonly owned banks" means 2 or more banks that each
qualify as a bank subsidiary of the same bank holding company
pursuant to Section 18 of the Federal Deposit Insurance Act;
"commonly owned bank" refers to one of a group of commonly
owned banks but only with respect to one or more of the other
banks in the same group.
"Community" means a city, village, or incorporated town
and also includes the area served by the banking offices of a
bank, but need not be limited or expanded to conform to the
geographic boundaries of units of local government.
"Company" means a corporation, limited liability company,
partnership, business trust, association, or similar
organization and, unless specifically excluded, includes a
"State bank" and a "bank".
"Consolidating bank" means a party to a consolidation.

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"Consolidation" takes place when 2 or more banks, or a
trust company and a bank, are extinguished and by the same
process a new bank is created, taking over the assets and
assuming the liabilities of the banks or trust company passing
out of existence.
"Continuing bank" means a merging bank, the charter of
which becomes the charter of the resulting bank.
"Converting bank" means a State bank converting to become
a national bank, or a national bank converting to become a
State bank.
"Converting trust company" means a trust company
converting to become a State bank.
"Court" means a court of competent jurisdiction.
"Director" means a member of the board of directors of a
bank. In the case of a manager-managed limited liability
company, however, "director" means a manager of the bank and,
in the case of a member-managed limited liability company,
"director" means a member of the bank. The term "director"
does not include an advisory director, honorary director,
director emeritus, or similar person, unless the person is
otherwise performing functions similar to those of a member of
the board of directors.
"Director of Banking" means the Director of the Division
of Banking of the Department of Financial and Professional
Regulation.
"Eligible depository institution" means an insured savings

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association that is in default, an insured savings association
that is in danger of default, a State or national bank that is
in default or a State or national bank that is in danger of
default, as those terms are defined in this Section, or a new
bank as that term defined in Section 11(m) of the Federal
Deposit Insurance Act or a bridge bank as that term is defined
in Section 11(n) of the Federal Deposit Insurance Act or a new
federal savings association authorized under Section
11(d)(2)(f) of the Federal Deposit Insurance Act.
"Fiduciary" means trustee, agent, executor, administrator,
committee, guardian for a minor or for a person under legal
disability, receiver, trustee in bankruptcy, assignee for
creditors, or any holder of similar position of trust.
"Financial institution" means a bank, savings bank,
savings and loan association, credit union, or any licensee
under the Consumer Installment Loan Act or the Sales Finance
Agency Act and, for purposes of Section 48.3, any proprietary
network, funds transfer corporation, or other entity providing
electronic funds transfer services, or any corporate
fiduciary, its subsidiaries, affiliates, parent company, or
contractual service provider that is examined by the
Commissioner. For purposes of Section 5c and subsection (b) of
Section 13 of this Act, "financial institution" includes any
proprietary network, funds transfer corporation, or other
entity providing electronic funds transfer services, and any
corporate fiduciary.

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"Foundation" means the Illinois Bank Examiners' Education
Foundation.
"General obligation" means a bond, note, debenture,
security, or other instrument evidencing an obligation of the
government entity that is the issuer that is supported by the
full available resources of the issuer, the principal and
interest of which is payable in whole or in part by taxation.
"Guarantee" means an undertaking or promise to answer for
payment of another's debt or performance of another's duty,
liability, or obligation whether "payment guaranteed" or
"collection guaranteed".
"In danger of default" means a State or national bank, a
federally chartered insured savings association or an Illinois
state chartered insured savings association with respect to
which the Commissioner or the appropriate federal banking
agency has advised the Federal Deposit Insurance Corporation
that:
(1) in the opinion of the Commissioner or the
appropriate federal banking agency,
(A) the State or national bank or insured savings
association is not likely to be able to meet the
demands of the State or national bank's or savings
association's obligations in the normal course of
business; and
(B) there is no reasonable prospect that the State
or national bank or insured savings association will

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be able to meet those demands or pay those obligations
without federal assistance; or
(2) in the opinion of the Commissioner or the
appropriate federal banking agency,
(A) the State or national bank or insured savings
association has incurred or is likely to incur losses
that will deplete all or substantially all of its
capital; and
(B) there is no reasonable prospect that the
capital of the State or national bank or insured
savings association will be replenished without
federal assistance.
"In default" means, with respect to a State or national
bank or an insured savings association, any adjudication or
other official determination by any court of competent
jurisdiction, the Commissioner, the appropriate federal
banking agency, or other public authority pursuant to which a
conservator, receiver, or other legal custodian is appointed
for a State or national bank or an insured savings
association.
"Insured savings association" means any federal savings
association chartered under Section 5 of the federal Home
Owners' Loan Act and any State savings association chartered
under the Illinois Savings and Loan Act of 1985 or a
predecessor Illinois statute, the deposits of which are
insured by the Federal Deposit Insurance Corporation. The term

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also includes a savings bank organized or operating under the
Savings Bank Act.
"Insured savings association in recovery" means an insured
savings association that is not an eligible depository
institution and that does not meet the minimum capital
requirements applicable with respect to the insured savings
association.
"Issuer" means for purposes of Section 33 every person who
shall have issued or proposed to issue any security; except
that (1) with respect to certificates of deposit, voting trust
certificates, collateral-trust certificates, and certificates
of interest or shares in an unincorporated investment trust
not having a board of directors (or persons performing similar
functions), "issuer" means the person or persons performing
the acts and assuming the duties of depositor or manager
pursuant to the provisions of the trust, agreement, or
instrument under which the securities are issued; (2) with
respect to trusts other than those specified in clause (1)
above, where the trustee is a corporation authorized to accept
and execute trusts, "issuer" means the entrusters, depositors,
or creators of the trust and any manager or committee charged
with the general direction of the affairs of the trust
pursuant to the provisions of the agreement or instrument
creating the trust; and (3) with respect to equipment trust
certificates or like securities, "issuer" means the person to
whom the equipment or property is or is to be leased or

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conditionally sold.
"Letter of credit" and "customer" shall have the meanings
ascribed to those terms in Section 5-102 of the Uniform
Commercial Code.
"Main banking premises" means the location that is
designated in a bank's charter as its main office.
"Maker or obligor" means for purposes of Section 33 the
issuer of a security, the promisor in a debenture or other debt
security, or the mortgagor or grantor of a trust deed or
similar conveyance of a security interest in real or personal
property.
"Merged bank" means a merging bank that is not the
continuing, resulting, or surviving bank in a consolidation or
merger.
"Merger" includes consolidation.
"Merging bank" means a party to a bank merger.
"Merging trust company" means a trust company party to a
merger with a State bank.
"Mid-tier bank holding company" means a corporation that
(a) owns 100% of the issued and outstanding shares of each
class of stock of a State bank, (b) has no other subsidiaries,
and (c) 100% of the issued and outstanding shares of the
corporation are owned by a parent bank holding company.
"Municipality" means any municipality, political
subdivision, school district, taxing district, or agency.
"National bank" means a national banking association

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located in this State and after May 31, 1997, means a national
banking association without regard to its location.
"Out-of-state bank" means a bank chartered under the laws
of a state other than Illinois, a territory of the United
States, or the District of Columbia.
"Parent bank holding company" means a corporation that is
a bank holding company as that term is defined in the Illinois
Bank Holding Company Act of 1957 and owns 100% of the issued
and outstanding shares of a mid-tier bank holding company.
"Person" means an individual, corporation, limited
liability company, partnership, joint venture, trust, estate,
or unincorporated association.
"Public agency" means the State of Illinois, the various
counties, townships, cities, towns, villages, school
districts, educational service regions, special road
districts, public water supply districts, fire protection
districts, drainage districts, levee districts, sewer
districts, housing authorities, the Illinois Bank Examiners'
Education Foundation, the Chicago Park District, and all other
political corporations or subdivisions of the State of
Illinois, whether now or hereafter created, whether herein
specifically mentioned or not, and shall also include any
other state or any political corporation or subdivision of
another state.
"Public funds" or "public money" means current operating
funds, special funds, interest and sinking funds, and funds of

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any kind or character belonging to, in the custody of, or
subject to the control or regulation of the United States or a
public agency. "Public funds" or "public money" shall include
funds held by any of the officers, agents, or employees of the
United States or of a public agency in the course of their
official duties and, with respect to public money of the
United States, shall include Postal Savings funds.
"Published" means, unless the context requires otherwise,
the publishing of the notice or instrument referred to in some
newspaper of general circulation in the community in which the
bank is located at least once each week for 3 successive weeks.
Publishing shall be accomplished by, and at the expense of,
the bank required to publish. Where publishing is required,
the bank shall submit to the Commissioner that evidence of the
publication as the Commissioner shall deem appropriate.
"Qualified financial contract" means any security
contract, commodity contract, forward contract, including spot
and forward foreign exchange contracts, repurchase agreement,
swap agreement, and any similar agreement, any option to enter
into any such agreement, including any combination of the
foregoing, and any master agreement for such agreements. A
master agreement, together with all supplements thereto, shall
be treated as one qualified financial contract. The contract,
option, agreement, or combination of contracts, options, or
agreements shall be reflected upon the books, accounts, or
records of the bank, or a party to the contract shall provide

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documentary evidence of such agreement.
"Recorded" means the filing or recording of the notice or
instrument referred to in the office of the Recorder of the
county wherein the bank is located.
"Resulting bank" means the bank resulting from a merger or
conversion.
"Secretary" means the Secretary of Financial and
Professional Regulation, or a person authorized by the
Secretary or by this Act to act in the Secretary's stead.
"Securities" means stocks, bonds, debentures, notes, or
other similar obligations.
"Special purpose trust company" means a special purpose
trust company under Article IIA of the Corporate Fiduciary
Act.
"Stand-by letter of credit" means a letter of credit under
which drafts are payable upon the condition the customer has
defaulted in performance of a duty, liability, or obligation.
"State bank" means any banking corporation that has a
banking charter issued by the Commissioner under this Act.
"State Banking Board" means the State Banking Board of
Illinois.
"Subsidiary" with respect to a specified company means a
company that is controlled by the specified company. For
purposes of paragraphs (8) and (12) of Section 5 of this Act,
"control" means the exercise of operational or managerial
control of a corporation by the bank, either alone or together

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with other affiliates of the bank.
"Surplus" means the aggregate of (i) amounts paid in
excess of the par value of capital stock and preferred stock;
(ii) amounts contributed other than for capital stock and
preferred stock and allocated to the surplus account; and
(iii) amounts transferred from undivided profits.
"Tier 1 Capital" and "Tier 2 Capital" have the meanings
assigned to those terms in regulations promulgated for the
appropriate federal banking agency of a state bank, as those
regulations are now or hereafter amended.
"Trust company" means a limited liability company or
corporation incorporated in this State for the purpose of
accepting and executing trusts.
"Undivided profits" means undistributed earnings less
discretionary transfers to surplus.
"Unimpaired capital and unimpaired surplus", for the
purposes of paragraph (21) of Section 5 and Sections 32, 33,
34, 35.1, 35.2, and 47 of this Act means the sum of the state
bank's Tier 1 Capital and Tier 2 Capital plus such other
shareholder equity as may be included by regulation of the
Commissioner. Unimpaired capital and unimpaired surplus shall
be calculated on the basis of the date of the last quarterly
call report filed with the Commissioner preceding the date of
the transaction for which the calculation is made, provided
that: (i) when a material event occurs after the date of the
last quarterly call report filed with the Commissioner that

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reduces or increases the bank's unimpaired capital and
unimpaired surplus by 10% or more, then the unimpaired capital
and unimpaired surplus shall be calculated from the date of
the material event for a transaction conducted after the date
of the material event; and (ii) if the Commissioner determines
for safety and soundness reasons that a state bank should
calculate unimpaired capital and unimpaired surplus more
frequently than provided by this paragraph, the Commissioner
may by written notice direct the bank to calculate unimpaired
capital and unimpaired surplus at a more frequent interval. In
the case of a state bank newly chartered under Section 13 or a
state bank resulting from a merger, consolidation, or
conversion under Sections 21 through 26 for which no preceding
quarterly call report has been filed with the Commissioner,
unimpaired capital and unimpaired surplus shall be calculated
for the first calendar quarter on the basis of the effective
date of the charter, merger, consolidation, or conversion.
(Source: P.A. 95-924, eff. 8-26-08; 95-1047, eff. 4-6-09;
96-1000, eff. 7-2-10; 96-1163, eff. 1-1-11.)
(205 ILCS 5/30) (from Ch. 17, par. 337)
Sec. 30. Conversion; merger with trust company or special
purpose trust company. Upon approval by the Commissioner a
trust company having power so to do under the law under which
it is organized may convert into a state bank or may merge into
a state bank as prescribed by this Act; except that the action

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by a trust company shall be taken in the manner prescribed by
and shall be subject to limitations and requirements imposed
by the law under which it is organized which law shall also
govern the rights of its dissenting stockholders. The rights
of dissenting stockholders of a state bank shall be governed
by Section 29 of this Act. The conversion or merger procedure
shall be:
(1) In the case of a merger, the board of directors of both
the merging trust company and the merging bank by a majority of
the entire board in each case shall approve a merger agreement
which shall contain:
(a) The name and location of the merging bank and of
the merging trust company and a list of the stockholders
of each as of the date of the merger agreement;
(b) With respect to the resulting bank (i) its name
and place of business; (ii) the amount of capital, surplus
and reserve for operating expenses; (iii) the classes and
the number of shares of stock and the par value of each
share; (iv) the charter which is to be the charter of the
resulting bank, together with the amendments to the
continuing charter and to the continuing by-laws; and (v)
a detailed financial statement showing the assets and
liabilities after the proposed merger;
(c) Provisions governing the manner of converting the
shares of the merging bank and of the merging trust
company into shares of the resulting bank;

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(d) A statement that the merger agreement is subject
to approval by the Commissioner and by the stockholders of
the merging bank and the merging trust company, and that
whether approved or disapproved, the parties thereto will
pay the Commissioner's expenses of examination;
(e) Provisions governing the manner of disposing of
the shares of the resulting bank not taken by the
dissenting stockholders of the merging trust company; and
(f) Such other provisions as the Commissioner may
reasonably require to enable him to discharge his duties
with respect to the merger.
(2) After approval by the board of directors of the
merging bank and of the merging trust company, the merger
agreement shall be submitted to the Commissioner for approval
together with the certified copies of the authorizing
resolution of each board of directors showing approval by a
majority of each board.
(3) After receipt by the Commissioner of the papers
specified in subsection (2), he shall approve or disapprove
the merger agreement. The Commissioner shall not approve the
agreement unless he shall be of the opinion and finds:
(a) That the resulting bank meets the requirements of
this Act for the formation of a new bank at the proposed
place of business of the resulting bank;
(b) That the same matters exist in respect of the
resulting bank which would have been required under

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Section 10 of this Act for the organization of a new bank;
and
(c) That the merger agreement is fair to all persons
affected. If the Commissioner disapproves the merger
agreement, he shall state his objections in writing and
give an opportunity to the merging bank and the merging
trust company to obviate such objections.
(4) To be effective, if approved by the Commissioner, a
merger of a bank and a trust company where there is to be a
resulting bank must be approved by the affirmative vote of the
holders of at least two-thirds of the outstanding shares of
stock of the merging bank entitled to vote at a meeting called
to consider such action, unless holders of preferred stock are
entitled to vote as a class in respect thereof, in which event
the proposed merger shall be adopted upon receiving the
affirmative vote of the holders of at least two-thirds of the
outstanding shares of each class of shares entitled to vote as
a class in respect thereof and of the total outstanding shares
entitled to vote at such meeting and must be approved by the
stockholders of the merging trust company as provided by the
Act under which it is organized. The prescribed vote by the
merging bank and the merging trust company shall constitute
the adoption of the charter and by-laws of the continuing
bank, including the amendments in the merger agreement, as the
charter and by-laws of the resulting bank. Written or printed
notice of the meeting of the stockholders of the merging bank

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shall be given to each stockholder of record entitled to vote
at such meeting at least thirty days before such meeting and in
the manner provided in this Act for the giving of notice of
meetings of stockholders. The notice shall state that
dissenting stockholders of the merging trust company will be
entitled to payment of the value of those shares which are
voted against approval of the merger, if a proper demand is
made on the resulting bank and the requirements of the Act
under which the merging trust company is organized are
satisfied.
(5) Unless a later date is specified in the merger
agreement, the merger shall become effective upon the filing
with the Commissioner of the executed merger agreement,
together with copies of the resolutions of the stockholders of
the merging bank and the merging trust company approving it,
certified by the president or a vice-president or, the cashier
and also by the secretary or other officer charged with
keeping the records. The charter of the merging trust company
shall thereupon automatically terminate. The Commissioner
shall thereupon issue to the continuing bank a certificate of
merger which shall specify the name of the merging trust
company, the name of the continuing bank and the amendments to
the charter of the continuing bank provided for by the merger
agreement. Such certificate shall be conclusive evidence of
the merger and of the correctness of all proceedings therefor
in all courts and places including the office of the Secretary

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of State, and said certificate shall be recorded.
(6) In the case of a conversion, a trust company shall
apply for a charter by filing with the Commissioner:
(a) A certificate signed by its president, or a
vice-president, and by a majority of the entire board of
directors setting forth the corporate action taken in
compliance with the provisions of the Act under which it
is organized governing the conversion of a trust company
to a bank or governing the merger of a trust company into
another corporation;
(b) The plan of conversion and the proposed charter
approved by the stockholders for the operation of the
trust company as a bank. The plan of conversion shall
contain (i) the name and location proposed for the
converting trust company; (ii) a list of its stockholders
as of the date of the stockholders' approval of the plan of
conversion; (iii) the amount of its capital, surplus and
reserve for operating expenses; (iv) the classes and the
number of shares of stock and the par value of each share;
(v) the charter which is to be the charter of the resulting
bank; and (vi) a detailed financial statement showing the
assets and liabilities of the converting trust company;
(c) A statement that the plan of conversion is subject
to approval by the Commissioner and that, whether approved
or disapproved, the converting trust company will pay the
Commissioner's expenses of examination; and

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(d) Such other instruments as the Commissioner may
reasonably require to enable him to discharge his duties
with respect to the conversion.
(7) After receipt by the Commissioner of the papers
specified in subsection (6), he shall approve or disapprove
the plan of conversion. The Commissioner shall not approve the
plan of conversion unless he shall be of the opinion and finds:
(a) That the resulting bank meets the requirements of
this Act for the formation of a new bank at the proposed
place of business of the resulting bank;
(b) That the same matters exist in respect of the
resulting bank which would have been required under
Section 10 of this Act for the organization of a new bank;
and
(c) That the plan of conversion is fair to all persons
affected.
If the commissioner disapproves the plan of conversion, he
shall state his objections in writing and give an opportunity
to the converting trust company to obviate such objections.
(8) Unless a later date is specified in the plan of
conversion, the conversion shall become effective upon the
Commissioner's approval, and the charter proposed in the plan
of conversion shall constitute the charter of the resulting
bank. The Commissioner shall issue a certificate of conversion
which shall specify the name of the converting trust company,
the name of the resulting bank and the charter provided for by

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said plan of conversion. Such certificate shall be conclusive
evidence of the conversion and of the correctness of all
proceedings therefor in all courts and places including the
office of the Secretary of State, and such certificate shall
be recorded.
(8.5) A special purpose trust company under Article IIA of
the Corporate Fiduciary Act may merge with a State bank or
convert to a State bank as if the special purpose trust company
were a trust company under Article II of the Corporate
Fiduciary Act, subject to rules adopted by the Department.
(9) In the case of either a merger or a conversion under
this Section 30, the resulting bank shall be considered the
same business and corporate entity as each merging bank and
merging trust company or as the converting trust company with
all the property, rights, powers, duties and obligations of
each as specified in Section 28 of this Act.
(Source: P.A. 91-357, eff. 7-29-99.)
Section 900-20. The Corporate Fiduciary Act is amended by
changing Sections 1-5.08, 2-1, 4-1, 4-2, 4-5, 4A-15, and 5-1
and by adding Article IIA as follows:
(205 ILCS 620/1-5.08) (from Ch. 17, par. 1551-5.08)
Sec. 1-5.08. "Foreign corporation" means:
(a) any bank, savings and loan association, savings bank,
or other corporation, limited liability company, or other

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entity now or hereafter organized under the laws of any state
or territory of the United States of America, including the
District of Columbia, other than the State of Illinois;
(b) any national banking association having its principal
place of business in any state or territory of the United
States of America, including the District of Columbia, other
than the State of Illinois; and
(c) any federal savings and loan association or federal
savings bank having its principal place of business in any
state or territory of the United States of America, including
the District of Columbia, other than the State of Illinois.
(Source: P.A. 91-97, eff. 7-9-99.)
(205 ILCS 620/2-1) (from Ch. 17, par. 1552-1)
Sec. 2-1. (a) Any corporation which has been or shall be
incorporated under the general corporation laws of this State
and any limited liability company established under the
Limited Liability Company Act for the purpose of accepting and
executing trusts, and any state bank, state savings and loan
association, state savings bank, or other special corporation
now or hereafter authorized by law to accept or execute
trusts, may be appointed to act as a fiduciary in any capacity
a natural person or corporation may act, and shall include,
but not be limited to, acting as assignee or trustee by deed,
and executor, guardian or trustee by will, custodian under the
Illinois Uniform Transfers to Minors Act and such appointment

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shall be of like force as in case of appointment of a natural
person and shall be designated a corporate fiduciary.
(b) No corporate fiduciary shall dissolve or cease its
corporate existence without prior notice to and approval by
the Commissioner and compliance with the requirements of
Section 7-1 of this Act.
(Source: P.A. 100-863, eff. 8-14-18.)
(205 ILCS 620/Art. IIA heading new)
ARTICLE IIA. SPECIAL PURPOSE TRUST COMPANY
AUTHORITY AND ORGANIZATION
(205 ILCS 620/2A-1 new)
Sec. 2A-1. Purpose. The General Assembly finds that
corporate fiduciaries perform a vital service in the custody,
safekeeping, and management of physical assets, traditional
electronic assets, and emerging digital assets for customers;
that it is in the public interest that trust companies may be
organized for the special purpose of providing fiduciary
custodial services and related services to customers; that the
operation of special purpose trust companies is impressed with
a public interest such that it should be supervised as an
activity under this Act; and that such special purpose trust
companies should obtain their authority, conduct their
operations, and be supervised as corporate fiduciaries as
provided in this Act.

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(205 ILCS 620/2A-2 new)
Sec. 2A-2. Special purpose trust company. Any corporation
that has been or shall be incorporated under the general
corporation laws of this State and any limited liability
company established under the Limited Liability Company Act
for the special purpose of providing fiduciary custodial
services or providing other like or related services as
specified by rule, consistent with this Article, may be
appointed to act as a fiduciary with respect to such services
and shall be designated a special purpose trust company.
(205 ILCS 620/2A-3 new)
Sec. 2A-3. Certificate of authority.
(a) It shall be lawful for any person to engage in the
activity of a special purpose trust company after the
effective date of this amendatory Act of the 103rd General
Assembly upon filing an application for and procuring from the
Secretary a certificate of authority stating that the person
has complied with the requirements of this Act and is
qualified to engage in the activity of a special purpose trust
company.
(b) No natural person or natural persons, firm,
partnership, or corporation not having been authorized under
this Act shall transact in the activity of a special purpose
trust company. A person who violates this Section is guilty of

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a Class A misdemeanor and the Attorney General or State's
Attorney of the county in which the violation occurs may
restrain the violation by a complaint for injunctive relief.
(c) Any entity that holds a certificate of authority under
Article II of this Act may engage in the activity of a special
purpose trust company without applying for or receiving a
certificate of authority under this Article IIA.
(d) Nothing in this Section shall limit the authority of a
depository institution to provide nonfiduciary custodial
services consistent with its charter in accordance with
applicable law and subject to any limitations and restrictions
imposed by its chartering authority.
(205 ILCS 620/2A-4 new)
Sec. 2A-4. Rulemaking and organization.
(a) The Department shall adopt rules for the
administration of this Article, including, but not limited to:
rules for defining statutory terms; applying for a certificate
of authority; review, investigation, and approval of
application for certificate of authority; capital
requirements; office location and name; collateralizing
fiduciary assets; and general corporate powers. The authority
of this subsection (a) is in addition to, and in no way limits,
the authority of the Secretary under subsection (a) of Section
5-1.
(b) Articles III, V, VI, VII, VIII, and IX of this Act

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shall apply to a special purpose trust company under this
Article as if the special purpose trust company were a trust
company authorized under Article II of this Act, subject to
any rules adopted by the Department.
(205 ILCS 620/4-1) (from Ch. 17, par. 1554-1)
Sec. 4-1. Foreign corporate fiduciary; certificate of
authority. After July 13, 1953, no foreign corporation,
including banks, savings banks, and savings and loan
associations, now or hereafter organized under the laws of any
other state or territory, and no national banking association
having its principal place of business in any other state or
territory or federal savings and loan association or federal
savings bank having its principal place of business in any
other state or territory, may procure a certificate of
authority under Article II of this Act and any certificate of
authority heretofore issued hereunder to any such foreign
corporation or to any such national banking association shall
become null and void on July 13, 1953, except that any such
foreign corporation or any such national banking association
actually acting as trustee, executor, administrator,
administrator to collect, guardian, or in any other like
fiduciary capacity in this State on July 13, 1953, may
continue to act as such fiduciary in that particular trust or
estate until such time as it has completed its duties
thereunder. Such foreign corporation and such national banking

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association shall be subject to the provisions in this Article
IV, regardless of whether its certificate of authority was
obtained before July 13, 1953. The right and eligibility of
any foreign corporation, any national banking association
having its principal place of business in any other state or
territory or any federal savings and loan association or
federal savings bank having its principal place of business in
any other state or territory hereafter to act as trustee,
executor, administrator, administrator to collect, guardian,
or in any other like fiduciary capacity in this State shall be
governed solely by the provisions of this Act. Provided,
however, that the Commissioner shall not be required to
conduct an annual examination of such foreign corporation
pursuant to Section 5-2 of this Act, but may examine such
foreign corporation as the Commissioner deems appropriate.
"Principal place of business" of any bank, federal savings and
loan association or savings bank, for purposes of this Article
IV, means the principal office as designated on the charter by
its principal regulator.
(Source: P.A. 91-97, eff. 7-9-99.)
(205 ILCS 620/4-2) (from Ch. 17, par. 1554-2)
Sec. 4-2. Foreign corporation; eligibility. Any foreign
corporation may act in this State as trustee, executor,
administrator, administrator to collect, guardian, or in any
other like fiduciary capacity, whether the appointment is by

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will, deed, court order or otherwise, without complying with
any laws of this State relating to the qualification of
corporations organized under the laws of this State to conduct
a trust business or laws relating to the qualification of
foreign corporations, provided only (1) such foreign
corporation is authorized by the laws of the state of its
organization or domicile to act as a fiduciary in that state,
and (2) a corporation organized under the laws of this State, a
national banking association having its principal place of
business in this State, and a federal savings and loan
association or federal savings bank having its principal place
of business in this State and authorized to act as a fiduciary
in this State, may, in such other state, act in a similar
fiduciary capacity or capacities, as the case may be, upon
conditions and qualifications which the Commissioner finds are
not unduly restrictive when compared to those imposed by the
laws of Illinois. Any foreign corporation eligible to act in a
fiduciary capacity in this State pursuant to the provisions of
this Act, shall be deemed qualified to accept and execute
trusts in this State within the meaning of this Act and the
Probate Act of 1975, approved August 7, 1975, as amended. No
foreign corporation shall be permitted to act as trustee,
executor, administrator, administrator to collect, guardian or
in any other like fiduciary capacity in this State except as
provided in Article IV of this Act; however, any foreign
corporation actually acting in any such fiduciary capacity in

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this State on July 13, 1953, although not eligible to so act
pursuant to the provisions of this Article IV, may continue to
act as fiduciary in that particular trust or estate until such
time as it has completed its duties thereunder.
(Source: P.A. 92-685, eff. 7-16-02.)
(205 ILCS 620/4-5) (from Ch. 17, par. 1554-5)
Sec. 4-5. Certificate of authority; fees; certificate of
reciprocity.
(a) Prior to the time any foreign corporation acts in this
State as testamentary trustee, trustee appointed by any court,
trustee under any written agreement, declaration or instrument
of trust, executor, administrator, administrator to collect,
guardian or in any other like fiduciary capacity, such foreign
corporation shall apply to the Commissioner of Banks and Real
Estate for a certificate of authority with reference to the
fiduciary capacity or capacities in which such foreign
corporation proposes to act in this State, and the
Commissioner of Banks and Real Estate shall issue a
certificate of authority to such corporation concerning only
the fiduciary capacity or such of the fiduciary capacities to
which the application pertains and with respect to which he
has been furnished satisfactory evidence that such foreign
corporation meets the requirements of Section 4-2 of this Act.
The certificate of authority shall set forth the fiduciary
capacity or capacities, as the case may be, for which the

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certificate is issued, and shall recite and certify that such
foreign corporation is eligible to act in this State in such
fiduciary capacity or capacities, as the case may be, pursuant
to the provisions of this Act. The certificate of authority
shall remain in full force and effect until such time as such
foreign corporation ceases to be eligible so to act under the
provisions of this Act.
(b) Each foreign corporation making application for a
certificate of authority shall pay reasonable fees to the
Commissioner of Banks and Real Estate as determined by the
Commissioner for the services of his office.
(c) Any foreign corporation holding a certificate of
reciprocity which recites and certifies that such foreign
corporation is eligible to act in this State in any such
fiduciary capacity pursuant to the provisions of Article IV of
this Act or any predecessor Act upon the same subject, issued
prior to the effective date of this amendatory Act of 1987 may
act in this State under such certificate of reciprocity in any
such fiduciary capacity without applying for a new certificate
of authority. Such certificate of reciprocity shall remain in
full force and effect until such time as such foreign
corporation ceases to be eligible so to act under the
provisions of Article IV of this Act.
(d) Any foreign corporation acting in Illinois under a
certificate of authority or a certificate of reciprocity shall
report changes in its name or address to the Commissioner and

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shall notify the Commissioner when it is no longer serving as a
corporate fiduciary in Illinois.
(e) The provisions of this Section shall not apply to a
foreign corporation establishing or acquiring and maintaining
a place of business in this State to conduct business as a
fiduciary in accordance with Article IVA of this Act.
(Source: P.A. 92-483, eff. 8-23-01.)
(205 ILCS 620/4A-15)
Sec. 4A-15. Representative offices.
(a) A foreign corporation conducting fiduciary activities
outside this State, but not conducting fiduciary activities in
this State may establish a representative office under the
Foreign Bank Representative Office Act. At these offices, the
foreign corporation may market and solicit fiduciary services
and provide back office and administrative support to the
foreign corporation's fiduciary activities, but it may not
engage in fiduciary activities.
(b) A foreign corporation invested with trust powers or
authority to act as a fiduciary pursuant to the laws of its
home state but not conducting fiduciary activities must apply
for and procure a license under the Foreign Bank
Representative Office Act before establishing an office in
this State for the purpose of marketing, soliciting, or
transacting any service or product, unless such office is
otherwise established as permitted by and in accordance with

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this Act, the Illinois Banking Act, the Savings Bank Act, the
Foreign Banking Office Act, or any Act specified by rules
adopted under this Act.
(Source: P.A. 92-483, eff. 8-23-01; 92-811, eff. 8-21-02.)
(205 ILCS 620/5-1) (from Ch. 17, par. 1555-1)
Sec. 5-1. Commissioner's powers. The Commissioner of Banks
and Real Estate shall have the following powers and authority
and is charged with the duties and responsibilities designated
in this Act:
(a) To promulgate, in accordance with the Illinois
Administrative Procedure Act, reasonable rules for the purpose
of administering the provisions of this Act, for the purpose
of protecting consumers of this State as may be necessary and
appropriate, and for the purpose of incorporating by reference
rules promulgated by the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve
System, the Office of the Comptroller of the Currency, the
Office of Thrift Supervision, or their successors that pertain
to corporate fiduciaries, including, but not limited to,
standards for the operation and conduct of the affairs of
corporate fiduciaries;
(b) To issue orders for the purpose of administering the
provisions of this Act and any rule promulgated in accordance
with this Act;
(c) To appoint hearing officers to conduct hearings held

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pursuant to any of the powers granted to the Commissioner
under this Section for the purpose of administering this Act
and any rule promulgated in accordance with this Act;
(d) To subpoena witnesses, to compel their attendance, to
administer an oath, to examine any person under oath and to
require the production of any relevant books, papers, accounts
and documents in the course of and pursuant to any
investigation being conducted, or any action being taken, by
the Commissioner in respect of any matter relating to the
duties imposed upon, or the powers vested in, the Commissioner
under the provisions of this Act, or any rule or regulation
promulgated in accordance with this Act;
(e) To conduct hearings;
(f) To promulgate the form and content of any applications
required under this Act;
(g) To impose civil penalties of up to $100,000 against
any person or corporate fiduciary for each violation of any
provision of this Act, any rule promulgated in accordance with
this Act, any order of the Commissioner or any other action
which, in the Commissioner's discretion, is a detriment or
impediment to accepting or executing trusts; and
(h) To address any inquiries to any corporate fiduciary,
or the officers thereof, in relation to its doings and
conditions, or any other matter connected with its affairs,
and it shall be the duty of any corporate fiduciary or person
so addressed, to promptly reply in writing to such inquiries.

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The Commissioner may also require reports from any corporate
fiduciary at any time he may deem desirable.
(Source: P.A. 96-1365, eff. 7-28-10.)
Section 900-25. The Consumer Fraud and Deceptive Business
Practices Act is amended by adding Section 2BBBB as follows:
(815 ILCS 505/2BBBB new)
Sec. 2BBBB. Violations of the Digital Assets Regulation
Act. Any person who violates Article 105 of the Digital Assets
Regulation Act commits an unlawful practice within the meaning
of this Act.
(205 ILCS 657/Act rep.)
Section 900-30. The Transmitters of Money Act is repealed.
Article 999.
Section 999-99. Effective date. This Act takes effect upon
becoming law, except that the changes to the Transmitters of
Money Act take effect January 1, 2025.
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INDEX
Statutes amended in order of appearance