California Financial Code
The license is not transferable or assignable.
Each licensee shall file with the commissioner quarterly a report as of the end of the preceding calendar quarter which shall include:
(a) An unaudited unconsolidated statement of income and statement of condition of licensee completed in accordance with generally accepted accounting principles applied on a consistent basis;
(b) A schedule of eligible securities owned by the licensee pursuant to Section 1876.8.
(c) The names and addresses of agents appointed or terminated during such quarter.
Each licensee shall, not more than 90 days after the close of each of its fiscal years or within a longer period as the commissioner may by regulation or order specify, file with the commissioner a report containing all of the following:
(a) Financial statements, including balance sheet, statement of income or loss, statement of changes in shareholder's equity, and statement of cash flows, for or as of the end of that fiscal year, prepared with audit by an independent certified public accountant or an independent public accountant in accordance with generally accepted accounting principles.
(b) A report, certificate, or opinion of the independent certified public accountant or independent public accountant, stating that the financial statements were prepared in accordance with generally accepted accounting principles.
(c) Any other information as the commissioner may by regulation or order require.
The commissioner may at any time require any licensee to make and file with the commissioner a special report furnishing such relevant information as the commissioner may reasonably specify to inform the commissioner of the actual financial condition of such licensee.
(a) No licensee shall issue any form of traveler's check for sale in this state unless all of the following are satisfied:
(1) The traveler's check clearly identifies the licensee as the issuer of the traveler's check.
(2) The traveler's check is not misleading in any material respect.
(3) The traveler's check complies with all applicable laws.
(b) Before a new licensee issues its first traveler's check for sale in this state, it shall file a certified copy of the form of that traveler's check with the commissioner.
Every travelers check issued by a licensee, for sale in this state, shall bear the name of the licensee clearly imprinted thereon.
Each licensee shall be liable in accordance with the California Commercial Code for the payment of all travelers checks duly issued by it and lawfully sold in this state.
Each licensee shall at all times maintain shareholder equity determined to be adequate by the commissioner.
No person shall become or continue to be an agent in California of a licensee, nor shall any licensee appoint or continue any person as its agent in California unless such person and such licensee shall have first made a written agreement setting forth the terms of the agency and including provisions:
(a) That the licensee appoints the person as its agent with authority to sell in California on behalf of the licensee traveler's checks issued by the licensee;
(b) That all funds, less fees due agents provided for and expressly set forth, received by the person from the sale of traveler' s checks issued by the licensee shall be trust funds owned by and belonging to the licensee;
(c) That the person make and keep such accounts, correspondence, memorandums, papers, books and other records as the commissioner by regulation or order requires and preserve such records for the time specified by such regulation or order.
(d) That the person will comply with all applicable conditions of this chapter and regulations and orders issued under this chapter.
No agent of a licensee shall, nor shall any licensee cause or permit any of its agents to, sell any travelers check issued by such licensee without concurrently receiving cash or its equivalent, check, draft, credit card, travelers check or payment instrument, or a combination of same believed to be valid in an amount not less than the face amount of such travelers check.
Each agent of a licensee which sells any traveler's check issued by such licensee shall, and each licensee shall require each of its agents which sells any traveler's check issued by such licensee to, report such sale within seven days after the sale and remit the face amount of such traveler's check to such licensee within three business days (or such shorter period as such agent and such licensee may specify in the agreement called for in Section 1869 or in any amendment of such contract) after such sale. This section shall not apply to an agent which is an insured institution pursuant to the Federal Deposit Insurance Corporation Act (12 U.S.C. 1811 et seq.) or the Federal Credit Union Act (12 U.S.C. 1781 et seq.).
For the purpose of this section, remittance shall include either direct payment of such funds to licensee or its representative, or the deposit of such funds in a bank or savings association in an account in the name of such licensee specifically established for the purpose of receiving such funds. Remittance by such agency to such licensee or its representatives or deposit by such agency in such account in a bank or savings association of funds in advance of the sale of such traveler's checks but in an amount not less than the amount that such agent would normally receive from such sales of payment instruments, shall be deemed compliance with provisions of this section.
No agent of a licensee shall, nor shall any licensee cause or permit any of its agents to, commingle any funds, less fees due agents, received from the sale by such agent of travelers checks issued by such licensee with any other property owned or controlled by such agent or use such funds for any purpose other than to remit such funds to such licensee; provided, however, that any agent of a licensee may, unless such agent and such licensee provide to the contrary in the agreement called for in Section 1869 or in any amendment of such agreement, commingle such funds with other cash, cash equivalents and travelers checks owned or controlled by it and use such funds in the ordinary course of its business for the purpose of making change and cashing travelers checks, checks, or drafts believed by it to be valid.
If any agent of a licensee shall commingle any funds, less fees due agents, received from the sale of travelers checks issued by such licensee with any other property owned or controlled by such agent, all such property shall be impressed with a trust in favor of such licensee in an amount equal to the aggregate amount of such funds so commingled.
All funds, less fees due agents pursuant to the agreement required by Section 1869, received by agents from the sale of travelers checks shall constitute trust funds owned by and belonging to the licensee.
No funds, less fees due agents, received by any agent of a licensee from the sale of travelers checks issued by such licensee, while held by such agent, nor any property impressed with a trust pursuant to Section 1874 shall be subject to enforcement of a money judgment or sequestration by order of any court, except by such licensee.
Nothing in this chapter shall be construed to prevent any licensee from taking any legal action necessary to enforce any claim which such licensee may have.