(1) Each license application shall be accompanied by a security device in the amount of $25,000. If the applicant proposes to engage in business under ORS 717.200 to 717.320, 717.900 and 717.905 at more than one location through authorized delegates or otherwise, the amount of the security device shall increase by $5,000 per location, not to exceed a maximum of $150,000. The security device shall be in a form satisfactory to the Director of the Department of Consumer and Business Services and shall run to the State of Oregon for the benefit of any claimants against the licensee to secure the faithful performance of the obligations of the licensee with respect to the receipt, handling, transmission and payment of money in connection with the sale and issuance of payment instruments or transmission of money. The aggregate liability on any security device shall not exceed the principal sum of the security device. Claimants against the licensee may bring suit directly on the security device or the director may bring suit on behalf of such claimants, either in one action or in successive actions.
(2) In lieu of the requirements of subsection (1) of this section, a licensee may deposit with the director, or with insured institutions as defined in ORS 706.008 located in this state and designated by the licensee and approved by the director, securities in an aggregate amount, based upon principal amount or market value, whichever is lower, of not less than the amount of the security device applicable under subsection (1) of this section or portion thereof. The securities shall be held to secure the same obligations as would the security device. The depositor shall be entitled to receive all interest and dividends on the securities and may, with the approval of the director, substitute other securities for those deposited. The director, in writing, for good cause shown, may require the depositor to substitute other securities for those deposited. As used in this subsection, “securities” includes interest-bearing stocks and bonds, notes, debentures or other obligations of the United States Government or any agency or instrumentality of the United States Government, or guaranteed by the United States Government, or of this state, or of a city, county, district or instrumentality of this state, or guaranteed by this state.
(3) The security device shall remain in effect until cancellation, which may occur only after 30 days’ written notice to the director. Cancellation shall not affect any liability incurred or accrued during the 30-day period.
(4) The security device shall remain in place for no longer than five years after the licensee ceases money transmission operations in this state. However, notwithstanding this provision, the director may permit the security device to be reduced or eliminated prior to that time to the extent that the amount of the licensee’s payment instruments outstanding in this state are reduced. The director may also permit a licensee to substitute a letter of credit or such other form of security device acceptable to the director for the security device in place at the time the licensee ceases money transmission operations in this state.
(5) In the event of bankruptcy of the licensee, the security device shall be considered by operation of law to be held in trust for the benefit of purchasers and holders of the licensee’s outstanding payment instruments. [1999 c.571 §7]Section: Previous 717.150 717.160 717.200 717.205 717.210 717.215 717.220 717.225 717.230 717.235 717.240 717.245 717.250 717.255 717.260 Next
Last modified: August 7, 2008