ACI – 17th National Forum on Prepaid Card Compliance January 30, 2017 State Regulatory and Enforcement Efforts Including Latest Challenges Associated with Money Transmitter Licensing Enforcement Donald J. Mosher Partner Schulte Roth & Zabel LLP 212-756-2187 donald.mosher@srz.com Tweeting about this conference?

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Agenda States that Regulate Money Transmission Money Transmitter Requirements Payment Processing Questions from Audience

States that Regulate Money Transmission Alabama Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Wisconsin Wyoming Hawaii Alaska Washington, DC MT license required Massachusetts only regulates foreign money transmission and the issuance and sale of payment instruments. Wisconsin only regulates money transmitters with a physical presence. New Mexico recently enacted its new money transmitter law, effective January 1, 2017. South Carolina recently enacted its money transmitter law, and the law will be effective no earlier than June 9, 2017.

Money Transmitter Requirements Money Orders Foreign and Domestic Money Transfers Stored Value / Prepaid Access Typical Coverage Receipts Prompt Remittance Posting Consumer Protection Permissible Investments (1:1; statutory trust) Surety Bond or Security Device Capitalization Safety & Soundness Agent Oversight: Contract Requirements; Appointment and Termination Recordkeeping; Periodic Reporting Examinations; C&Ds; Civil Action; Suspension & Revocation Supervision & Enforcement

Is an Agent of Payee Expressly Exempt? Washington Maine Montana North Dakota Oregon Minnesota Vermont New Hampshire Idaho South Dakota Wisconsin Massachusetts New York Wyoming Michigan Rhode Island Connecticut Nebraska Iowa Pennsylvania New Jersey Nevada Ohio Washington, DC Utah Illinois Indiana Delaware Colorado West Maryland California Virginia Kansas Virginia Missouri Kentucky North Carolina Arizona Tennessee Oklahoma New Mexico South Carolina Arkansas Illinois – New Policy as of July 29, 2015 Kansas - Guidance MT 2016-01, Nov 30, 2016 (http://www.osbckansas.org/mt/guidance/mt2016_01_agent_of_the_payee.pdf) Kentucky – effective July 15, 2016 North Carolina – recent amendments incorporating agent of payee exemption are effective as of October 1, 2016 Pennsylvania – Effective 1/2/2017 (Penn MT Law, as amended by 2016 Pa. Laws 129 aka 2015 Pa. HB 850) Texas – Interpretive letters, e.g., Opinion Number 14-01, dated May 9, 2014; see also 7 Texas Admin Code § 33.4 Washington – Interpretive Statement 2016-1 Mississippi Georgia Alabama Texas Louisiana Alaska Express statutory agent of payee exemption Florida Policy/regulatory exemption for agent of payee Hawaii

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