Rule 80-3-1-.06. Material Service Providers

Rule 80-3-1-.06. Material Service Providers

1. (1)

   1. (a) Pursuant to O.C.G.A. § 7-1-72, licensed money transmitters may enter into contracts with third party service providers or affiliates of the licensee, as defined by O.C.G.A. § 7-1-4, to perform material services ("material service provider"), including, but not limited to, business and consumer financial record keeping, data processing, transmission file processing, consumer account management and services, and information security services related to the transmission of money performed for a licensed money transmitter (together, "material services").
   2. (b) For avoidance of doubt, material services include any services that: (1) require access to consumer funds, consumer account data, or personally identifiable information of consumers; or (2) grant the service provider rights, abilities, or other access to modify, create, delete, or otherwise alter such data or information, regardless whether such rights are limited, restricted, monitored, or otherwise controlled by the licensed money transmitter.
   3. (c) Conversely, services that would not be deemed material services unless such services meet the requirements of subsections (a) and (b) include, but are not limited to: (1) administrative services; (2) human resources management; (3) facilities management; (4) legal services; and (5) compliance functions; provided that all persons that make material decisions with respect to the creation of compliance policies and the enforcement of the same are employees of the licensee or of an affiliate acting as a material service provider.
   4. (d) Material service providers may not (1) engage in money transmission as defined by O.C.G.A. § 7-1-680, on behalf of a licensee; (2) hold themselves out to be engaging in money transmission; or (3) maintain custody or control of funds related to money transmission obligations of the licensee. This prohibition does not apply to a material service provider that is a licensed money transmitter or otherwise permitted to perform such activities pursuant to an exemption set forth in O.C.G.A. § 7-1-682.

   5. (e) The provisions of this rule are not applicable to:

      1. 1. any state or federally chartered bank, trust company, credit union, savings and loan association, savings bank, or industrial bank, provided that every such bank, trust company, credit union, savings and loan association, savings bank, or industrial bank has deposits that are federally insured, or
      2. 2. an authorized agent as defined by O.C.G.A. § 7-1-680.
2. (2) Natural persons performing material services must be employees of the licensed money transmitter, an authorized agent or an entity acting as a material service provider.
3. (3) A licensed money transmitter is responsible for satisfying outstanding money transmission obligations even if material services are provided by a material service provider.

4. (4) A licensed money transmitter entering into a contract with a material service provider must maintain the following information on file and shall not execute a contract with a material service provider unless this information has been obtained:

   1. (a) A copy of the contract under which the material services are provided;
   2. (b) A schedule of fees to be charged for each type of material service to be performed;

   3. (c) Written assurance from the material service provider that:

      1. 1. The records of the licensed money transmitter for which the material services are to be performed will be subject to examination and regulation by the department as if the records were maintained by the licensed money transmitter on its own premises;
      2. 2. The records of the licensed money transmitter in the material service provider's possession shall be available to examiners promptly upon receipt of notice; and
      3. 3. The Department shall have the authority to periodically review the internal routine and controls of the material service providers to ascertain that the operations are being conducted in a sound manner.
   4. (d) A listing of all reports, and other records which the material service provider is offering the licensed money transmitter and the time required, after receipt of notice of examination, to provide those reports or information in readable form to the examiners; and
   5. (e) Evidence of financial stability, which may include the material service provider's most recent audited financial statements, most recent financial statements, or other financial records reasonably sufficient to demonstrate the material service provider's ability to perform the contracted services.
5. (5) A licensed money transmitter contracting with a material service provider must employ good faith efforts to monitor the financial condition of the material service provider and must notify the Department immediately when it discovers or suspects that the material service provider is insolvent or has suffered significant financial losses that threaten the continuing viability of the material service provider.
6. (6) As set forth in O.C.G.A. § 7-1-72, each material service provider that enters into a contract with a licensed money transmitter to provide material services shall be subject to examination and regulation by the Department to the same extent as if the services were performed by the licensed money transmitter.

Authority: O.C.G.A. § 7-1-61.

History. Original Rule entitled "Reports of Apparent Criminal Irregularity by Check Cashers, Check Sellers, and Other Money Transmitters" adopted. F. Aug. 26, 1997; eff. Sept. 15, 1997.

Amended: Rule retitled "Reports of Apparent Criminal Irregularity by Check Cashers, Check Sellers, Money Transmitters, and Agents". F. July 28, 2003; eff. August 17, 2003.

Amended: F. Aug. 22, 2006; eff. Sept. 11, 2006.

Amended: F. Sep. 18, 2012; eff. Oct. 8, 2012.

Amended: Title changed to "Reports of Apparent Criminal Irregularity by Check Cashers, Payment Instrument Sellers, Money Transmitters, and Authorized Agents." F. Jun. 10, 2014; eff. Jun. 30, 2014.

Amended: F. June 27, 2018; eff. July 17, 2018.

Repealed: F. Dec. 16, 2021; eff. Jan. 5, 2022.

Adopted: New Rule entitled "Material Service Providers." F. June 18, 2025; eff. July 8, 2025.