Colorado § 11-110-801 - Relationship between licensee and authorized delegate - written policies and procedures required - background investigation - definition.

§ 11-110-801. Relationship between licensee and authorized delegate - written policies and procedures required - background investigation - definition.

(1) As used in this section, "remit" means to make direct payments of money to a licensee or the licensee's representative authorized to receive money or to deposit money in a bank in an account specified by the licensee.

(2) 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 shall:

(a) 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;

(b) Enter into a written contract that complies with subsection (4) of this section; and

(c) 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.

(3) An authorized delegate must operate in full compliance with this article 110.

(4) The written contract required by subsection (2)(b) of this section must:

(a) Be signed by the licensee and the authorized delegate and, at a minimum, must appoint the person signing the contract as the licensee's authorized delegate with the authority to conduct money transmission on behalf of the licensee;

(b) Set forth the nature and scope of the relationship between the licensee and the authorized delegate and the respective rights and responsibilities of the parties;

(c) 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 article 110 and rules implementing this article 110 and relevant provisions of the bank secrecy act and the federal "USA PATRIOT Act", Pub.L. 107-56;

(d) 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;

(e) Impose a trust on money and monetary value net of fees received for money transmission for the benefit of the licensee;

(f) Require the authorized delegate to prepare and maintain records as required by this article 110 or rules implementing this article 110 or as reasonably requested by the banking board;

(g) Acknowledge that the authorized delegate consents to examination or investigation by the banking board;

(h) State that the licensee is subject to regulation by the banking board and that, as part of that regulation, the board may suspend or revoke an authorized delegate designation or require the licensee to terminate an authorized delegate designation; and

(i) Acknowledge receipt of the written policies and procedures required under subsection (2)(a) of this section.

(5) If the licensee's license is suspended, revoked, surrendered, or expired, the licensee must, within five business days, provide documentation to the banking board that the licensee has notified all applicable authorized delegates of the licensee whose names are in a record filed with the board 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.

(6) 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 an authorized delegate commingles any money received from money transmission with any other money or property owned or controlled by the authorized delegate, all commingled money 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.

(7) An authorized delegate shall not use a subdelegate to conduct money transmission on behalf of a licensee.

Source: L. 2025: Entire article R&RE, (HB 25-1201), ch. 91, p. 400, § 1, effective August 6.