Exemption for Sale of Bank-Issued Stored Value Cards.
August 23, 2016
Re: Opinion Request
Thank you for your letter to the General Counsel of Business Oversight, Scott Wyckoff, dated July 29, 2016. As Senior Counsel for the Legal Division, the General Counsel requested that I respond to this matter.
___________ previously received an opinion letter dated June 24, 2011, from the Department of Business Oversight (formerly, Department of Financial Institutions). That letter exempted from the Money Transmission Act (“MTA”), ___________ activities as a program manager for the sale and distribution of bank-issued, FDIC-insured reloadable stored value cards. At the time the June 24, 2011 letter was issued, ___________ was the card issuing bank.
___________ has informed the Department that ___________ is now the card issuing bank. ___________ serves as the program manager for ___________ stored value cards. Other than the change in the card issuing bank, all other material facts regarding ___________ role as program manager remain the same as discussed in the June 24, 2011 letter.
Since the issuance of the June 24, 2011 letter, the Department has adopted a regulation that specifies exemptions from the MTA. (Cal. Code Regs., tit. 10, § 80.3002.) Subdivision (a)(1) of Section 80.3002 exempts from the MTA the sale of a money transmission product of a person exempt pursuant to Financial Code section 2010. A bank issued stored value card is a product of a person exempt under Financial Code section 2010.1 Thus, the sale of a bank issued stored value card is exempt from the MTA. Accordingly, the sale and distribution by ___________ of bank-issued cards is exempt from the MTA.
This opinion is based solely on the facts as represented in your correspondence. Any change in the facts or circumstances, as we understand them, could lead to a different conclusion. If you have any questions, please feel free to contact me at ___________.
Jan Lynn Owen
Department of Business Oversight
Jennifer L.W. Rumberger
cc: Robert Venchiarutti, Department of Business Oversight, San Francisco
1 Banks are exempt from the MTA. Fin. Code, § 2010(d).