The Illinois Department of Financial & Professional Regulation recently released five cease and desist orders from January 2013 against six entities charging each with unlicensed activities under the state’s Transmitters of Money Act. These six entities offer a variety of services in Illinois, including domestic and international money transfer, bill payment services and prepaid cards.

One of these companies, Square, Inc. is described in its order as providing “mobile card reading devices for the express purpose of transmitting money,” providing iPhone and Android apps to Illinois consumers “for the express purpose of transmitting money” through those devices and selling and issuing “digital gift cards to Illinois consumers for the express purpose of purchasing items from designated vendors on Square’s Website.”

The orders, which all follow a similar format, recite a number of statutory provisions regarding required licensing and penalties that can be imposed, include factual findings about each company (most of which have been operating in Illinois for at least five years) and then provides the following:

  • The entity is required to cease and desist providing any money transmission services in Illinois. 
  • The entity is required to produce documents, including account activity statements for Illinois consumers, any other material containing information relevant to money transmissions made to and from Illinois consumers, and copies of annual independent testing reports of the company’s AML compliance program. 
  • The entity is liable for (i) $1,000 per violation; (ii) $1,000 for each day it is in violation of the act; and (iii) four times the amount of unlicensed money transmissions conducted in Illinois. 

The orders each provide that payment is due to the department within an average of two weeks. Unlike most actions of this nature, however, these orders do not state the specific dollar amount that the entity is required to pay.

At least two entities reportedly are continuing to operate in Illinois, despite the C&Ds. A number of other entities have received inquiries from the department regarding activities in Illinois, suggesting it’s likely that there will be additional actions.

These C&D orders can be accessed here.