By the Division of Banks
COMMONWEALTH OF MASSACHUSETTS
COMMISSIONER OF BANKS
Docket No. 2014-005
In the Matter of
San Jose, California
Foreign Transmittal Agency License # FT3345
WHEREAS, PAYPAL, INC. San Jose, California, (PayPal or the Corporation), a licensed foreign transmittal agency under Massachusetts General Laws chapter 169, has been advised of its right to Notice and Hearing pursuant to General Laws chapter 169, sections 12 and 13, and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER (Consent Agreement) with representatives of the Division of Banks (Division) dated May 28, 2014, whereby, solely for the purpose of settling this matter, and without admitting any allegations or implications of fact or the existence of any violation of state or federal laws and regulations governing the conduct and operation of a foreign transmittal agency, PayPal agrees to the issuance of this CONSENT ORDER (Consent Order) by the Commissioner of Banks (Commissioner);
WHEREAS, an examination was conducted pursuant to General Laws chapter 169, section 10, as of April 8, 2013 to assess the Corporation’s level of compliance with applicable Massachusetts and federal statutes, rules and regulations governing the conduct of those engaged in the business of a foreign transmittal agency in the Commonwealth;
WHEREAS, the Report of Examination (Report) issued pursuant to the Division’s examination of PayPal as of April 8, 2013 alleged substantial non-compliance with applicable state and federal statutes, rules, and regulations governing the conduct of those engaged in the business of a foreign transmittal agency in Massachusetts; and
WHEREAS, the parties now seek to resolve by mutual agreement, the matters identified in the Report.
NOW COME the parties in the above-captioned matter, the Division and PayPal, and stipulate and agree as follows:
- PayPal must continue to implement and maintain an effective and timely OFAC screening process that will prevent transactions from being conducted that involve individuals on the Office of Foreign Asset Controls (OFAC) sanction lists or that involve the sale or purchase of property under OFAC sanctions and restrictions, as required by 31 CFR 500 et seq.
- Within thirty (30) days from the effective date of this Consent Order, PayPal must develop, implement and maintain a monitoring program which includes periodic testing of its OFAC screening process to verify that screening is done prior to the transfer of funds, and to verify that potential OFAC hits are properly identified.
- Within thirty (30) days from the effective date of this Consent Order, PayPal must provide the Division with the details of its revised OFAC screening process which reflects the development and implementation of procedures and controls to ensure adequate and timely screening of transactions. The Licensee must also provide details of how it plans to ensure continued compliance with all OFAC regulations.
- PayPal must notify the Division within one business day of the issuance of any formal regulatory action taken against the Corporation by OFAC, or any other state or federal regulator, involving PayPal’s compliance with OFAC’s monitoring and reporting requirements.
- Within thirty (30) days from the effective date of this Consent Order, PayPal must address and correct all other deficiencies and areas of concern set forth in the Report and must institute appropriate procedures designed to prevent their recurrence.
- On the thirtieth (30th) day after the end of each calendar quarter following the date of this Consent Order, PayPal must furnish written progress reports to the Division, which shall address and include the following:
- A description of the form, content, and manner of any actions taken to address each Section of this Consent Order and the results thereof; and
- Written findings prepared by PayPal detailing a review of management’s and staff members’ adherence to the policies, programs, and procedures adopted pursuant to this Consent Order and to applicable statutes, regulations, and rules, as well as a description of any operational changes implemented during such quarter which are intended to improve PayPal’s compliance condition in Massachusetts and the results thereof.
- The reporting requirement to the Division referenced in Section 6 of this Consent Order shall remain in effect and shall not be amended or rescinded without the prior written modification, termination, or suspension of the applicable provision of this Consent Order from the Commissioner.
- Nothing in this Consent Order shall be construed as permitting PayPal to violate any law, rule, regulation, or regulatory bulletin to which the Corporation is subject.
- In consideration of the foregoing Consent Order, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke PayPal’s foreign transmittal agency license under Massachusetts General Laws chapter 169, section 12, while this Consent Order is in effect.
- Failure to comply with the terms of this Consent Order shall constitute grounds for license suspension and/or revocation, or other formal regulatory action pursuant to applicable provisions of the General Laws of the Commonwealth of Massachusetts.
- This Consent Order shall become effective immediately upon the date of its issuance.
- The provisions of this Consent Order shall remain effective and enforceable except to the extent that, and until such time as, the Commissioner or a court of competent jurisdiction modifies, terminates, suspends, or sets aside any provision of this Consent Order.
- This Consent Order and the Consent Agreement are the complete documents representing the resolution of this matter. There are no other agreements between the Division and PayPal.
BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.
Dated at Boston, Massachusetts, this 28th day of May, 2014
David J. Cotney
Commissioner of Banks
Commonwealth of Massachusetts