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Opinion  Summary of Selected Opinion 00-110

Date: 07/01/2000
Organization: Division of Banks
Docket Number: 00-110

This opinion was issued in the third quarter of 2000.

Table of Contents

Licensing requirement for internet escrow company

An internet escrow company helps to facilitate internet transactions by acting as a safe harbor for buyer and seller. A buyer deposits into the company's trust account and when the funds have cleared, the seller is instructed to ship the merchandise to the buyer. Upon the buyer's receipt and acceptance of the merchandise, the company releases the funds to the seller.

The Division has responsibility for licensing and supervising ten entities under nine separate statutes of the Massachusetts General laws. Each of these entities provides financial services to consumer or commercial customers in various contexts such a providing credit, the cashing or issuing of checks and collection of debts. Mass.Gen.Law chapter 169 govern entities which receive deposits of money or its equivalent for transmittal to foreign countries. Upon review of these statutes within the jurisdiction of the Division, there is no provision which would be applicable to an escrow internet company, provided the escrow internet company does not transmit monies it receives to foreign countries.

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