Nevada Administrative Code Chapter 671 - Issuers of Instruments for Transmission or Payment of Money
✅ Nevada Administrative Code Chapter 671 – Issuers of Instruments for Transmission or Payment of Money
1. Overview and Purpose
NAC Chapter 671 regulates entities known as issuers of instruments for transmission or payment of money within Nevada. These entities include businesses that issue financial instruments such as:
Money orders,
Traveler’s checks,
Payment cards,
Stored value cards,
Other instruments used to transmit or pay money.
The chapter implements statutory requirements under Nevada Revised Statutes (NRS) Chapter 671, which seeks to:
Protect consumers who use such instruments.
Ensure issuers operate in a financially sound manner.
Prevent fraud and abuse in money transmission.
Maintain oversight and regulatory compliance for consumer protection.
The Nevada Division of Financial Institutions supervises and enforces these regulations.
2. Scope and Applicability
Applies to all issuers of instruments designed for the transmission or payment of money operating in Nevada.
Includes domestic and foreign issuers offering these financial products within the state.
Covers businesses issuing instruments either as primary providers or agents.
3. Key Provisions
a) Licensing and Registration
Issuers must obtain a license or registration with the Division of Financial Institutions before conducting business in Nevada.
The licensing process includes background checks, financial review, and demonstration of operational capacity.
Renewal and ongoing reporting requirements ensure continued compliance.
b) Financial Requirements
Issuers must maintain minimum net worth and financial reserves as prescribed by the regulations.
Required to maintain surety bonds or other financial guarantees to protect consumers.
Regular financial reporting and audits are mandated.
c) Disclosure and Consumer Protection
Issuers must provide clear and conspicuous disclosures to consumers, including:
Terms and conditions of the instruments.
Fees and charges associated with purchase or use.
Procedures for refunds, cancellations, and lost/stolen instruments.
Prohibitions on deceptive marketing or misrepresentation.
d) Recordkeeping and Reporting
Issuers must keep detailed records of all instruments issued, redeemed, and outstanding.
Reports must be submitted periodically to the Division, including data on financial condition and compliance.
Records must be retained for a specified period for audit purposes.
e) Operational Standards
Requirements on how instruments are issued, redeemed, and accounted for.
Safeguards to prevent fraud, money laundering, and misuse of instruments.
Standards for agent oversight where third parties issue instruments on behalf of issuers.
f) Enforcement and Penalties
The Division has authority to impose fines, suspend, or revoke licenses for violations.
Civil penalties may be assessed for failure to comply with the NAC or NRS.
Injunctive relief and other legal remedies are available to protect consumers.
4. Relevant Case Law and Legal Principles
Though specific Nevada appellate cases directly involving NAC Chapter 671 may be limited, the following legal principles apply broadly to regulated issuers of payment instruments:
📌 Case Principle: Licensing Compliance
Courts uphold state authority to require licensing for entities issuing financial instruments, emphasizing consumer protection and regulatory oversight.
📌 Case Principle: Consumer Disclosure
Failure to provide adequate disclosures about fees or terms can result in findings of deceptive trade practices or violations of consumer protection laws.
📌 Case Principle: Fiduciary and Financial Responsibility
Issuers are held to standards of financial responsibility to ensure that consumer funds are protected.
Mismanagement or insolvency of issuers can result in regulatory action and potential civil liability.
📌 Case Principle: Enforcement Authority
Courts generally defer to the state regulatory agency’s authority to enforce licensing, financial, and operational rules.
Penalties and license revocations are upheld when supported by evidence of violations.
5. Practical Implications
| Stakeholder | Responsibilities / Impact |
|---|---|
| Issuers | Must obtain proper licensing, maintain financial standards, and comply with disclosure and recordkeeping rules. |
| Consumers | Receive protections regarding transparency, security, and recourse in case of fraud or loss. |
| Division of Financial Institutions | Regulates and enforces compliance, ensuring industry integrity and consumer safety. |
6. Summary
NAC Chapter 671 establishes a regulatory framework to govern businesses issuing instruments for money transmission or payment in Nevada. The regulations emphasize:
Licensing and financial soundness of issuers.
Consumer disclosures and protections.
Detailed recordkeeping and reporting.
Strong enforcement mechanisms to prevent fraud and protect public interests.
Nevada courts support robust state oversight of these financial service providers as essential to maintaining consumer trust and market stability.
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