An act relating to banking, insurance, and securities

Added extensive virtual currency regulatory framework including new definitions for 'virtual currency,' 'virtual-currency business activity,' 'virtual-currency administration,' 'virtual-currency storage,' 'virtual-currency kiosk,' 'virtual-currency kiosk operator,' 'virtual-currency transaction,' 'digital wallet,' 'digital wallet address,' 'blockchain analytics,' and 'transfer.' Money transmission definition expanded to include virtual-currency business activity.

Financial privacy subchapter (sections 10201-10204) changed terminology from 'financial institution' to 'regulated entity' throughout, significantly broadening which entities are subject to customer financial privacy protections. New definition of 'regulated entity' includes persons required to be licensed or chartered under Part 2 of the title, out-of-state equivalents, and their subsidiaries.

Payroll processing services added to the definition of 'money transmission,' bringing payroll processors under money transmitter licensing requirements. New definition clarifies it does not include an employer performing payroll on its own behalf or for its affiliate.

Section 10101 (application of consumer protection chapter) is repealed. Section 2573(b), which stated that a person engaging in virtual-currency business activity is engaged in money transmission, is repealed (function now covered by the expanded definition in section 2503).

Consumer litigation funding companies shifted from a registration framework to a licensing framework. New surety bond or irrevocable letter of credit requirement equal to double the company's largest funded amount in Vermont in the prior three calendar years or $50,000, whichever is greater.

New section 2107 establishes change-of-control approval requirements. Any person seeking to acquire control of a licensee must obtain Commissioner approval first. Includes a $500 nonrefundable fee for money transmitter changes of control, a 60-day review period, multiple exemptions (proxy voting, devise/descent, personal representatives, internal reorganizations for money transmitters), and a public offering exemption.

New section 2103 establishes detailed license approval criteria including financial responsibility assessment factors (outstanding judgments excluding medical, tax liens, foreclosures within three years, delinquent accounts), felony conviction restrictions (7-year lookback or any time for fraud/dishonesty/money laundering felonies), and specific surety bond and liquid asset requirements by license type.

Section 2506 added a provision allowing the Commissioner to waive one or more application requirements for good cause shown, or permit substituted information in lieu of required information.

New section 2109 establishes annual renewal requirements with a December 1 deadline. Licenses for mortgage loan originators, consumer litigation funding companies, and money transmitters automatically expire on December 31 if the renewal fee is not paid or minimum standards are not met by December 1.

Section 2110 modified the revocation ground from 'violation of a state or federal anti-money-laundering statute' to 'felony in a domestic, foreign, or military court.' Added a reconsideration process (licensee may request reconsideration within 15 days, Commissioner must decide within 60 days) and an appeal right to the Civil Division of Superior Court of Washington County within 15 days of the Commissioner's decision.

Section 2117 added a confidentiality provision: information obtained during or for an examination or investigation shall be confidential and privileged, treated as provided in section 23 of the title.

New definition of 'In this State' for money transmission: physical location in Vermont for in-person transactions; for electronic or phone transactions, the provider may rely on residential address, principal place of business, or account records to determine if the person is 'in this State.'

Section 2102 changed 'under oath or affirmation' to 'under oath,' removing the affirmation option for license applications. Also removed the word 'license' from 'consumer litigation funding company registration license' to simply 'registration.'

Consumer litigation funding companies are now required to obtain a license rather than merely register. A new financial stability requirement mandates a surety bond or irrevocable letter of credit equal to double the company's largest funded amount in Vermont over the prior three calendar years, or $50,000, whichever is greater.

The financial privacy subchapter (sections 10201-10204 and beyond) replaces every reference to 'financial institution' with 'regulated entity,' a newly defined term that broadly covers any person required to be licensed or chartered under Part 2 of Title 8, out-of-state entities regulated equivalently to independent trust companies, financial institutions, credit unions, foreign bank branches, and their subsidiaries. This significantly widens the range of entities subject to Vermont's customer financial privacy protections.

Section 2573(b), which stated that a person engaging in virtual-currency business activity is engaged in the business of money transmission, is repealed. This removes the automatic classification of all virtual-currency activity as money transmission, though such activity may still be covered through other definitional pathways.

New definitions added for 'virtual-currency kiosk' (a money transmission kiosk through which virtual-currency business activity is offered) and 'virtual-currency transaction.' The definition of 'money transmission kiosk' is expanded to explicitly include machines capable of accepting or dispensing cash in exchange for virtual currency.

In section 2103 (license approval), the list of entity types requiring findings for each key individual is expanded from 'partnership corporation' to 'corporation, limited liability company, partnership, or other entity,' and gendered language ('his or her') is replaced with gender-neutral language ('the person's').

Section 2107 (change of control) undergoes subsection renumbering: former subsection (g) becomes (h), and former (h) becomes (i). The multistate licensing provision in the new subsection (i) is revised to clarify that the Commissioner may accept investigation results from a lead investigative state if that state has sufficient staffing, expertise, and minimum standards.

The official version adds the bill's introductory metadata: sponsors (Representatives Marcotte, Graning, Bosch, Carris Duncan, Duke, Micklus, Olson, Priestley, and White), committee referral to the Committee on Banking/Financial Services, subject line, and a statement of purpose summarizing that the bill makes various amendments to Vermont banking, financial services, insurance, and securities laws.

The header changed from 'AS PASSED BY HOUSE' (unofficial) to 'BILL AS PASSED BY THE HOUSE' (official), and the page count increased from 88 to 178 pages due to formatting differences in the official enrolled version.

License applications may now be made under 'oath or affirmation' instead of requiring an oath, accommodating applicants who object to swearing an oath on religious or personal grounds.

A new subsection (g) in the change-of-control section (8 V.S.A. 2107) exempts public offerings of securities from the requirement to obtain Commissioner approval before acquiring control of a licensee. This prevents routine public market transactions from triggering regulatory review.