(Disclosure: Rose Law Group represents Blackhawk Network.)
By Thomas Galvin, Rose Law Group Attorney | Rose Law Group Reporter
Governor Ducey just signed HB 2508, which passed overwhelmingly in the House and Senate chambers of the state legislature. Arizona HB 2508, which was sponsored and championed by Representative Shawnna Bolick, makes several substantive changes to the current Arizona money transmitter licensing (MTL) law which removes needless regulations on gift card sales in Arizona. Some of the important provisions include removing the current obligation to post a physical copy of the money transmitter statute in each office and at each authorized retail or branch location. And the bill eliminates the requirement to include a full copy of the retailer’s agreement with the gift card providers.
Rose Law Group is proud to represent Blackhawk Network, a leader in the gift card industry, who spearheaded this deregulatory effort. Blackhawk is a member of the Arizona community. It employs about 120 Arizonans in its office in north Phoenix
HB 2508 removed the requirement for authorized delegates (e.g., a grocery store or convenience store that sells branded gift cards) to provide a full copy of the Arizona money transmission statute, to the other contracting party, as part of the authorized delegate agreement. No other state requires stores to provide a complete copy of the statutes covering gift cards to authorized delegates. The current Arizona requirement is a costly and resource-intensive administrative burden that is particularly challenging for money transmitters that work with a large network of authorized delegates.
HB 2508 removes the current legal obligation to post a copy of an license in each office and at each authorized retail location. The eliminated requirement presented a significant administrative burden for licensees with no corresponding consumer protection benefit and with no prudential effect. Very few consumers ever see the posted copies of the license, and even fewer are able to make the connection that they are related to the money transmitter products/services they have purchased or are considering purchasing. In turn, the license posting requirement creates a heavy administrative burden. The licenses are customized by store location and must be replaced annually. In addition, the agent must spend time and resources conducting store audits to help ensure that the signage is properly posted, as failure to do so may result in regulatory exam findings.
The eliminated requirement dissuaded businesses from selling gift cards and reduced consumer access to products because some retailers refuse to sign the contract because of the burdens placed on their legal departments.
In short, this provision will provide valuable regulatory relief to licensees and potentially increase access to popular, consumer friendly money transmission services in Arizona.