Money Transmitter Licensing and Maintenance

If you want to conduct business as a money transmitter in a certain state, your Company may be required to obtain a license in said state. Federal and state regulations are strict regarding all types of monetary transmissions, and you must first obtain the proper license and authority before you can work in this type of business. 

At Bates Group, we assist clients in obtaining their money transmitter license (MTL), as well as with compliance following licensure and the start of operations. If you would like to learn more about our services regarding state licensing, please contact our team directly. 

Do You Need a Money Transmitter License (MTL)?

Every state has its own definition of what constitutes a “money transmitter,” which means it can be difficult to know whether you need a license for your company’s operations. For example, some states exempt digital currency operations from needing a license, while other states do not. We can evaluate your situation and advise whether we believe you need a license for your particular business model. 

Generally speaking, any party that completes transactions over $1,000 in a day can qualify as a money transmitter if the transactions include: 

  • Currency exchanging or dealing
  • Check cashing
  • Money orders
  • Traveler’s checks
  • Money transfers

Meeting Licensing Requirements

Once you determine that you need an MTL, you must meet specific requirements, which can vary significantly from state to state. Some common requirements in most states may include:

  • Submission of a state-specific Money Transmitter Application
  • Meeting a Net Worth requirement and presenting a Statement of Net Worth 
  • Company’s Good Standing Certificate (State of Formation & State the Company is applying in)
  • Background Checks & Fingerprints for Control Persons
  • AML Compliance Program
  • Internal Policies & Procedures
  • Personal Financial Statements for Control Persons
  • Paying licensing fees
  • Obtaining a Surety Bond or another form of security

Applications also can require a substantial amount of supporting documentation. This can include a detailed business plan that details the financial health and intended operations of the business, financial statements and records for shareholders and directors, and your background check information. In addition, you will need to present your anti-money laundering (AML) policies and procedures that are in line with the requirements enforced by the Financial Crimes Enforcement Network (FinCEN), which is part of the U.S. Department of Treasury.

License Maintenance and Renewal

In addition to license acquisition, we can also complete all required aspects of the license maintenance process including, but not limited to:

  • Staying up-to-date on the license maintenance requirements for all states where the Client holds a license
  • Coordinating with the Client on all MSB reporting requirements
  • Completion and submission of the Money Services Business (MSB) Call Report every quarter in NMLS
  • Completion and submission of all other state MSB Quarterly Reports that are due outside of NMLS
  • Completion and submission of all state MSB Annual Reports that are due throughout the year
  • Coordinating with state regulators on any questions they have and/or documentation they need related to MSB licensing throughout the year
  • Uploading documentation and update relevant information in NMLS if changes within the Client require uploading/updating (Policies & Procedures, Address, Business Plan, Risk Assessments, etc.)
  • Submitting the Client’s Annual Financial Statement each year in NMLS and anywhere else that a state may require it to be uploaded for the maintenance of their MSB licenses
  • Submitting the Authorized Agent Report each quarter in NMLS (whether the Client uses agents or not, it must be submitted)
  • Periodic review of the Client’s NMLS account for any deficiencies identified by state regulators
  • Coordinating with Client personnel on any information that is needed to complete required reports, forms, assessments, etc. related to their MSB licenses
  • Coordinating with the Client on any MSB licensing-related renewal requirements

Contact Our State Licensing Team for Additional Information and Assistance

If you would like to learn more about how to obtain a state money transmitter license, please speak with our state licensing team at Bates. Contact us to discuss your options today.

Contact Bates Group