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Money Transmitters FAQ
Money Transmitters
Q. If I want to be in the business of sending money to other countries, do I need a license?
A. Yes. If you or your company receive money in California for the purpose of sending it to another country or within the United States, your company needs to be licensed as a Money Transmitter.
Q. How long does it take to get a license?
A. The processing time for a successful applicant varies significantly, but ranges from a few months to approximately a year.
Q. Can I operate a transmitter business while the application is pending?
A. No. The license must actually be issued before you can operate a transmitter business.
Q. Can an individual get a license?
A. No. You must be a corporation or a limited liability company to apply for a transmitter license.
Q. What is the capital requirement?
A. The capital requirement varies based on the licensee's plan of operation and risk profile. The amount of tangible net worth stated in the Financial Code, $500,000, is not the amount required for licensing, but rather the minimum allowed for existing licensees. A new licensee would typically be required to have more tangible net worth, at least $1 million, to offset the expected losses of a new transmitter and support its operational needs at all times.
Q. Is there a bonding and/or security requirement?
A. Yes. Financial Code Section 2037(a)” requires that transmitters deposit with the State Treasurer cash or securities as security for the timely and proper delivery of transmission money. A surety bond may be substituted for the cash or securities under Financial Code Section 2037(c)”.
Q. How much is the bonding requirement?
A. A money transmitter that sells or issues payment instruments or stored value is required to maintain securities on deposit or a bond of a surety company in an amount no less than $500,000 or 50% of the average daily outstanding payment instrument and stored value obligations in California (Average Daily Transmission Liability (ADTL)) whichever is greater, provided that such amount shall not be more than $2,000,000 (Financial Code Section 2037(d)). Furthermore, a money transmitter that engages in receiving money for transmission shall maintain securities on deposit or a bond of a surety company in an amount greater than the average daily outstanding obligations for money received for transmission in California (ADTL), provided that such amount shall not be less than $250,000 nor more than $7,000,000 (Financial Code section 2037(e)). For ADTL instructions and a sample, please go to http://www.dfi.ca.gov/forms/tma/callreport.asp.
Go to Money Transmitter Division web page.
Other Resources
Additional information on Money Transmitters is available from Financial Crimes Enforcement Network (FinCEN) - Department of the Treasury