California

Who needs to register?

Under California statute, businesses receiving money or monetary value for transmission within or outside the US must obtain a money transmitter license in California, whether the transmissions are physically in the state, or with, to or from persons located in California.

 

Who is the regulator?

California Department of Financial Institutions

 

What are the money transmitter license requirements?

To apply as a money transmitter requires the following qualifications, fees, meetings and documents:

  • A pre-file meeting with the Money Transmitter Staff to demonstrate working knowledge of laws and regulations that govern money transmitters and present proposed business plan
  • Applicant must be a corporation or an LLC located within the US
  • Biographical information of the business
  • Authorizations of Board of Directors
  • Criminal Convictions or material litigation within the last 10 years (of firm, officer, manager, or person in control)
  • Description of previous money transmission services and the services the company seeks to provide
  • List of proposed agents and locations
  • List of other state licenses, revocations, suspensions, disciplinary action
  • Information concerning bankruptcy or receivership proceedings
  • Sample form of payment instrument
  • Sample form of receipt for transactions involving money transmissions
  • Names and address of banks through which payments will be paid
  • Description of source of money or credit to be used by applicant
  • Date and location of incorporation
  • Certificate of good standing
  • Documents detailing organizational structure
  • 10 year biographical history of business, including officers, managers, directors, and persons of control, and their educational background
  • Audited financial statements for previous year, and if available, two years prior. If subsidiary business, provide parent statements
  • Unconsolidated financial statements of preceding two years (audited or non-audited)
  • Copy of most recent SEC report, if publicly traded
  • Name and address of registered agent in California
  • Business plan for money transmission business and 3 years pro forma financial statements
  • Fingerprints and biographical document (e.g., passport, license, etc.)
  • Proposed compliance procedures
  • $5,000 application fee

Note: Businesses registering in California may have to pay an additional fee for commissioner investigation and examination at a rate of $75 per person per hour. The Commissioner may also require other documentation necessary to the public interest.

 

What are the general bonding requirements?

Bonding requirements for Californian money transmitters vary on an individual basis, and are determined by the Commissioner. Each licensee deposits and maintains the determined amount of cash or securities with the Treasurer.

The amount will range from $250,000 to $7,000,000.

 

Additional resources:

California Money Transmission Act

 

 

Disclaimer: Information provided by Shipkevich, PLLC and any of its affiliated web pages is for general educational purposes only, and should not be taken as legal advice.