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Can I obtain a money transmitter license in California? What are the requirements?

To obtain a money transmitter license in California, you must comply with the requirements set forth in the Financial Code and the California Code of Regulations.

Requirements for obtaining a money transmitter license in California:

  1. Submitting an application for a license to the Commissioner of Business Oversight [2.2][3.2].
  2. Providing a description of the applicant's progress to date in preparing to commence transacting in the State of California the business of money transmission [2.2].
  3. Providing a proposed timetable for completing preparations to commence transacting in the State of California the business of money transmission [2.2].
  4. Depositing and thereafter maintaining on deposit with the Treasurer cash in an amount not less than, or securities having a market value not less than, such amount as the commissioner may find and order from time to time as necessary to secure the faithful performance of the obligations of the licensee with respect to money transmission in California [Fin Code CACL 2037].
  5. Maintaining securities on deposit or a bond of a surety company in an amount of no less than five hundred thousand dollars ($500,000) or 50 percent of the average daily outstanding payment instrument and stored value obligations in California, whichever is greater [Fin Code CACL 2037].
  6. Maintaining 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, provided that such amount shall not be less than two hundred fifty thousand dollars ($250,000) nor more than seven million dollars ($7,000,000) [Fin Code CACL 2037].
  7. Providing a copy of a resolution of the board of the applicant, or in the case of a limited liability company, a document of similar import authorizing the applicant to apply for a license, authorizing the Commissioner to examine the applicant in connection with the application, authorizing and directing all directors, officers, and employees of the applicant and any person having custody of any of the records of the applicant, to furnish to the Commissioner such information, and to permit the Commissioner to inspect and copy such records, as the Commissioner may request in connection with the application, authorizing any bank or other financial institution with which the applicant has transacted business to furnish to the Commissioner such information, and to permit the Commissioner to inspect and copy such records, as the Commissioner may request in connection with the application, and authorizing any governmental agency which licenses or regulates money transmitters, issuers of payment instruments, issuers of travelers checks, or other financial institutions and which has information or records regarding the applicant, to furnish to the Commissioner such information, and to permit the Commissioner to inspect and copy such records, as the Commissioner may request in connection with the application [2.4].
  8. Paying a nonrefundable fee of five thousand dollars ($5,000) [Fin Code CACL 2032].
  9. Providing a list of any criminal convictions of the applicant and any material litigation in which the applicant has been involved in the 10-year period next preceding the submission of the application [Fin Code CACL 2032].
  10. Providing a description of any money transmission services previously provided by the applicant and the money transmission services that the applicant seeks to provide in this state [Fin Code CACL 2032].
  11. Providing a list of the applicant’s proposed agents and the locations in this state where the applicant and its agents propose to engage in money transmission [Fin Code CACL 2032].
  12. Providing a list of other states in which the applicant is licensed to engage in money transmission and any license revocations, suspensions, or other disciplinary action taken against the applicant in another state [Fin Code CACL 2032].
  13. Providing information concerning any bankruptcy or receivership proceedings affecting the licensee [Fin Code CACL 2032].
  14. Providing a sample form of payment instrument or instrument upon which stored value is recorded, if applicable [Fin Code CACL 2032].
  15. Providing a sample form of receipt for transactions that involve money received for transmission [Fin Code CACL 2032].
  16. Providing the name and address of any bank through which the applicant’s payment instruments and stored value will be paid [Fin Code CACL 2032].
  17. Providing a description of the source of money and credit to be used by the applicant to provide money transmission services [Fin Code CACL 2032].
  18. Providing the date of the applicant’s incorporation or formation and the state or country of incorporation or formation [Fin Code CACL 2032].
  19. Providing a certificate of good standing from the state or country in which the applicant is incorporated or formed [Fin Code CACL 2032].
  20. Providing a description of the structure or organization of the applicant, including any parent or subsidiary of the applicant, and whether any parent or subsidiary is publicly traded [Fin Code CACL 2032].
  21. Providing the legal name, any fictitious or trade name, all business and residential addresses, and the employment, in the 10-year period next preceding the submission of the application, of each executive officer, manager, director, or person that has control, of the applicant, and the educational background for each person [Fin Code CACL 2032].
  22. Providing a list of any criminal convictions and material litigation in which any executive officer, manager, director, or person in control, of the applicant has been involved in the 10-year period next preceding the submission of the application [Fin Code CACL 2032].
  23. Providing a copy of the applicant’s audited financial statements for the most recent fiscal year and, if available, for the two-year period next preceding the submission of the application [Fin Code CACL 2032].
  24. Providing a copy of the applicant’s unconsolidated financial statements for the current fiscal year, whether audited or not, and, if available, for the two-year period next preceding the submission of the application [Fin Code CACL 2032].
  25. If the applicant is publicly traded, providing a copy of the most recent report filed with the United States Securities and Exchange Commission under Section 13 of the federal Securities Exchange Act of 1934 (15 U.S.C. Sec. 78m) [Fin Code CACL 2032].
  26. If the applicant is a wholly owned subsidiary of a corporation publicly traded in the United States, providing a copy of audited financial statements for the parent corporation for the most recent fiscal year or a copy of the parent corporation’s most recent report filed under Section 13 of the federal Securities Exchange Act of 1934 (15 U.S.C. Sec. 78m) and, if available, for the two-year period next preceding the submission of the application [Fin Code CACL 2032].
  27. Providing the name and address of the applicant’s registered agent in this state [Fin Code CACL 2032].
  28. Providing the applicant’s plan for engaging in money transmission business, including without limitation three years of pro forma financial statements [Fin Code CACL 2032].
  29. A licensee shall conduct money transmission in California under its true name unless it has complied with Chapter 5 (commencing with Section 17900) of Part 3 of Division 7 of the Business and Professions Code [Fin Code CACL 2041].
  30. A licensee may only conduct money transmission in California under its true name unless it has provided 30-day advance written notice to the commissioner. A licensee may also use a trade name or logo, so long as there is reasonable disclosure of its true name [Fin Code CACL 2041].
  31. A person shall not engage in the business of money transmission in this state, or advertise, solicit, or hold itself out as providing money transmission in this state, unless the person is licensed or exempt from licensure under this division or is an agent of a person licensed or exempt from licensure under this division [Fin Code CACL 2030].

For more information on the requirements for obtaining a money transmitter license in California, please refer to the Financial Code and the California Code of Regulations [1.1][2.2][3.2][2.4].

Note that an applicant may commence transacting in the State of California the business of money transmission on or after the date on which a license is issued to such applicant [2.1].