money transmitter
California Money Transmitter Laws & Licensing
Complete guide to money transmitter licensing in California. Covers application requirements, surety bond amounts, net worth minimums, FinCEN registration, and key statutes governing money transmission in California.
California money transmitter requirements at a glance
| Surety bond | $250,000 to $7,000,000 for receiving money for transmission; selling or issuing payment instruments or stored value carries a separate $500,000 to $2,000,000 bond, and the two are cumulative |
|---|---|
| Net worth requirement | Greater of $100,000 or a sliding scale of total assets (3% of the first $100 million, 2% of $100 million to $1 billion, 0.5% above $1 billion) |
| Renewal cadence | Annual |
| FinCEN MSB registration | Required |
Application process
To obtain a money transmitter license in California, applicants generally need to submit a completed application to the California DFPI, provide a surety bond of $500,000-$7,000,000, demonstrate minimum net worth of $500,000, provide audited financial statements, implement a comprehensive BSA/AML filings program, and pass background checks for all control persons. Many states now accept applications through NMLS. The application process typically takes 3-12 months depending on the state and complexity of the applicant's business model.
Renewals
Money transmitter licenses in California generally require annual renewal. Renewal typically requires submission of audited financial statements, updated surety bond, quarterly or annual transaction reports, BSA/AML filing documentation, and payment of renewal fees. Some states require call report filings on a quarterly basis throughout the year.
Money transmitters operating in California are also generally expected to register with FinCEN as a money services business (MSB) and implement a comprehensive BSA/AML filings program. This includes appointing a filings officer, developing written policies and procedures, conducting employee training, filing Currency Transaction Reports (CTRs), and submitting Suspicious Activity Reports (SARs). California may have specific requirements for cryptocurrency and virtual currency businesses.
Key statutes
- Money Transmission Act, security requirement (Cal. Fin. Code § 2037) . Floors the bond for receiving money for transmission at $250,000 (maximum $7,000,000) and the bond for selling or issuing payment instruments or stored value at $500,000 (maximum $2,000,000). The two amounts are cumulative.
- Money Transmission Act, tangible net worth (Cal. Fin. Code § 2040) . Requires tangible net worth of the greater of $100,000 or 3% of total assets for the first $100 million, 2% of additional assets to $1 billion, and 0.5% above $1 billion.
Federal baseline
Federal law applies in every state, not just this one.
- Bank Secrecy Act (31 U.S.C. § 5311) . Federal BSA/AML requirements for money services businesses
