California Department of Business Oversight (DBO) is the licensing authority/regulatory body when it comes to obtaining California Money Transmitter License. Nationwide Multistate Licensing System and Registry (NMLS) handles the process of applying for this license. Even though it’s not easy to obtain a California Money Transmitter License, it’s not impossible.
What are the requirements to apply for a California Money Transmitter License?
For obtaining a California Money Transmitter License, the following documents are needed:
- Company form MU1 (this is the main application form)
- Individual form MU2 (this must be completed by individuals in a position of control)
- Anti-Money Laundering (AML) / Bank Secrecy Act (BSA) policies which explain specifically how you will comply with these laws
- A credit report for individuals in positions of control (authorized through NMLS)
- An audited financial statement prepared by a certified public accountant (CPA) in accordance with Generally Accepted Accounting Principles (GAAP)
- A business plan that outlines your products, target market, fee schedule, and more
- Your company’s Certificate of Authority or Certificate of Good Standing
- A Flow of Funds Structure that describes the different types of transactions or services you will conduct, from the beginning to the completion of the transaction
- Document samples of the receipts for transactions and of payment instruments
- A management chart that identifies directors, officers, and managers
- An organizational chart that includes the percentage of ownership of direct and indirect owners, and subsidiaries and affiliates
- A California money transmitter bond
- FDIC 3064-0006 – Interagency Biographical and Financial Report Form
- FDIC 3064-0006 – Department of Business Oversight Supplemental Instructions (Rev.05-17) (PDF)
- DBO 2 – Personal Financial Statement (Rev.01-19) (PDF)
- DBO 3 – Confidential Resume (Rev.01-19) (PDF)
- DBO 525
- Money Transmitter Call Report Form For Licensees That Are ON the NMLS (Rev.04-19) (Excel)
- DBO 550 – Emergency Contact Person Information (Rev.05-17) (PDF)
- DBO 2110 – Application for a License to Engage in the Money Transmission Business (Rev. 01-19) (PDF)
- Registration with FinCEN as a Money Services Business
- Surety bonds
What is the process for obtaining a California Money Transmitter License?
Application has to be made to the Department of Business Oversight (DBO) and it should include: 1) Signatures at all required places; 2) Required Application fee; 3) Submission of fingerprints of “all responsible persons”; 4) All enclosures and financial statements as stated in the form.
The processing time takes on average 6-12 months for California.
How much does it cost to obtain a California Money Transmitter License?
In order to obtain a California Money Transmitter License, one should consider a License Application Fee of $5,000. When it comes to net worth, an applicant shall possess, and a licensee shall maintain at all times, tangible shareholder’s equity of two hundred fifty thousand dollars ($250,000) to five hundred thousand dollars ($500,000), depending on estimated or actual transaction volume, as determined by the commissioner based on the factors described in the subdivision.
Surety Bond can be of a minimum of $250,000 and a maximum of $7,000,000. Those selling or issuing payment instruments or stored value must get a bond in an amount of $500,000 or in an amount equal to 50% of their average outstanding payment instrument and stored value obligations in California, whichever is greater. The maximum amount of this bond shall not exceed $2,000,000.
Additionally, those receiving money for transmission must get a bond in an amount greater than their average daily outstanding obligations for money received for transmission, with the minimum bond amount being $250,000, and the maximum $7,000,000. Applicants pay around 0.75% – 10% of the total bond amount. Please note that a high-risk surety bond will typically range between 2.5%-10% of the total bond amount.
The annual license fee has to be paid every year as mentioned above. Licensees must file audit reports with the commissioner within 90 days after the end of their fiscal year. Legal Fees varies between $35,000 and $100,000.
Empire Global has a team of experienced professionals who will assist you through the entire process of California Money Transmitter License application including assistance in the preparation of documents, submission of application and responding to any queries. We request you to get in touch with Empire Global at the earliest to understand the entire process in detail and apply for a California Money Transmitter License.