On October 24, the Massachusetts Division of Banks (DOB) released a comprehensive set of regulatory changes, effective November 7, to align with the commonwealth’s Money Transmission Act (MTA) enacted in January (previously covered by InfoBytes here). The new regulatory framework replaces prior requirements that applied only to check cashers, check sellers, and foreign transmittal agencies, and establishes uniform licensing and compliance obligations for all entities engaged in money transmission in Massachusetts, as defined under the MTA.

Regulation 209 CMR 44.00 is the primary implementing regulation for the MTA and establishes the licensing and regulatory framework for money transmitters to operate in the commonwealth. The regulation specifies the requirements for obtaining a license to engage in money transmission in Massachusetts, which include the submission of detailed application materials, and demonstration of a tangible net worth based on statutory thresholds. Under the regulation, licensees must maintain permissible investments at least equal to their outstanding money transmission obligations and provide a surety bond ranging from $100,000 to $500,000, depending on their average daily transmission liability. The regulation requires licensees to file annual and quarterly call reports, submit audited financial statements within 90 days of fiscal year-end, maintain books and records for at least three years, and make such records available to the commissioner. Finally, licensees must notify the DOB of significant events, changes in ownership or key individuals, and other material developments.

Corresponding amendments to 209 CMR 45.00, previously titled “the Licensing and Regulation of Money Services Businesses” removed all provisions related to money transmission, check sellers, and foreign transmittal agencies — activities now governed by 209 CMR 44.00 or other regulations. As amended, 209 CMR 45.00 applies solely to the licensing, operation and oversight of check cashers, thereby updating definitions, requirements and cross-references to align with the new statutory framework.

Similarly, to align with the new law, 209 CMR 48.00 was amended to include money transmitters licensed under Chapter 169B in applicable recordkeeping requirements for licensees and 801 CMR 4.02 was amended to update the DOB’s fee schedule to reflect new money transmitter licensing categories and requirements under Chapter 169B.