2 minutes | January.10.2025
Massachusetts H4840 requires a license for anyone who transmits money or holds itself out as providing money transmission services, expanding an existing licensing requirement covering only foreign remittance transactions. The law is set to take effect in September 2025, nine months after passage.
While generally consistent with the Money Transmission Modernization Act (“MTMA”), the new law applies “only to those transactions engaged in by a person for personal, family or household purposes.” The goal is to protect consumers by requiring companies to comply with state Division of Banking regulations, Gov. Maura Healey said.
Massachusetts included express exemptions for:
In line with other recent state actions to exempt payroll processing activity (see, e.g., Me. Rev. Stat. tit. 32, § 6071(15) (effective August 9, 2024); Minn. Stat. Ann. § 53B.29(14) (effective August 1, 2024); S.C. Code Ann. § 35-11-110(A) (effective July 2, 2024)), Massachusetts did not expressly include payroll processing in its definition of money transmission – though there is also no express exemption for payroll processing activities.
Bond requirement changes: The law updates Massachusetts’ bond requirement to the “greater of $100,000 or an amount equal to 100 percent of the licensee’s average daily money transmission liability in the commonwealth calculated for the most recently completed 3-month period not greater than $500,000.” The prior law required a bond of $50,000 or twice the average total weekly amount transmitted to foreign countries.
Existing licenses: The new law repeals Chapter 169, however, licenses obtained under that chapter will remain in effect, but renewal will need to be filed in accordance with the new law.
New licenses: Anyone who did not previously need a license may continue offering money transmission services as long as an application is filed by July 2025, six months after passage.
Virtual currency: The virtual currency section of the MTMA was not adopted.