With the passage of HB 215 in May, the Alabama Monetary Transmission Act became law. The bill brings about some changes for Alabama money transmitters and takes effect on August 1, 2017.
Alabama money transmitters sell or issue payment instruments, stored value, or receive money or monetary value for transmission. The Alabama Monetary Transmission Act does not apply to any U.S. departments or agencies, the U.S. Postal Service, or any state, county, or city governmental agencies, among others.
Under current law, Alabama money transmitters must post a $10,000 surety bond when applying for a license, plus $5,000 for each additional business location, not to exceed $50,000. HB 215 will increase that bond amount, requiring money transmitters to post a bond that is a minimum of $100,000 or an average of the daily outstanding obligations for money received for transmission in Alabama, plus 50 percent of the average daily outstanding payment instrument and stored value obligations in the state—whichever is greater. The maximum surety bond Alabama money transmitters can be required to obtain is $5,000,000.
Alabama money transmitters apply for a license through the Alabama Securities Commission. Per HB 215, their licenses expire annually on March 31. New applicants must pay a filing and license fee of no less than $500, and the renewal fee must also be no less than $500 and must be paid by March 15 each year. License renewals must be accompanied by a renewal report containing the following information:
- Copy of licensee’s most recent financial statement
- Number and monetary value of payment and stored-value instruments the licensee has sold in Alabama that have not been previously reported
- Monetary amount of payment and stored-value instruments currently outstanding
- Description of any material change in information from licensee’s original application not already reported to the Commission
- Proof that an adequate surety bond or other financial security has been maintained
- List of business locations in Alabama
Licensees have an additional 20 days after March 31 to renew their license, but a late fee of $100 is incurred for each day between expiration and license renewal.�HB 215 also increases the minimum net worth required of Alabama money transmitters, from $5,000 to $25,000, evidenced by current financial statements.
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