Minnesota Money Transmitter Changes Become Effective January 1, 2024

Certain provisions of the Minnesota Money Transmitter Modernization Act (MTMA) which conflict with current law or establish new requirements will become effective January 1, 2024, five months after the effective date of the other provisions.  Notwithstanding the January 1, 2024, effective date, the Minnesota Department of Commerce has determined that current money transmitter licensees must comply with these new provisions in order to renew their licenses for 2024, and as of November 1, 2023, new license applicants must comply with these new provisions before a license may be granted.

Among other changes, the MTMA establishes new surety bond and net worth requirements; redefines “control” of a money transmitter; creates a passive investor exception to control; and establishes a comprehensive change-of-control approval process; creates several new exemptions from the licensing requirements, including for payment system operators and certain persons dealing in securities and investments; adds classes of permissible investments which licensees may hold to meet reserve requirements; and codifies requirements for virtual currency businesses.