Recently, the Governor of Massachusetts signed into law H.4840 creating Chapter 169B: The Money Transmission Act. The Act is designed to regulate money transmission especially through payment apps. The bill repeals Massachusetts’ money transmission law, Chapter 169 of the General Laws, and replaces it with expanded licensing requirements. The prior law followed the model developed by the Conference of State Bank Supervisors, and only required entities engaged in international transmissions to obtain a license in Massachusetts. The new Act now requires a license for covered entities engaging in both domestic and international transmissions. The Act also mandates that licensees maintain a tangible net worth greater than $100,000 or a percentage of total assets; it also lists permissible investments such as cash, certificates, obligations, and bonds; and sets conditions for license suspension or revocation. Although the Act became effective upon signing, compliance with its licensing and other substantive requirements is not required until October.
