California Considers Revisions to its Money Transmission Act

On March 11, the California State Assembly Standing Committee on Banking and Finance held a hearing entitled “Emerging Technology and the California Money Transmission Act.” The hearing’s purpose was to discuss the MTA’s interactions with emerging technology and mobile payments and “bring common sense reforms to money transmission laws” to “account for the changes in technology.” This is especially significant since the MTA has been a source of concern for many businesses because of its broad scope and limited exemptions. These concerns have been especially amplified for emerging technologies in recent years given that many new technologies and apps, in particular, are beginning to combine service and third-party payment functions into a single interface; a feature which they fear could require licensing under the MTA. The Commissioner of the California Department of Financial Institutions noted during her testimony that the Department had received many inquiries from technology-related services since the MTA’s enactment and that the Department intends to clarify the matter in the near future.