To engage in money transmission in the state of Alabama, you need to obtain a license. This license is regulated by the State Securities Commission. You can apply to get licensed at the Commission and be issued a paper license or through the Nationwide Multistate Licensing System & Registry (NMLS).
To get licensed, you will need to complete a number of requirements, such as to provide extensive financial information, post a money transmitter bond, and more.
See the sections below for a guide to how to get your Alabama money transmitter license.
Alabama Money Transmitter License Overview
The Alabama Monetary Transmission Act defines money transmission as the “selling or issuing of payment instruments, stored value, or receiving money or monetary value for transmission”.
By getting licensed, companies can offer debt management and credit counseling services, sell or issue traveler’s checks, drafts, prepaid access, and stored value. They may also pay bills, transmit electronic money, transport currency, and deal or exchange foreign and virtual currency.
To get licensed, companies must complete the steps detailed in the following section.
How to get a money transmitter license in Alabama
To apply for your license, you have two options. You can either apply through the Alabama Securities Commission, using the forms provided on its website or electronically through NMLS.
When applying through the Commission, you have the option to apply for an individual license or a company license. Individuals face fewer licensing requirements than companies. Through NMLS you can only apply for a company license.
The application process for companies differs slightly between the Commission and NMLS but generally, a similar set of documents must be submitted.
To apply through NMLS, you will need to register in the system after which you can navigate to the license application page and get started with completing the various forms. For an overview of all the required documents and forms, see the official new application checklist.
Alternatively, to apply through the Commission, you will need to complete Form MT.
In choosing either option, you will be required to provide the following information whether as part of the application form or separately, attached to it:
- Legal information such as name, business, and residential addresses, email, etc. of the applicant and all executive officers, managers, directors, and persons of control in the company
- Information regarding any criminal convictions of the applicant or any of the above-listed persons in the company, within the past 10 years
- Information regarding any bankruptcy or receivership proceedings against the applicant, control persons, and any affiliates, within the past 7 years
- A description of any money transmission services provided in the past
- Information regarding any other states where the applicant has a money transmission license, and any disciplinary actions taken against the applicant in relation to those services
- A list of the proposed authorized delegates in the company and all the locations where a business will be conducted in the state
- A list of banks which the applicant plans to use for their money transmission services
- A certificate of good standing and the date of incorporation
- An organizational chart
- Copies of both the audited financial statements of the applicant for the most recent fiscal year and unconsolidated financial statements for the current fiscal year
- Sample copies of all contracts which will be used by your agents and delegates, and those used with consumers
- Sample copies of payment instruments and instruments on which stored value is recorded
- Proof of minimum net worth of at least $25,000
- A money transmitter surety bond in an amount of at least $100,000
All of the above must be provided to NMLS or the Commission as part of your application. You must also pay a $500 filing fee, and a $500 licensing fee when applying for the first time. Once your application is reviewed and if it is determined to meet all requirements, you will be issued an Alabama money transmitter license.
Licenses expire yearly on March 31 and must be renewed latest by March 15. If a money transmitter fails to renew their license by March 31, they are given 20 days from the expiration date to submit all necessary renewal documents. They will also need to pay a late renewal fee of $100 for every day between the expiration of their license and the submission of the required renewal documents.
Alabama Money Transmitter Surety Bond Requirement
Money transmitters in Alabama are required to post a surety bond as a form of financial security and guarantee they will comply with the provisions of the Alabama Monetary Transmission Act.
The Act states that the amount of the bond must be the greater of either $100,000 or the transmitter’s average daily outstanding obligations for money received for transmission in the state, and 50% of their average daily outstanding payment instrument and stored value obligations in the state.
The cost of getting your bond is equal to a percentage of its full amount. Your personal credit score is the main factor that influences that percentage. The higher your score – the lower your bond rate.
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