The "Money Transmission Modernization Act" aims to overhaul the regulation of money transmission in Michigan by establishing a licensing requirement for individuals and entities involved in this sector, replacing the existing Money Transmission Services Act of 2006. The bill seeks to enhance regulatory coordination among states, protect the public from financial crimes, standardize licensing requirements, and modernize safety measures to safeguard customer funds. It introduces new definitions relevant to money transmission, outlines exemptions for certain entities, and grants the director authority to require documentation from those claiming exemptions. The legislation emphasizes the confidentiality of information obtained during regulatory examinations and investigations while allowing for specific disclosures.

Additionally, the bill details the application process for obtaining and maintaining a money transmission license, including requirements for personal and business information, criminal history, and financial statements. It mandates that licensees submit reports on authorized delegates and significant events, and establishes penalties for non-compliance. The bill also introduces provisions for permissible investments, enforcement mechanisms, and a transition period for current licensed money transmitters, ensuring they are not subject to conflicting new requirements until July 1, 2026. The existing Money Transmission Services Act will be repealed effective July 1, 2026, with the new act taking effect on January 1, 2026, promoting uniformity in the law across states.