SB 219
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Third Reader
Senate Bill 219 (Chair, Finance Committee)(By Request - Departmental -
Labor)
Finance Economic Matters
Financial Institutions – Commissioner of Financial Regulation – Money
Transmissions
This departmental bill expands the Maryland Money Transmission Act (MMTA) by,
among other things, updating the definition of “money transmission” to clarify that certain
forms of value (e.g., cryptocurrencies and prepaid access system cards) are items of
monetary worth, subject to regulation under MMTA. The bill also incorporates applicable
federal definitions by reference in order to align Maryland law with federal law.
Fiscal Summary
State Effect: Special fund revenues decrease by an estimated $68,000 beginning FY 2022
as a result of the bill’s licensing fee changes. Expenditures are not materially affected.
(in dollars) FY 2022 FY 2023 FY 2024 FY 2025 FY 2026
SF Revenue ($68,000) ($68,000) ($68,000) ($68,000) ($68,000)
Expenditure 0 0 0 0 0
Net Effect ($68,000) ($68,000) ($68,000) ($68,000) ($68,000)
Note:() = decrease; GF = general funds; FF = federal funds; SF = special funds; - = indeterminate increase; (-) = indeterminate decrease
Local Effect: The bill does not materially affect local government finances or operations.
Small Business Effect: The Maryland Department of Labor (MDL) has determined that
this bill has minimal or no impact on small business (attached). The Department of
Legislative Services (DLS) disagrees with this assessment as discussed below.
 Analysis
Bill Summary: The bill updates the reporting requirements for money transmitters and
requires the use of the Nationwide Multistate Licensing System and Registry (NMLS). The
bill also reduces the fee associated with the establishment of ancillary branches and money
transmission kiosks from $2,000 each to $1,000 and $500, respectively; the fee remains
$2,000 for each principal office.
The bill also addresses certain operational processes of licensees by (1) setting forth
deadlines for the remittance and/or deposit of funds by authorized delegates (i.e.,
designated agents) and (2) altering penalties associated with failure to provide a required
notice to the Office of the Commissioner of Financial Regulation (OCFR) in a timely
manner.
Current Law/Background: The bill is, in part, a result of recommendations made in the
2018 report of the Maryland Financial Consumer Protection Commission (MFCPC). The
report noted that, under MMTA, a person may not engage in the business of money
transmission if that person (or the person with whom that person engages is in the business
of money transmission) is located in the State, unless that person is licensed by OCFR.
While it may be implicit, MMTA does not explicitly address the supervision of virtual
currencies, the exchange of virtual currencies, or other new technologically advanced
money service businesses. Further, based on a comparison of the Uniform Model Act with
State law, the commission noted that there may be gaps in consumer protection provisions
that are in the Uniform Model Act but not in State law.
OCFR considers virtual currencies to be covered by MMTA. However, to be proactive as
the cryptocurrency markets continue to develop, MFCPC recommended that the
General Assembly pass legislation that makes explicit what is implicit in the applicability
of MMTA. Further, the commission recommended explicitly stating the licensing
requirement for fiat currency and virtual currency exchanges. To further modernize State
law, the commission recommended that the General Assembly consider adopting consumer
protections that are included in the Uniform Model Act but not in State law.
OCFR regulates and licenses sellers of money orders and travelers’ checks and those who
receive money for transmission to others, known as money transmitters, operating in
Maryland. First enacted in Maryland in 1959, the laws regulating money transmitters were
updated in 2002 to more effectively regulate the industry. Under Title 12, Subtitle 4 of the
Financial Institutions Article, money transmitter services include bill payer services,
accelerated mortgage payment services, informal money transfer systems outside the
conventional financial institutions system, and money transmissions conducted over the
Internet.
SB 219/ Page 2
To qualify for a money transmitter license, an applicant must meet specified requirements
designed to protect consumers. In particular, the applicant must satisfy OCFR that the
applicant (1) is of good moral character and has sufficient financial responsibility, business
experience, and general fitness to engage in the business of money transmission and (2) has
a certain net worth. An applicant must pay a $2,000 annual licensing fee. New applicants
must pay a $1,000 investigation fee and meet certain bonding requirements. Since 2012,
Maryland has used NMLS for licensing and renewal of money transmitters; the bill codifies
this practice.
State Revenues: Nondepository Special Fund revenues decrease by $68,000 annually,
beginning in fiscal 2022. Under the bill, the licensing fee for an ancillary branch is $1,000,
while the licensing fee for a kiosk is $500; currently, $2,000 is charged for any location.
OCFR advises that, of the current 220 licensed money transmitters in the State, 163 are
primary organizational branches, 35 are ancillary branches, and 22 are confirmed to be
automated kiosks. This estimate assumes the number of licensees remains constant, and
the distribution of location types remains the same in future years.
Small Business Effect: MDL advises the bill has minimal or no impact on small
businesses in the State. DLS disagrees and notes that, to the extent that any small businesses
engage in money transfer activities described in the bill, they may meaningfully benefit
from the reduced fees related to establishing ancillary branches and kiosks under MMTA.
Additional Information
Prior Introductions: HB 855 of 2020, a similar bill, passed second reading in the House,
but no further action was taken prior to adjournment.
Designated Cross File: None.
Information Source(s): Maryland Department of Labor; Department of Legislative
Services
Fiscal Note History: First Reader - January 21, 2021
rh/mcr Third Reader - February 9, 2021
Analysis by: Eric F. Pierce Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 219/ Page 3
 ANALYSIS OF ECONOMIC IMPACT ON SMALL BUSINESSES
TITLE OF BILL: Financial Institutions - Commissioner of Financial Regulation - Money
Transmissions
BILL NUMBER: SB 219
PREPARED BY: Joe Cunningham, Director of Legislative Response & Special Projects
PART A. ECONOMIC IMPACT RATING
This agency estimates that the proposed bill:
_X_ WILL HAVE MINIMAL OR NO ECONOMIC IMPACT ON MARYLAND SMALL
BUSINESS
OR
WILL HAVE MEANINGFUL ECONOMIC IMPACT ON MARYLAND SMALL
BUSINESSES
PART B. ECONOMIC IMPACT ANALYSIS
This proposed legislation will benefit small businesses, and the overall business community,
because it revises and reduces fees to reflect current market practices and the use of automation.
The proposal also updates Maryland’s money transmission laws in a way that better harmonizes
them with federal law and the laws of other states so that national and multistate businesses can
more easily operate in Maryland. For example, while requiring financial reporting through the
NMLS will result in more frequent reporting to OCFR on the part of affected companies, those
companies are already required to use the NMLS reporting system by other states in which they
do business and hence they are currently filing reports for the other states using the NMLS and
filing Maryland’s reports on a separate basis. The proposed change will permit them to file, and
for Maryland to use, only the NMLS financial reports that they are currently filing. The legislation
maintains existing consumer protections.
SB 219/ Page 4


Statutes affected:
Text - First - Financial Institutions – Commissioner of Financial Regulation – Money Transmissions: 12-410 Financial Institutions, 12-416 Financial Institutions, 12-401 Financial Institutions, 12-404 Financial Institutions, 12-405 Financial Institutions, 12-406 Financial Institutions, 12-407 Financial Institutions, 12-408.1 Financial Institutions, 12-410 Financial Institutions, 12-411 Financial Institutions, 12-412 Financial Institutions, 12-413 Financial Institutions, 12-414 Financial Institutions, 12-415 Financial Institutions, 12-416 Financial Institutions, 12-418 Financial Institutions, 12-422 Financial Institutions, 12-425 Financial Institutions, 12-427 Financial Institutions, 12-430.1 Financial Institutions
Text - Third - Financial Institutions – Commissioner of Financial Regulation – Money Transmissions: 12-410 Financial Institutions, 12-416 Financial Institutions, 12-401 Financial Institutions, 12-404 Financial Institutions, 12-405 Financial Institutions, 12-406 Financial Institutions, 12-407 Financial Institutions, 12-408.1 Financial Institutions, 12-410 Financial Institutions, 12-411 Financial Institutions, 12-412 Financial Institutions, 12-413 Financial Institutions, 12-414 Financial Institutions, 12-415 Financial Institutions, 12-416 Financial Institutions, 12-418 Financial Institutions, 12-422 Financial Institutions, 12-425 Financial Institutions, 12-427 Financial Institutions, 12-430.1 Financial Institutions