A Brief History of MSB Laws
Money Services Businesses (MSBs) — including money transmitters, currency exchanges, check cashers, and later digital asset firms — have been regulated in the U.S. since the early 20th century. These laws were born of necessity: to protect consumers, prevent money laundering, and ensure the solvency of non-bank financial service providers. Each state maintained its own licensing regime, leading to inconsistent regulatory hurdles and fragmented oversight.
As fintech innovations surged in the 2010s, the complexity of managing licenses across multiple states became a significant burden for companies expanding beyond their home jurisdiction.
What’s New in 2025?
- 31 states have now adopted or partially adopted the Money Transmission Modernization Act (MTMA). This includes major jurisdictions like California, New York, Florida, and Texas.
- Uniform standards for net worth, surety bonds, licensing documentation, and supervision are now in force across these states.
- This uniformity makes multistate licensing faster, more predictable, and less costly, with shared examinations and harmonized regulatory expectations.
Multistate Licensing — The Strategic Advantage
Licensing in only one state is costly and operationally limiting. But by pursuing a multistate MSB strategy—especially in jurisdictions that adhere to the MTMA—you gain:
- Standardized capital and bond requirements
- Shared compliance documentation and audit standards
- Coordinated supervisory exams instead of redundant reviews
- Scale efficiencies—one compliance program across multiple states
We don’t advise standalone state licensing (one license or one state). It’s just not financially efficient to get involved in a one off license. Conversely, a multistate MSB built in 2025 is not just viable—it’s the most effective path for fintechs, international banks, and payment innovators.
MTMA-Adopting States as of 2025
State | Adoption Status |
Alaska | Fully adopted |
Arizona | Fully adopted |
Arkansas | Fully adopted |
California | Fully adopted |
Colorado | Fully adopted |
Connecticut | Partial |
Georgia | Fully adopted |
Hawaii | Fully adopted |
Illinois | Fully adopted |
Indiana | Fully adopted |
Iowa | Fully adopted |
Kansas | Fully adopted |
Maine | Fully adopted |
Maryland | Fully adopted |
Massachusetts | Fully adopted |
Minnesota | Fully adopted |
Mississippi | Newly adopted |
Missouri | Fully adopted |
Nebraska | Fully adopted |
Nevada | Fully adopted |
New Hampshire | Fully adopted |
North Dakota | Fully adopted |
Rhode Island | Partial |
South Carolina | Fully adopted |
South Dakota | Fully adopted |
Tennessee | Fully adopted |
Texas | Fully adopted |
Utah | Fully adopted |
Vermont | Fully adopted |
Virginia | Newly adopted |
West Virginia | Fully adopted |
2025 Highlights of MTMA Adoption
Feature | Updates in 2025 |
States Adopting MTMA | Reached 31 total |
Uniform Net‑Worth Requirement | ≥ $100k or 3% of liabilities |
Bond/Security Balancing | Based on obligation size |
Shared Examination Protocol | Multi-state audits activated |
Virtual Currency Clarification | Crypto included under same rules |
MTMA Deep Dive: Capital & Bond Requirements
Net Worth Standards
Under MTMA, MSBs must maintain tangible equity of at least $100,000, or 3% of outstanding obligations, whichever is greater. This scales responsibly with company size and exposure.
Surety Bond or Security
States now require bonds keyed to operational volume—ranging from $50,000 to several million—designed to protect consumer funds and fulfil payment commitments.
Why It Delivers Efficiency in 2025
- 1. Predictable regulatory thresholds across states simplify planning.
- 2. Common application documents mean less duplication and faster approvals.
- 3. One audit framework reduces time and legal costs.
- 3. State-by-state roll-out of MTMA ensures rapid scalability once you've cleared your first few licenses.
MSBs in Credit Card Issuing & Payments
MSB licenses allow companies to:
- Issue prepaid and credit cards via BIN sponsorship
- Partner with processors on ACH, wire, and card rails
- Handle balances and payments within regulated frameworks
Taken together, this enables fintechs and banks to offer embedded finance, merchant services, and consumer lending while maintaining strict compliance.
International Banks & Puerto Rico MSB Strategy
For foreign banking institutions licensed in Puerto Rico, layering in a U.S. MSB offers powerful benefits:
- Access to U.S. payment rails—ACH, Fedwire, SWIFT
- Facilitation of credit card issuing programs
- Support for lending products like receivables financing, merchant cash advances, and digital credit
- Ability to open U.S. correspondent banking relationships
This hybrid model bridges the gap between Puerto Rico’s license and licensed capabilities on the U.S. mainland.
Related Articles
- Building a Compliance Program for a Fintech, Crypto or Credit Card Issuing Business (2023)
- Structuring a Fintech or Card Issuer Without an MSB License (2023)
Despite being published in 2023, these guides remain relevant to the MSB and fintech landscape of 2025.
Conclusion
2025 is the year for building a multistate MSB that scales. With MTMA’s harmonized framework and increasing state adoption, the path to licensing, compliance, and operational expansion has never been more efficient.
If you’re planning a multistate MSB — whether a fintech startup, international bank, or payment platform — we’re ready to assist. Our turnkey services include licensing strategy, filings, compliance setup, and coordination across the 31 MTMA states.
Contact us at info@banklicense.pro for more information.