2023 California Code
Financial Code - FIN
DIVISION 1.2 - MONEY TRANSMISSION ACT
CHAPTER 3 - Licenses
Section 2040.

2040. (a) Subject to subdivision (b), a licensee shall maintain at all times a tangible net worth of the greater of one hundred thousand dollars ($100,000) or 3 percent of total assets for the first one hundred million dollars ($100,000,000), 2 percent of additional assets for one hundred million dollars ($100,000,000) to one billion dollars ($1,000,000,000), and one-half of 1 percent of additional assets for over one billion dollars ($1,000,000,000).

(b) (1) The commissioner shall, pursuant to paragraph (2), have the authority to exempt, in part or in whole, an applicant or licensee from the requirements of this section.

(2) The commissioner, in determining whether to exempt, in part or in whole, an applicant or licensee from the requirements of this section, shall consider all of the following factors:

(A) Whether the applicant or licensee is licensed to engage in money transmission in other states and whether the applicant or licensee has been subject to any disciplinary actions, including license revocations or suspensions.

(B) Whether the applicant or licensee is licensed to engage in money transmission in other states and the tangible net worth requirements in those other states, if applicable.

(C) The nature and magnitude of short-term fluctuations in the total assets and money transmitter liabilities of the applicant or licensee, the risks associated with those fluctuations, and how those fluctuations affect the net worth requirements of this section.

(D) Any factors that suggest that the money transmission activities of the applicant or licensee function in such a manner that a waived or modified tangible net worth requirement would not compromise the interest of persons in this state who use money transmission services, including, but not limited to, both of the following:

(i) The manner in which the applicant or licensee holds actual possession of funds from persons in this state who use money transmission services.

(ii) Whether the applicant or licensee transmits funds described in clause (i) to the intended recipient as soon as practicable following receipt.

(E) Any other factors as the commissioner deems appropriate.

(c) If a licensee is subject to an order issued under Section 580 or 581, the commissioner may require a licensee to maintain tangible net worth greater than the amount required by subdivision (a) of this section.

(Repealed and added by Stats. 2023, Ch. 463, Sec. 6. (AB 1116) Effective January 1, 2024.)