2025 Pennsylvania Consolidated & Unconsolidated Statutes
Act 7 - MONEY TRANSMISSION BUSINESS LICENSING LAW - TITLE OF ACT, SHORT TITLE, LICENSE REQUIRED, EXEMPTIONS, QUALIFICATIONS FOR A LICENSE, FEE, FINANCIAL STATEMENT AND SECURITY, LIABILITY OF LICENSEES, LICENSEE REQUIREMENTS AND AGENTS
Session of 2025
No. 2025-7
SB 202
AN ACT
Amending the act of September 2, 1965 (P.L.490, No.249), entitled "An act providing for the licensing and regulation of the business of transmitting money or credit for a fee or other consideration by the issuance of money orders, by the sale of checks or by other methods; conferring powers and duties upon the Department of Banking and Securities; and imposing penalties," further providing for title of act and for definitions; providing for short title; and further providing for license required, for exemptions, for qualifications for a license, for fee, financial statement and security, for liability of licensees, for licensee requirements and for agents.
The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows:
Section 1. The title of the act of September 2, 1965 (P.L.490, No.249), referred to as the Money Transmission Business Licensing Law, is amended to read:
AN ACT
Providing for the licensing and regulation of the business of transmitting money, virtual currency or credit for a fee or other consideration by the issuance of money orders, by the sale of checks or by other methods; conferring powers and duties upon the Department of Banking and Securities; and imposing penalties.
Section 2. The definitions of "agent" and "transmittal instrument" in section 1 of the act are amended and the section is amended by adding definitions to read:
Section 1. Definitions.--Unless the context clearly indicates otherwise, the following words when used in this act shall have the following meanings:
"Agent" means any person that provides money transmission or virtual currency transmission services on behalf of another person.
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"Self-hosted wallet" means a digital medium or wallet in which the user has direct control of the controllable electronic records as outlined under 13 Pa.C.S. Div. 12 (relating to controllable electronic records).
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"Transmittal instrument" means any check, draft, money order, personal money order, debit card, stored value card, electronic transfer or other method for the payment of money or virtual currency or transmittal of credit or virtual currency, other than a merchandise gift certificate or instrument with a similar purpose sold in the regular course of business by a vendor of personal property or services in a closed loop system or hybrid closed loop system.
"Virtual currency" means as follows:
(1) The term includes a digital representation of value that:
(i) Is used as a medium of exchange, unit of account or store of value.
(ii) Is not money, unless the virtual currency was adopted or authorized by a domestic or international government as a medium of exchange, whether denominated in cash.
(2) The term does not include:
(i) A transaction in which a merchant grants, as part of an affinity or rewards program, value that cannot be taken from or exchanged with the merchant for money, bank credit or virtual currency.
(ii) A digital representation of value issued by or on behalf of a publisher and used solely within an online game, game platform or family of games sold by the same publisher or offered on the same game platform.
Section 3. The act is amended by adding a section to read:
Section 1.1. Short Title.--This act shall be known and may be cited as the Money Transmission and Virtual Currency Transmission Business Licensing Law.
Section 4. Sections 2, 3(1), 4(a)(1) and (c)(5) introductory paragraph, 6 heading and (a)(2) and (3) and (b.1), 11(a), 11.1(1), (2), (3) and (4) and 12(b) and (c)(2), (3) and (6) of the act are amended to read:
Section 2. License Required.--(a) No person shall [engage]:
(1) Engage in the business of transmitting money by means of a transmittal instrument for a fee or other consideration with or on behalf of an individual without first having obtained a license from the department.
(2) Engage in the business of transmitting virtual currency by means of a transmittal instrument for a fee or other consideration with or on behalf of an individual without first having obtained a license from the department.
(b) This act does not apply to [money] the following:
(1) Money transmission or virtual currency transmission between business entities in connection with commercial contracts, unless the contracts involve money transmission or virtual currency transmission for personal or household purposes involving individuals.
(2) The use of a self-hosted wallet, unless the individual with control of the controllable electronic records as outlined under 13 Pa.C.S. Div. 12 (relating to controllable electronic records) in the self-hosted wallet transmits virtual currency as part of a third-party service on behalf of another individual in exchange for a fee or other consideration associated with the transmission.
Section 3. Exemptions.--No license shall be required for any of the following:
(1) Banks, bank and trust companies, credit unions, savings banks and [private banks] trust companies organized under the laws of this Commonwealth; similar banking institutions organized under the laws of the United States or of any other state [which are insured by the Federal Deposit Insurance Corporation]; similar credit unions organized under the laws of the United States or another state[, and insured by the National Credit Union Share Insurance Fund]; and savings and loan associations and building and loan associations organized under the laws of another state or of the United States; or their affiliates or agents.
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Section 4. Qualifications for a License.--(a) To qualify for a license an applicant shall:
(1) have a tangible net worth of at least five hundred thousand dollars ($500,000) as determined by audited financials prepared in accordance with United States generally accepted accounting principles; and
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(c) The department may deny a license or otherwise restrict a license if it finds that the applicant, or a director, officer, partner, employee, agent or ultimate equitable owner of ten percent or more of the applicant:
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(5) does not possess the financial responsibility, character, reputation, integrity and general fitness to command confidence of the public to warrant the belief that the money transmission or virtual currency transmission business will be operated lawfully, honestly, fairly and within the legislative intent of this act and in accordance with the general laws of this Commonwealth. For purposes of this clause, an applicant is not financially responsible if the applicant has shown a disregard in the management of the applicant's own financial condition. The factors that the department may consider in making a determination regarding an applicant's financial responsibility shall include:
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Section 6. Fee, Financial Statement and Security Bond.--(a) Each application for a license shall be accompanied by:
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(2) a financial statement showing a tangible net worth of at least five hundred thousand dollars ($500,000) as determined by audited financials prepared in accordance with United States generally accepted accounting principles;
(3) a bond in the penal sum of one million dollars ($1,000,000) executed by a surety company authorized to transact business within the Commonwealth of Pennsylvania [or securities as provided in the following subsection]. The bond shall run to the Commonwealth of Pennsylvania and shall be for the use of the Commonwealth and of any person or persons who may have a cause of action against the licensee for failure to carry out the terms of any transmittal instrument which the licensee shall have issued and who were residents of the Commonwealth of Pennsylvania at the time the cause of action arose. The condition of the bond shall be that the licensee will comply with and abide by the provisions of this act and the rules and regulations of the department lawfully promulgated under this act and that the licensee will pay to the Commonwealth, to the department or to any other person any moneys that may become due from the licensee to the Commonwealth or to the department or to any other person under the provisions of this act or of any transmittal instrument issued by the licensee within this Commonwealth and who were residents of the Commonwealth of Pennsylvania at the time the cause of action arose. If any person shall be aggrieved by the misconduct of any licensee, he may upon recovering judgment against such licensee, issue execution under such judgment and maintain an action upon the bond of the licensee in any court having jurisdiction of the amount claimed, provided the department assents thereto.
(b.1) If the department, in its discretion, shall determine the bond [or deposit of securities] provided for in clause (3) of subsection (a) is not adequate, the department may, after an examination and a consent agreement or order, require an additional bond in an amount up to the average daily outstanding balance of money received for transmission in this Commonwealth during the thirty days preceding the department's requirement plus an additional ten percent of the amount of the average daily outstanding balance subject to the same conditions and the same right of execution provided for in clause (3) of subsection (a).
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Section 11. Liability of Licensees.--(a) Every licensee shall be liable for the payment of all moneys or virtual currency covered by transmittal instruments which he issues in this Commonwealth whether directly or through an agent and whether as a maker or a drawer.
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Section 11.1. Licensee Requirements.--A licensee shall:
(1) Operate in a safe and sound manner, ensuring that its practices and the practices of its agents, if applicable, do not create the likelihood of material loss, insolvency or dissipation of assets, or otherwise materially prejudice the interest of individuals who use the licensee's services to transmit money or virtual currency.
(2) Comply with all applicable Federal or State laws and rules pertaining to the business of money transmission[.] or virtual currency transmission, including 12 U.S.C. Ch. 21 (relating to financial recordkeeping) and 31 U.S.C. Ch. 53 (relating to monetary transactions).
(3) Register all of its agents who engage in the business of money transmission or virtual currency transmission involving individuals who are located in this Commonwealth.
(4) On a date determined by the department, file a report setting forth such information as the department shall require concerning the money transmission or virtual currency transmission business conducted by the licensee. Licensees who fail to file the required report by the date required by the department may be subject to a penalty of one hundred dollars ($100) for each day after the due date until the report is filed.
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Section 12. Agents.--* * *
(b) An agent engaged in the business of money transmission or virtual currency transmission under subsection (a) or subject to an exemption under section 3 shall be appointed pursuant to a written agreement between the agent and the person on whose behalf the agent is acting.
(c) The written agreement shall contain at least the following provisions:
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(2) The agent is acting on behalf of the person employing the agent's service for the transmission of money or virtual currency.
(3) The agent is subject to the control of the person on whose behalf the agent is acting, meaning that the licensee or exempted person takes complete financial responsibility for the money or virtual currency being transmitted from the moment an individual initiates the transmission of money or virtual currency until the intended recipient receives the transmitted money or virtual currency.
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(6) The agent may not provide money transmission or virtual currency transmission outside the scope of activity permissible under the written agreement between the agent and the person on whose behalf the agent is acting except to the extent that the agent is licensed itself or operating as an agent for another person.
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Section 5. This act shall take effect in 60 days.
APPROVED--The 27th day of June, A.D. 2025.
JOSH SHAPIRO
