Tier 2 States: Medium Complexity, High Strategic Value
Below the Tier 1 mega-states sits a cohort of states that are important strategically, that have meaningful populations, that represent real market opportunity, and that have moderately demanding regulatory requirements. These Tier 2 states don't require quite as much documentation or scrutiny as California or New York, but they're not trivial either. The application processes are more demanding than most, the regulators are attentive, and the licensing timelines are meaningful.
6.1 Georgia
Georgia regulates money transmitters through the Department of Law's Money Transmitter Regulatory Division and under the Georgia Money Transmitter Act, found in the Official Code of Georgia Annotated (O.C.G.A.) Chapter 34-27. Georgia is a major financial services hub (Atlanta is home to a large regional banking infrastructure) and a growing fintech market, and the state takes money transmitter licensing seriously.
Georgia's definition of money transmission is functional: any person who receives currency, payment orders, or monetary value from one person and transmits it to another person or location at a different location. The statute provides exemptions for licensed banks, for persons acting as agents of a specific payee (similar to Texas), and for certain other specific situations.
Georgia's application requirements follow the NMLS process but include state-specific supplements. You'll submit MU forms, audited or reviewed financial statements, and a detailed business plan. Georgia requires that your financial statements be certified as accurate. If you're a startup, you'll submit financial projections. Georgia has a minimum net worth requirement of fifty thousand dollars.
Georgia's surety bond requirement ranges from fifty thousand dollars to two hundred fifty thousand dollars depending on your business model and transaction volume. The bond must be issued by a surety authorized to do business in Georgia.
Georgia also requires that you maintain detailed records of all transactions and that you have adequate procedures for handling customer complaints. If a customer disputes a transaction, you must investigate and resolve the dispute according to Georgia law.
The timeline for Georgia licensing is typically three to five months. Georgia regulators are reasonably efficient, though they will issue information requests if your application raises any questions. Georgia is considered moderately business-friendly for money transmitter licensing.
6.2 Arizona
Arizona regulates money transmitters through the Department of Financial Institutions (DFI) under the Arizona Money Transmitter Act, found in Arizona Revised Statutes (A.R.S.) Section 6-1201 and following. Arizona is a growing state with an expanding financial services industry, and the state takes money transmitter licensing seriously.
Arizona's definition of money transmission is functional and consistent with most states. Arizona provides exemptions for licensed banks, for persons acting as agents of a specific payee, and for certain other specific situations.
Arizona's application process follows the NMLS pathway. You'll submit MU forms, audited or reviewed financial statements, and a business plan. Arizona requires financial statements to be audited or reviewed by a qualified CPA. Arizona has a minimum net worth requirement of twenty-five thousand dollars for money transmitters (lower than many states).
Arizona's surety bond requirement ranges from fifty thousand dollars to two hundred fifty thousand dollars depending on your business model. Arizona allows for the bond to be adjusted based on your actual transaction volume and business risk profile.
Arizona also requires that you maintain detailed records and that you have procedures for handling customer complaints. Arizona regulators can examine your books and records, and they conduct periodic examinations of licensees.
The timeline for Arizona licensing is typically three to five months. Arizona regulators are reasonably efficient and business-friendly. Arizona is considered a straightforward state for money transmitter licensing.
6.3 Colorado
Colorado regulates money transmitters through the Division of Financial Services under the Colorado Money Transmitter Law, found in the Colorado Revised Statutes (C.R.S.) Section 11-102-1 and following. Colorado is a growing state with a strong financial services sector, and the state has a balanced approach to money transmitter regulation.
Colorado's definition of money transmission is functional. Colorado provides exemptions for licensed banks, for persons acting as agents of a specific payee, and for certain other situations.
Colorado's application process follows the NMLS pathway. You'll submit MU forms, financial statements, and a business plan. Colorado requires audited or reviewed financial statements. Colorado has a minimum net worth requirement of twenty-five thousand dollars.
Colorado's surety bond requirement ranges from fifty thousand dollars to two hundred fifty thousand dollars depending on your business model. Colorado allows the DFS to adjust bond requirements based on specific risk factors.
Colorado is known for relatively swift processing. The Division of Financial Services typically issues licenses within three to four months if the application is complete and raises no significant issues. Colorado is considered moderately business-friendly for money transmitter licensing.
6.4 Virginia
Virginia regulates money transmitters through the State Corporation Commission's Bureau of Financial Institutions under the Virginia Money Services Act, found in the Code of Virginia (Va. Code Ann.) Section 6.2-1900 and following. Virginia is a major financial services hub (Northern Virginia is home to numerous financial services companies) and a growing fintech market.
Virginia's definition of money transmission is functional and consistent with most states. Virginia provides exemptions for licensed banks, for certain specific service providers, and for persons acting as agents of customers (not agents of payees, which distinguishes Virginia from Texas).
Virginia's application process follows the NMLS pathway. You'll submit MU forms, audited or reviewed financial statements, and a business plan. Virginia requires financial statements from a qualified CPA and has a minimum net worth requirement of fifty thousand dollars.
Virginia's surety bond requirement typically ranges from fifty thousand dollars to two hundred fifty thousand dollars depending on your business model and transaction volume.
Virginia requires that you maintain detailed transaction records and have procedures for handling customer complaints. Virginia regulators conduct examinations of licensees to verify compliance with applicable laws.
The timeline for Virginia licensing is typically three to five months. Virginia is considered moderately business-friendly, though the state's regulators are attentive and will issue information requests if your application raises questions.
6.5 North Carolina
North Carolina regulates money transmitters through the Office of the Commissioner of Banks under the Money Services Law, found in the North Carolina General Statutes (N.C. Gen. Stat.) Section 53-208.1 and following. North Carolina is a major financial services hub (home to major bank headquarters) and a growing fintech market.
North Carolina's definition of money transmission is functional. North Carolina provides exemptions for licensed banks, for persons acting as agents of a specific payee, and for certain other specific situations.
North Carolina's application process follows the NMLS pathway. You'll submit MU forms, audited or reviewed financial statements, and a business plan. North Carolina requires financial statements from a qualified CPA and has a minimum net worth requirement of fifty thousand dollars for money transmitters.
North Carolina's surety bond requirement ranges from fifty thousand dollars to five hundred thousand dollars depending on your business model and transaction volume. North Carolina has discretion to set the bond amount based on risk assessment.
North Carolina requires detailed transaction records and procedures for handling customer complaints. The state conducts examinations of licensees on a periodic basis.
The timeline for North Carolina licensing is typically three to five months. North Carolina is considered moderately business-friendly, though regulators will ask detailed questions if your application raises any issues.
6.6 Pennsylvania
Pennsylvania regulates money transmitters through the Department of Banking and Securities under the Pennsylvania Money Transmitter Act, found in the Pennsylvania Consolidated Statutes Title 12 (Bank and Securities Department) Section 5101 and following. Pennsylvania is a major financial services hub and has a sophisticated regulatory infrastructure.
Pennsylvania's definition of money transmission is functional. Pennsylvania provides exemptions for licensed banks, for persons acting as agents of a specific payee, and for certain other specific situations.
Pennsylvania's application process follows the NMLS pathway. You'll submit MU forms, audited or reviewed financial statements, and a business plan. Pennsylvania requires financial statements from a qualified CPA and has a minimum net worth requirement of fifty thousand dollars.
Pennsylvania's surety bond requirement ranges from fifty thousand dollars to two hundred fifty thousand dollars depending on your business model and transaction volume.
Pennsylvania requires detailed transaction records, procedures for handling customer complaints, and periodic reporting to the regulator. The state conducts examinations of money transmitter licensees.
The timeline for Pennsylvania licensing is typically four to six months. Pennsylvania is considered moderately demanding, though the state is reasonably business-friendly and processes applications efficiently.
6.7 Ohio
Ohio regulates money transmitters through the Department of Commerce's Division of Financial Institutions under the Money Transmitter Law, found in the Ohio Revised Code (O.R.C.) Section 1307.01 and following. Ohio is a major financial services hub and an important market for money transmission.
Ohio's definition of money transmission is functional. Ohio provides exemptions for licensed banks, for persons acting as agents of a specific payee, and for certain other specific situations.
Ohio's application process follows the NMLS pathway. You'll submit MU forms, audited or reviewed financial statements, and a business plan. Ohio requires financial statements from a qualified CPA. Ohio has a minimum net worth requirement of fifty thousand dollars.
Ohio's surety bond requirement typically ranges from fifty thousand dollars to two hundred fifty thousand dollars depending on your business model and transaction volume.
Ohio requires detailed transaction records and procedures for handling customer complaints. The state conducts examinations of licensees.
The timeline for Ohio licensing is typically three to five months. Ohio is considered moderately business-friendly and processes applications at a reasonable pace.
6.8 Michigan
Michigan regulates money transmitters through the Department of Insurance and Financial Services (DIFS) under the Money Transmission Act, found in the Michigan Compiled Laws (MCL) Section 487.841 and following. Michigan is a significant financial services hub and an important market for money transmission.
Michigan's definition of money transmission is functional. Michigan provides exemptions for licensed banks, for persons acting as agents of a specific payee, and for certain other specific situations.
Michigan's application process follows the NMLS pathway. You'll submit MU forms, audited or reviewed financial statements, and a business plan. Michigan requires financial statements from a qualified CPA. Michigan has a minimum net worth requirement of fifty thousand dollars.
Michigan's surety bond requirement ranges from fifty thousand dollars to two hundred fifty thousand dollars depending on your business model and transaction volume.
Michigan requires detailed transaction records and procedures for handling customer complaints. The state conducts examinations of licensees.
The timeline for Michigan licensing is typically four to six months. Michigan is considered moderately business-friendly, though the state's regulators are thorough in their review.
6.9 Massachusetts
Massachusetts regulates money transmitters through the Division of Banks under the Massachusetts Securities Division of the Office of the Secretary, with primary authority over money transmitters. Massachusetts is a major financial services hub and an important market.
Massachusetts's definition of money transmission is functional and consistent with most states. Massachusetts provides exemptions for licensed banks, for persons acting as agents of a specific payee, and for certain other situations.
Massachusetts's application process follows the NMLS pathway, with state-specific supplemental requirements. You'll submit MU forms, audited or reviewed financial statements, and a detailed business plan. Massachusetts requires financial statements from a qualified CPA. Massachusetts has a minimum net worth requirement of fifty thousand dollars.
Massachusetts's surety bond requirement ranges from fifty thousand dollars to two hundred fifty thousand dollars depending on your business model and transaction volume.
Massachusetts requires detailed transaction records and procedures for handling customer complaints. The state conducts periodic examinations of licensees.
The timeline for Massachusetts licensing is typically four to six months. Massachusetts is considered moderately business-friendly, though regulators are attentive and will ask detailed questions.
6.10 New Jersey
New Jersey regulates money transmitters through the Department of Banking and Insurance under the Money Transmitter Act, found in the New Jersey Statutes Annotated (N.J.S.A.) Section 31:1-1 and following. New Jersey is a major financial services hub and an important market for money transmission.
New Jersey's definition of money transmission is functional. New Jersey provides exemptions for licensed banks, for persons acting as agents of a specific payee, and for certain other situations.
New Jersey's application process follows the NMLS pathway. You'll submit MU forms, audited or reviewed financial statements, and a business plan. New Jersey requires financial statements from a qualified CPA. New Jersey has a minimum net worth requirement of fifty thousand dollars.
New Jersey's surety bond requirement ranges from fifty thousand dollars to two hundred fifty thousand dollars depending on your business model and transaction volume.
New Jersey requires detailed transaction records and procedures for handling customer complaints. The state conducts examinations of licensees.
The timeline for New Jersey licensing is typically four to six months. New Jersey is considered moderately business-friendly and processes applications efficiently.