Relating To The Money Transmitters Modernization Act.
Summary
SB1368 updates Hawaii’s Money Transmitters Modernization Act to conform more closely to the Model Money Transmitters Modernization Act. The bill revises the list of assets that a money transmitter licensee may count as “permissible investments,” adding receivables from payment processors for authorized debit and credit card transactions tied to money transmission services. It also changes the financial-responsibility standard by redefining how a licensee’s tangible net worth is calculated, replacing the prior structure with a total-assets-based formula that scales with the size of the business.
The bill also streamlines licensing fees. It keeps a $5,000 nonrefundable application fee, but removes the separate upfront annual license fee from the application stage and instead imposes a $5,000 initial license fee only after the application is approved. The act would take effect on July 1, 2025.
Impact
If enacted, SB1368 would amend sections 489D-4, 489D-6, and 489D-10 of the Hawaii Revised Statutes governing money transmitters. It would broaden the types of assets that can satisfy reserve or investment requirements, update the net-worth compliance standard for licensees, and modify the timing and structure of licensing fees administered by the Department of Commerce and Consumer Affairs, Division of Financial Institutions. The changes are intended to align Hawaii with a multistate regulatory model and affect money transmitter license applicants and existing licensees operating in Hawaii.
Sentiment
The available bill materials indicate a generally supportive and administrative/regulatory tone. The stated purpose is to modernize Hawaii’s framework, improve consistency with national standards, and promote efficiency in licensing and supervision. No committee transcripts or recorded votes are provided, so there is no evidence in the supplied record of organized opposition or divided sentiment.
Contention
The main policy issues appear to be technical rather than ideological: whether Hawaii should adopt the model act’s standards, how much financial cushion money transmitters should be required to maintain, and whether the revised fee structure appropriately balances regulatory cost recovery with licensing efficiency. The bill’s changes could matter most to money transmission companies, payment processors, and regulators, but no specific objections, amendments, or stakeholder disputes are reflected in the provided record.