Senate Bill 835 creates the “Money Transmission Modernization Act,” a new framework for regulating money transmitters in Michigan and repeals the existing Money Transmission Services Act, 2006 PA 250, effective July 1, 2026. The bill requires persons engaged in money transmission to obtain a state license unless they qualify for a statutory exemption, and it defines money transmission broadly to include selling or issuing payment instruments or stored value, receiving money for transmission, and payroll processing services. It also establishes detailed application, background check, ownership-change, reporting, recordkeeping, and renewal requirements for licensees and key individuals.
The bill gives the Department of Insurance and Financial Services broad authority to administer and enforce the act, including the ability to share information with other states and federal regulators, participate in multistate licensing and supervision systems, and use the nationwide multistate licensing system and registry for applications, renewals, reporting, and related processes. It also sets prudential standards for licensees, including minimum tangible net worth, surety bond or deposit requirements, and maintenance of permissible investments equal to outstanding money transmission obligations. The act includes consumer-facing requirements such as receipts, refund rules, disclosure of the department’s contact information, and special payroll-processing disclosures.
The bill’s impact on state law is substantial because it replaces the current statutory scheme with a modernized licensing and supervision structure aligned with multistate standards. It would change how money transmitters, authorized delegates, and persons acquiring control of a licensee are vetted and supervised, while also creating new compliance obligations for reporting, audits, background investigations, and anti-money-laundering coordination. It also establishes enforcement tools including license suspension or revocation, cease-and-desist orders, civil fines, and felony penalties for false filings, criminal fraud, and unlicensed money transmission.
The general sentiment reflected in the bill text is strongly pro-regulatory modernization and consumer protection. The stated purpose emphasizes reducing unnecessary regulatory burden through coordination with other states, while also protecting the public from financial crime and safeguarding customer funds. Although no committee transcript or vote record is provided, the structure and findings suggest the bill is intended to update Michigan’s framework to match national licensing practices and improve supervisory efficiency rather than to loosen oversight.
The main points of contention likely center on the breadth of licensing coverage, the compliance burden on businesses, and the treatment of payroll processing services and authorized delegates. The bill imposes extensive reporting, financial, and background-check requirements, and it allows the director to require documentation from entities claiming exemptions. It also creates strict liability and trust obligations for authorized delegates and persons acting on behalf of unlicensed transmitters, which could be significant for payment processors, fintech firms, payroll companies, and other intermediaries. The transition period through July 1, 2026 appears designed to ease implementation, but it also indicates that existing licensees and payroll processors will need time to conform to the new requirements.
This bill would repeal and replace Michigan’s existing money transmission statute with a new act governing licensing, supervision, consumer disclosures, financial safeguards, and enforcement for money transmitters. It would affect the Department of Insurance and Financial Services, money transmitters, payment processors, payroll processing providers, authorized delegates, and persons acquiring control of licensees. The bill also updates related statutory references by incorporating multistate licensing systems, confidentiality rules, and anti-money-laundering coordination, while preserving a transition period before the new requirements fully apply.
The bill appears generally supportive of stronger, more standardized regulation of money transmission, with an emphasis on consumer protection, financial integrity, and interstate coordination. Its stated goals are to modernize the law, reduce unnecessary regulatory burden through multistate cooperation, and better protect customer funds. No recorded committee debate or votes are included, so there is no direct evidence of opposition or amendment activity in the provided materials.
Likely areas of contention include the scope of activities requiring a license, especially the inclusion of payroll processing services, the extensive background and reporting requirements for owners and key individuals, and the financial security standards such as net worth, surety bond, and permissible investment requirements. Businesses may also object to the director’s broad authority to require documentation for exemptions, share information across jurisdictions, and impose penalties for noncompliance. The bill’s strict treatment of authorized delegates and persons acting for unlicensed transmitters could be especially significant for fintech, remittance, and payroll service providers.