One of the most important questions facing non-bank providers of payments services is whether they are subject to regulation under U.S. state money transmission laws. Though almost all U.S. states regulate money transmitters, there are a number of states that provide exemptions for entities that act as an agent of the payee. While a small handful of states have had long-standing agent of the payee exemptions, California more recently addressed the applicability of a money transmission licensing law to payments services, and a number of other states followed suit. However, recent California developments suggest that the scope of what constitutes exempt payee-agency activity may be subject to greater scrutiny. In addition, the California Department of Business Oversight, which regulates money transmission in California, has indicated that it is commencing a rulemaking on the “agent of the payee” exemption and its limitations.

Read our client alert.

Email Disclaimer

Unsolicited e-mails and information sent to Morrison & Foerster will not be considered confidential, may be disclosed to others pursuant to our Privacy Policy, may not receive a response, and do not create an attorney-client relationship with Morrison & Foerster. If you are not already a client of Morrison & Foerster, do not include any confidential information in this message. Also, please note that our attorneys do not seek to practice law in any jurisdiction in which they are not properly authorized to do so.

©1996-2018 Morrison & Foerster LLP. All rights reserved.