Money Transmitter Frequently Asked Questions

The North Carolina Office of the Commissioner of Banks charters, licenses, and regulates a variety of financial institutions within the State.  Answers to some of your questions and concerns regarding money transmitters may be found in this section.  Please use any of the links to the left for additional assistance.  If you still need assistance, please contact Lisa Johnson at ljohnson@nccob.gov.  

Categories

General

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§ 53 208.43. License requirement. 

(a) No person except those exempt pursuant to G.S. 53-208.44 shall engage in the business of money transmission in this State without a license as provided in this Article. 

(b) A licensee may conduct its business in this State at one or more locations, directly or indirectly owned, or through one or more authorized delegates, or both, pursuant to the single license granted under this Article. 

(c) For the purposes of this Article, a person is considered to be engaged in the business of money transmission in this State if that person solicits or advertises money transmission services from a Web site that North Carolina citizens may access in order to enter into those transactions by electronic means. 

Money transmitter applications should be submitted through the Nationwide Multistate Licensing & Registry System (NMLS).  A link is available on our website under Forms and Fees.

This license authorizes the following activities: 

  • Electronic Money Transmission 
  • Issuing traveler's checks 
  • Selling traveler’s checks 
  • Issuing money orders 
  • Selling money orders 
  • Issuing and/or selling drafts 
  • Issuing prepaid access/stored value 
  • Selling prepaid access/stored value 
  • Check cashing (a separate check-cashing license is also required) 
  • Virtual Currency exchange or holding 
  • Other-Money Services  

North Carolina General Statutes (NCGS) § 53-208.44 lists the available exemptions; however, certain exemptions require confirmation from the Commissioner prior to conducting the activity.  For those exemptions requiring confirmation, please use the Money Transmitter License Determination / Exemption Request screen to submit your request and any supporting documentation.

Yes.  NCGS § 53-208.44(c) authorizes the use of delegates.  Licensees (not NCCOB) must issue a certificate of authority to each location where the licensee conducts business through an authorized delegate.  The certificate must be posted in public view and read as follows: “Money transmission on behalf of (insert name of licensee) is conducted at this location pursuant to the North Carolina Money Transmitters Act. N.C.G.S. § 53-208.41 et seq.” 

No. The NCCOB does not require a customer receipt.  However, if the licensee is subject to the Consumer Financial Protection Bureau’s Remittance Transfer Rule, the rule requires the disclosure to include the name, telephone number(s), and website of the State agency that licenses or charters the remittance transfer provider with respect to the remittance transfer. 

The information for this agency is as follows: North Carolina Commissioner of Banks, 919-733-3016 or toll free 1-800-874-9791, and NCCOB.gov.

NCCOB strives to examine every licensee within 18 months of licensure and every 3 years thereafter.

Renewal

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No.  The North Carolina Money Transmitter license is a perpetual license and does not require renewal.  However, licensees are required to use the Nationwide Multistate Licensing System & Registry (NMLS) to obtain and maintain its Money Transmitter license.  NMLS will require licensees to pay annual fees for the use of the system that occurs during renewal season, which begins November 1st and ends December 31st

Yes.  Surety bonds are required as part of the application process and must be maintained throughout the life of the license.  The initial surety bond is $150,000 and must be submitted through NMLS.  No paper surety bonds are accepted.  Annually, NCCOB will review the licensees reported transaction volume for the prior year to determine if the surety bond must be increased.  If a surety bond increase is required, licensees must do so before May 31st.  The bond amount is calculated using the table below.  

 

Transmission Volume in U.S. Dollars Required Bond Amount
Up to $1,000,000 $150,000
Greater than $1,000,000 but less than $5,000,000 $175,000
Greater than $5,000,000 but less than $10,000,000 $200,000
Greater than $10,000,000 but less than $50,000,000 $225,000
Greater than $50,000,000 $250,000

Yes.  Pursuant to NCGS §53-208.49, licensees must pay an annual assessment to cover the cost of regulation.  The assessment shall consist of a base amount of five thousand dollars ($5,000) for volumes of no more than one million dollars ($1,000,000) plus an additional sum, calculated on the transmission dollar volume reported by the licensee pursuant to NCGS 53-208.53 for the previous calendar year.  The cumulative assessment shall be calculated as follows: 

Transmission in U.S. Dollar Volume Per U.S. Dollar Assessment
$0 to $1,000,000   $5,000
$1,000,001 to $5,000,000 $0.0008 $3,200
$5,000,001 to $10,000,000 $0.0006 $3,000
$10,000,001 to $50,000,000 $0.00004 $1,600
More than $50,000,000 $0.0000006  

Money Transmitters Assessment Calculator

Reporting Requirements

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On or before March 31st of each year, the licensee must provide a copy of its most recent audited financial statement, including balance sheet, statement of income or loss, and statement of changes in shareholder's equity, if applicable, statement of changes in financial position.  Upon request, licensees should provide copies of bank statements and other documentation related to the existence and quality of the licensee's permissible investments.  This audited financial statement should be uploaded to the appropriate section in NMLS.  

 

Licensees are required to file quarterly Money Service Businesses Call Reports (Call Reports) through NMLS.  Call Reports are due 60 days after the end of each calendar quarter and as follows: 

  1. May 31 for the quarter ending March 31; 
  2. August 31 for the quarter ending June 30; 
  3. November 30 for the quarter ending September 30; and 
  4. February 28 for the quarter ending December 31. 

If a licensee cannot meet any of the reporting deadlines, they should send a written request for an extension to Lisa Johnson at ljohnson@nccob.gov

NCGS § 53-208.42 (15) defines outstanding transmission obligation as (a) “Any payment instrument or stored value issued by the licensee which has been sold in the United States directly by the licensee, or any payment instrument or stored value issued by the licensee which has been sold by an authorized delegate of the licensee in the United States, but in either case has not yet been paid or refunded by the licensee. (b) Any money or monetary value received by the licensee for transmission that has not been remitted to the payee or refunded to the sender. 

To the extent that the outstanding transmission obligation was received in virtual currency, for the purposes of compliance with this Article, the obligation shall be denominated in the amount or value to be transmitted to the payee. 

Assets that qualify as PI are defined under NCGS § 53-208.42(17).  Permissible investments must be unencumbered, held solely in the name of the licensee, and located within the United States.  The most common types of permissible investments are cash, depository accounts, agent receivables no more than 30 days past due, and highly rated investment securities.

Maybe.  Cash held in deposit accounts outside the U.S. are not permitted as PI.  However, cash, denominated in currencies other than the U.S. dollar held in U.S. depositories are allowed.

Yes.  Virtual currency is allowed, but only to the extent it covers outstanding transmission obligations received by the licensee in like-kind virtual currency.   

If a licensee intends to hold virtual currency as PI, the company must have established procedures in place for examiners and auditors to verify the accuracy of reported amounts of virtual currency held in the name of the licensee and on behalf of consumers.  The NCCOB may at any time request the licensee verify virtual currency transmission obligations outstanding and virtual currency held as permissible investments, including virtual currency stored offline. 

Yes.  The NC MTA defines virtual currency as a digital representation of value that can be digitally traded 

and functions as a medium of exchange, a unit of account, or a store of value but does not have legal tender status as recognized by the United States Government.  The NC MTA defines “money transmission” as the “act of engaging in the business of receiving money or monetary value for transmission within the United States or to locations abroad by any and all means, including payment instrument, wire, facsimile, or electronic transfer,” and further defines “monetary value” as a “medium of exchange, whether or not redeemable in money,” virtual currency is within the scope of the NC MTA. 

Maybe.  A virtual currency exchanger is a person that exchanges virtual currency for fiat currency or other virtual currencies, and vice versa.  An exchanger that sells its own stock of virtual currency is generally not considered a virtual currency transmitter under the NC MTA.  In contrast, an exchanger will typically be considered a virtual currency transmitter, where the exchanger holds customer funds while arranging with a third party a satisfactory buy/sell order and transmitting virtual currency and fiat currency between buyer and seller. 

A virtual currency administrator is a person that issues or redeems virtual currency. Although administrators must register with FinCEN and comply with the Bank Secrecy Act, merely acting as an administrator generally does not require a license under the NC MTA.  

No.  The NC MTA applies equally to all money transmitters

No.  Blockchain 2.0 technologies refer to the use of the blockchain (or other similar virtual distributed ledger systems) to verify ownership or authenticity in a digital capacity. This technology includes such software innovations as colored coins (i.e. coins that are marked specifically to represent a non-fiat-money asset), smart contracts (i.e. agreements implemented on a virtual distributed ledger), and smart property (i.e. property that is titled using a virtual distributed ledger). These uses of the blockchain generally do not involve the use of virtual currency as a medium of exchange.  As a result, these software innovations are not regulated by the NC MTA.

No. Multi-signature software allows a virtual currency user to distribute authority over his or her virtual currency among multiple different actors. This software requires multiple actors to authorize a virtual currency transaction before the transaction can be consummated.  Specifically, a multi-signature provider holds one of two or more private keys needed to authorize transactions.  The multi-signature provider cannot authorize a transaction alone, so this provider is not holding virtual currency on behalf of another and does not engage in virtual currency transmission by signing transactions on behalf of the user.

It depends on the type of wallet that is provided.   

A hosted, custodial wallet provider is in the business of storing a user’s virtual currency on a remote computer until such time as the user desires to spend or exchange the user’s virtual currency.  The hosted wallet provider typically agrees to safeguard the user’s private keys and make them available at some later date.  This custodial function is regulated under the NC MTA. 

 
In contrast, a non-hosted, non-custodial wallet is typically outside the scope of the NC MTA.  A non-hosted wallet is a piece of software deployed on the user’s own computer or device that makes the user’s private keys easier to use. In a non-hosted, non-custodial model, the software provider never gains access to the user’s private keys and does not agree to transmit the user’s virtual currency.    

It depends. Virtual currency kiosks that allow consumers to purchase or sell virtual currency, from the kiosk operator’s own supply of virtual currency, do not require a license under the MTA. Virtual currency kiosks that allow the transmission of virtual or fiat currency between consumers, or that hold virtual or fiat currency on behalf of consumers, require a license under the NC MTA. 
 
Companies that operate virtual currency kiosks should verify ownership of the recipient’s wallet to ensure funds are not sent to a third party. If a company will not or cannot verify ownership, it must seek licensure under the MTA. In verifying ownership, operators of virtual currency kiosks cannot rely on ownership requirements hidden in terms of service. Rather, virtual currency kiosks should include a separate screen or highlighted interface in which the consumer specifically affirms ownership of the recipient wallet.