The Money Transmission Modernization Act (MTMA) is the Conference of State Bank Supervisors' model law for money transmission. As of September 2026, CSBS reports that 31 states have enacted it in full or in part, and that money transmitters licensed in at least one adopting state account for 99% of reported money transmission activity. For licensees, the MTMA turns the most variable state requirements, net worth, surety bonds and permissible investments, into common standards, adds a consistent approach to change of control and supports coordinated examinations.
This article covers the compliance side: the requirements licensees must meet in adopting states and the controls that show they are met.
What the MTMA standardises
| Area | MTMA requirement | Control needed |
|---|---|---|
| Tangible net worth | Tiered by total assets, with floor and cap | Monthly calculation and buffer monitoring |
| Surety bond | Scaled to state transmission volume, with minimum and maximum | Annual review and adjustment |
| Permissible investments | At least equal to outstanding obligations at all times | Daily reconciliation |
| Change of control | Prior approval of acquisitions of control | Shareholder monitoring and deal procedure |
| Authorised delegates | Licensee responsible for delegates' conduct | Delegate due diligence and oversight |
| Reporting | Call reports and notices through NMLS | Calendar and data quality checks |
| Examinations | Multistate coordination | Examination readiness file |
Permissible investments: a daily control
The MTMA requires a licensee to hold permissible investments with a market value at least equal to its outstanding money transmission obligations at all times. These investments are held in trust for customers if the licensee becomes insolvent. Eligible assets include cash, certificates of deposit, certain receivables from authorised delegates, US government securities and some money market funds, some subject to limits.
The words at all times mean this is a daily test. A licensee whose outstanding obligations spike on a high-volume day, for example before a holiday, can fall short even if month-end figures look healthy. The control set should include:
- a daily calculation of outstanding obligations, by state where the law requires;
- a daily valuation of permissible investments, applying any concentration limits;
- an automated alert where the margin falls below an internal buffer;
- a funding procedure to restore the position the same day;
- records retained for examination.
For virtual currency businesses, outstanding obligations may include virtual currency owed to customers. State laws and CSBS guidance address whether like-kind assets are required, so check each state's position.
Net worth and bonds
Tangible net worth under the MTMA rises with the licensee's total assets between a floor and a cap. Intangible assets, such as goodwill and capitalised software, are excluded. For fintechs whose balance sheets are largely intangible, this is often the binding constraint. CSBS guidance published in 2026 addresses the treatment of virtual currency in tangible net worth and of right-of-use lease assets, and should be reflected in the calculation.
Surety bonds scale with the licensee's money transmission volume in each state, between a minimum and a maximum. Review bond amounts after each annual report of volume and adjust before the state asks.
Licensees growing quickly should model net worth and bond requirements forward, using projected assets and volumes for the next 12 to 24 months. A funding round or a large new client can move a licensee into a higher tier, and capital should be in place before the requirement applies, not after an examiner notices. Record the projection and the board's decision on the buffer to hold above the requirement.
Change of control
Acquiring control of a licensee requires prior approval in MTMA states. Control is presumed above a common shareholding threshold, and the acquirer files through NMLS with information on the people and entities involved. Licensees should:
- monitor the cap table and know which investors approach the threshold;
- build the approval timetable into fundraising and M&A documents;
- prepare the filing package in advance, including biographical and financial information on controllers;
- notify states of changes in key individuals as each state requires.
A transaction that closes before approval puts the licence at risk in every state that has not approved it.
Authorised delegates
Many money transmitters operate through authorised delegates, the agents that accept funds from customers. Under the MTMA the licensee is responsible for its delegates' conduct of money transmission. A delegate program needs written contracts, due diligence before appointment, AML training, monitoring of activity, remittance of funds within set periods, and termination where needed. Receivables from delegates can count as permissible investments within limits, so delegate remittance timing also affects the daily calculation.
Review each delegate at least annually, and more often for high-volume or higher-risk delegates. Track remittance timeliness, transaction patterns, complaints and training completion. Delegates that remit late, show unusual activity or resist monitoring should be placed on a remediation plan or terminated. Keep the delegate list current in NMLS where states require it, and make sure the list held for FinCEN purposes matches.
Reporting and examinations
Licensees file call reports through NMLS, including the money services businesses call report, and annual reports with financial statements. Our MSB call report guide covers the content and our article on NMLS renewal for money transmitters covers the year-end cycle.
The MTMA supports multistate examinations coordinated through CSBS, including the One Company, One Exam approach. Keep an examination readiness file with the latest permissible investments and net worth calculations, bond schedule, delegate list, BSA/AML risk assessment and independent test, complaints log and board minutes.
Findings that recur in examinations
State examinations of money transmitters regularly identify the same weaknesses:
- permissible investments calculated monthly rather than daily, with shortfalls on high-volume days;
- outstanding obligations understated by excluding funds held by delegates or in transit;
- intangible assets counted towards net worth;
- change of control filings made after a transaction closed;
- delegate oversight that consists of contracts without monitoring;
- call report data that does not reconcile to financial statements;
- BSA/AML risk assessments not updated for new products or corridors.
Each of these can be addressed with a control and evidence. An internal review against this list before the next examination is an efficient use of compliance time.
A compliance calendar for MTMA licensees
| Frequency | Task |
|---|---|
| Daily | Permissible investments against outstanding obligations |
| Monthly | Tangible net worth calculation and buffer review |
| Quarterly | MSB call report through NMLS; delegate monitoring review |
| Annually | Renewal through NMLS, annual report and audited financial statements, bond review, independent AML test |
| Event driven | Change of control, key individual changes, new products, material incidents |
Where states differ
| Point | Why it matters |
|---|---|
| Effective dates | Some states phase in provisions over time |
| Figures | Some states changed net worth or bond figures |
| Partial adoption | Some states adopted only parts of the model law |
| Virtual currency | Treatment of crypto in obligations and net worth varies |
| Non-adopting states | New York and others apply their own regimes |
Keep a state matrix that records, for each state, whether the MTMA applies, the effective date, the figures and any local variations. Review it when states legislate, usually after each legislative session. Assign an owner for the matrix and record the source for each entry, such as the statute, regulation or state guidance, so that changes can be traced and examiners can see the basis for the firm's approach.
Using CSBS guidance
CSBS runs a formal process for requests for unified MTMA implementation guidance. Topics published so far include virtual currency in tangible net worth, right-of-use leases and stablecoin tangibility. Licensees should monitor new guidance, apply it to their calculations and record which guidance they rely on. Where a state takes a different view, record the state's position.
Our guide to US money transmitter compliance requirements covers the wider obligations, and our US money transmitter licence page covers applications.
For licensees planning expansion into further states, the MTMA reduces the work of adapting the compliance framework state by state, but each new licence still brings its own application, bond, reporting and examination. Build the state matrix, the daily permissible investments control and the change of control procedure once, at group level, and extend them as each state is added. That approach keeps the framework consistent and makes the next examination, in whichever state leads it, easier to manage.