HB 25-1201

HB 25-1201, also known as the Model Money Transmission Modernization Act, updates Colorado’s regulations for companies that handle money transfers. It clarifies how these companies are regulated and monitored, makes it easier for them to participate in multistate licensing programs, and provides more options for enforcement if a company fails to meet its obligations. This bill has been signed into law, meaning the updated rules are now in effect for businesses operating in Colorado that handle money transmission services.

Official Summary

The act repeals the current "Money Transmitters Act" and replaces it with the model "Money Transmission Modernization Act" (MTMA). The act adopts the MTMA in part. The act updates outdated or inconsistent regulations relating to money transmitters and money transmission services, including: Clarifying the definition of "control" of a licensee and introducing a rebuttable presumption of control; Enabling Colorado's participation in multistate licensing initiatives; Codifying the agent-to-payee exemption to licensure; Revising prudential standards required for licensing and ongoing monitoring, such as tangible net worth and permissible investment calculations; Establishing an irrevocable, standby letter of credit as a permissible investment; and Expanding the enforcement actions available in case of nonperformance by a money transmitter.(Note: This summary applies to this bill as enacted.)

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