Georgia State-Chartered Banks and Credit Unions Closure Procedures
In light of recent inquiries related to COVID-19, the Department would like to remind all Georgia State-Chartered Banks and Credit Unions of emergency closing notification procedures. Georgia Banks and Credit Unions Closure Procedures
MSB Frequently Asked Questions
The Money Service Businesses FAQs page is designed to assist potential and existing MSB licensees/registrants (i.e., check cashers, sellers-issuers of payment instruments and money transmitters) with common questions about the various Georgia laws and Department regulations and policies applicable to the MSB industry.
What functions does your Department perform with respect to money service businesses (MSBs)?
To ensure that the citizens of Georgia have access to wide array of properly operated money service providers, the MSB section of the Non-Depository Financial Institutions Division is responsible for supervising those who are licensed (or who should be licensed) to do business in the Georgia as a check casher, seller-issuer of payment instruments or money transmitter. In regards to MSBs covered by Georgia law, the Department is charged with the supervision and examination of their business affairs to ensure that they operate in a manner consistent with state law, and also for the protection of the interests of consumers who are served by these entities.
Certain categories of MSBs must apply to the Department and meet certain licensing standards before they may legally offer their services to the public. Monetary fines and civil sanctions can be levied if a person or company is discovered to be operating in Georgia without being properly licensed.
After obtaining a license, periodic examinations of the licensee's operations are performed to monitor operating standards to assure compliance with the provisions of Title 7 of the Official Code of Georgia (O.C.G.A.) Article 4 or 4a.
I have bad credit. Will my license be approved?
Bad credit will make your application very difficult to approve. At the very least, you must settle charged-off accounts, judgments and outstanding tax liens. Those who are delinquent on child support payments must remedy this problem before they can be licensed. If you have collection accounts, you must provide proof that you have setup a payment plan and have made at least one payment.
I have a criminal background. Will my license be approved?
Criminal activity increases the difficulty of making a favorable finding on an application. While minor traffic offenses will not affect your chances for a license, convicted felons who have not been PARDONED (not just paroled) or who have not sought and obtained/documented the remedies provided for in O.C.G.A. Section 7-1-684 for sellers-issuers of payment instruments or money transmitters and O.C.G.A. Section 7-1-703 for check cashers, cannot be licensed. The Department verifies the criminal background of each applicant for a license. It is very important to provide honest answers in the application. Omissions regarding arrests are deemed to be a serious falsification of the application and can lead to denial regardless of the nature or outcome of the arrest.
Are agents of sellers-issuers of payment instruments or money transmitters required to obtain a separate license?
No. Entities that serve as authorized agents for sellers-issuers of payment instruments or money transmitters are allowed to engage in money transmission without obtaining a separate license as long as they do not engage in money transmission outside of the scope of their contract with the principal transmitter or seller. Therefore, any authorized agent which starts to offer money transmission or selling/issuing of payment instruments on its own behalf will be required to obtain its own license.
What is a surety bond and why do I need to have one? (for sellers-issuers of payment instruments and money transmitters)
A surety bond is a three-party instrument between a surety (insurance company), the licensee, and the Department. The agreement binds the licensee to comply with the terms and conditions of the laws and regulations concerning the issuance of their license. If the licensee is unable to successfully meet those requirements, the surety assumes certain monetary obligations required for performance under that surety bond for the licensee, and ensures that the obligations are met. Such obligations may be those owed to qualifying consumers, other creditors, or the Department.
Electronic Surety Bonds (ESB)
Electronic surety bonds (ESB) for certain MSB license types were available in NMLS starting January 23, 2017.
New company license applications submitted after January 23, 2017 are required to meet all surety bond requirements by completing the electronic surety bond process. See the ESB Adoption Map and Table for more information.
Seller of Payment Instruments and Money Transmitter licensees are required to convert their existing surety bond to NMLS via the submission of an ESB by December 31, 2017. See the GA ESB Conversion Plan for more information.
Please note that the Department cannot recommend any particular surety company. Check with the Office of the Georgia Insurance and Safety Fire Commissioner to see if any insurer you are considering is authorized to do business in Georgia.
The minimum surety bond for payment instrument sellers $250,000 and $100,000 for money transmitters.
The Department may require a licensee to provide additional coverage for the adequate protection of payment instrument holders if the average daily outstanding balances for payment instrument sellers exceed the current bond amount, the average daily outstanding orders to transmit not yet paid for money transmitters exceed the current bond amount, or the Department determines that additional coverage is necessary in order to satisfy the department that the provisions of subsection (a) of Code Section 7-1-684 are fulfilled.
The Department assesses the licensee's quarterly outstandings to determine if high bond coverage is required; however, under no circumstances shall the additional bond coverage required by the Department exceed $2,000,000.
Do I need to register as an MSB with the Financial Crimes Enforcement Network (FinCEN)?
The requirement to register with FinCEN differs for each type of MSB. Refer to the definitions page on FinCEN's website for further information - https://www.fincen.gov/money-services-business-definition
Please note that certain MSBs under the federal definition may not need to be licensed with the Department. For instance, a check casher that does not charge a fee is not required to be licensed with the Department. However, a check casher would still need to register with FinCEN if they meet the activity threshold established by federal regulations (An activity threshold of greater than $1,000 per person per day in one or more transactions).
What is an Anti-Money Laundering (AML) Policy and where do I find information regarding developing a Policy?
Each MSB is required by law to have an effective anti-money laundering (AML) compliance program. An effective anti-money laundering program is one that is reasonably designed to prevent the MSB from being used to facilitate money laundering and the financing of terrorist activities. The federal regulation requiring MSBs to develop and maintain an AML compliance program is contained in 31 CFR Chapter X § 1022.210. Each program must be commensurate with the risks posed by the location, size, nature and volume of the financial services provided by the MSB.
Office of Foreign Asset Control (OFAC) – NOTE: MSBs must have a policy to follow regarding checking the list of Specially Desigated Nationals as is required by the Patriot Act. Refer to http://www.treasury.gov/about/organizational-structure/offices/Pages/Office-of-Foreign-Assets-Control.aspx
Am I required to file any periodic/quarterly reports with your Department?
Yes. Money transmitter and seller of payment instrument licensees must file certain reports through the Nationwide Multistate Licensing System (NMLS) on a quarterly basis and must also file a Report of Outstanding Payment Instruments or Money Transfers directly with the Department. All parts of the reporting requirement are due within 45 days of the quarter-end.
Due quarterly, within 45 days of the end of every calendar quarter:
- Q1 data (January 1 – March 31) is due May 15
- Q2 data (April 1 – June 30) is due August 14
- Q3 data (July 1 – September 30) is due November 14
- Q4 data (October 1 – December 31) is due February 14
Licensees that fail to file all reports by the deadline may be assessed a fine of $1,000 and may subject their Georgia license to revocation.
The Department adopted the NMLS Money Services Businesses Call Report (MSBCR) functionality for submission of routine financial and transactional reporting requirements by Seller of Payment Instrument and Money Transmitter Licensees. Learn more about the MSBCR requirements from the NMLS Resource Center at https://mortgage.nationwidelicensingsystem.org/slr/common/Pages/MoneyServicesBusinessesCallReport.aspx.
Agent/office information must be uploaded via the Uniform Authorized Agent Report (UAAR) in the NMLS. Even if you have no agents or changes to report, you must still file through the NMLS. Learn more about the UAAR requirements from the NMLS Resource Center at https://mortgage.nationwidelicensingsystem.org/slr/common/Pages/UniformAuthorizedAgentDelegateReporting.aspx.
A fillable PDF form available from the Department’s dbf.georgia.gov website must be completed by the licensee to satisfy one part of the quarterly reporting requirements. The need to maintain this document is driven by the need to obtain average daily outstandings during the quarter in order to determine the adequacy of the licensee’s surety bond. This information is not currently available in the MSB Call Report. NOTE: this is being replaced with a fillable PDF that will be emailed to the MSB mailbox. The form is found at https://dbf.georgia.gov/documents/quarterly-report-outstandings-sale-payment-instruments-and-money-transmitter-licensees.