STATE LICENSING & OTHER SUPPORT

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If you want to conduct business as a  money transmitter in a certain state, your Company may be required to  obtain a license in said state. Federal and state regulations are strict  regarding all types of monetary transmissions, and you must first  obtain the proper license and authority before you can work in this type  of business. 

At 2920 Wall LLC, we assist clients  in obtaining their money transmitter license, as well as with  compliance following licensure and the start of operations. 

Every state has its own definition of what constitutes a “money transmitter,” which means it can be difficult  to know whether you need a license for your company’s operations.  For example, some states exempt digital currency operations from needing a  license, while other states do not.  We can evaluate your situation and  advise whether we believe you need a license for your particular  business model. 

Generally speaking, any party that completes transactions over $1,000 in a day can qualify as a money  transmitter if the transactions include: 

• Currency exchanging or dealing
• Check cashing
• Money orders
• Traveler’s checks
• Money transfers

To be on the safe side, let us evaluate your licensing requirements for your intended operations.

Once you determine that you need a  money transmitter license, you must meet specific requirements, which  can vary significantly from state to state. Some common requirements in  most states may include:

• Submission of a state-specific Money Transmitter Application
• Meeting a Net Worth requirement and presenting a Statement of Net Worth 
• Company’s Good Standing Certificate (State of Formation & State the Company is applying in)
• Background Checks & Fingerprints for Control Persons
• AML Compliance Program
• Internal Policies & Procedures
• Personal Financial Statements for Control Persons
• Paying licensing fees
• Obtaining a Surety Bond or another form of security

Applications also can require a  substantial amount of supporting documentation. This can include a  detailed business plan that details the financial health and intended  operations of the business, financial statements and records for  shareholders and directors, and your background check information. In  addition, you will need to present your anti-money laundering (AML)  policies and procedures that are in line with the requirements enforced  by the Financial Crimes Enforcement Network (FinCEN), which is part of  the U.S. Department of Treasury.

In addition to license acquisition, we can also complete all required  aspects of the license maintenance process including, but not limited  to:

• Staying up-to-date on the license maintenance requirements for all states where the Client holds a license
• Coordinating with the Client on all MSB reporting requirements
• Completion and submission of the Money Services Business (MSB) Call Report every quarter in NMLS
• Completion and submission of all other state MSB Quarterly Reports that are due outside of NMLS
• Completion and submission of all state MSB Annual Reports that are due throughout the year
• Coordinating with state regulators on any questions they have and/or  documentation they need related to MSB licensing throughout the year
• Uploading documentation and update relevant information in NMLS if  changes within the Client require uploading/updating (Policies &  Procedures, Address, Business Plan, Risk Assessments, etc.)
• Submitting the Client’s Annual Financial Statement each year in NMLS  and anywhere else that a state may require it to be uploaded for the  maintenance of their MSB licenses
• Submitting the Authorized Agent Report each quarter in NMLS (whether the Client uses agents or not, it must be submitted)
• Periodic review of the Client’s NMLS account for any deficiencies identified by state regulators
• Coordinating with Client personnel on any information that is needed  to complete required reports, forms, assessments, etc. related to their MSB licenses
• Coordinating with the Client on any MSB licensing-related renewal requirements

Marijuana remains illegal on the federal level in the United States of America and many businesses are unable to open bank accounts, accept credit cards or debit card payments with many banks and financial institutions. Most cannabis dispensaries must rely on cash if they can’t offer modern digital payment methods to their clients. This heavy reliance on cash makes legal cannabis dispensaries targets for criminals with knowledge of these large sums of cash onsite in addition to a perfect layer for money laundering. 

Most banks and financial institutions face the following 2 ongoing challenges as it relates to providing essential services for legal cannabis dispensaries:

• Marijuana is illegal at the federal level in the United States of America
• Banks need to stay with AML rules, regulations, and laws

• Policy creation
• Risk Assessment creation
• FinCEN regulatory guidance analysis and applicability to business model
• Defining marijuana business tiers
• BSA Filing guidance
• Customer due diligence procedures
• Training