Application Procedures

(1) Application. Each Applicant for a license as a money transmitter shall submit an application in a form prescribed by the Commissioner, containing such information as the Commissioner may from time to time require. (2) License Requirements. An Applicant is required to submit information supporting the following general requirements: (a) Financial responsibility. 1. An Applicant shall demonstrate a tangible net worth of the greater of a. $100,000 or b. 3 per cent of total assets for the first $100,000,000, 2 per cent of additional assets for $100,000,000 to $1,000,000,000, and 0.5 per cent of additional assets for over $1,000,000,000. Tangible net worth shall be demonstrated at initial application by the Applicant’s most recent audited or reviewed financial statements. Notwithstanding the foregoing provisions of this subsection, the Commissioner shall have the authority, for good cause shown, to exempt, in-part or in whole, any Applicant or Licensee from the requirements of this subsection. In addition, a review of financial responsibility may include a review of historical net losses, profitability, and any other information that the Commissioner may deem necessary. 2. An Applicant shall demonstrate that it will maintain at all times permissible investments that have a market value computed in accordance with the generally accepted accounting principles issued by the Financial Accounting Standards Board of not less than the aggregate amount of all of its outstanding money transmission obligations, as further described in M.G.L. c. 169B, § 9. (b) Financial statement. An Applicant shall submit financial statements prepared in accordance with generally accepted accounting principles issued by the Financial Accounting Standards Board, in U.S. dollars, meeting the following minimum requirements: 1. Contents. The financial statements required by 209 CMR 44.00 shall include, but are not limited to, a Balance Sheet, Statement of Income, and Statement of Cash Flows, and all relevant notes thereto. An Applicant shall also submit financial statements for the preceding fiscal year and such other financial information as the Commissioner may require. If an Applicant’s financial statements are consolidated, the Applicant shall include a separate breakdown of all consolidated entities. Consolidated financial statements shall include a separate, stand-alone breakdown of the Applicant with a separate balance sheet, income statement, and statement of cash flows. 2. Initial Application. An Applicant shall submit audited or reviewed financial statements for its preceding fiscal year or such other financial information as the Commissioner may require. Reviewed financial statements shall be prepared in accordance with Statements of Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. At the discretion of the Commissioner and under such conditions as he or she may impose, an Applicant’s unaudited financial statements may be submitted with audited consolidated financial statements of its parent entity. (c) Character and Fitness. An Applicant shall submit information that will demonstrate that the Applicant possesses the financial and business experience, competence, character, and general fitness to engage in the licensed business. (d) Other Information. An Applicant shall submit such other information the Commissioner may deem necessary to properly evaluate an application. In evaluating an application and requesting information from an Applicant, the Commissioner may be guided or rely upon the standards set forth in the NMLS Policy Guidebook, as published by the State Regulatory Registry. (3) Bond. Each Applicant shall provide, and a Licensee shall at all times maintain, security consisting of a surety bond in a form satisfactory to the Commissioner. (a) The amount of the required security shall be the greater of $100,000 or an amount equal to one hundred percent of the Licensee's average daily money transmission liability in Massachusetts calculated for the most recently completed three-month period, up to a maximum of $500,000. (b) A Licensee that maintains a bond in the maximum amount provided for in clause (a) of this subsection shall not be required to calculate its average daily money transmission liability in the Commonwealth for purposes of this subsection. (c) A Licensee may exceed the maximum required bond amount.