Notice to Applicants
Texas Finance Code (Code), Chapter 152 (Chapter 152), generally requires a person or business to have a license to engage in the money services business in Texas. There are two types of Money Services Business licenses and separate applications for each type. A person or business that engages in the money transmission business must have a money transmission license. Money transmission means 1) selling or issuing payment instruments to a person located in this state; 2) selling or issuing stored value to a person in this state; 3) receiving money for money transmission services from a person located in this state; 4) includes payroll processing services, and does not include the provision of solely of online or telecommunications services or network access.
A person or business that engages only in the currency exchange business must have a currency exchange license. Currency exchange means receiving 1) the currency of one government and exchanging it for the currency of another government; 2) a negotiable instrument, as defined by Section 3.104, Business & Commerce Code, and exchanging it for the currency of another government.
Certain requirements for a money transmission license are different from the requirements for a currency exchange license. Please read Chapter 152 to determine if you are engaged in a business that requires a license and what kind of license you need. Refer particularly to §152.003 (definitions), §152.004 (exemptions), and §152.101 (money transmission license required). Licenses do not expire.
To apply for a money transmission license, you must file an application with the Texas Department of Banking via NMLS and submit all other forms, schedules, exhibits and attachments listed in the NMLS TX-DOB Money Transmission License New Application Checklist.
The Application for a currency exchange license consists of the forms, schedules, exhibits and attachments that are attached to or follow the application found here on the Department’s website.
The filing of an application for a Money Services Business (Application) for a new license, or requesting an application or otherwise corresponding with the Texas Department of Banking about the need for a license or about your Application, does not authorize you to engage in business activities that require a license under Chapter 152. If you are operating without the required license, you are violating Chapter 152 and you are subject to enforcement action and penalties.
The filing fee of $5,000 for a currency exchange license must accompany your application. Your check should be made payable to the Texas Department of Banking. The filing fee of $10,000 for a money transmission license must be paid in NMLS. The filing fee is non-refundable. In addition, the Department may charge investigations fees for processing applications that take longer than normal or where an onsite investigation is necessary. You will be notified before any investigation fees are imposed.
If you do not submit the filing fee at the same time you submit your application, your application will be returned.
The application must be fully completed and all of the required information must be provided. You must respond to each question, even if the answer is “None” or Not Applicable”. Be sure to:
- Provide complete addresses, including zip codes.
- Sign each form where required.
- Have signatures notarized as required.
- Cross-check the information BEFORE you submit the application to insure accuracy and consistency in the information provided.
In accordance with the USA PATRIOT Act of 2001 and the Department of Treasury’s Title 31 CFR Chapter X, pertaining to anti-money laundering programs for the Money Services Businesses, each applicant must be aware of the requirements of the law and its implementation deadlines. Money services businesses currently established must be in compliance with these requirements, including a current registration with Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Department of Treasury, www.fincen.gov as a money services business.
Please direct any questions regarding a Money Services Business Application or a proposed new license to the Texas Department of Banking, Corporate Activities Division, at (512) 475-1294. Alternatively, you can submit questions via the Ask a Question form on the Department’s website by selecting "Application & Licensing", typing your question and then clicking the Submit button.
Security:>
Security is the term used in Chapter 152 to describe the surety bond, irrevocable letter of credit, or deposit required under §152.352 for a money transmission license and §152.5353 for a currency exchange license. For money transmission license applications, you may submit an Electronic Surety Bond to satisfy this requirement. If the security is obtained outside of NMLS, the original security must accompany the Application when it is submitted to the Department. The required amounts are:
Currency Exchange License: The amount of required security is $2,500 if it only conducts business in-person exclusively at physical locations and only with persons in this state. Otherwise, the security required is the greater of $2,500 or an amount equal to one percent of the licensee’s total dollar volume of currency exchange business in this state for the preceding year up to a maximum of $1,000,000.
Money Transmission License: The amount of the required security for a money transmission licensee is the following:
- For a licensee with a tangible net worth in an amount not greater than 10 percent of the licensee’s total assets, the greater of:
- $100,00; or
- 100 percent of the licensee’s average daily money transmission liability in Texas for the most recently completed three-month period, up to a maximum amount of $500,000.
- For a licensee with a tangible net worth in an amount greater than 10 percent of the licensee’s total assets, $100,000.
Please carefully review Sections §152.352, §152.353, and §152.354 for details about the security requirements.
Net Worth:
Currency Exchange License: An Applicant that intends to engage only in currency exchange business and that applies for a currency exchange license certified unaudited financial statements for the most recent fiscal year-end and fiscal quarter that demonstrates the Applicant’s solvency.
Money Transmission License: Section 152.351 of the Code requires that a company’s tangible net worth must be in an amount of not less than the following:
- For an applicant with total assets in an amount not greater than $100 million, the greater of $100,000 or 3 percent of the value of the applicant’s total assets.
- For an applicant with total assets in an amount greater than $100 million and not greater than $1 billion, the sum of $3 million and 2 percent of the additional assets in excess of $100 million; and
- For an applicant with total assets in an amount greater than $1 billion, the sum of $21 million and 0.5 percent of the additional assets in excess of $1 billion.
The net worth must be supported through the submission of audited financial statements for the most recent fiscal year-end and certified financial statements for the most recent fiscal quarter.
Background Checks:
Extensive background checks are conducted on each Applicant as well as the Control Persons and Key Individuals. See §152.003 for definitions and Appendix A-Supplemental Forms of the currency exchange application or the Supplemental Forms Section of the NMLS TX-DOB Money Transmission License New Application Checklist for clarification. These checks include law enforcement agencies, credit reports, and other regulators.
Key Individuals and Control Persons who have resided outside the U.S. at any time in the preceding 10 years must provide a search firm report prepared by an independent search firm that both meet the requirements of Section 152.105(c) of the Code. The report must be submitted directly to the Department by the search firm.
At a minimum, the search firm performing the investigative background report must demonstrate that they have sufficient knowledge and resources and employ accepted and reasonable methodologies to conduct the research of the background report and is not affiliated with or has an interest in any of the individuals under investigation. The background investigation report must be in English. The cost of the report must be borne by the applicant or the individual. The investigation report must be submitted directly to the Department with a copy of the report provided at the time of submission of the application. Contact the Corporate Activities Division for additional information.
Contact Information:
Review Chapter 152 of the Texas Finance Code thoroughly prior to completing the application form. If you have any questions, please contact the Corporate Activities Division at (512) 475-1294. Completed application forms should be mailed to:
Texas Department of Banking
Corporate Activities Division
2601 North Lamar Blvd.
Austin, TX 78705-4294
Confidentiality:
Information submitted in connection with the application may be subject to disclosure under the Open Records Act and Chapter 152 of the Code. Confidential information should be clearly marked when submitted.
CORP-MW01 Updated: 09/2023