Indiana Money Transmitters

The Department of Financial Institutions regulates the business of money transmission under the Indiana Money Transmitter Act, IC 28-8-4.

The Act does not apply to the United States or an instrumentality of the United States; a state, a political subdivision of the state; a bank, a bank holding company, an industrial loan and investment company, a credit union, a building and loan association, a savings and loan association, a savings association or bank, a mutual bank or savings bank organized under the laws of any state or the United States; or an authorized delegate of a person licensed under the Act.

Applicants for a Money Transmitter License

To be considered for a license, the applicant must complete the application and submit it to the Department of Financial Institutions. There is an initial license application fee of $1,000 to be included with the application. The check or money order is to be made payable to the Department of Financial Institutions. A license renewal fee of $500, plus $10 per location or delegated agent, up to a total maximum fee of $2,000 is due by December 31 each year.

The Department will investigate the financial condition and respon­sibility, business and financial experience, character, and general fitness of the applicant. An on-site investigation may be conducted, the cost of which shall be borne by the applicant.

State Police Report

A criminal record report from the State Police of the State of residence for each owner, partner, officer, or member must accompany the application.

The report for Indiana residents from the Indiana State Police may be secured by sending a money order (amount determined by State Police) to the ISP Central Records Division, IGCN 100 North Senate, Room 302, Indianapolis, IN 46204, 317-232-8262. Include your name, address, date of birth, and your finger prints and request a review of records for the Department of Financial Institutions for the issuance of a Money Transmitter license.

Financial Statement

An audited Financial Statement or most recent 10K filing with the Securities Exchange Commission (SEC) revealing a net worth of the lesser of $100,000 plus a net worth of $50,000 for each location and for each authorized delegate in Indiana; or a net worth of $600,000. An audited Financial Statement is to be attached to the application including a balance sheet, a statement of income or loss, a statement of changes in shareholder's equity, management letter, and a statement of changes in financial position; or if the licensee is a wholly owned subsidiary, the consolidated audited annual financial statement of the parent corporation filed with the licensee's unaudited annual financial statement. A copy of the most recent peer review letter that the CPA has received must also be included.

Security Device

An application for a license must be accompanied by a security device as required by Section 27 of the act or a deposit as required by Section 29 of the act.

House Enrolled Act, effective July 1, 2004 has raised the required surety device under IC 28-8-4-27, Step three from $100,000 to $200,000 and Step four (2) from $200,000 to $300,000; and raised insurance policy amount in IC 28-8-4-33(2) to the amount of the required security device required under section 27.

Permissible Investments

A licensee must at all times possess permissible investments with an aggregate market value, calculated in accordance with generally accepted accounting principles, of not less than the aggregate face amount of all outstanding payment instruments issued or sold by the licensee or an authorized delegate of the licensee in the United States. The Director may waive the permissible investments required if the dollar value of a licensee’s outstanding payment instruments do not exceed the security device posted by the licensee under section 27 or the deposit made by the licensee under section 29 of the Act.

FinCEN Information

If you are an existing money transmitter in other states and are already filed with the Treasury Department /FinCEN, please send us a copy of your registration. If you are a new money transmitter, information regarding the BSA and FinCen is on the Internet. Registration forms and information are available at: http://www.ustreas.gov/; statutes are at: http://www.fdic.gov/regulations/laws/rules/8000-1400.html. Information about FinCEN is at: http://www.fincen.gov/. You will need include a copy of your registration with your application.

Insurance Information

When a license is granted, each licensee shall maintain a policy of insurance which insures the applicant against loss by a criminal act or act of dishonesty issued by an insurer authorized to do business in Indiana. The principal sum of the policy shall be equivalent to the amount of the security device (see above) required under section 27 or the deposit required under section 29 of the Act.

Upon granting the license, a duly authenticated and numbered license will be forwarded to the address designated in the application. The licensee should show the assigned license number in all correspondence or communications with the Department subsequent to licensing.

Licenses under the Indiana Money Transmitter Act are issued on the basis of representations made in the application. Any substantial change in the information included in the application should be reported to the Department within ten days after such change. Changes in the name requires the submission of the license to the Department for reissue. Changes in ownership of the holder of the license terminates the license.

If you desire further information concerning specific questions, please contact this office.

Applicants will need to comply now as a new applicant.

President Bush’s Executive Order dated September 23, 2001

On September 23, 2001, President George W. Bush issued an Executive Order targeting terrorists by blocking property of and prohibiting transactions with persons who commit, threaten to commit, or support terrorism.

The complete text of the Order is available at www.treas.gov/terrorism.html and includes a list of all persons specifically identified to pose a significant risk to national security and the economy of the United States. These names have been added to the Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals and Block Persons List under the Order. These assets need to be blocked with immediate notice given to OFAC. All transactions with any person or entity on OFAC’s list are prohibited.

The Department of Financial Institutions expects its licensees to already have procedures in place to guard against transactions which are banned by OFAC. Please review your procedures to assure that you are in compliance with OFAC’s directives. In addition, please review the list and your transaction records for entries associated with these names. You are directed to report any past transactions or current attempts to conduct financial transactions immediately to OFAC’s hotline at 1-800-540-6322 and to notify the Department of Financial Institutions of any reports you make to OFAC.

In addition to the above noted reporting requirements you should be familiar with the filing requirements of the federal government’s Suspicious Activity Report (SAR), which can be found at www.treas.gov/fincen/msbs_sarfs.html.

If you have any other suspicious activity to report, please contact the Indiana FBI office in Indianapolis at (317) 639-3301.

Definitions

"Money Transmission" means the sale or issuance of payment instruments; or engaging in the business of receiving money for transmission from; or transmitting money to any location and by any means, including a payment instrument, wire, facsimile, or electronic transfer.

"Payment Instrument" means a check; draft; money order; traveler's check; or an instrument or written order for the transmission or payment of money; sold or issued to one or more persons, whether such instrument is negotiable.

"Payment Instrument" does not include a credit card voucher; a letter of credit; or an instrument that is redeemable by the issuer in goods or services.

"Authorized delegate" means an entity designated by a licensee to sell or issue payment instruments; or engage in the business of transmitting money on behalf of the licensee.

"Security device" includes a surety bond, an irrevocable letter of credit, or other similar security device.

License Requirement

A person shall not engage in the business of money transmission without a license obtained from the Indiana Department of Financial Institutions.

The application must contain:

  • the location of the applicant's business records;
  • the history of the applicant's material litigation; and criminal convictions for the 5 years before the date of the application;
  • a description of the activities conducted by the applicant;
  • the applicant's history of operations;
  • the business activities in which the applicant seeks to be engaged in Indiana;
  • a list identifying the applicant's proposed authorized delegates in Indiana;
  • a sample authorized delegate contract;
  • a sample payment instrument;
  • the name and address of the clearing bank or banks which the applicant's payment instruments will be drawn or through which such payment instruments will be payable;
  • the location of the applicant's business records;
  • documents revealing that the applicant has a net worth of at least $100,000 calculated in accordance with generally accepted accounting principles plus $50,000 for each location in Indiana or each authorized delegate located in Indiana or $600,000;
  • a certificate from the state in which the applicant was incorporated stating that the corporation is in good standing;
  • a description of the corporate structure of the applicant;
  • If a corporation or LLC, list all persons or entities owning 10% or more of the company. For entities meeting this test, list the persons owning that entity;
  • an audited financial statement or parent corporation's form 10K for the current year if available and the preceding two years;
  • and a security device that secures the faithful performance of the obligations of the licensee to receive, handle, transmit, and pay money in connection with the sale and issuance of payment instruments or transmission of money in accordance with Section 27 of the Act or deposits in lieu of a security device in accordance with Section 29.

The director shall issue a license to an applicant authorizing the applicant to engage in the activities of money transmitting if the director finds that the applicant's business will be conducted honestly, fairly, and in a manner commanding the confidence and trust of the community and the applicant has fulfilled the requirements imposed by the Money Transmitter Act.

There is a application fee of $1,000. A license may be renewed for twelve months upon the filing of a renewal application by December 31st of each year. The license renewal fee is set by the department and is currently $500.00 plus $10 per authorized delegate or $2,000.

Each licensee shall maintain a policy of insurance issued by an insurer authorized to do business in Indiana that insures the applicant against loss by a criminal act or act of dishonesty. The principal sum of the policy shall be equivalent to the amount of the security device required under Section 27 or deposit required under Section 29 of the Money Transmitters Act.

A licensee must at all time possess permissible investments with an aggregate market value calculated in accordance with generally accepted accounting principles of not less than the aggregate face amount of all outstanding payment instruments issued or sold by the licensee or an authorized delegate of the licensee in the United States.

The director or his representative may conduct an annual onsite examination of a licensee or an authorized delegate of a license. Written notice will be given 45 days before conducting an onsite examination. Reasonable expenses incurred in the examination will be borne by the licensee. If the director determines, based on the licensee's financial statements and past history of operations in Indiana, that an onsite examination is unnecessary, the directory may waive the onsite examination.

Money Transmitter License Renewal

  1. Indiana licensed Money Transmitters must submit to the Department their license renewal application and renewal fee on or before December 31 each year. The renewal fee is $500 plus $10 per agent/location up to a maximum of $2,000.
  2. Make check payable to the INDIANA DEPARTMENT OF FINANCIAL INSTITUTIONS and return with completed form.
  3. A late payment penalty of $5 per day may be assessed for returns mailed after January 31.
  4. For your record retention , make a copy of the renewal form and to keep in your files. A copy of this form and your cancelled check will serve as your receipt.
  5. If you have changed your name, address, or telephone number, indicate any changes on the form.

Money Transmitter Brochure