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HB 25-1201

Model Money Transmission Modernization Act

2025 Regular Session Introduced by Nick Hinrichsen and 3 co-sponsors

Modernizes Colorado money transmission law to a model act standardizing licensing, boosting protections, enabling cross-state oversight while tightening reserves and enforcement.

Governor Signed
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Bill Summary · HB 25-1201

HB 25‑1201 — Model Money Transmission Modernization Act

Status: Governor signed (04/18/2025) | Introduced: 02/10/2025
Primary sponsors: Rep. Bob Marshall; Sen. Nick Hinrichsen. Cosponsor: J. Jackson; also sponsored by Larry Liston.

Purpose / Intent

Replaces Colorado’s existing Money Transmitters Act with a modernized, model-based Money Transmission Modernization Act to:
- standardize licensing and regulatory definitions and practices,
- reduce unnecessary regulatory burden and enable multistate coordination,
- strengthen consumer protections and safety-and-soundness requirements, and
- update permissible investment and reserve rules to reflect current market practices.

Key provisions (summary)

  • Repeals the prior Money Transmitters Act and enacts the Money Transmission Modernization Act.
  • Licensing and scope
    • Clarifies and standardizes what constitutes “money transmission” and related definitions (e.g., average daily money transmission liability).
    • Codifies common exemptions (including the agent‑to‑payee exemption).
    • Enables Colorado to participate in multistate licensing / supervisory initiatives.
  • Control and governance
    • Defines “control” (e.g., power to vote ≥25% of voting shares or otherwise exercise controlling influence).
    • Establishes a rebuttable presumption of control at a 10% voting interest (subject to rebuttal for passive investors).
    • Aggregates immediate family interests for control calculations.
  • Prudential and safekeeping requirements
    • Tiers reserve / tangible net worth and reserve requirements by firm asset size and average daily money transmission liability (quarterly measurement periods identified).
    • Revises allowable investments and permissible investment calculations; explicitly allows certain securities, irrevocable standby letters of credit, and specified foreign depository cash holdings as permissible holdings.
    • Sets risk‑control limits and authorizes the Banking Board to further restrict high‑risk investments.
  • Enforcement and supervision
    • Expands Division of Banking authority: issue cease-and-desist orders to prevent imminent harm/insolvency; impose daily fines; recover investigation costs; run additional background checks in certain licensing contexts; petition courts for temporary restraining orders; and settle enforcement matters without requiring admission of guilt.
    • License applicants/agents may seek judicial review of license denial, suspension, or revocation, and may petition courts to suspend cease-and-desist orders.
  • Criminal penalties
    • Two new offenses created as class 2 misdemeanors: (1) engaging in money transmission as an agent without required licensing and (2) falsifying related records.

Who is affected

  • Money transmitters, their agents, authorized delegates, and related payment-service providers active in Colorado.
  • The Division of Banking (DORA) and the Banking Board (supervisory and rulemaking responsibilities).
  • Judicial Department (potential, but expected minimal, increase in filings for judicial review or temporary relief).

Fiscal and operational impact

  • Fiscal note (Legislative Council Staff): minimal ongoing state workload and minimal state revenue impacts. No appropriation required.
  • State revenue: could increase minimally from filing fees if agents seek judicial review or petitions to suspend enforcement orders (subject to TABOR).
  • Criminal justice impact: comparable prior offense had zero convictions FY2021-22 through FY2023-24; bill expected to produce minimal additional criminal filings or costs.

Timeline / Effective date

  • Effective 90 days after adjournment sine die of the General Assembly, assuming no referendum petition.

Legislative history (selected)

  • Introduced in House: 02/10/2025 (Finance)
  • Passed House & Senate (no amendments on third readings): March 2025
  • Sent to Governor / Signed: Sent 04/08/2025; Governor signed 04/18/2025.

This summary highlights the bill’s principal regulatory, supervisory, and enforcement changes that modernize Colorado’s money‑transmission framework and align it with a model interstate approach.

Compiled from official sources — confirm details with the bill’s official record.

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