The California legislature recently held public hearings to discuss forthcoming California Money Transmission Act regulations. Amendments to the Act in 2010 have caused significant confusion in the marketplace because the act of money transmission was defined very broadly to include “receiving money for transmission.” This could be interpreted to include a large number of new companies and technologies that enable peer-to-peer and mobile payments, entities that were previously not subject to the Act. Thomas Brown, lecturer at Berkeley Law School and a partner at Paul Hastings LLP, delivered remarks that outlined issues that have arisen since the Act was amended, and described possible modifications to the Act intended to promote and advance new payments technologies. Mr Brown urged regulators to revise and refine the definition of money transmission, and to clarify the Act’s scope.
California’s Department of Financial Institutions is expected to clarify its stance on the scope of the Act in the coming weeks, and anticipates soliciting public comment on draft regulations this spring.
Link to video of the hearings.
Link to Mr. Brown’s remarks.