Texas money transmitter licensing: the ATM route filing path

What to take away

The statute, the rules and the agency behind the forms

Three names cover the Texas filing. The statute is the Texas Money Services Act, Texas Finance Code Chapter 151. The rules sit in 7 TAC Chapter 33. The agency is the Texas Department of Banking, and it takes applications through NMLS, the Nationwide Multistate Licensing System.

A money transmission license is granted state by state, so a license held elsewhere does not carry into Texas. Whether your route needs one at all is a separate question, answered in the guide to the licenses an ATM route needs.

The entity has to exist before the application

The Texas application assumes a legal entity already exists. In Texas that means forming under the Texas Business Organizations Code and filing with the Secretary of State. Form it first and keep the formation documents to hand, because they go into the package.

Operators who have not launched yet can follow the ATM route launch sequence so formation, banking and machine placement happen in a workable order, and only then turn to the licensing forms.

Six formation steps for a Texas LLC

Six steps take a Texas LLC from a blank page to an entity the Department can read.

Step five carries the weight for licensing. The Department reads the operating agreement to see who controls the entity, so draft it with the application in mind. Whoever the agreement makes a controller is a person who will appear on an MU2.

Control persons and the forms they file

The company files one MU1, and every control person files an MU2. Both go through NMLS, and fingerprints go in electronically. The table shows who files what and which document each form has to agree with.

The Department's rules and instructions decide who counts as a control person, so confirm that definition with them before you list names. Collect each control person's details before you open the NMLS record, because every one of them files an MU2. Get the match right before you file. If the agreement names a controller with no MU2, or an MU2 names someone the agreement does not, the two documents disagree on who controls the entity.

What the package carries beyond the forms

Besides MU1 and MU2, the package covers the formation documents, a financial statement and an anti-money laundering program. The first two come straight from the entity you formed. The third is written for the way your route actually handles cash.

The money side sits in the Department's instructions. A new money transmission license carries a $10,000 application fee, as stated in the Texas fee rule. Bond amounts and minimum net worth depend on transmission volume, so check the current Department and NMLS instructions before you budget.

The bond comes from a surety authorized in Texas and names the Department as obligee. It is not insurance for the operator: it pays valid claims if the operator defaults, and the operator pays a premium. Net worth comes from the financial statement and generally means assets minus liabilities, with adjustments the Department specifies.

The federal track runs in parallel with the state filing and is separate from it. The explainer on US money transmitter rules sets out where FinCEN registration starts and how it sits beside a state license.

When control or ownership changes

Amendments cover changes of control, ownership, legal name, address and authorized delegates. A new control person usually needs a fresh MU2 and background check, so a partner joining the LLC is a licensing event as well as a change to the operating agreement.

Authorized delegates are the least obvious trigger. A change in who may act for the licensee sits on the amendment list beside ownership and address, so record those appointments with the same care as a new owner.

That makes the operating agreement a live document. Each time you amend it to add a member or move the office, check whether the same change has to be filed through NMLS. The two records should never drift apart, and an examiner should never find a controller the file does not show.

Renewal and the examination file

Renewal runs annually through NMLS and follows the NMLS calendar, not your filing date. You submit an updated financial statement, keep the bond current and pay the renewal fee.

The Department examines licensees on a schedule and can examine for cause. For an ATM route that means transaction records, settlement reports and the reconciliation between vault cash and customer balances. Keep them in a form you can hand over without rebuilding them.

Common questions