Key takeaways
- Almost every licensing jurisdiction requires assets that cover what the licensee owes customers. Montana does not license money transmitters, Puerto Rico relies on a bond and liquid assets, and Alabama's Act has no separate permissible investment section.
- The CSBS enactment list dated October 8, 2026 shows 35 states with the Money Transmission Modernization Act (MTMA): 31 in full and 4 in part.
- MTMA states count cash, insured deposits, government obligations and qualifying letters of credit in full, and cap delegate receivables, rated investments and foreign deposits.
- Older laws differ: some count only against payment instruments, some allow waivers when the bond covers obligations, and several have no percentage caps at all.
- A licensee in many states must pass every state's test at once, so the strictest applicable rule sets the real portfolio.
What are the key facts on permissible investments by state?
Permissible investments are the safe, liquid assets a licensed money transmitter must hold against the money it owes customers, under the law of each state that licenses it.
| Item | Position |
|---|---|
| Rule | State money transmission statutes; the MTMA model is section 10.03 to 10.04 |
| Regulators | State financial regulators, coordinated through the Conference of State Bank Supervisors (CSBS) and NMLS |
| Applies to | Licensed money transmitters, and in many states sellers of payment instruments and stored value |
| Timing | At all times; reported quarterly in Section III of the NMLS MSB Call Report, due 45 days after quarter end |
| Last checked | October 11, 2026, against state statutes, the CSBS enactment list and NMLS |
This page is original research. It records, for each jurisdiction, the statute or rule that holds the permissible investment requirement and its main asset classes and limits. Laws change often in this area, so firms must confirm the current position with each regulator and with counsel before relying on any entry.
What does the permissible investment rule require?
It requires a licensee to hold assets, valued at market, that are at least equal to its outstanding money transmission obligations.
Under the MTMA model, as enacted for example in Massachusetts General Laws c.169B, section 9, a licensee must maintain at all times permissible investments with a market value, computed under US generally accepted accounting principles, of not less than the aggregate amount of all its outstanding money transmission obligations. Those obligations are the payment instruments and stored value it has issued and not yet paid, and the money it has received for transmission and not yet delivered or refunded. Permissible investments are held in a statutory trust for customers if the licensee fails, even if they are mixed with the firm's other assets. Our guide to money transmitter permissible investments explains the rule itself; this page compares how each state writes it.
Which assets count under the MTMA model?
The MTMA counts five classes in full and caps four others as a share of total permissible investments.
| Asset | MTMA treatment |
|---|---|
| Cash, insured deposits, cash in transit, card-funded receivables owed by a bank, AAA money market funds | In full |
| Certificates of deposit or senior debt of insured depository institutions | In full |
| US government, agency and state or local government obligations | In full |
| Irrevocable standby letter of credit naming the regulator as beneficiary | Full drawable amount |
| Surety bond above average daily money transmission liability in the state | The excess counts |
| Receivables from authorized delegates under 7 days old | Up to 50% of total; no more than 10% from one delegate |
| Short-term rated investments, commercial paper, rated bills, notes and bonds, tri-party repos, money market funds rated A- to below AAA, government-only mutual funds | Up to 20% per category and 50% combined |
| Cash at foreign banks with an eligible rating, FATCA registration and no OFAC or FATF high-risk exposure | Up to 10%, if the last examination rating was satisfactory |
An eligible rating is A- or higher for long-term debt and A-2 or SP-2 or higher for short-term debt, from S&P or an equivalent agency. The full-value classes appear in identical form in, for example, Illinois 205 ILCS 658/10-4, Arizona section 6-1230 and Vermont 8 V.S.A. section 2543.
Which states follow which model?
Three families of law are in use: the MTMA, the older Uniform Money Services Act style, and state-specific statutes.
The CSBS enactment list, dated October 8, 2026, marks 31 states as full MTMA adopters and California, Connecticut, Rhode Island and Utah as partial. Some enactments are recent: Louisiana's Act 888 of 2026 rewrote its chapter with effect from July 1, 2026, and Colorado's repeal and re-enactment took effect on August 6, 2025 according to the Colorado Division of Banking. States outside the MTMA generally use the 2004 Uniform Money Services Act pattern, with delegate receivables and riskier assets capped at 20% each and 50% combined, or older statutes with a simple coverage test and a regulator's power to approve or waive.
What is the rule in each state?
The table gives, for each licensing jurisdiction, the section that holds the requirement and the main asset classes and limits. "MTMA classes and limits" means the treatment in the table above.
| Jurisdiction | Statute or rule | Main asset classes and limits |
|---|---|---|
| Alabama | Ala. Code 8-7A-1 et seq. | No permissible investment section in the Act's section list; security device under 8-7A-7 and $25,000 net worth under 8-7A-10 |
| Alaska | AS 06.55.501 to 06.55.502 | Uniform Act style: delegate receivables up to 20% (10% per person); listed debt, shares and demand loans 20% each, 50% combined. CSBS lists an MTMA enactment |
| Arizona | A.R.S. 6-1229 to 6-1230 | MTMA classes and limits |
| Arkansas | Ark. Code 23-55-701 to 702 | MTMA classes and limits; virtual currency owed must be held in like kind |
| California | Cal. Fin. Code 2081 to 2082 | Eligible securities at least equal to obligations; agent balances excluded after 45 business days; foreign deposits need prior approval |
| Colorado | C.R.S. 11-110-1003 to 1004 | MTMA model (full adopter per CSBS) |
| Connecticut | Conn. Gen. Stat. 36a-596 et seq. | Partial MTMA adopter per CSBS; section not separately confirmed |
| Delaware | Del. Code tit. 5, 2301 et seq. | MTMA enactment; CSBS gives the effective date as the earlier of July 6, 2027 or published regulations |
| District of Columbia | D.C. Code 26-1005 | Permissible investments and statutory trust |
| Florida | Fla. Stat. 560.210 | Cash, domestic or foreign bank deposits, top-three rated investments, money market funds, vendor receivables not over 90 days past due; like-kind virtual currency; waiver if bond covers |
| Georgia | O.C.G.A. 7-1-683.2(c); Rule 80-3-2-.07 | MTMA classes and limits by rule, with no foreign deposit category |
| Hawaii | HRS 489D-8 | Coverage of all obligations; waiver where the bond covers them |
| Idaho | Idaho Code 26-2906; 26-2902(14) | Uniform Act asset list with no percentage caps; waiver if security covers |
| Illinois | 205 ILCS 658/10-3 to 10-4 | MTMA classes and limits |
| Indiana | Ind. Code 28-8-4.1-1003 to 1004 | MTMA model; bond minimum $300,000 under 1002 |
| Iowa | Iowa Code 533C.803 to .804 | MTMA classes and limits |
| Kansas | K.S.A. 9-588 to 9-589 | MTMA classes and limits, effective January 1, 2025 |
| Kentucky | KRS 286.11-015 | Coverage requirement; commissioner defines permissible investments |
| Louisiana | La. R.S. 6:1061 to 6:1062 | MTMA model (Act 888 of 2026) |
| Maine | 32 M.R.S. 6100-T to 6100-U | MTMA classes and limits |
| Maryland | COMAR 09.03.14.18 | MTMA classes and limits |
| Massachusetts | M.G.L. c.169B, s.9 | MTMA classes and limits |
| Michigan | MCL 487.1031 to .1032 | Uniform Act style: delegate receivables up to 20% (10% per person); listed debt, shares and demand loans 20% each, 50% combined |
| Minnesota | Minn. Stat. 53B.61 to 53B.62 | MTMA classes and limits |
| Mississippi | HB 1428 of 2025, replacing Miss. Code 75-15-1 et seq. | MTMA model, effective July 1, 2025; section not separately confirmed |
| Missouri | RSMo 361.900 et seq. | MTMA model per CSBS; section not separately confirmed |
| Montana | No license | Montana does not regulate money transmitters |
| Nebraska | Neb. Rev. Stat. 8-2732 to 8-2733 | MTMA classes and limits |
| Nevada | NRS 671.125 to 671.135 | MTMA-style limits; deposits at federally or privately insured institutions |
| New Hampshire | RSA 399-G:29 | MTMA classes and limits |
| New Jersey | N.J.S.A. 17:15C-2 | Nine defined classes, including delegate receivables not past due and top-three rated investments |
| New Mexico | N.M. Stat. 58-32-701 | Coverage of instruments, stored value and money transmitted in all states |
| New York | N.Y. Banking Law 651 | Market value at least equal to outstanding instruments, or net carrying value with market value at least 80% of it |
| North Carolina | N.C.G.S. 53-208.48 | Unencumbered investments; virtual currency may be held; waiver if bond covers |
| North Dakota | N.D.C.C. 13-09.1-34 to 35 | MTMA model |
| Ohio | ORC 1315.06 | Uniform Act asset list; demand loans to one borrower up to 10%; delegate receivables only as permitted |
| Oklahoma | 6 O.S. 1511 et seq. | CSBS lists a new MTMA act at 6 O.S. 1551 et seq.; confirm commencement |
| Oregon | ORS 717.215 | Coverage of outstanding payment instruments; waiver if security covers |
| Pennsylvania | Money Transmitter Act | Not confirmed on the date checked |
| Puerto Rico | Act 136-2010 | No permissible investment provision; bond and liquid assets |
| Rhode Island | R.I. Gen. Laws 19-14.3-2.1 to 2.2 | MTMA classes and limits (partial adopter overall) |
| South Carolina | S.C. Code tit. 35, ch. 11 | MTMA model per CSBS; section not separately confirmed |
| South Dakota | SDCL 51A-17-101 to 102 | MTMA full-value classes; limited classes not confirmed |
| Tennessee | Tenn. Code 45-7-137 to 138 | MTMA model |
| Texas | Tex. Fin. Code 152.355 to 152.356 | MTMA classes and limits, plus stablecoins up to obligations in the same stablecoin |
| Utah | Utah Code 7-25 and 7-1-103.5 | Partial MTMA adopter per CSBS; section not separately confirmed |
| Vermont | 8 V.S.A. 2542 to 2543 | MTMA classes and limits, effective July 1, 2024 |
| Virginia | Va. Code 6.2-1952 to 1953 | MTMA classes and limits |
| Washington | RCW 19.230.200 to .210 | Coverage of outstanding money transmission; monthly permissible investment reports |
| West Virginia | W. Va. Code 32A-2-8b | Cash, deposits, government obligations, letters of credit, bond excess and commissioner-approved assets; no percentage caps |
| Wisconsin | Wis. Stat. 217.10(3) | MTMA model |
| Wyoming | Wyo. Stat. 40-22-107 | Coverage of outstanding payment instruments; waiver if bond covers |
Where do the state rules differ most?
They differ on what is covered, which assets count, digital assets, and whether a bond can replace investments.
- Scope: Oregon, Wyoming and New York measure against payment instruments, while MTMA states measure all money transmission obligations.
- Waivers: Florida, Hawaii, Idaho, North Carolina, Ohio, Oregon and Wyoming let the regulator waive the requirement where the bond or security covers obligations.
- No caps: Idaho and West Virginia set no percentage limits, so the asset list and the regulator's approval do the work.
- Digital assets: Texas counts stablecoins up to obligations in the same stablecoin; Arkansas and Florida require virtual currency owed to be held in like kind; North Carolina allows virtual currency as a permissible investment; California applies separate DFAL reserve requirements to licensed digital asset businesses.
- Valuation: New York allows net carrying value if market value is at least 80% of it; MTMA states use market value under GAAP.
Our guide to the virtual currency like-kind requirement covers the digital asset rules in more depth.
How does a multi-state licensee test its portfolio?
It applies each state's caps to the same reconciled portfolio and checks that the eligible total still covers obligations.
Worked example. A licensee with outstanding money transmission obligations of $100.0 million holds the assets below. One authorized delegate, Delegate A, owes $12.0 million of the $18.0 million delegate receivables, all under 7 days old.
| Asset | Held ($m) | MTMA eligible ($m) |
|---|---|---|
| Cash at US insured banks | 45.00 | 45.00 |
| US Treasury bills | 20.00 | 20.00 |
| Receivables from other delegates | 6.00 | 6.00 |
| Receivable from Delegate A | 12.00 | 10.56 |
| Commercial paper rated A-1 | 12.00 | 12.00 |
| Corporate bonds rated A | 8.00 | 8.00 |
| Cash at an eligible foreign bank | 4.00 | 4.00 |
| Total | 107.00 | 105.56 |
Delegate A can count only up to 10% of total permissible investments. If T is the eligible total, T = 95.00 + 0.10T, so T is $105.56 million and Delegate A counts for $10.56 million. The other caps hold: delegate receivables are 15.7% of T, commercial paper 11.4%, bonds 7.6%, the rated basket together 18.9% and foreign cash 3.8%. Coverage is 105.6%. If obligations rose to $106.0 million before Delegate A settled, the licensee would be $0.44 million short in every MTMA state, even with $107.0 million of assets on the balance sheet.
What should a multi-state licensee check?
These checks keep one portfolio compliant in every state at once.
- List every state license and the statute and section that sets its permissible investment test.
- Record which states use the MTMA, which use Uniform Act caps and which allow waivers.
- Apply the strictest cap for each asset class across all states where the licensee holds a license.
- Recalculate the single-delegate and combined caps each day, because they move with the eligible total.
- Value investments at market under GAAP, not at cost.
- Hold digital assets in like kind where the state requires it, and exclude them where it does not count them.
- Reconcile the figures to bank, custody and ledger records before reporting them in the MSB Call Report.
Our guides to the MSB Call Report permissible investments section and tangible net worth under the MTMA cover the related tests.
How does Safeheld help?
Safeheld reconciles bank and ledger records for each entity and currency every day, so the obligations and assets in this test start from confirmed figures.
It produces a prepared report pack for Section III of the NMLS MSB Call Report, which the licensee reviews and completes. See daily reconciliation.
Frequently asked questions
Do all states require permissible investments?
Almost all of them. Montana does not license money transmitters, Puerto Rico's Act 136-2010 relies on a bond and liquid assets, and Alabama's Act has no separate permissible investment section. Every other jurisdiction in the table sets a coverage test or lets the regulator set one.
How many states have adopted the MTMA?
The CSBS enactment list dated October 8, 2026 shows 35 states: 31 in full and California, Connecticut, Rhode Island and Utah in part.
Are permissible investments calculated state by state?
Under the MTMA the test compares total permissible investments with all outstanding money transmission obligations, not obligations in one state. Each licensing state applies its own version of that test.
Do agent receivables count as permissible investments?
In MTMA states, receivables from authorized delegates under 7 days old count up to 50% of total permissible investments, with no more than 10% from one delegate. Uniform Act states such as Michigan cap them at 20%.
Can stablecoins count as permissible investments?
Texas counts stablecoins up to the obligations owed in the same stablecoin. Most other states do not list them, so the regulator's approval is needed.
Can a surety bond replace permissible investments?
In several older statutes, including Florida, Idaho, Oregon and Wyoming, the regulator may waive the requirement if the bond covers all obligations. Under the MTMA, only the part of the bond above average daily liability counts.
How often are permissible investments reported?
Quarterly, in Section III of the NMLS MSB Call Report, due 45 days after the end of each calendar quarter.
References
- CSBS, MTMA state enactments (October 8, 2026, PDF)
- CSBS, Model Money Transmission Modernization Act
- Massachusetts General Laws c.169B, section 9
- Illinois, 205 ILCS 658/10-4 Types of permissible investments
- NMLS, MSB Call Report Section III: Permissible Investments
- NMLS, MSB Call Report reporting frequency
About Safeheld
Safeheld is reconciliation and regulatory financial control software for regulated firms that hold client money. For US money transmitters it reconciles obligations and assets for each entity and currency every day and prepares the permissible investment figures for the NMLS MSB Call Report, which the licensee reviews and completes. To discuss your money transmission operations, contact us at safeheld.com/contact.
This article is general information on US money transmission rules and is not legal or regulatory advice.