California to Clarify Money Transmission Act Exemption Through Rulemaking

On February 8, 2019, the California Department of Business Oversight (“DBO”) announced that it will undertake a rulemaking to clarify the exemption in the state’s money transmitter licensing law for agents of payees. This exemption allows payment agents, such as some online marketplaces and home share platforms that work on behalf of providers of goods and services, to receive and remit payments to those providers without being licensed as money transmitters. This Legal Update provides background on the exemption and discusses the DBO’s invitation to stakeholders for comments.