Banking

Money Transmitters

Persons engaged in the business of money transmission must obtain a license from the Division of Banking. Money transmission is defined as the sale or issuance of payment instruments to a person located in this state, the sale or issuance of stored value to a person located in this state, or receiving money or monetary value for transmission from a person located in the state to a location within or outside the United States. The term includes payroll processing services.

A licensee may conduct business in South Dakota at one or more locations, or through one or more authorized delegates, or both, under a single license.

Multi-state Licensure

Money transmitters may wish to be licensed in more than one state. South Dakota money transmitter license applicants may be eligible for an expedited licensing process called the Multi-state MSB Licensing Agreement Program.

Requirements for Licensure

South Dakota money transmitter license applications must be submitted through the Nationwide Multistate Licensing System (NMLS). The NMLS website provides step-by-step instructions on how to access the system and guides on how to complete the MU forms. All licenses expire on December 31 of each year, and renewal applications must be submitted through the NMLS. The initial and annual renewal fees are set by Administrative Rules of South Dakota (ARSD) 20:07:21:01 and ARSD 20:07:21:02.

Any changes to application data should be made via an amendment submitted through NMLS.

Exemptions

South Dakota Codified Laws (SDCL) Chapter 51A-17 exempts certain entities from licensing requirements including, but not limited to, authorized delegates of licensees that have contracts with licensees, the U.S. government, the U.S. Postal Service, the state or any political subdivision, federally insured depository financial institutions, registered securities broker-dealers, and South Dakota chartered trust companies.

Laws and Rules

South Dakota Codified Laws (SDCL) Chapter 51A-17 on Money Transmission

Administrative Rules of South Dakota (ARSD) Chapter 20:07:21 on Money Transmission Licenses

Financial Crimes Enforcement Network (FinCEN) on Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) - 31 CFR 1022

Consumer Finance Protection Bureau (CFPB) on federal Remittance Rule - 12 CFR 1005

Federal Trade Commission (FTC) on Standards for Safeguarding Customer Information - 16 CFR 314

List of Entities Holding Money Transmitter License (Link goes to the NMLS Consumer Access)

Marcia Hultman