Minnesota Department of Commerce

Overview

The Minnesota Department of Commerce is the primary state regulator responsible for licensing and supervising money transmitters, money services businesses, virtual currency operators, and related financial service providers in Minnesota. Operating under the framework of Minnesota Statutes Chapter 53B (Money Transmitters Act), as modernized by the Minnesota Money Transmission Modernization Act (MTMA) effective May 24, 2023, the Department exercises binding regulatory authority over all persons and entities engaged in money transmission within the state.

The Department licenses individuals and businesses engaged in check cashing, money transmission, ATM operation, electronic funds transfer, and virtual currency business activities. All money transmitters in Minnesota must obtain a license from the Department of Commerce and maintain compliance with state and federal requirements.

Basic Identity

Classification

Inclusion Justification

What This Entity Oversees

Examination Authority:

The Commissioner may conduct examinations or investigations of licensees and authorized delegates as reasonably necessary to administer and enforce Chapter 53B. Examinations may be conducted on-site or off-site as the Commissioner reasonably requires.

Examination Scope:

Examinations assess:

• Compliance with Chapter 53B requirements
• Maintenance of required financial standards
• Proper handling of consumer funds
• Recordkeeping and reporting compliance
• Fraud prevention and consumer protection measures
• Virtual currency business activity compliance

Multistate Supervision Coordination:

The Commissioner participates in multistate supervisory processes to efficiently and effectively administer and enforce Chapter 53B and minimize regulatory burden for multistate licensees. Coordination occurs through:

• Conference of State Bank Supervisors (CSBS)
• Money Transmitter Regulators Association (MTRA)
• Affiliated regulatory organizations

Record Review and Reporting:

Licensees must maintain records and reports as required by the Commissioner to ensure compliance and facilitate supervision. [UNVERIFIED: specific record retention periods and reporting frequency requirements]

Consumer Protections:

The Department enforces comprehensive consumer protection measures, including:

• Licensing requirements to ensure operator legitimacy
• Net worth and bonding requirements to ensure financial stability
• Examination and supervision to detect fraud and violations
• Fraud investigation and enforcement actions
• Recovery programs to compensate defrauded consumers
• Disclosure and transparency requirements

Virtual Currency Consumer Fraud Protection:

Effective August 1, 2024, Minnesota implemented new consumer protection law provisions specifically addressing cryptocurrency fraud. The Department's Financial Institutions and Enforcement Divisions actively:

• Monitor crypto companies operating in Minnesota
• Ensure mandatory licensing compliance
• Enforce new cryptocurrency fraud protection requirements
• Investigate consumer complaints involving virtual currency scams

Recent Consumer Protection Actions:

• As of 2025-2026, the Department reported 70 complaints and $540,000 in consumer losses related to cryptocurrency scams, with particular targeting of older residents through crypto ATMs
• The Department coordinated with law enforcement and other agencies to combat emerging fraud schemes

Dispute Resolution:

[UNVERIFIED: specific mechanisms for consumer dispute resolution and fund recovery procedures]

Regulatory Powers

Enforcement Authority:

The Commissioner possesses comprehensive enforcement powers to ensure licensee compliance and protect Minnesota consumers. As of January 1, 2024 through early 2026, the Department opened 1,081 cases investigating consumer complaints involving money transmission companies and related financial services businesses.

Enforcement Actions and Results:

The Department has obtained:

• Over 35 enforcement actions against violators
• Over $2 million in civil penalties imposed
• Over $450,000 recovered and returned to Minnesota consumers

Enforcement Mechanisms:

Available enforcement tools include [UNVERIFIED: specific actions such as license suspension, revocation, cease and desist orders, civil penalties, criminal referrals]

Complaint Investigation:

The Department investigates consumer complaints involving debt collection, debt settlement, credit services, lending, money transmission, and related financial service providers. Complaints may be filed through the Department's online complaint portal.

Regulatory Role and Function

Legal Foundation

Statutory Authority:

• Minnesota Statutes Chapter 53B – Money Transmitters Act
• Minnesota Session Law 2023, Chapter 57, Senate File 2744 – Minnesota Money Transmission Modernization Act (MTMA)
• Minnesota Session Law 2024, Chapter 114, Senate File 4097 – Virtual Currency Kiosk Regulations
• Minnesota Rules Chapter 2675 – Virtual Currency Customer Disclosures

Commissioner Authority:

The Commissioner of Commerce is granted broad administrative authority to:

• Administer, interpret, and enforce money transmission law
• Adopt regulations to implement Chapter 53B
• Conduct examinations and investigations of licensees and authorized delegates
• Impose and collect proportionate and equitable fees and costs associated with applications, examinations, investigations, and enforcement actions
• Recover costs incurred to administer and enforce this chapter

Definition of Money Transmission:

Money transmission is defined as selling or issuing payment instruments, or engaging in the business of receiving money for transmission or transmitting money within the United States or to locations abroad by any and all means, including payment instrument, wire, facsimile, or electronic transfer. This definition explicitly includes virtual currency business activity.

Licensing and Authorization Relevance

License Requirement:

Persons engaged in the business of money transmission must obtain a license from the Department of Commerce. A licensee may conduct business in Minnesota at one or more locations, or through one or more authorized delegates, or both, under a single license.

Application Process:

• Applications must be submitted through the National Multistate Licensing System (NMLS)
• Initial application fee: $4,000 (nonrefundable)
• Renewal fee: $2,500 (effective 2024)

Application Requirements:

Applicants must provide:

• Complete list of owners, partners, officers, directors, and stockholders owning 10% or more of corporate stock
• 10-year work history for each beneficial owner and management person
• Criminal background checks (BCA) for all listed individuals
• Articles of incorporation, partnership agreement, and/or certificate of assumed name (if applicable)
• Evidence of current workers' compensation insurance
• Proof of compliance with net worth requirements
• Proof of surety bond or deposit in required amount
• Authorization to Release Information forms for background investigations

Authorized Delegates:

Licensees may designate authorized delegates to conduct money transmission on their behalf. Authorized delegates must comply with background check and eligibility requirements.

Net Worth Requirements:

Minimum net worth standards based on business locations in Minnesota:

Surety Bond Requirements (Effective 1/1/2024):

Licensees must provide and maintain security consisting of:

• Greater of: $100,000 OR 100% of average daily money transmission liability in Minnesota (calculated for most recent completed three-month period)
• Maximum: $500,000
• Minimum Exception: $100,000 if licensee's tangible net worth exceeds 10% of total assets
• Form: Surety bond in form satisfactory to Commissioner, or deposit instead of bond with Commissioner approval

Bond Conditions:

• Security device remains effective until cancellation
• Cancellation requires 30 days' written notice to Commissioner
• Cancellation does not affect rights of claimants for liabilities incurred during bond period
• Bond protects public compensation for financial harm from licensee non-compliance, fraud, or failure to transfer consumer funds

Alternative Security:

With Commissioner approval, licensees may provide a deposit instead of a surety bond to satisfy security requirements.

Virtual Currency Business Activity:

The Commissioner regulates virtual currency business activity as a form of money transmission. Virtual currency business activity is explicitly included within the definition of money transmission under Minnesota Statutes Chapter 53B.

Licensing for Virtual Currency:

All persons engaged in virtual currency business activity must obtain a money transmission license from the Department. This includes:

• Virtual currency exchanges
• Virtual currency custodians
• Virtual currency payment processors
• Virtual currency ATM operators

Virtual Currency Kiosk Regulation:

Minnesota Session Law 2024, Chapter 114, Senate File 4097 (effective May 21, 2024) introduced specific requirements for virtual currency kiosk operation. [UNVERIFIED: specific operational requirements for crypto ATMs and kiosks]

Virtual Currency Customer Disclosure Rules:

Minnesota Statutes Section 53B.72 and Minnesota Rules Chapter 2675 establish mandatory customer disclosure requirements for virtual currency transactions. These rules became effective January 1, 2026 and require disclosure of:

• [UNVERIFIED: specific disclosure content requirements for virtual currency transactions]

Fintech and Digital Assets:

The Department monitors emerging fintech and digital asset developments. Through the Minnesota Money Transmission Modernization Act (2023), the Department updated its regulatory framework to address modern payment technologies and stablecoin-related business activities. [UNVERIFIED: specific regulatory approach to stablecoins and digital assets]

Payments and Money Movement Relevance

The Minnesota Department of Commerce has the following relevance to payments and money movement in United States:

Payment Systems Governed or Overseen

The Minnesota Department of Commerce does not directly operate payment systems. Its payment-related role includes:

Money transmitters, payment processors, and fintech companies operating in this jurisdiction require licensing or registration with this entity.

Relationship to Other Regulators

Multistate Licensing System (NMLS):

Minnesota requires all money transmission license applications to be submitted through the National Multistate Licensing System (NMLS), facilitating interstate coordination and reciprocity for multistate operators.

Regulatory Cooperation:

The Commissioner coordinates with:

• Federal regulatory agencies (FinCEN, OCC, FDIC)
• Other state money transmitter regulators through CSBS and MTRA
• Law enforcement agencies at state and federal levels
• International regulatory bodies for cross-border compliance Requires verification from official sources

Multistate Supervision Processes:

The Commissioner participates in established multistate supervisory processes to:

• Standardize examination procedures
• Share regulatory information
• Reduce duplication and burden on multistate licensees
• Enforce consistent standards across jurisdictions

Geography and Jurisdiction Notes

Important Departments and Divisions

Key Public Resources

Minnesota Department of Commerce

Address:

85 7th Place East, Suite 280

St. Paul, Minnesota 55101

United States

General Phone:

• Main: 651-539-1500
• Toll-Free: 1-800-657-3602

Commissioner's Office:

• Commissioner: Grace Arnold
• Email: [email protected]

Money Transmission Licensing Division:

• [UNVERIFIED: specific division contact information]
• Website: https://mn.gov/commerce/licensing/list/financial-institutions/money-transmission/

Complaint and Enforcement:

• Consumer Complaint Portal: https://mn.gov/commerce/money/licensing/look-up-license/
• Fraud Reporting: [UNVERIFIED: specific fraud/enforcement contact]

Financial Institutions and Enforcement Divisions:

• Email: [UNVERIFIED: specific enforcement division email]

Official Resources:

• Money Transmission Licensing: https://mn.gov/commerce/licensing/list/financial-institutions/money-transmission/
• Money Services Businesses: https://mn.gov/commerce/money/industry/money-services-business/
• Virtual Currency Information: https://mn.gov/commerce/money/investments/cryptocurrency/
• License Lookup: https://mn.gov/commerce/money/licensing/look-up-license/
• Contact Page: https://mn.gov/commerce/about/contact/

Statutory References:

• Minnesota Statutes Chapter 53B (full text): https://www.revisor.mn.gov/statutes/cite/53B/full
• Minnesota Rules Chapter 2675: Virtual Currency Customer Disclosures

NMLS Application Checklist:

• Money Transmitter Company New Application Checklist: https://mortgage.nationwidelicensingsystem.org/slr/PublishedStateDocuments/MN-Money-Transmitter-Company-New-App-Checklist.pdf

Notes on Naming and Language