Michigan Department of Insurance and Financial Services (DIFS)

Overview

The Michigan Department of Insurance and Financial Services (DIFS) is the primary state regulator responsible for licensing and supervising money transmission service providers in Michigan. Operating under the legal framework of the Money Transmission Services Act (Act 250 of 2006), DIFS enforces comprehensive regulatory requirements for all entities engaging in money transmission activities, including the sale or issuance of payment instruments, stored value devices, or receipt of money for transmission.

DIFS operates as part of Michigan's financial services regulatory infrastructure, with Director Anita Fox leading the department as of 2026. The department regulates a broad array of financial service providers, including banks, credit unions, insurance companies, mortgage licensees, and consumer finance entities.

Basic Identity

Classification

Inclusion Justification

What This Entity Oversees

Examination Authority

DIFS possesses broad authority to examine money transmitter licensees to ensure compliance with the Money Transmission Services Act and protect consumers. Requires verification from official sources Examinations may be conducted on a routine basis or for-cause investigations.

Examination Scope: Requires verification from official sources

• Financial condition and record-keeping
• Compliance with net worth and surety bond requirements
• Customer fund protection practices
• Authorized delegate oversight and control
• Consumer complaint handling
• Anti-fraud and anti-money laundering measures

Supervision Framework

• Ongoing Supervision: Licensees are subject to continuous supervision and monitoring
• Reporting Requirements: Requires verification from official sources Licensees must submit periodic financial reports, compliance certifications, and updated information regarding significant corporate changes
• Regulatory Contact: For inquiries regarding examination procedures and licensing supervision, contact DIFS at (517) 284-8800 or [email protected]

Regulatory Objectives

DIFS prioritizes consumer protection through:

1. Licensing Requirements that ensure financial stability of money transmitter operators
2. Net Worth and Bonding requirements that provide recourse for consumer losses
3. Examination and Supervision to detect unsafe practices before harm occurs
4. Enforcement Action against licensees engaging in fraud or unauthorized practices

Consumer Complaints

Filing a Complaint: Consumers in Michigan can file complaints against money transmitter licensees with DIFS:

• Online: Michigan.gov/DIFScomplaints
• Phone: 877-999-6442 or (517) 284-8800
• Hours: Monday–Friday, 8:00 a.m. to 5:00 p.m.
• Mailing Address: P.O. Box 30220, Lansing, MI 48909-7720

Consumer Protections Against Fraud

DIFS has issued consumer alerts regarding Requires verification from official sources fraud involving money transmitters and unauthorized operators. The department warns consumers to verify licensure through NMLS or DIFS before engaging with money transmitter services.

Regulatory Powers

DIFS Enforcement Authority

Under the Money Transmission Services Act, DIFS possesses comprehensive enforcement powers, including:

License Actions:

• Denial of license applications
• Revocation or suspension of licenses
• Conditional licensing with specific requirements
• Cease and desist orders

Civil and Administrative Penalties:

• Requires verification from official sources Civil fines for violations of the statute
• Administrative actions for unsafe or unsound practices
• Corrective action orders requiring remediation

Injunctive Relief:

• Authority to seek injunctions in court to restrain unlicensed money transmission
• Enforcement against unauthorized operators

Consumer Protection Orders

DIFS may order licensees to:

• Cease operations that endanger consumer funds
• Implement corrective measures
• Restitution to injured consumers
• Enhanced customer disclosure or protections

Regulatory Role and Function

Legal Foundation

Primary Statute

DIFS derives its authority over money transmission from the Michigan Money Transmission Services Act, Act 250 of 2006, codified in Michigan Compiled Laws (MCL) Chapter 487, Sections 487.1001–487.1047. The statute became effective on July 3, 2006.

Key Statutory Provisions:

• MCL 487.1011: Establishes license requirement for money transmission services
• MCL 487.1012: Prescribes application forms and required information
• MCL 487.1013: Details financial statement, net worth, and surety bond requirements
• MCL 487.1014: Governs investigation, issuance, denial, and license term provisions

Jurisdictional Scope

Money transmission under Michigan law includes:

• Selling or issuing payment instruments
• Selling or issuing stored value devices
• Receiving money or monetary value for transmission
• Requires verification from official sources Providing money movement or transmission services not otherwise specifically regulated

Regulatory Binding Authority

DIFS decisions regarding license approval, denial, conditions, and enforcement actions are binding under Layer 1 control authority. The Director has specific statutory authority to approve or deny applications within 120 days of receiving a complete application, with provisions for extended investigation periods.

Licensing and Authorization Relevance

License Requirement

Mandatory License: All persons and entities providing money transmission services in Michigan must obtain a license from DIFS prior to commencing operations. No exemption permits unlicensed money transmission under MCL 487.1011.

Application Process

Submission Method: Applications are submitted electronically through the Nationwide Multistate Licensing System (NMLS), which serves as the centralized platform for money transmitter license applications in Michigan.

Application Components:

1. Completed application form via NMLS
2. Financial statements demonstrating required net worth
3. Electronic surety bond (submitted via NMLS)
4. Application fee (amount per DIFS fee schedule)
5. Information regarding authorized delegates and branch locations
6. Background and qualification information

Review and Approval Timeline

• Standard Review Period: 120 days from receipt of a complete application
• Extension Authority: The Director may extend the review period by up to 120 additional days if continued investigation is necessary
• Approval/Denial Decision: The Director issues a written decision approving or denying the application
• Hearing Rights: Applicants denied a license have the right to request a hearing under Michigan administrative procedure

License Term and Renewal

• Expiration: All licenses expire on December 31 of each calendar year
• Renewal Deadline: Licensees must renew on or before December 1 of each year
• Continuous Operation: Failure to timely renew results in automatic license expiration and prohibition on continued operations

Net Worth Requirement

Minimum Net Worth: Applicants must demonstrate and maintain net worth exceeding (not merely equal to) specified thresholds.

Single Location: Minimum net worth of $100,000

Multiple Locations and Authorized Delegates: The greater of:

• $100,000 base plus $25,000 for each additional location or authorized delegate, OR
• $1,000,000 (whichever is less, but capped at $1,500,000 maximum)

Example Calculation: An applicant with 5 locations would require $100,000 + ($25,000 × 4 additional locations) = $200,000 net worth (unless this exceeds $1,000,000, in which case $1,000,000 applies).

Financial Documentation: Net worth must be verified through audited or reviewed financial statements submitted with the application and as part of ongoing supervision requirements.

Surety Bond Requirement

Purpose: The surety bond protects consumers and ensures financial responsibility of the licensee.

Bond Amount:

• First Location: $500,000 minimum
• Each Additional Location/Delegate: $10,000 per location
• Maximum Cap: $1,500,000 (total bond amount cannot exceed this limit)

Issuer Requirements:

• Must be issued by a surety company or bonding company authorized to conduct business in Michigan
• Bonding company must maintain adequate capital and rating standards
• Requires verification from official sources Bond issuer must be approved by DIFS or comply with DIFS-specified rating requirements

Bond Term and Continuity:

• Bond must expire no earlier than the license expiration date
• Licensees must maintain continuous bonding throughout the license term
• Renewal of bonds must occur prior to expiration

Submission Method: Electronic surety bonds are submitted via NMLS as part of the application process.

Cryptocurrency Regulatory Status

Explicit DIFS Position: Cryptocurrencies currently fall outside the regulatory authority of DIFS. This is because cryptocurrencies are not backed by tangible assets or insured deposits and are not considered "money" under Michigan law.

Money Transmitter Act Applicability

The Money Transmission Services Act does not explicitly include the concept of "virtual currency." However, the statute includes the undefined concept of "monetary value," which Requires verification from official sources may potentially encompass certain digital assets depending on their characteristics and function.

Current Regulatory Approach: Cryptocurrency activities and digital asset transmission in Michigan are not explicitly regulated by DIFS at this time, though:

• General consumer protection laws apply to cryptocurrency-related businesses
• Fraud and misrepresentation statutes apply regardless of asset type
• DIFS issues consumer alerts regarding cryptocurrency risks

Consumer Warnings

DIFS, in coordination with the Michigan Attorney General and LARA, has issued consumer alerts advising Michigan residents of the risks inherent in cryptocurrency use, including:

• Volatility and market risk
• Scam and fraud vulnerability
• Irreversibility of transactions
• Lack of insurance protection

Fintech Regulatory Sandbox

Requires verification from official sources Michigan has been considering adoption of a state-level regulatory sandbox program to facilitate innovation in digital assets and fintech. Such a sandbox would allow developers and operators to test innovative financial products under controlled conditions with limited regulatory requirements, pending broader legislative implementation.

Payments and Money Movement Relevance

The Michigan Department of Insurance and Financial Services (DIFS) has the following relevance to payments and money movement in United States:

Payment Systems Governed or Overseen

The Michigan Department of Insurance and Financial Services (DIFS) 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

NMLS Integration

DIFS operates as a participant in the Nationwide Multistate Licensing System (NMLS), which provides:

• Centralized application processing for money transmitter licenses
• Interstate coordination of licensing standards and examinations
• Reciprocal recognition of state licensing actions
• Coordinated enforcement against multistate operators

Interstate Reciprocity

Requires verification from official sources Money transmitter licenses issued by DIFS apply only within Michigan. Operators wishing to provide services in other states must obtain separate licenses from those states' regulators.

Multi-State Operator Requirements

Licensees with locations or authorized delegates in multiple states must:

• Maintain separate compliance with each state's requirements
• Meet the highest net worth and bonding standards required across all jurisdictions
• Submit to examination by each state's regulator
• Coordinate information sharing through NMLS

Geography and Jurisdiction Notes

Important Departments and Divisions

Key Public Resources

Primary Contact Information

Department of Insurance and Financial Services (DIFS)

Mailing Address:

P.O. Box 30220

Lansing, MI 48909-7720

Physical Address:

Mason Building, 7th Floor

Lansing, MI 48909

Telephone:

• Main: (517) 284-8800
• Toll-Free: 877-999-6442
• Hours: Monday–Friday, 8:00 a.m. to 5:00 p.m. EST

Email: [email protected]

Fax: (517) 284-8837

Website: https://www.michigan.gov/difs

Online Resources

Money Transmission Services Licensing:

https://www.michigan.gov/difs/industry/licensing-cf/money-transmit

Money Transmission Services Act FAQ:

https://www.michigan.gov/difs/news-and-outreach/faq/consumer-finance/money-transmission

DIFS Online Services and NMLS Access:

https://difs.state.mi.us/DIFSLogin/

DIFS Complaint Portal:

Michigan.gov/DIFScomplaints

Leadership

Director: Anita Fox

Notable Role (2026): Selected to serve with the National Association of Insurance Commissioners (NAIC) and International Association of Insurance Supervisors (IAIS)

Statutory Resources

Michigan Money Transmission Services Act (Act 250 of 2006):

• Full Text (Legislature.mi.gov): https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-Act-250-of-2006
• PDF Version: https://www.legislature.mi.gov/documents/mcl/pdf/mcl-Act-250-of-2006.pdf

Notes on Naming and Language