Senate Finance advances House Bill 12-01 to modernize money-transmission rules

DENVER — The Senate Finance Committee voted unanimously to move House Bill 12-01, a measure to replace Colorado’s current money-transmission law with a version of the Uniform Money Transmission Modernization Act, to the Committee of the Whole after a public hearing and witness testimony.

Senator Liston, prime sponsor, said House Bill 12-01 would modernize Colorado law to reflect recent growth in money-transmission services and align the state with a model law adopted by other jurisdictions. "By enacting this model legislation, Colorado would be joining 27 other states who have already done so," Liston said during his opening remarks.

The bill’s supporters — including State Bank Commissioner Ken Bolt and industry witnesses — told the committee the measure standardizes definitions, reduces duplicative regulation for companies that operate in multiple states, and preserves consumer protections such as net-worth, bonding and permissible-investment requirements.

State Bank Commissioner Ken Bolt said the bill "streamlines regulatory standards by standardizing definitions of money transmission" and would improve clarity about who needs a license and how permissible investments are calculated. Adam Fleisher of the Money Services Roundtable said the measure "will reduce the overall regulatory burden for businesses without compromising consumer protection." Michael Hennen, representing the Independent Payroll Providers Association and small payroll processors, said the amended bill would help small payroll firms remain viable and continue serving local businesses.

ADP’s Senior Director of Government Affairs Amy Miller opposed the House amendment (referred to in committee as L002), which exempts certain payroll-processing services from money-transmitter licensing. Miller told the committee that payroll processors handle large sums on behalf of employers and argued the exemption would remove protections for small businesses that rely on those services. "Without proper oversight, businesses and the state face serious risks if companies misappropriate or mishandle funds," she said.

Witnesses and senators discussed the scope of the amendment. Supporters of L002 said the exemption applies only when a payroll processor serves strictly as an agent appointed by an employer and meets specific conditions; supporters argued that many small processors do not hold client funds and that the amendment prevents unnecessary licensing of businesses that do not engage in money transmission. Opponents said the exemption risks leaving some employers and employees without state-level protection if a payroll provider mismanages funds.

Committee questioning also touched on interstate effects: sponsors and witnesses noted that 27 states have enacted versions of the model law and that 17 of those states adopted language similar to the L002 payroll exemption. Senators asked whether federal action would be preferable; sponsors and regulators said state-level action has been the norm in this area and that the model law aims to create consistent standards across states.

After closing remarks from the sponsors, Senator Liston moved the bill to the Committee of the Whole with a favorable recommendation. The committee recorded the motion and the roll-call vote resulted in unanimous approval; the sponsors asked that the bill be proposed for the consent calendar.

Votes at a glance House Bill 12-01 (Money Transmission Modernization Act) — Motion: Move to Committee of the Whole with a favorable recommendation; Outcome: Passed unanimously; Tally: Yes 9, No 0, Abstain 0 (committee recorded unanimous passage). Named yes votes recorded for Senators Bridal, Frizzell, Gonzales, Kipp, Holger, Mullica, Marchman, Simpson and additional aye votes called during roll call.

Why it matters Supporters say adopting the model law would make licensing and supervision more consistent for companies operating across state lines and would maintain consumer safeguards such as bonding and net-worth requirements. Opponents of the amendment argued that excluding some payroll processors from licensing would reduce protections for small businesses and their employees.

What’s next The bill will go to the Committee of the Whole and was proposed for the consent calendar, per the sponsors' request.