Committee considers HB 118 to exclude payroll processors from automatic money‑transmitter status
Loading...
Summary
HB 118 would take payroll processors out of the presumption that they are money transmitters under Maryland law; OFR clarified companies that perform money transmission would still need to be licensed.
Delegate Pam Queen presented House Bill 118 to clarify the Maryland Money Transmitters Act so that payroll processors are not automatically deemed money transmitters. Queen said payroll processors act as agents of employers and are subject to different oversight than businesses that accept and transmit public funds.
Industry witnesses representing payroll processors argued the current interpretation imposes heavy operational and bonding costs (licensing and audits across states) that would push employers to larger national providers or into self‑service payroll. "Payroll processors are not money transmitters," Robin Imbravno said, and industry testimony described existing governance by banking partners, NACHA and IRS reporting that provide consumer protections.
Committee members asked whether a company could be both a payroll processor and a money transmitter; OFR told the committee the bill would remove the automatic deeming but any entity engaging in true money transmission activities would still have to hold a money transmitter license. Members requested OFR provide a list of the 10 companies it identified and clarification on which firms must retain money transmitter licensing prior to any vote.
