United States – Maryland

Licensing, Authorisation & Market Access

Maryland has enacted a targeted exclusion from its money transmission licensing perimeter. SB 261 (Ch. 21, 2026 RS) amends the definition of "money transmitter" under the Maryland Money Transmission Act to exclude a person designated as an agent of a payor, for the purpose of that agent's provision of payroll-processing services, under certain circumstances. The exclusion is now in force, with a legal effective date of 1 October 2026. For a payroll-processing agent that qualifies under the statute's terms, the consequence is that the activity in question falls outside the licensing requirement altogether, rather than being licensed on modified terms.

This also stands as a correction to the Maryland record. The exemption had previously been recorded against Montana, under a similarly numbered SB 261 in that state's legislature; the measure is Maryland's, and the record now reflects Chapter 21 of Maryland's 2026 Regular Session as the correct instrument. Whether a corresponding duplicate entry on the Montana side has itself been independently corrected has not been verified, and is noted as an open item rather than resolved here.

The statute's own terms leave open what exactly constitutes "certain circumstances" for the exclusion to apply, and what applicability thresholds, if any, attach to the agent-of-a-payor designation. Those boundary questions have not yet been researched and are not addressed in this record.

Outlook

With the exclusion in force from 1 October 2026, the open question for Maryland's money transmission perimeter is the scope of "certain circumstances" governing which payroll-processing agent arrangements actually qualify. Until that boundary is further clarified, payor-agent arrangements touching Maryland payroll processing sit in a narrowed but not fully delineated carve-out from licensing.

Licensing, Authorisation & Market Access

Maryland's money-transmission licensing perimeter narrowed slightly this cycle through SB261 (2026), which amends the Maryland Money Transmission Act to exempt agents of a payor that provide payroll-processing services from money-transmitter licensing. Prior to this amendment, an entity acting as an agent of a payor to process payroll could fall within the scope of activity requiring licensure as a money transmitter; SB261 removes that requirement for the payroll-processing use case specifically, rather than broadening any general exemption category. This is a liberalising development for firms operating in the payroll-processing space with a nexus to Maryland, since it removes a licensing requirement that would otherwise have applied to a defined class of agents.

This sits on top of Maryland's existing licensing-administration architecture, under which the Office of the Commissioner of Financial Regulation has, since July 1, 2023, administered money-transmitter licences on a principal-office basis: individual licences for locations other than the principal executive office are not required and are not issued. Firms holding a Maryland money-transmitter licence disclose additional operating locations under that single principal-office licence rather than obtaining separate per-location licences, a structural fact about licensing administration that predates this cycle but continues to shape how any newly licensed or newly exempted entity would interact with the regime.

Taken together, the cycle's single confirmed development, the SB261 payroll-processing exemption, is a narrow, targeted liberalisation rather than a broader overhaul of Maryland's money-transmission licensing perimeter. It does not alter the principal-office licensing-administration model, nor does it touch licensing requirements for money transmission generally; it removes one specific, named category of activity, payroll processing performed by an agent of the payor, from the scope of activity requiring licensure.

Outlook

Watch for how the Office of the Commissioner of Financial Regulation interprets the boundaries of the SB261 payroll-processing exemption in practice, since the statutory language is confined to agents of the payor providing payroll-processing services and the practical scope of that carve-out (for example, whether it extends to third-party payroll platforms operating under varying commercial structures) was not established this cycle. No further Maryland money-transmission legislative activity was identified this cycle.

Licensing, Authorisation & Market Access

Maryland regulates money transmission broadly under the Maryland Money Transmission Act (Financial Institutions Article, Title 12, Subtitle 4), which requires a general money transmitter licence covering domestic and international transmission activity, without a bespoke electronic-money or payment-institution licence class distinct from that general framework. This cycle's material development is SB 261, which exempts agents of the payor providing payroll-processing services from that licensure requirement, effective October 1, 2026. This is a scope contraction relative to a 2024 development in which the Office of Financial Regulation, through adoption of portions of the CSBS Model Money Transmission Modernization Act, had brought payroll processors within the money-transmission definition in the first place; SB 261 partially reverses that 2024 expansion for this specific activity category.

This narrowing sits alongside a standing procedural simplification: effective July 1, 2023, Maryland stopped requiring or issuing individual licences for business locations other than a licensee's principal executive office, permitting licensees to conduct business at disclosed additional locations under the umbrella of a single principal-office licence. Together, these two developments describe a licensing regime that has, over recent cycles, moved toward administrative simplification on the branch-location front while simultaneously fine-tuning the substantive scope of who must be licensed at all, illustrated most recently by the payroll-processor carve-out. The general MTL regime remains the sole state-level licensing lever for digital-asset businesses operating in Maryland as well; there is no separate crypto-specific licensing class, and digital-currency exchanges are licensed as money transmitters under the same statute now being scope-tuned by SB 261.

The bank-versus-nonbank distinction in Maryland's licensing framework is structural: banks and other depository institutions are generally exempt from money transmitter licensure by virtue of their existing prudential supervision, while nonbank payment institutions and e-money-equivalent businesses, including crypto exchanges, must obtain and maintain the general MTL licence and pass through the state's character-and-fitness review at licensing and renewal.

Outlook

Watch for whether Maryland continues issuing narrow, activity-specific carve-outs to its money transmission statute following the payroll-processor exemption, and whether the October 1, 2026 effective date for SB 261 surfaces any transition friction for agents of the payor currently licensed under the pre-amendment scope.

Licensing, Authorisation & Market Access

Maryland's licensing and market-access framework moved on five distinct fronts this cycle, spanning both bank and non-bank payment-institution/e-money-institution rails. On the non-bank side, HB 118 amended the Maryland Money Transmission Act to exclude a person designated as an agent of a payor for payroll-processing purposes from the statutory 'money transmitter' definition, effective October 1, 2026; OFR estimates the exemption affects three companies and brings Maryland's treatment of payroll processors into alignment with the approach already taken by peer Model Law states. This is a licensing-scope narrowing in the exemption's favor — it removes a category of non-bank payment activity from the money-transmitter licensing perimeter rather than adding to it.

Running in the opposite direction, Maryland repealed an exemption that had allowed persons who acquire or are assigned certain mortgages, mortgage loans, or installment loans to avoid state financial-services licensing requirements altogether. This repeal closes a licensing gap that had been surfaced by cross-filed passive-trust exemption bills in the 2025 session, and it applies to the non-bank financial-services licensing perimeter broadly rather than to payment institutions specifically.

The most consequential development for market access is the finalization and expansion of Maryland's virtual-currency-kiosk registration regime. The Office of the Commissioner of Financial Regulation adopted COMAR 09.03.16 on a permanent basis, effective March 30, 2026, requiring each virtual-currency-kiosk operator and each kiosk itself to register with OFR through the Nationwide Multistate Licensing System (NMLS), with registration mandatory from January 1, 2026. Companion legislation, SB 741, effective October 1, 2026, broadens the statutory definition of 'virtual currency kiosk operator' to capture software-based kiosk deployers — not merely physical automated-teller-machine-style kiosks — and removes the regime's prior ATM exclusion outright. This combination substantially widens the population of non-bank payment-institution-adjacent operators now subject to a state registration requirement, on a compressed timeline: registration obligations began taking effect from January 2026, with the broadened scope following in October 2026.

On the bank side of the ledger, Maryland reduced the examination fee required to obtain a new commercial-bank charter from $15,000 to $7,000, a direct reduction in the cost of market entry for prospective bank-chartered participants, including those seeking a bank charter to support payment-services activity. This bank-specific cost reduction sits in analytical contrast to the tightening non-bank kiosk-registration regime: Maryland is simultaneously lowering entry cost on the bank-charter pathway while raising the registration and compliance burden on non-bank crypto-kiosk operators, illustrating the bank-PSP versus non-bank-PI/EMI distinction that runs through this module.

Each of these five developments carries strong sourcing: the payroll-processor exemption and mortgage/installment-assignee repeal are both confirmed at High confidence from OFR's own 2026 legislative review (Tier 1), the COMAR kiosk-registration finalization is likewise a Tier-1, High-confidence primary-source finding, and the SB 741 scope-broadening and bank-charter fee reduction are each corroborated at Tier 2 by independent legal-industry reporting.

For prospective market entrants, the practical read is bifurcated by business model. A payroll-processing agent of a payor now sits outside Maryland's money-transmitter licensing perimeter entirely from October 2026, reducing licensing friction for that narrow category. A virtual-currency-kiosk operator — whether hardware-based or, from October 2026, software-based — faces an expanded and now-permanent registration obligation with no equivalent narrowing. A prospective bank charter applicant faces a lower upfront examination-fee cost than before. And any entity previously relying on the mortgage/installment-loan-assignee exemption to avoid licensing altogether must now assess its licensing exposure under the repealed-exemption baseline for the first time this cycle.

Outlook

The next concrete milestones are the October 1, 2026 effective dates for both HB 118's payroll-processor exemption and SB 741's kiosk-scope broadening. Newly captured software-based kiosk deployers should treat the October 2026 date, not the earlier March 2026 COMAR effective date, as their operative registration deadline. The bank-charter fee reduction has no further scheduled milestone but remains a standing lower-cost entry pathway for new bank charters going forward.

Licensing, Authorisation & Market Access

Maryland's 2026 legislative session produced three distinct movements in the state's money-transmission and financial-institution licensing perimeter. SB741 (Chapter 417), effective October 1, 2026, expands the definition of virtual currency kiosk operator to capture software-based kiosk operators, removes the prior exclusion for automated teller machines, and clarifies that kiosks may not offer ATM-equivalent services, closing a registration gap for a nonbank cash-in/cash-out channel into digital assets. Separately, a narrower measure excludes payroll processors acting as agent-of-payor, subject to certain standards, from Maryland's money-transmitter definition, aligning Maryland with several other states that already carve out this activity; the Office of Financial Regulation estimates the change affects three companies, a commercially minor exemption relative to the kiosk expansion. A third, corrective measure, SB784, repeals an erroneously enacted all-purchasers exemption from the Mortgage Lender Law and Installment Loan Law, restoring consistency between statute and Office of Financial Regulation guidance without affecting the separate passive-trusts exemption.

Read together, the net direction of this cycle's licensing perimeter activity is tightening: the kiosk expansion is a meaningful increase in nonbank registration scope, the payroll-processor exemption is a narrow and commercially minor carve-out, and the mortgage-law repeal is corrective rather than substantive. The bank-versus-nonbank distinction is explicit in two of the three measures: kiosk operators and payroll processors are both nonbank actors whose perimeter status changed this cycle, while no bank-specific licensing movement was evidenced.

Outlook

Watch for the kiosk-oversight expansion's effective date of October 1, 2026, and for whether newly captured software-based kiosk operators come into registration compliance ahead of or in response to enforcement activity. The payroll-processor exemption and mortgage-law correction are unlikely to generate further near-term developments absent litigation or further corrective legislation.

Commercial Intelligence & Fintech

The Maryland General Assembly created a Digital Asset and Blockchain Technology Task Force this cycle, to be staffed and facilitated by the Office of Financial Regulation, with a policy report due to the Governor and General Assembly by October 1, 2027. This is a policy-body-formation event rather than a licensing, enforcement, or product development, distinct from the substantive stablecoin, kiosk, and staking measures enacted in the same session, and it signals that Maryland intends to treat this cycle's legislative package as a starting point for further blockchain and cryptocurrency policy work rather than a completed framework.

Outlook

Watch for the Task Force's composition and initial work plan, and for whether its October 2027 report addresses the practical interaction between the stablecoin regime, kiosk registration, and the staking-as-a-service clarification as a single coordinated policy question.