SB-505 • 2026

Money Transmission Act: authentication.

Crime Education

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Richardson
Last action: 2026-05-26
Official status: From committee with author's amendments. Read second time and amended. Re-referred to Com. on B. & F.
Effective date: Not listed

Plain English Breakdown

The candidate explanation included a claim about making it illegal for unlicensed individuals or businesses to engage in money transmission, which is not directly supported by the provided official source material.

Money Transmission Act: Authentication

The Money Transmission Act requires digital wallet providers and money transmitters to use two-factor or multi-factor authentication when users log in, starting January 1, 2028.

What This Bill Does

Requires digital wallet providers and money transmitters operating in California to use two-factor or multi-factor authentication for user login starting January 1, 2028.
Prohibits these companies from allowing a user to log in without implementing automatic logout requirements, session timeouts, and reauthentication measures.

Who It Names or Affects

Digital wallet providers operating in California
Money transmitters doing business in California

Terms To Know

Two-factor authentication: A security process that requires two different methods to verify a user's identity, such as a password and a text message code.

Limits and Unknowns

The bill does not specify the exact penalties for noncompliance.
It is unclear how existing companies will adapt to these new requirements by January 1, 2028.

Bill History

2026-05-26 California Legislative Information
From committee with author's amendments. Read second time and amended. Re-referred to Com. on B. & F.
2026-05-04 California Legislative Information
Referred to Com. on B. & F.
2026-01-27 California Legislative Information
In Assembly. Read first time. Held at Desk.
2026-01-27 California Legislative Information
Read third time. Passed. (Ayes 40. Noes 0. Page 3296.) Ordered to the Assembly.
2026-01-21 California Legislative Information
Read second time. Ordered to third reading.
2026-01-20 California Legislative Information
From committee: Be ordered to second reading pursuant to Senate Rule 28.8.
2026-01-09 California Legislative Information
Set for hearing January 20.
2026-01-08 California Legislative Information
Re-referred to Com. on APPR.
2026-01-08 California Legislative Information
Withdrawn from committee.
2026-01-07 California Legislative Information
Re-referred to Com. on JUD.
2026-01-07 California Legislative Information
Withdrawn from committee.
2026-01-07 California Legislative Information
From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 0. Page 3187.) (January 7). Re-referred to Com. on APPR.
2026-01-05 California Legislative Information
From committee with author's amendments. Read second time and amended. Re-referred to Com. on B. & F.I.
2025-12-18 California Legislative Information
Set for hearing January 7.
2025-03-26 California Legislative Information
April 2 set for first hearing canceled at the request of author.
2025-03-24 California Legislative Information
From committee with author's amendments. Read second time and amended. Re-referred to Com. on B. & F.I.
2025-03-18 California Legislative Information
Set for hearing April 2.
2025-02-26 California Legislative Information
Referred to Coms. on B. & F.I. and JUD.
2025-02-20 California Legislative Information
From printer. May be acted upon on or after March 22.
2025-02-19 California Legislative Information
Introduced. Read first time. To Com. on RLS. for assignment. To print.

Official Summary Text

SB 505, as amended, Richardson.
Money Transmission Act: authentication.
The Money Transmission Act (MTA) prohibits a person from engaging in the business of money transmission in the state, or from advertising, soliciting, or holding itself out as providing money transmission in the state, unless the person is licensed by the Department of Financial Protection and Innovation under the act. The MTA defines “money transmission” to mean, among other things, selling or issuing stored value to a person located in the state and defines “stored value” to mean monetary value representing a claim against the issuer that is stored on an electronic or digital medium and evidenced by an electronic or digital record and that is intended and accepted for use as a means of redemption for money or monetary value or payment for goods or services. The MTA punishes noncompliance with, among other things, a civil penalty, license revocation, and, for certain violations, as a
felony, as prescribed.
This bill would
prohibit, beginning January 1, 2028, under the act, a digital
wallet provider or money transmitter operating in the state
prohibit a licensee under the MTA
from allowing a user
to log in
login
without using
two-factor authentication or multifactor authentication for any login by that user.
2-factor authentication, multifactor authentication, or other reasonably equivalent or more secure access control, as specified. The bill would prohibit a licensee from allowing a user login without implementing an automatic logout requirement, a session timeout requirement, and a reauthentication requirement, as
specified. The bill would provide that its provisions become operative January 1, 2028.
By expanding the scope of a crime, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.

Current Bill Text

Read the full stored bill text

Download Bill PDF