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EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
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*hb0118*
HOUSE BILL 118
I1 6lr1456
(PRE–FILED)
By: Delegate Queen
Requested: October 30, 2025
Introduced and read first time: January 14, 2026
Assigned to: Economic Matters
Committee Report: Favorable
House action: Adopted
Read second time: February 19, 2026
CHAPTER ______
AN ACT concerning 1
Maryland Money Transmission Act – Definition of Money Transmitter 2
– Alteration 3
FOR the purpose of altering, for a certain licensing requirement, the definition of “money 4
transmitter” under the Maryland Money Transmission Act to exclude a certain 5
person designated as an agent of a payor for the purpose of the agent’s provision of 6
payroll processing services under certain circumstances; and generally relating to 7
the Maryland Money Transmission Act. 8
BY repealing and reenacting, without amendments, 9
Article – Financial Institutions 10
Section 12–401(a) 11
Annotated Code of Maryland 12
(2020 Replacement Volume and 2025 Supplement) 13
BY repealing and reenacting, with amendments, 14
Article – Financial Institutions 15
Section 12–401(q) 16
Annotated Code of Maryland 17
(2020 Replacement Volume and 2025 Supplement) 18
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 19
That the Laws of Maryland read as follows: 20
2 HOUSE BILL 118
Article – Financial Institutions 1
12–401. 2
(a) In this subtitle the following words have the meanings indicated. 3
(q) (1) “Money transmitter” means a person that engages in money 4
transmission that is required to be licensed under this subtitle, whether or not the person 5
maintains a license. 6
(2) “Money transmitter” includes: 7
(i) A bill payer service; and 8
(ii) An accelerated mortgage payment service. 9
(3) “MONEY TRANSMITTER” DOES NOT INCLUDE A P ERSON 10
DESIGNATED AS AN AGENT OF A PAYOR FOR THE PURPOSE OF PROVIDING PAYROLL 11
PROCESSING SERVICES FOR WHICH THE AGENT WOULD OTHERWISE NEED TO BE 12
LICENSED UNDER THIS SUBTITLE, IF: 13
(I) THERE IS WRITTEN AGREEMENT BETWEEN THE PAYOR AND 14
THE AGENT THAT DIREC TS THE AGENT TO PROV IDE PAYROLL PROCESSI NG 15
SERVICES ON THE PAYOR’S BEHALF; 16
(II) THE PAYOR HOLDS THE A GENT OUT TO EMPLOYEE S AND 17
OTHER PAYEES AS PROV IDING PAYROLL PROCES SING SERVICES ON THE PAYOR’S 18
BEHALF; AND 19
(III) THE PAYOR ’S OBLIGATION TO A PA YEE, INCLUDING AN 20
EMPLOYEE OR ANOTHER PARTY ENTITLED TO RE CEIVE FUNDS VIA THE PAYROLL 21
PROCESSING SERVICES PROVIDED BY THE AGEN T, IS NOT EXTINGUISHED IF THE 22
AGENT FAILS TO REMIT THE FUNDS TO THE PAYEE. 23
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 24
October 1, 2026. 25