CO HB1201

Repeals and replaces Colorado's existing money transmitter regulations (Article 110, Title 11) with a modernized framework designed to coordinate with other states and reduce regulatory burden while protecting consumers from financial crime

Requires licensing for money transmission activities including selling payment instruments, issuing stored value, receiving money for transmission, and payroll processing services, with exemptions for banks, government entities, payment system operators, and agents of payees

Establishes prudential standards requiring licensees to maintain tangible net worth (at least $100,000 or tiered percentage of assets), surety bonds ($250,000 minimum up to $1 million), and permissible investments equal to outstanding money transmission obligations

Creates oversight framework under the Banking Board including application requirements, background checks, quarterly reporting, annual audited financials, and examination authority, with provisions for multistate coordination through NMLS

Sets enforcement mechanisms including license suspension/revocation, cease and desist orders, civil penalties, and criminal penalties (Class 2 misdemeanor for unlicensed activity or false statements), with sunset review scheduled for September 1, 2030