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On June 29, 2026, the Maryland Office of the Commissioner of Financial Regulation published an industry advisory regarding exemptions from money transmitter licensure. During its 2026 session, Maryland's General Assembly passed House Bill 118, which Governor Wes Moore signed into law. The legislation takes effect October 1, 2026, and excludes payroll processors from the definition of money transmitter under Maryland Code Annotated, Financial Institutions Article Section 12-401, provided certain conditions are satisfied. To qualify for the exemption, three conditions must be met: a written agreement must direct the payroll processor to provide services on behalf of the employer; the employer must hold the processor out to employees as providing payroll services on the employer's behalf; and the employer's obligation to pay employees must not be extinguished if the processor fails to deliver funds to employees. If these conditions are satisfied and the processor does not provide any other type of money transmission service, the processor need not hold a Maryland money transmitter license. Payroll processors currently licensed as money transmitters and eligible for exemption under the new law may surrender their license on or after October 1, 2026, or allow it to expire on December 31, 2026. The advisory clarifies the implementation timeline and licensing options available to affected processors. Questions regarding this advisory should be directed to Assistant Commissioner Clifford Charland at 410-230-6167 or via email at [email protected].