Money transmitter bond cost
The Money Transmitter Division of the California Department of Business Oversight requires money transmitters doing business in the state to obtain a surety bond. The bond amount varies from a minimum of $250,000 to a maximum of $7,000,000. The amount must be greater than the average daily outstanding obligations for money received for transmission in the state, provided it is within the above range.
Since these bonds require underwriting, it is important you have your financial information handy to expedite the bonding process. Worried your credit will disqualify you for a bond? Not to worry, we employ a specialized bad credit bonding program through which we can approve 99% of our applicants.
Why this bond
A money transmitter bond helps ensure that the principal (money transmitter) comply with the legal requirements outlined in the bond form. Money transmitters in California are required to adhere to Division 1.2 of the California Financial Code (section 2000 – 2176). Prohibited acts under this law include, but are not limited to:
- Failing to cooperate with examination
- Engaging in fraud, intentional misrepresentation or gross negligence
- Engaging in unsafe or unsound business practice
- Suspending payment of its obligations
- Failing to remove an agent after commissioner finds agent in violation of the law
If the principal violates the terms of the bond, claims can be filed against the bond. The surety will cover for damages up to the penal sum of the bond, but the principal will be liable for reimbursing the surety the equivalent amount of money in a timely manner.
Money transmitter bond details
The Department of Business Oversight mandates that money transmitters obtain a security with regards to the terms outlined in the Money Transmission Act. This bond amount varies from applicant to applicant. The bond runs concurrently with the license period for which the license is granted.
If the surety decides to terminate the bond, it must file a 30-day notice of cancellation. During this period, the surety remains liable for all claims filed against the bond.
Become a money transmitter
In addition to filing a surety bond, money transmitter applicants must submit a license application to the Money Transmitter Division. The application must include the following information along with appropriate fees:
- legal name and residential business address of the applicant
- list of any criminal convictions of the applicant during the past 10 years
- description of money services applicant will provide
- list of applicant’s proposed agents and all business locations
- list of other states where applicant is licensed to engage in money transmission
- information concerning any bankruptcy
- certificate of good standing from the state
For a complete list of requirements for money transmitter bonds, check out the Additional information section below.
In addition to state license requirements, money transmitters must register as a money services business (MSB) with the Financial Crimes Enforcement Network before conducting business. To successfully register, applicants must electronically submit registration through BSA E-Filing.
A link to this site is available in the Additional information section below. Take the first step toward getting licensed in California by requesting your free quote for a transmitter bond!
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