To obtain a money transmitter license in California, one must provide a California Money Transmitter Bond. This is a type of surety bond and every state requires a surety bond to be a licensed money transmitter. Depending on your state, this license may be called money remitter, money services business, check casher, or sales of check license. While the license is a requirement of the California Department of Financial Protection and Innovation (formerly Department of Business Oversight), it is administered via the Nationwide Mortgage Licensing System (NMLS).
Why Do I Need This Surety Bond?
A surety bond is made to protect the public. In basic terms, it guarantees your business will adhere to all laws and requirements in your industry. In the event your business conducts unlawful acts, a consumer of your services may file a claim on the bond. Nearly any company that offers payment services requires a money transmitter bond. Due to a history of fraudulence and inaccurate money transmissions, state agencies now require this bond to protect consumers. While this bond does not protect the business owner, it offers proof that your business handles clients’ money responsibly.
The Money Transmitter Division of the Department of Financial Protection and Innovation (DFPI) licenses and regulates money transmitters, which includes issuers of payment instruments (money orders) and travelers’ checks and non-bank issuers of stored value.
Click her to apply for your California Money Transmitter Bond.
A money transmitter’s license authorizes the following activities:
- Domestic and international money transmission
- Issuing and selling payment instruments (traveler’s checks and money orders)
- Issuing and selling stored value
Per the California MONEY TRANSMISSION ACT
“Stored value” means 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 term does not include a credit card voucher, letter of credit, or any stored value that is only redeemable by the issuer for goods or services provided by the issuer or its affiliate, except to the extent required by applicable law to be redeemable in cash for its cash value.
Money Transmitter Bond
In order to get your money transmitter’s business license, you’ll need a California Money Transmitter Bond.
- Required by: Money Transmitter Division of the California Department of Financial Protection and Innovation.
- Minimum bond amount: $250,000
- Maximum bond amount: $7,000,000
The Money Transmitter Division will determine your bond amount. The applicant should verify the bond amount with the obligee before applying for the bond to ensure the bond amount is correct.
Money Transmitter License
These are additional details about the licensing process that you should be aware of. (Only the bond is handled at Surety1, but this information will help you get your license.)
First, you will need to have a pre-filing meeting with the Money Transmitter Division staff. The Money Transmitter Division strongly recommends this meeting so you are well prepared to apply and meet all the requirements to become a money transmitter. The filing fee is $5,000 for a new license and is NOT refundable, even if not accepted. The meeting will help assure your application will be accepted. The California Money Transmitter Bond is not required until after the license application has been accepted by the California Department of Financial Protection and Innovation.
All licensing fees are required by the obligee, not the surety bond company. For specific license requirements, view the license check list provided by the NMLS.
How to obtain a California Money Transmitter Bond
At Surety1.com, surety bonds are all we do so we strive to simplify the process of getting bonded. The process to obtain the required surety bond is:
- Complete our easy to navigate and secure online application 1
- Usually within one business day, one of our surety bond professional agents will contact the applicant to discuss the information required by the surety underwriters to gain an approval for the bond.
- Review the free, no obligation quote.
- Sign dome paperwork and make payment for the bond.
Once these steps have been completed, the original California Money Transmitter Bond will be shipped for signature. Once signed the surety bond Upload in NMLS: under
Surety Bond in the Document Uploads section of the Company Form (MU1).
1 – The name of the applicant on the surety bond application must match exactly the full legal business name of applicant for the license.
Surety1.com is a service of AssuredPartners one of the largest and fastest growing insurance agencies in the nation. Representing over a dozen surety bond companies, Surety1.com is the premier online provider of surety bonds nationwide since 2003.
For more information on state requirements for Money Transmitter Bonds visit our State-by-State Guide to Money Transmitter Bonds