To obtain a money transmitter license, every state requires a surety bond. Depending on your state, this license may be called money remitter, money services business, check casher, or sales of check license.
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 cost of the bond, the “premium,” depends largely on the bond amount and the applicant’s financial status. The state requiring the bond determines the amount. At Surety 1, we will find you the lowest quote for your bond, starting at only 1.5% of the bond amount.
In order to get your money transmitter’s business license, you’ll need a bond.
The applicant should verify the bond amount with the obligee before applying for the bond to ensure the bond amount is correct.
The required bond amount can also be equal to the daily average of outstanding payment instruments for the preceding 12 months of business history.
Also, if the maximum bond amount exceeds $1,000,000, then the applicant has the choice to post the bond plus a dollar-for-dollar increase in the applicant’s net worth up to the maximum amount of $2,000,000. The obligee enforces these requirements, not the surety company.
The bonds are put in place to guarantee the money transmitter will obey all Illinois rules and regulations. Acting against the Illinois Transmitters of Money Act includes:
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.)
In order to apply for a license, Illinois requires all of the following:
The licensing fees are required by the obligee, not the surety company.
Before money transmitters in Illinois can receive a license, they need to register as a money services business (MSB) with the Federal Crimes Enforcement Network. Registration is completed through the (BSA) e-filing system.
Money transmitters in Illinois must also register as a money services business (MSB) with the Federal Crimes Enforcement Network (FinCEN). The registration process must be completed by the Bank Secretary Act (BSA) e-filing system.