Kentucky Money Transmitter Bond

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.

Why Do I Need This 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.

How Much Will the Bond Cost?

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.

 

Money Transmitter Bond

In order to get your money transmitter’s business license, you’ll need a bond.

• Required by: Kentucky Department of Financial Institutions
• Minimum bond amount: $500,000
• Maximum bond amount: Varies
• Valid: 1 year-renewable

This bond ensures compliance with Chapter 286.11 of the Kentucky Revised Statutes. If the principle acts against the rules and regulations stated in the bond, the business license can be revoked.

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.)

• The licensed is valid for one year, so it needs to be renewed annually. Kentucky charges a license renewal fee of $250- $500.
• The obligee charges an investigation fee of $500 which is non-refundable. A mandatory investigation is conducted by the obligee to guarantee the applicant is trustworthy and credible.
• The obligee requires the applicant to maintain a minimum net worth of $500,000.

On the license application, specific information is required.

• Legal name of applicant and residential residence
• Surety bond
• List of other states the applicant is registered in, if any
• Description of business activities and any money transmission history conducted in Kentucky

The license application can be filled out using an electronic system referred to as  NMLS. Although, for businesses that are not conducting multi-state businesses or do not want to use the electronic application system can also have access to other application forms.

Money transmitters in Kentucky 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.

See a checklist for new money transmitter license applications at NMLS.