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
This surety bond ensures that the money transmitter will comply with the Nebraska Money Transmitters Act.
In order to get your money transmitter’s business license, you’ll need a bond.
- Required by: Department of Banking and Finance
- Minimum bond amount: $100,000
- Maximum bond amount: Varies
- Valid: 1 year-renewable
For each additional location, $5,000 more in converge is required by the obligee.
The exact bond amount should be verified with the obligee before applying for the bond.
The bond is valid until it is cancelled. If the bond is cancelled, the Director of the Department of Banking and Finance must be notified within 30 days before the effective cancellation date.
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.)
Licensing requirements include:
- Licensing fees
- Net worth of at least $50,000
- Detailed business plan
- Surety bond
- Explanation of the types of services the business will offer
- Audited financial statements from current and preceding 2 years of applicant
Licensing fees are required by the obligee, not the surety company.
Money transmitters in Nebraska 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.
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.
See a checklist for new money transmitter license applications at NMLS.