Money Transmitter Bond

To obtain a money transmitter license in New York, you will need to provide a New York Money Transmitter Bond, also called a BOND, NEW YORK INSTRUMENTS in the State. It is a type of surety bond. The license requirements for money transmitters are found primarily in Article 13-B of the New York Banking Law (“BL”) and the regulations thereunder. BL Section 641(1) provides:

No person shall engage in the business of selling or issuing checks, or engage in the business of receiving money for transmission or transmitting the same, without a license therefor obtained from the superintendent as provided in this article, nor shall any person engage in such business as an agent, except as an agent of a licensee or as agent of a payee; provided, however, that nothing in this article shall apply to a bank, trust company, private banker, foreign banking corporation licensed pursuant to article two of this chapter or foreign banking company authorized to operate pursuant to the International Banking Act of 1978.

Apply for this license via the Nationwide Mortgage Licensing System (NMLS). The license authorizes the following activities:

• Bill paying
• Issuing and/or selling drafts
• Selling prepaid access/stored value
• Electronic Money Transmitting
• Foreign currency dealing or exchanging
• Issuing money orders
• Issuing prepaid access/stored value
• Issuing traveler’s checks
• Other-Money Services
• Selling money orders
• Selling traveler’s check

Why Do I Need The BOND, NEW YORK INSTRUMENTS ?

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 shop your bond request to a number of the more than a dozen markets represented by the agency to provide a competitive quote with competitive terms.  Most bonds will be priced at 1% to  3% of the surety bond amount.

Money Transmitter Bond

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

• Required by: Department of Financial Services
• Minimum bond amount: $500,000
• Maximum bond amount: Varies
• Valid: 1 year – continuous

This surety bond guarantees the money transmitter will comply with Article 13-B of the New York Banking Law.

Violation of Article 13-B includes:

• Knowingly receiving more than $10,000 from a single transaction
• Collecting $250,000 of transmission within a 1-year period or less
• Transaction of money associated with criminal conduct.

These violations result in revocation of the license and cancellation of the surety bond. Otherwise, this bond is continuous, so it is valid until it is cancelled. If it is cancelled, the obligee must be notified of the cancellation. 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 Requirments

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:

• Applicant’s legal name and residential address
• Business location
• Location where the books and records are kept
• Addresses of any additional business locations
• Bond, New York Instruments
• Licensing fees

Licensing fees are required by the state of New York, not the surety company. 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 New York 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.

How do I apply for a New York Money Transmitter Bond?

At surety1.com, we make it easy to apply for your Money Transmitter Bonds:

1. Complete our easy to navigate and secure online application. One application is available for all states.¹
2. Usually within one business day one of our professional surety bond agents will be in touch to request for financial information required by the surety companies to provide a firm quote.
3. Review your free, no obligation quote.
4. Sign some paperwork and make payment.

^{1. The name of the applicant on the surety bond application must match exactly the Full legal business name of applicant for the license.} 

After completing these steps, your surety bond will be shipped to you for the required signature. After the bond is signed by the principal (applicant), the original surety bond document must be provided to the NY-DFS.

Surety1.com is a service of AssuredPartners one of the largest and fastest growing insurance agencies in the nation. Surety1.com is the premier online provider of surety bonds nationwide since 2003. Surety1 also maintains an A+ rating from the Better Business Bureau.

Visit our State-by-State Guide to Money Transmitter Bonds