To obtain a money transmitter license in New York, you will need to provide a New York Money Transmitter Bond. Every state requires a surety bond to operate as a money transmittor. Depending on your state, this license may be called money remitter, money services business, check cashier, 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.
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:
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.
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:
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.
Learn more at the New York State Department of Financial Services.