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: Tennessee Department of Financial Institutions
• Minimum bond amount: $50,000
• Maximum bond amount: $800,000
• Valid: 1 year-renewable

An additional bond amount of $10,000 will be added for each additional business location which is required by the obligee.

This bond ensures compliance with the laws of the Tennessee Code Annotated 45-7-201 along with other Tennessee state laws.

If this bond is cancelled, the Commissioner of Tennessee Department of Financial Institutions of the State of Tennessee must be notified of the cancellation within 30 days of 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

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.)

Required license application information:

1. Legal name and residential address of applicant
2. Business address of principle
3. Location of where business records are stored
4. Mandatory investigation fee
5. Detailed description of previous, current, and planned business activities of principle
6. Number of reports filed within the last year
7. Surety bond
8. Samples of each type of payment form for business
9. Copy of applicant’s audited financial statements for the past year and preceding 2 years
10. Business organizational structure
11. Certificate of good standing

All licensing fees are required by the obligee, 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 Tennessee 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.