A Money Transmitter Bond is a surety bond that represents a three party agreement between a principal, an obligee, and a surety. The principal is the one who needs the bond (you), the obligee is the state agency requiring you to get the bond, and the surety bond company is the entity that issues the bond. This type of bond is also known as a Money Remitter Bond, a Money Services Business Bond, or a Check Casher Bond.
The bond essentially guarantees that you will make the company whole in the event of a loss.
When you secure a surety bond you are promising that you will follow the rules and regulations of your industry. Having a Money Transmitter Bond ensures you will take care of clients’ money according to your money transmitter license. Thus, if you don’t follow the rules and regulations stated in your license, your clients are free to make a claim against your bond. Typical acts that could result in a claim include theft, fraud, or any other dishonest act.
Each state has different bond amounts ranging from $25,000 to $300,000. Check the bond amounts for the state in question. It is not necessary to pay the full bond amount to get bonded.
The surety will request a copy of your financial statement, cyber policy, and fidelity policy to underwrite the bond. Pedersen & Sons’ surety agency is licensed to operate in all 50 states and can facilitate Money Transmitter Bonds throughout the country.
If you need assistance or have questions, contact us today at 212-227-7277.
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