New York Money Transmitter License: Full Guide [2020]

Published: Apr 16, 2020
newyorkmoneytransmitterlicense

 

Money transmitters in the state of New York have to undergo a licensing procedure prior to launching their operations. If you wish to launch such a business endeavor, you need to obtain a New York money transmitter license. 

The licensing body in the state is the New York Department of Financial Services. However, the actual process is conducted via the website of the Nationwide Multistate Licensing System and Registry (NMLS), as in most other states. 

To get started with your licensing, you can consult the detailed guide below, so you’re well prepared for meeting the criteria. 

Meet the New York Money Transmitter License Requirements

The regulations that govern the activities of money transmitters in the state are set in the Article 13B of the New York Banking Law. The Department of Financial Services bases its requirements on this legal framework. 

Business Documents 

The first step that you should take is to register your business entity in the state of New York. You can use the NY Business Express portal to get started. Your formation documents should accompany your money transmitter license application.

The starting point for your application process is Company Form (MU1), which is the New York money transmitter license application form. Additionally, you have to submit the following documents:

  • Trade name (if applicable) 
  • Business plan
  • Organizational chart
  • Management chart
  • Resident/Registered Agent information
  • Disclosure questions
  • Primary and non-primary contact employees information
  • Qualifying individual information and resume 
  • Chief Compliance Officer information
  • Control Person (MU2) Attestation
  • Authorized agents locations
  • Certificate of Authority/Good Standing Certificate
  • FinCEN registration confirmation number
  • Your Anti-Money Laundering (AML) / Bank Secrecy Act (BSA) policies
  • Agent and correspondent policies
  • Document samples
  • Flow of funds structure
  • Permissible investments list and affidavit 

The full list of requirements is on the NMLS website, if you need further information. If you wish to work with virtual currency, you have to obtain an NY virtual currency business activity license

Provide a Surety Bond 

It’s worth paying attention to one of the requirements that you have to provide to get licensed – the surety bond. All applicants have to obtain a $500,000 New York money transmitter bond. You need to provide it in the official bond form.

The bond serves as an extra layer of protection for the state and for your customers against potential illegal activities on your side. It ensures your compliance with the New York money transmitter law and any other applicable regulations. 

In order to get bonded, you have to cover a small percentage of the required bond amount. This is your premium. A range of factors influence the exact bond price you will pay. The most important ones are your personal credit score as the business owner. The audited business financials are also of great significance in the bond cost formation. 

The more stable these criteria are, the smaller your bond premium is likely to be.

For applicants with solid financial status, the typical percentages are between 0.5% and 5%.

Want to see the exact cost of your New York money transmitter bond? Fill in the short form below! 

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Credit Report and Financial Statements

All control persons, including the Chief Compliance Officer, have to authorize a credit report

You have to showcase your audited financial statements prepared by a Certified Public Accountant for the two most recent years of your operations. They should contain a balance sheet, income statement, and statement of cash flows. 

Direct and indirect owners and executive officers have to provide their personal financial statements as well. 

Complete the New York Money Transmitter License Application

newyorkmoneytransmitterlicenseWhen you have collected all the required documents, it’s time to apply. You have to submit your application online to the NMLS.

Some paperwork has to be sent directly to the Department. You can use the following mailing address:

New York State Department of Financial Services 

Licensed Financial Services – Applications Unit 

One State Street, New York, NY 10004-1511

License and Registration Fees

The applicable fees that you have to cover are:

  • $3,000 application fee
  • $15 credit report fee per person

 

Have more questions about obtaining your New York money transmitter license and bonding? You can reach us at 877.514.5146

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John Williams

John Williams

John Williams is currently the Director of Sales for Lance Surety. Since joining the company in 2011, he has served in various roles throughout the organization, working his way up to now managing our team of licensed agents. As a licensed property & casualty agent, John has become extremely knowledgeable in all facets of the surety industry, including commercial, court and contract bonds. Under his leadership, John’s team has helped thousands of businesses throughout the country meet their license and bonding requirements.