How to Get a Money Transmitter License in New York

Published: Sep 13, 2018
Your New York Money Transmitter License

According to the Banking Law of the state of New York, you cannot engage in money transmitting operations without being licensed. All professionals who want to conduct such activities need to obtain a New York money transmitter license from the state Department of Financial Services.

The licensing procedure ensures that transmitters who are allowed to operate meet the necessary level of professional and business qualifications. Among the requirements you have to fulfill is posting a New York money transmitter bond. It guarantees you will follow all applicable laws.

The rest of the steps that you need to undertake to start your money transmitting business in New York can be found below.

New york money transmitter license requirements

Applicants for a money transmitter license in New York need to undergo a rigorous process, which entails preparing and obtaining a long list of paperwork. As of 2017, the procedure is conducted via the Nationwide Multistate Licensing System and Registry (NMLS), but the New York Department of Financial Services remains the licensing body.

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 via the NMLS website:

  • Two most recent yearly Audited financial statements prepared by a Certified Public Accountant
  • Report Authorized Agents via the NMLS Uniform Authorized Agent Reporting (UAAR) functionality
  • List Resident/Registered Agents in the MU1 form
  • Provide Primary Contact Employees information, as well as Non-Primary Contact Employees
  • Note your company’s FinCEN Registration Confirmation Number and Filing Date
  • Complete Disclosure Questions
  • Provide information about your Chief Compliance Officer
  • Complete the Control Person (MU2) Attestation
  • Authorize credit reports for control persons
  • Present your Anti-Money Laundering (AML) / Bank Secrecy Act (BSA) Policy
  • Upload your business plan
  • Provide a Certificate of Authority/Good Standing Certificate
  • Present your Agent and Correspondent Policies (procedures)
  • Upload samples of your business forms
  • Submit a description of your flow of funds structure
  • Provide your entity formation documents, management chart, and organizational chart
  • Submit a list of permissible investments
  • Provide a $500,000 surety bond

You can find the full checklist here for further information about each of these requirements. Additionally, you may need to provide extra documents for each control person (Individual Form MU2), such as credit report, personal documents, and financial statement.  

The New York money transmitter license cost is $3,000, which is the amount of the application fee. The credit report is $15 per each control person.

Getting your surety bond

It’s worth paying attention to one of the requirements that you have to provide to get licensed – the surety bond. All money transmitters in New York have to provide a $500,000 bond in the official bond form in order to obtain their state license. The bond serves as an extra layer of guarantee that ensures you will follow the law. Thus, it provides protection for the state and for your customers against potential illegal activities on your side.

In order to get bonded, you have to cover a small percentage of the required bond amount. This is your actual surety bond cost. For applicants with solid financial status, the typical percentages are about 1% to 5%.

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 type of currency you are working with is also likely to influence the price. The more stable all these criteria are, the smaller your bond premium is likely to be.

Still have questions about your New York money transmitter licensing and bonding? Our specialists are here to help. You can reach us at 877.514.5146.

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Victor Lance is the founder and president of Lance Surety Bond Associates, Inc. He began his career as an officer in the U.S. Marine Corps, serving two combat tours. As president of Lance Surety, he now focuses on educating and assisting small businesses throughout the country with various license and bond requirements. Victor graduated from Villanova University with a degree in Business Administration and holds a Masters in Business Administration (MBA) from the University of Michigan's Ross School of Business.