The Process of Getting Licensed and Bonded as a Money Transmitter in South Carolina
South Carolina Anti-Money Laundering Act now has requirements for individuals who wish to do business as money transmitters.
Money transmitters need to obtain a license as well as maintain a valid money transmitter bond before they can operate legally in the state. Read on for all the details.
Money Transmitter License Requirements in South Carolina
Everyone “selling or issuing payment instruments, stored value, or receiving money or monetary value for transmission” must now obtain a money transmitter license in South Carolina.
This is required by the South Carolina Anti-Money Laundering Act which came into effect in the beginning of 2017. Exempt from this requirement, according to Section 35-11-110, are:
- U.S. federal government agencies and departments
- The U.S. Postal Service and contractors making transmissions on behalf of the USPS
- State, county and city agencies
- Banks and bank holding companies
- Credit unions under the regulation of the National Credit Union
Those who are not exempt from this requirement must obtain their money transmitter license from the state Attorney General.
Other Licensing Requirements
To obtain a license, applicants will have to include the following details and items on their application, according to Section 35-11-205:
- The legal name of the applicant, along with their residential and business address
- A list of criminal convictions of the applicant or material litigation in the past 10 years
- A description of money services provided by the applicant previously
- A list of authorized delegates (See Article 4 of the Act)
- A list of other states in which the applicant is licensed to provide the same services
- Information concerning applicant bankruptcy
- Name and address of banks to be used for the payment instruments and stored value of the applicant
- A description of the applicant’s money or the credit to be used
Applicants must also:
- Pay a $1,500 non-refundable application fee
- Post a $50,000 South Carolina money transmitter bond
- Add $10,000 to the bond value for every additional location (with a maximum bond amount of $250,000)
Once licensed, South Carolina money transmitters must maintain a net worth of at least $250,000 as well as permissible investments at all times. Licensees must further renew their licenses on a biennial basis, paying a renewal fee of $750, and submit renewal reports alongside their renewal application.
South Carolina Money Transmitter Bond Requirement
Money transmitter bonds are a type of surety bond which protects people who work with money transmitters from fraud and dishonesty on part of transmitters. These bonds guarantee that if customers are treated unfairly they may file a claim against the bond and be compensated for their losses by the surety.
The cost of obtaining a money transmitter bond depends on an applicant’s personal credit score, their financial statements, and a few other factors. The exact cost is determined on a case-by-case basis but applicants can always get a preliminary estimate of their bond cost by using a surety bond cost calculator online.