Mississippi Money Transmitter Bonds Explained
Mississippi money transmitter businesses have to get a state license prior to launching operations in the state. If you’re planning to get started with this endeavor, you will need to provide a money transmitter bond as a part of the process.
The bonding requirement serves as an additional layer of protection for the state of Mississippi and for your customers. It ensures that you will not transgress from your legal obligations, or if you do, that there can be financial compensation for the harmed parties.
Your money transmitter bond functions as a three-party contract. Theparty required to get bonded is the principal (your business). The Mississippi Department of Banking and Consumer Finance is the obligee, while the surety backs your company by providing the bond.
Questions about Money Transmitter Bonds in Mississippi
Who is required to obtain a money transmitter bond in Mississippi?
Any entity that wants to obtain a Mississippi money transmitter license has to provide a surety bond during the procedure. The Mississippi Department of Banking and Consumer Finance is the licensing body, while the process is handled via the Nationwide Multistate Licensing System and Registry (NMLS). The bond requirement is between $25,000 and $500,000. It ensures you will follow the Mississippi Code, Title 75, Chapter 15.
How much does it cost to get a money transmitter bond in Mississippi?
The principal bond amount is set at $25,000, or the amount of your outstanding money transmissions in the state if it is greater. The maximum bond is $500,000.
In order to get bonded, you have to pay a small percentage of the required bond amount. This is your bond premium, which is typically between 1% and 5% for applicants with stable finances.
The surety bond cost is determined on the basis of a careful assessment of your personal and business finances. The most important factor is your personal credit score, but your surety may need to review also your audited business financials because of the high bond amount. In addition, you may also have to provide your personal financial statement and cash verification. The stronger your financial profile is, the lower your bond price is likely to get.
Is it possible to obtain the bond with bad credit?
You may be able to get your Mississippi money transmitter bond with problematic finances. However, you will need to showcase your maximum financial strength, as well as a review of your audited business financials. If the surety underwriter sees your profile as stable enough, they will be able to provide you with the bond.
How do I get my bond?
To get bonded, simply apply online (it takes 5min). Once we have all the required information and your application is approved, one of our agents will contact you with your free quote. Once paid for, you will receive a digital and a hard-copy of your bond.
You can learn further details about the bonding process in our extended How to Get Bonded page.
Have further questions or need help with your application? Our bonding experts are here to help you. Just call us at (877) 514-5146.
How are bond claims handled?
Unlike insurance, your surety bond does not protect your money transmitting business. It can provide a safety mechanism for parties who have suffered damages as a result of potentially illegal actions on your side. They can file a claim against your bond.
If there is a proven claim, you have to cover the costs, which can be up to the penal sum of your bond. While your surety may pay the sum at first, you have to reimburse it fully. That’s why it’s best to avoid situations that can give rise to claims, as they can hurt your business financially and in terms of reputation.
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