What Is an Alabama Money Transmitter Bond?
Money transmitters in Alabama must be licensed to conduct business. Posting an Alabama money transmitter bond is a primary requirement for obtaining a license.
Money transmitter bonds function like an extra layer of security for state authorities and the general public. They guarantee that money transmitters will act in accordance with applicable laws. The bond can provide compensation to any affected parties, if a claim against the bonded individual is proven.
The Alabama money transmitter bond, like other Alabama surety bonds, is a three-party contract. Your money transmitter business is the principal. The Alabama Securities Commission is the obligee that requires the bonding before they'll provide you with a license. The third entity is the surety that bonds your company.
Frequently Asked Questions
Who needs to get an Alabama money transmitter bond?
Any business that wants to engage in money transmitting in Alabama, such as selling, issuing, dispensing, and receiving money, has to get an Alabama money transmitter license. The Alabama Securities Commission is the licensing authority.
The surety bond is an indispensable requirement for getting the license, ensuring that money transmitters will comply with applicable sections in the Code of Alabama. Applicants have to supply the bond using the official bond form.
The bond amount that money transmitters in Alabama need to post can be between $100,000 and $5,000,000. The exact amount is set by the Securities Commission, on the basis of factors such as the applicant’s outstanding and stored value obligations, as well as payment instruments. Before you start your licensing process, you’ll need to check with the Securities Commission for your required bond amount.
The bond price you have to pay, however, is different from the bond amount. It’s called the bond premium. It’s only a fraction of the required amount, and is between 1% and 5% for applicants with solid finances. This means that for a $100,000 bond, your cost may be as low as $1,000 to $5,000.
|Bond Type||Surety Bond Amount||Credit Sore|
|Above 700||Between 650-699||Between 600-649||Below 599|
|Alabama Money Transmitter Bond||(Minimum Amount) $100,000||$750-$1,500||$1,000-$2,500||$2,500-$5,000||$5,000-$10,000|
|(Maximum Amount) $5,000,000||$37,500-$75,000||$50,000-$125,000||$125,000-$250,000||$250,000-$500,000|
How is your bond premium calculated? Your surety examines your personal and business finances to assess the risk of getting you bonded. It considers your personal credit score, business finances, and assets and liquidity. Your professional experience can also impact your bond price. You can expect to pay less for your bond if your overall finances are in good shape.
Need more information about how your bond price is set? You can consult our surety bond cost page for a complete overview.
Can I get bonded with bad credit?
Getting bonded with problematic finances can be tough. Lance Surety Bonds operates its Bad Credit Surety Bonds program to assist applicants with low credit scores, tax liens, bankruptcies, and civil judgements get the bonds they need.
The typical bad credit premiums are in the range of 5%-10%. The higher price is needed to compensate for the increased bonding risk. Since we work with a number of A-rated, T-listed surety companies, you can still get the best rate with us. We can shop around for you and choose a top bonding option for your circumstances.
How do I get an Alabama money transmitter bond?
You can start your bonding process online with no hassle. The first step of the process is to apply for a free, no-obligations quote today.
When you’re ready with your paperwork, you can complete your full application. Then we’ll deliver your exact bond price
Our How to Get Bonded page is an excellent resource if you need more information about how the bonding process works.
If you have questions, you can reach us at (877) 514-5146. Lance Surety Bonds’ experts will be happy to help you.
How are bond claims handled for Alabama money transmitters?
Money transmitter bonds do not protect your business. Their purpose is to safeguard the interests of your customers. You can face a bond claim if you engage in fraudulent activities and a party is harmed as a result.
Proven claims entail compensation for the claimant. It may be up to the penal sum of your bond- a considerable amount. This means that bond claims can be a serious financial threat and should be avoided under any circumstances. After a claim, it can also be difficult to get bonded again.