What Is a Georgia Money Transmitter Bond?
Are you considering creating a Georgia money transmitter company? The operations of money transmitters in the state are regulated by the Georgia Department of Banking and Finance. Among the main criteria you have to satisfy is posting a money transmitter bond.
What’s the purpose of getting bonded? The Department aims to guarantee that you will follow the law in your work as a money transmitter. The bond can provide a fair compensation for harmed parties if you breach the law.
The Georgia money transmitter bond works as a contract between three entities. Your money transmitting company is the principal. The obligee is the state Department of Banking and Finance. The surety is the third party that provides the bonding.
Questions about Money Transmitter Bonds in Georgia
In which cases do I have to obtain this bond?
The Georgia Department of Banking and Finance requires all entities that want to conduct money transmitting operations in the state to get licensed. The procedure is handled by the Nationwide Multistate Licensing System and Registry (NMLS).
One of the main requirements you have to meet when getting your Georgia money transmitter license is to provide a surety bond. The amount should be $100,000, but the Department may increase it up to $2 million if it sees it necessary. You have to use the official bond form. The bond you provide guarantees your compliance with all applicable Georgia laws and rules.
What is the Georgia money transmitter bond cost?
You have to obtain a $100,000 bond in order to get your state license. In some cases, the required amount may be increased to any amount up to $2 million. The bond amount is different from your actual cost, which is the bond premium. It represents about 1% and 5% of the amount in case you can demonstrate strong finances.
The surety bond cost for money transmitter bonds is formulated after a careful consideration of your personal and business financials. The most important factor may as well be your audited business financials, but your surety will also consider the business owner’s personal credit score and assets and liquidity. For money transmitting businesses, the type of currencies that you handle may also affect your bond price. In general, the more stable your overall profile is, the smaller your bond premium is likely to be.
What if I have bad credit?
Getting a money transmitter bond with problematic finances can be tough. The main factor that will affect the bonding decision is your audited business financials. Since the bond amounts are considerable - from $100,000 to $2 million, the documents should be convincing enough, so that we can extend the surety backup for you.
Need more details about the bonding process? We have crafted a detailed How to Get Bonded page to provide you with all the information you may need.
We’re here to help as well. If you have further questions, you can contact us at (877) 514-5146. Our bonding specialists will happily assist you.
What happens in case of a claim against my money transmitter bond?
The purpose of the Georgia money transmitter bond you have obtained is to ensure an extra layer of security for the state and your customers. If you fail to abide by the law, you may end up with a claim against your surety bond. This is the mechanism through which harmed parties can seek a fair reimbursement.
The claim can be up to the penal sum of your bond. At first, your surety may cover the costs on proven claims in order to ensure a fast payment to the claimants. You need to repay it fully soon after, as this is your commitment under the bond indemnity agreement. Bonds are not designed to protect you financially, so you should take care to avoid claims and the financial consequences that ensue from them.