Idaho Money Transmitter Bonds Explained
Idaho money transmitters must obtain a state license before being allowed to operate legally. In the process of obtaining your licensing, you have to provide a money transmitter bond.
The goal of the bond requirement is to ensure the interests of the state and of the general public will be protected. It serves as a safety mechanism that guarantees your legal compliance as a money transmitter.
Your surety bond works like a contract between three entities. The principal is your money transmitting business. The obligee is the Idaho Department of Finance which imposes the licensing requirement. The surety is the third party, which is the one that provides you with the bonding.
Questions about Money Transmitter Bonds in Idaho
When do I have to provide this bond?
You have to obtain a surety bond when you apply for an Idaho money transmitter license. The bond amount is between $10,000 and $500,000 and is based on the number of locations that you want to operate. It ensures your compliance with Chapter 29, Title 26 of the Idaho Statutes and all other applicable laws.
The licensing procedure is conducted through the Nationwide Multistate Licensing System and Registry (NMLS). However, the licensing body is the state Department of Finance.
How much do I have to pay to get bonded?
The price that you have to pay to get bonded depends on the bond amount that you are required to obtain. For Idaho money transmitters, the minimum bond amount is $10,000. For each additional location, you have to cover another $5,000 up to a maximum of $500,000.
On the basis of this amount, your surety bond cost is calculated. It represents a small percentage of it that is referred to as the bond premium. The main factor that influences it is your personal credit score. However, the rest of your personal and business finances are also important, such as your audited company financials, personal financial statements, and available cash. Your surety sets your bond cost by considering the perceived bonding risk, as shown in your paperwork.
Is bad credit bonding possible?
Getting a money transmitter bond with financial problems can be difficult because of the substantial bonding amounts that are required. You may still be able to obtain it, but you will have to showcase a considerable level of financial stability. The audited financials of your business will be required, as well as any other documents that can contribute to presenting a stable profile as a bond applicant.
How do I get an Idaho money transmitter bond?
To start your bonding process, you can simply fill out our online application form (it takes 5min). Then you will need to attach your paperwork, so that we can assess your complete profile. You will receive a bond quote from us afterwards. If it is satisfactory for you, you can purchase the bond straight away.
Need more details about how bonding works? Don't hesitate to consult our in-depth How to Get Bonded page.
In case you have further queries, Lance Surety Bonds' experts are here to help. You can reach us at (877) 514-5146.
What happens if I receive a bond claim?
The safety mechanism of surety bonds allows a harmed party to file a claim against your bond if they have suffered damages caused by your unlawful actions. In such situations, the claimant can seek a reimbursement of up to the bond amount you have provided during licensing.
The claim is examined and if it is proven, you are liable for all relevant costs, as set in the bond indemnity agreement. Your surety may initially cover the expenses, but you have to fully repay it soon after. Thus, bond claims can harm your money transmitting business substantially, and it is best to avoid them.