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What Is a Massachusetts Money Transmitter Bond?
Do you want to operate a Massachusetts money transmitter business? You will need to undergo a licensing process with the state Division of Banks. One of the requirements you need to fulfill is to post a money transmitter bond.
The goal of the bonding is to protect the state and your customers against potential illegal or unethical actions you may engage in. The bond is a security instrument that safeguards against your non-compliance with applicable laws.
Just like the rest of surety bonds, the money transmitter bond is a three-party contract. Your business is the principal. The Division of Banks is the obligee that imposes the bond requirement. The surety is the third entity that provides the bond.
Questions about Money Transmitter Bonds in Massachusetts
In which cases do I need to post this bond?
You need a Massachusetts money transmitter license if you want to operate in the state. The process is conducted via the website of the Nationwide Multistate Licensing System and Registry (NMLS). Among the requirements of the Division of Banks that you have to meet is to post a surety bond. The bond amount is either $50,000 or twice the average weekly amount of transmitted money. The bond ensures your compliance with the Massachusetts Money Transmitter Law.
How much does the Massachusetts money transmitter bond cost?
The minimum bonding amount for obtaining your Massachusetts money transmitter license is $50,000. Your bond price is a fraction of this bond amount, which is called the bond premium. It is often between 1% and 5% of the required bond amount, in case you have solid finances.
Your surety bond cost is based on the examination of a number of personal and business financials. Your surety provider will take into consideration your personal credit score, and in many cases, a review of your audited business financials. You may also have to show personal financial statement or provide cash verification. For money transmitters, the currency you work with may also affect your bond price.
What if I have bad credit?
Getting your money transmitter bond with problematic finances can be tough. There may still be an option to obtain the needed bond, but your audited business financials will be the most important factor. The surety underwriter will have to be convinced that the bonding risk is not too high, so the stronger your finances are, the easier it will be.
How do I apply for this bond?
Would you like to learn more about the way bonding works? Check out our detailed How to Get Bonded page, which provides the most important facts about the process.
Our bonding experts are here to assist you. Have questions or need help? Just reach us at (877) 514-5146.
What happens if I receive a bond claim?
Unlike insurance, your surety bond does not protect your company. Its purpose is to safeguard the interests of your customers and guarantee your legal compliance. You can end up with a claim against your bond if you don’t abide by the relevant rules and regulations in the state.
The claimants can seek a compensation of up to the penal sum of your bond. On proven claims, the surety may step in to pay the costs to ensure a quick reimbursement. However, you have to repay it soon after, since this is set in the bond indemnity agreement. This makes bond claims financially harmful, so it’s best to avoid situations that can lead to them.
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Quick response times and turn around for issuing bonds. Great customer service and very knowledgeable. We have used Lance Surety multiple times and have never been disappointed. Highly recommend them and Collette!
Long story short, these guys cut through the B.S. and get the job done. Responsiveness, excellent! Communication, excellent! Respect for their industry partners, excellent! John, Collette, Ryan, you're all-stars! Thank you!
We decided for Lance Surety Bond's quote for 2 reasons; Price and Customer Service. Our Representative Ryan was just SUPERB!! [...] I highly recommend Lance Surety Bond for all your Bonding needs! I'll definitely come back for all of mine. :-) Thanks Ryan!
