Minnesota Money Transmitter Bond

According to Chapter 57 of the Minnesota Session Laws, any applicant for a money transmission license must maintain a surety bond or, alternatively, a surety deposit. Surety bond amounts must be either greater than $100,000 or an amount equal to 100% of the money transmitter's daily liability in Mineesota. This amount is calculated over the previous three-month period and can reach a maximum of $500,000.

Typically, applicants will pay only a fraction of this amount, known as the bond cost, usually beginning at 1% of the bond amount. However, it’s important to remember that this fee must be paid each year to ensure continuous coverage, and the amount you pay will depend on your specific situation. To get an accurate estimate, you can quickly and easily request a personalized quote with Lance Surety Bonds, with our years of experience helping businesses succeed even if they have poor credit scores.

To obtain a Minnesota Money Transmitter Bond, businesses must demonstrate financial stability, meet the net worth criteria, and comply with state regulations as outlined in Chapter 57. In addition, businesses must also demonstrate ethical business practices that also include workers compensation insurances.

According to Chapter 57, a money transmitter must maintain a net worth: 

• Greater than $100,000

OR 

• Three percent of total assets for the first $100,000,000
• Two percent of additional assets between $100,000,000 to $1,000,000,000;
• And one-half percent of additional assets over $1,000,000,000.

Wire transfers, electronic transfers, currency exchange services, virtual currencies, and the issuance of payment instruments all fall under the umbrella of a money transmitter bond, safeguarding consumers and providing a financial guarantee in case of poor business practice or error. In detail, the bond covers elements such as:

• Licensing Requirements — Posting a bond is a crucial part of the money transmitter licensing process.
• Regulatory Compliance — A bond serves as a financial guarantee that the business will operate within the bounds of Minnesota statutes.
• Consumer Protection — A bond ensures that funds transmitted by consumers are handled responsibly and that the business will fulfill its financial obligations.
• Ethical Business Practices: The bond acts as a commitment to ethical business practices, promoting transparency and integrity.
• Financial Responsibility: By requiring a bond, regulators ensure that businesses have the financial capacity to meet their obligations.
• Risk Management — Money transmitters often deal with large sums of money, and the bond acts as a risk management tool.
• Business Integrity — The bond signifies the business's commitment to ethical and lawful conduct in its operations, reinforcing its integrity within the financial services industry.

Applying for and obtaining a Minnesota Money Transmitter bond requires business to carefully navigate the application process. This means you will need to successfully complete the money transmitter license application process before applying for a bond.

1. Bond Quote 
   Request a personalized bond quote from Lance Surety Bonds for the premium you will need to pay. We will assess factors such as credit score and business financials and deliver the most competitive quotes around today.
2. Bond Approval
   Your business will need to go through a thorough underwriting process, including a review of your credit history and financials, to secure bond approval.
3. Bond Premium Payment
   Your premium, as previously quoted in the initial phase of your application, will be a percentage of the total bond amount. This should be paid promptly to ensure your bond can be issued as soon as possible. 
4. Bond Issuance
   Upon approval, the bond will be issued. Ensure all necessary documentation is in order to facilitate a smooth issuance process.
5. Compliance and Renewal
   Continue to comply with state regulations, including maintaining the bond, and ensuring timely renewal to sustain legal operation.