Missouri Money Transmitter Bond Explained
Starting a Missouri money transmitter business entails that you comply with the licensing requirements of the state. Among the criteria you have to fulfill is posting a money transmitter bond.
The purpose of the bonding is to safeguard the interests of the state and of your customers. It guarantees that you will follow the law in your operations as a money transmitter
The surety bond that you have to obtain works as a contract between your business as the principal and two more entities. The Missouri Division of Finance is the obligee that sets the bonding requirement. The surety is the third party that provides the bond.
Questions about Money Transmitter Bonds in Missouri
Who is required to obtain a money transmitter bond in Missouri?
A Missouri money transmitter license is required of all parties who want to engage in transmitting activities in the state. The licensing authority is the Missouri Division of Finance, while the procedure is executed via the Nationwide Multistate Licensing System and Registry (NMLS). One of the main requirements that you have to meet during the licensing is to post a surety bond in a minimum amount of $100,000. The maximum amount is $1 million. The bond serves as a guarantee that you will follow your obligations under the Missouri Revised Statutes, Title XXIV and other applicable laws.
How much does it cost to get a money transmitter bond in Missouri?
The bond amount for Missouri money transmitters who get licensed for the first time is $100,000 for your first location. When you renew your license and bonding, the bond amount should equal five times the greatest amount transmitted in a single day in the last year. The renewed bond should be between $100,000 and $1 million.
The surety bond cost you have to pay is only a fraction of the required amount. It is referred to as the bond premium. If your finances are in good shape, the rates that you can expect are between 1% and 5%.
The exact price that you have to pay is set after careful consideration of your personal and business finances. The surety that you apply with has to take a close look at your personal credit score. For larger bond amounts, it may need to review your audited business financials, as well as financial statement and cash verification. The bond cost is cheaper when the perceived bonding risk is lower.
Can I obtain this bond with bad credit?
Obtaining a Missouri money transmitter bond if you’re struggling with problematic finances can be more difficult because of the high bonding amounts. It may still be possible to get bonded if you can showcase a level of financial stability. You will have to provide your audited business finances, as well as any other documents that can attest to that.
How do I get bonded?
To apply for a money transmitter bond in Missouri, simply fill out our online application form (it takes 5min). After providing all the required information we’ll send your application for approval. You will be then contacted with a free firm quote. After receiving your payment, we will provide you with a digital and a hard-copy of your bond.
Looking for more detailed information on the bonding process? Make sure to refer to the extensive How to Get Bonded page
Lance Surety Bonds specialists are available to answer your questions and help you with your bond application. You can call us at (877) 514-5146.
What happens if I get a claim against the bond?
The goal of the bonding is to ensure you will follow your obligations under the Missouri Revised Statutes. If you transgress from them and a party suffers damages as a result, you may receive a claim against your bond. This is how a fair reimbursement can be sought.
On proven claims, the surety can step in to cover the costs and provide a fast compensation to the claimant. The sum that can be claimed is up to the bond amount you have posted. As per the bond indemnity agreement, you are liable for all payments and have to reimburse the surety afterward. This makes the bond claims a financial threat that should not be overlooked.
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