Nebraska Money Transmitter Bonds Explained
The first step to launching a Nebraska money transmitting business is to get a state license that allows your operations. You need to obtain a money transmitter bond as a part of this procedure.
The bond requirement serves as a protection mechanism that safeguards the interests of your customers and the licensing authorities. It guarantees you will abide by the legal framework in the state in your work as a money transmitter.
Your surety bond works as a three-party contractual agreement, with your business being the principal. The Nebraska Department of Banking and Finance is the obligee that imposes the requirement, while the surety is the bond provider that backs your company.
Questions about Money Transmitter Bonds in Nebraska
When is this bond required?
Obtaining a Nebraska money transmitter license requires posting a surety bond. The Department of Banking and Finance is the licensing body that regulates this professional field. The Nationwide Multistate Licensing System and Registry (NMLS) handles the actual process of licensing and the relevant paperwork.
The bond that you provide guarantees you will follow all applicable laws, including the Nebraska Money Transmitters Act.
What are the bonding costs?
The surety bond cost that you have to pay to get bonded depends on the required bond amount. For Nebraska money transmitters, it is set at $100,000. The Department may increase it up to $250,000 if it sees it as necessary for a particular applicant.
On the basis of the bond amount, the bond premium is your actual cost, which represents a small percentage of the requirement. Your surety determines it by examining your personal credit score. It needs to assess how risky it is to provide you with the bonding. The surety may also consider your audited business financials, personal financial statements, and cash on hand as additional indicators. The stronger your overall profile is, the lower your bond price would be.
Can I obtain this bond with bad credit?
Obtaining a money transmitter bond with financial problems is difficult. The surety that you apply with has to see enough stability in your finances in order to extend a large bond coverage of $100,000 and more. Thus, you will have to provide your audited business financials, as well as any other documents that prove your financial strength.
How do I get bonded?
The first step to getting your money transmitter bond is to fill in our online application form (it takes 5min). Whenever we have your complete paperwork, we will send you the bond cost. If you are satisfied with it, you can pay online and receive your bond digitally and on paper.
For more information about the bonding process, you can consult the in-depth How to Get Bonded page.
Our bonding experts are here to assist you. You can reach us at (877) 514-5146.
How are bond claims handled for money transmitters?
Unlike insurance, your surety bond protects your customers rather than your money transmitting business. Thus, if you fail to follow applicable laws, a harmed party can file a claim against the bond. By doing this, they can demand fair reimbursement for the suffered damages.
If the case is proven legitimate, you will have to compensate the claimant. The maximum penalty is the bond amount that you have posted. Your surety can cover the costs initially, so that the claim is paid in due time. However, you need to repay it fully, as set in the bond indemnity language. Since the liability remains with you, it is best to avoid claims because they can seriously harm your business.