What Is a North Carolina Money Transmitter Bond?
The North Carolina Office of the Commissioner of Banks requires money transmitters who want to operate in the state to get a license. One of its indispensable requirements is that you have to obtain a money transmitter bond.
The surety bond that you provide to the Office guarantees that you will follow all applicable state laws and rules in your operations. In this way, it protects the state and your customers.
The money transmitter bond functions as a contract between three entities. The principal is your money transmitting business. The Office of the Commissioner of Banks is the obligee that imposes the bond requirement. The surety bond is provided by the surety.
Frequently Asked Questions
When is this bond required?
North Carolina money transmitters have to get licensed with the Office. The actual procedure is conducted through the Nationwide Multistate Licensing System and Registry (NMLS). As a part of the process, you have to provide a surety bond between $150,000 and $250,000. You have to present it in the official bond form. The bond guarantees your compliance with the North Carolina Money Transmitters Act.
What is the North Carolina money transmitter bond price?
In order to obtain a North Carolina money transmitter license, you have to post a surety bond between $150,000 and $250,000. There are four bond levels depending on the volume of money you have transmitted in the last 12 months. This represents the required bond amount. However, your bond price is different, and it is called the bond premium. It is only a fraction of the amount, usually between 1% and 5%, which depends on the financial strength of your profile.
Your the company’s audited business financials are amongst the most important criteria that affect your surety bond cost. Other significant factors include the business owner’s personal credit score and assets and liquidity, including personal financial statement or cash verification. By examining these criteria, your surety can assess the level of the bonding risk involved. The smaller it is, the less you’re likely to pay for your bond. In the case of money transmitter bonds, the type of currency you’re managing may also affect your price.
What happens if my finances are problematic?
It’s difficult to obtain a money transmitter bond if your credit is bad. It may be possible to get bonded, but expect your audited business financials to be scrutinized. Since the bond amount is considerable - between $150,000 and $250,000, the risk for underwriters is higher. They are looking for all potential factors that can showcase your financial strength before issuing a bad credit bond.
How do I get bonded?
Do you want to learn more about the way bonding works? You can consult our How to Get Bonded page. It is an in-depth guide that’s at your disposal.
Need more information or assistance with your bond application? Just call us at (877) 514-5146. Lance Surety Bonds’ experts will help you out.
How are money transmitter bond claims handled?
The money transmitter bond that you’ve posted as a part of your licensing aims to protect the state and your customers. It can be used to provide a fair compensation to harmed parties if you have transgressed from your legal obligations.
The claimants can seek a reimbursement up to the penal sum of your bond, which is between $150,000 and $250,000 for North Carolina money transmitter bonds. At first, your surety may step in to cover the costs on proven claims. However, you have to pay all expenses, as you are fully liable for it. This means that it’s best to avoid problematic situations that can lead to claims, as they can harm your business financially and in terms of reputation.