Oklahoma Money Transmitter Bonds Explained
Oklahoma money transmitters have to undergo a licensing process in order to be able to legally run their operations in the state. If you’re planning to launch such a business, you will need to provide a money transmitter bond as a part of the requirements.
The goal of the bonding is to ensure you will follow all relevant laws that govern money transmitting in Oklahoma. It serves as an extra layer of protection for the state and for your customers.
The money transmitter bond represents a contract between you (as the principal), the Oklahoma Banking Department that requires the bond (as the obligee), and the surety (as the bond provider).
Questions about Money Transmitter Bonds in Oklahoma
Who is required to obtain a money transmitter bond in Oklahoma?
You need to obtain an Oklahoma money transmitter license from the state Banking Department if you want to engage in money transmitting. The process is handled via the website of the Nationwide Multistate Licensing System and Registry (NMLS). In order to meet the Department’s licensing requirements, you need to provide a surety bond. Its amount depends on your exact activities and the number of locations you want to have. The bond ensures your compliance with the Oklahoma Administrative Code, Title 85, Chapter 15.
How much does it cost to get a money transmitter bond in Oklahoma?
The price that you have to pay to get bonded is formulated on the bond amount you are required to provide.
The amounts are as follows:
$50,000 basic amount, plus $10,000 for each extra location, with maximum amount of $500,000
$500,000 for money transmitters who also want to engage in sales of checks
$200,000 for money transmitters who work primarily through electronic means
The surety bond cost represents a small percentage of the required amount, also known as the bond premium. It is typically between 1% and 5% of the bond amount if your finances are in good shape.
The bond formulation is based on the strength of your personal and business finances. Your surety has to consider your personal credit score and may need to also examine your audited business financials since the bond amounts are considerable. You may also need to provide your personal financial statement, as well as cash verification. The stronger these factors are, the smaller your bond cost is likely to be.
What happens if I have bad credit?
It’s more difficult to get a money transmitter bond with problematic finances because the bond amounts are large. Surety underwriters should feel confident enough in your financial solidity so that they can extend bond backing of up to $500,000. They will need to consider your audited business financials. It’s a good idea to showcase all possible financial documents that demonstrate your strength.
How can I get bonded?
Would you like to learn more details about the bonding process and its intricacies? We have devised an in-depth guide that you can find on our How to Get Bonded page.
Our bonding experts are here to help you. You can reach us at (877) 514-5146 to get assistance with your queries.
What if I get a claim against my surety bond?
The purpose of your money transmitter bond is to protect your customers and the state of Oklahoma. It guarantees you will adhere to the legal standards of your profession. If you fail to do so, you can receive a claim against the bond by the harmed party.
The claimant can seek reimbursement in an amount up to the penal sum of your bond. If the case is proven, the surety may step in to cover the costs quickly, so the compensation is timely. However, unlike insurance claims, the bond claim is your financial responsibility. You have to repay all incurred costs. This makes claims a serious threat that is best to be avoided.