Money Transmitter Bonds in Oregon Explained
If you’d like to launch an Oregon money transmitter company, you will have to undergo a licensing process to obtain the right to operate legally. This entails providing a money transmitter bond.
Your bonding protects the state and your customers against potentially harmful illegal actions you may commit in your capacity as a money transmitter. It can be used to ensure a fair reimbursement to parties who have suffered damages as a result.
The money transmitter bond represents a contract between your company as the principal, and two more parties. The Oregon Division of Finance and Corporate Securities is the obligee, while the surety is the third entity providing you with a bond.
Questions about Money Transmitter Bonds in Oregon
Who is required to obtain a money transmitter bond in Oregon?
Any entity that wants to obtain an Oregon money transmitter license needs to provide a surety bond as a part of the procedure. The Nationwide Multistate Licensing System and Registry (NMLS) is the body that handles the process, while the Oregon Division of Finance and Corporate Securities is the state licensing authority. The minimum bond amount is $25,000, and can go up to $150,000 depending on the number of locations you want to have. The bonding ensures your compliance with the Oregon Revised Statutes, Chapter 717.
How much does it cost to get a money transmitter bond in Oregon ?
The basic bond amount required of you as an Oregon money transmitter is $25,000. For any additional location that you want to operate, you would need to add $5,000 to it. The maximum bond coverage you may have to post is $150,000.
The surety bond cost is a fraction of the required amount, called the bond premium. If your finances are in good shape, the rates that you can expect are between 1% and 5%.
When you apply with a surety, it has to examine your personal and business finances. The most important factors include your personal credit score and audited business financials, especially for larger bond amounts. Additionally, you may have to showcase your personal financial statement and provide cash verification.
Can I get a bond with bad credit?
It’s more difficult to get bonded if your finances are problematic. Surety underwriters have to feel secure enough to extend a large bond amount to the applicant. That’s why you will have to provide your audited business financials, as well as any other documents that prove your financial stability. The bonding decision will depend on their strength.
How do I apply for a bond?
Would you like to explore the nitty-gritty details of how bonding works? You can refer to our extensive How to Get Bonded page, which can give you a thorough overview.
Have further queries, or need help with your bond application? Don’t hesitate to contact us at (877) 514-5146.
What happens in case of a claim against my surety bond?
You can receive a claim against your Oregon money transmitter bond if you fail to follow applicable state statutes, or transgress from your legal obligations in any way. This is how harmed parties can seek reimbursement for suffered damages.
If the claim is proven, you have to pay the costs. The claimed amount can be up to the bond amount you have posted. Your surety may cover the sum at first, but as per the bond indemnity agreement, you need to compensate it fully afterward. Thus, the best course of action is to avoid situations that can lead to claims.