South Carolina Money Transmitter Bonds Explained
In South Carolina, money transmitters need to go through a licensing process. As a part of it, you need to get a money transmitter bond.
The goal of the bonding is to protect state authorities that issue the license and the general public. It ensures that you will act in accordance with state laws, thus safeguarding the interests of your customers.
Your money transmitter bond functions as a contract between your company as the principal, and two more entities. The South Carolina Attorney General is the obligee that requires you to get the bond, and the surety is the party that provides it.
Questions about Money Transmitter Bonds in South Carolina
Who needs to provide a money transmitter bond?
Any entity that has to get a South Carolina money transmitter license needs to post a surety bond. The licensing body is the Money Services Division at the South Carolina Attorney General's Office. As for other financial professionals, the procedure is handled via the Nationwide Multistate Licensing System and Registry (NMLS).
The bond amount that you have to provide is $50,000, plus $10,000 for each additional location. The total bond amount cannot exceed an additional $250,000. The bonding guarantees your compliance with the South Carolina Anti-Money Laundering Act and all other applicable laws.
How much do I have to pay to get bonded?
The bond amount that you have to provide is set by state authorities and is between $50,000 and $250,000. It depends on the number of locations that you want to operate. Your bond premium represents a percentage of this amount, and this is your actual surety bond cost.
To get your exact bond premium, you have to apply with a surety. It will examine your personal credit score as the most important factor demonstrating your financial strength. It may also need to take a close look at your audited business financials, as well as personal financial statements and liquidity. In this way, the surety can determine the level of the bonding risk involved. The lower it is, the better your bond premium can be.
Can I get bonded with bad credit?
It may be possible to get a money transmitter bond with bad credit, but the bonding decision will depend on how strong your overall financial profile is. Due to the larger bonding amounts, the risk is higher, and you will need to demonstrate financial stability. You will need to provide audited business financials and various other documents.
How do I get this surety bond?
The first step to getting your South Carolina money transmitter bond is to complete our online application form (it takes 5min). Once we have all your paperwork, we will be able to assess your bond price. If the quote is satisfactory for you, you can buy the bond straight away. You will receive a digital, as well as a hard copy from us.
The extensive guide on our How to Get Bonded page is an excellent resource in case you want to learn more about the way bonding works.
Lance Surety Bonds' experts are here to help with your any questions or your application. You can call us at (877) 514-5146 to get their assistance.
What happens if I get a claim against the bond?
In case you transgress from your obligations under the South Carolina Anti-Money Laundering Act or other applicable statutes, you can face a claim against your money transmitter bond. This is how harmed parties can demand fair compensation for any damages suffered. The sum they can seek is up to the full bond amount you have provided when getting licensed.
Initially, the surety that bonded you may pay the costs to make sure the claimant receives a fast payment. However, bonds are not a form of insurance for your business, so you need to cover all incurred costs fully. This is set in the bond indemnity agreement that is signed during the bonding process. Thus, claims pose a serious risk for your business, and it is best to stay away from them as much as possible.