What Is a Utah Money Transmitter Bond?
Similarly to most states, Utah requires money transmitters to get a license prior to launching legal operations. If you want to obtain the right to offer your services in Utah, you will have to post a money transmitter bond as a part of the licensing.
Why is bonding necessary? State authorities require it in order to protect the citizens from potential illegal actions on the side of money transmitters. The bond is a safety mechanism.
In practical terms, the bond represents a contract between three entities. Your money transmitting business is the principal. The Utah Department of Financial Institutions is the obligee requiring the bond. The third party is the surety which gets you bonded.
Questions about Money Transmitter Bonds in Utah
In which cases do I need this surety bond?
The Utah Department of Financial Institutions is the licensing body that oversees the activities of money transmitters in the state. It is the one issuing Utah money transmitter licenses, although the process is conducted via the Nationwide Multistate Licensing System (NMLS). In order to obtain your license, you have to provide a surety bond with a minimum coverage of $50,000. The purpose of the bond is to ensure that you will follow your obligations under the Utah Financial Institutions Act.
What’s the bond price?
The minimum bond amount that you have to post as a Utah money transmitter is $50,000. The bond premium that you have to cover is a small fraction of it. It is about 1%-5% for applicants with solid finances.
How is your surety bond cost determined? The most important factor is your personal credit score. Other criteria include your business financials and assets and liquidity you may showcase.
If state authorities require a larger bond amount, a review of your audited business finances may be needed. The more stable your overall profile is, the smaller your bond price would be.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Utah money transmitter bond||$50,000||$375-$750||$500-$1,250||$1,250-$2,500||$2,500-$5,000|
Can I get a Utah money transmitter bond with bad credit?
For applicants struggling with a low credit score, tax liens, bankruptcies, or civil judgements, Lance Surety Bonds runs its Bad Credit Surety Bonds program. It may be the right option for you if your finances are problematic. However, for money transmitter bonds in larger amounts, strong finances are a must, so approval will depend on the particular circumstances.
How do I obtain my bond?
Keen on learning more details about the bonding process? Make sure to consult our How to Get Bonded page.
Lance Surety Bonds’ specialists are here to help. You can reach us at (877) 514-5146 to get assistance with your queries or your bond application.
How are bond claims handled for money transmitters?
The goal of your Utah money transmitter bond is to safeguard the interests of your customers against potentially harmful illegal actions that you may commit. If you transgress from your legal obligations, a party who has suffered damages as a result can bring a claim against your bond.
For proven claims, the maximum compensation is the penal sum of your bond. Initially, the surety may take on the costs to ensure that the reimbursement is paid quickly. However, you are fully liable and should repay it soon after. This makes bond claims a serious financial threat for your business that’s best to be avoided.