California Money Transmitter Bond

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California Money Transmitter Bond

Any business that issues and sells payment instruments, travelers checks, and non-bank issuers of stored value is needed to have a Money Transmitter Bond in the state of California. In addition to that, any business that engages in money transmission operations is required to have this bond.

The Money Transmitter Division of the California Department of Business Oversight is the agency in charge of regulating the industry and issuing licenses for money transmitters. The Nationwide Mortgage Licensing System (NMLS) is the organization in charge of processing new license applications.

In accordance with the requirements established in the Money Transmission Act, money transmitters are required to get the California Money Transmitter Bond, which is a requirement that is mandated by the Department of Business Oversight. The amount of this bond is different for each and every applicant.

The duration of the bond is identical to that of the licensing term, during which the license is valid. If the surety wants out of the bond agreement, it has to provide a thirty-day notice of cancellation before doing so. During this time, the surety is still responsible for paying any claims that are brought against the bond.

Bond Amount

In order to legally do business in the state of California, money transmitters are required to get a surety bond from the Money Transmitter Division of the California Department of Business Oversight. The value of the bond might range anywhere from the low end of $250,000 to the high end of $7,000,000. As long as the amount falls within the previously mentioned range, it is acceptable as long as it is more than the daily outstanding responsibilities that are typical for money that is received in the state for the purpose of transfer.

Because the California Money Transmitter Bond needs underwriting, it is essential that you have your financial information close at hand in order to speed up the process of becoming bonded.


In order to complete the application procedure and get a license to operate as a money transmitter in the state of California, companies are required to buy a Money Transmitter. If the company does not operate in accordance with the conditions of its license, the bond guarantees that the general public will be compensated for any resulting financial damage.

In a nutshell, the California Money Transmitter Bond may be thought of as a kind of insurance that protects the general public in the event that the money transmitter violates licensing regulations.

California Money Transmitter Bond

Surety Bond-California Money Transmitter Bond new

The California Money Transmitter Bond is a kind of surety bond that helps guarantee that the principal (the money transmitter) will adhere to all of the legal criteria mentioned in the bond form. Division 1.2 of the California Financial Code, specifically section 2000-2176, must be followed by all money transmitters operating in the state of California.

The following are examples of activities that are against the law, however the list is not exhaustive:

  • Participating in dishonesty, willful deception, or very careless behavior.
  • Participating in a commercial activity that is hazardous or risky.
  • Not cooperating with the examination in any way.
  • Failure to remove an agent once the commissioner finds the agent in breach of the law and despite the commissioner’s recommendation to do so.
  • Putting the payment of its debts on hold for the time being.

Claim forms may be submitted to the bond in the event that the principal breaches the conditions of the bond. The principal is responsible for paying back the surety the comparable amount of money in a timely way, but the surety will cover any damages up to the bond’s punitive sum if the principal is found to be at fault for the incident.

Frequently Asked Questions

What Are the Steps Necessary To Start a Career as a Money Transmitter in California?

Applicants for a license to act as a money transmitter are required to file a surety bond with the Money Transmitter Division in addition to submitting an application for a license. Before beginning operations, money transmitters are required to register with the Financial Crimes Enforcement Network (FinCEN) as a money services company (MSB), in addition to complying with the licensing requirements of their respective states. Applicants are required to electronically submit registration using BSA E-Filing in order for their registration to be processed properly.

Is It Necessary To Have a Credit Check In Order To Get the California Money Transmitter Bond?

The proprietors of the money transmission firm will have their credit checked by surety companies so that they may decide whether or not they are eligible for the California Money Transmitter Bond and what the cost will be. Owners who have a history of successful employment and a high credit score should anticipate receiving the best prices. Certain surety firms may refuse to insure a business whose owners have low credit or charge them additional premiums.
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