Debt Management and Money Transmitter programs are required to be licensed in Alabama. A part of the licensing process includes obtaining a security, such as a surety bond.
The State of Alabama Securities Commission administers the debt management and money transmitter programs and has oversight of the licensing, as well as handling of consumer complaints and auditing.
Pursuant to the Code of Alabama 1975, § 8-7-3, requires any person, that provides services for a fee or other consideration and is in the business of selling, issuing or otherwise dispensing of checks or receives money for the purpose of paying the customer’s bills, invoices, or account to first obtain a license.
The licensing process includes:
1. Payment of the license fee and completion of the Application for License Pursuant to The Sale of Checks Act (Form SA).
2. Provide a list of all offices, agencies, or locations in Alabama in which the applicant intends to do business.
3. Maintain a bank account that has a minimum amount equal to all outstanding liabilities.
4. Submit a complete list of Alabama activities (a list of all clients and time periods of operation)
5. Submit audited financial statements to the commission that shows a net worth greater than $5,000 (not more than 12 months old)
6. A $10,000 surety bond for the principal office and $5,000 for each additional location up to a maximum of $50,000. In lieu of a bond, a deposit may be made to the state in the amount equal or greater to the amount of the required bond.
7. Annual license and bond renews April 1st of each year.
8. Submit a copy of the most recent IRS form 990 (if operated as a not-for-profit) or a recent tax return if for profit.
9. Include a complete list of all owners, officers, employees, agents, and others that are paid for services.
10. Include sample copies of contracts for service providers and participant enrollment, other agreements and disclosures, copies of complaint files, advertising materials. Contracts should include language that prohibits the comingling of funds, escrow provisions, conflict of interest policies, payment of provisions for debtors, explanation of fees, etc.
Premiums for the Alabama Debt Management Program Bond start as low as $100 depending on credit and the bond amount required.
Contact SuretyGroup.com at:
Hours: 8:00-5:00 CST, Monday through Friday
SuretyGroup.com is your online bond provider.