California Money Transmitter Surety Bonds

California's Department of Business Oversight (CBO) protects consumers and overseas financial service providers and products by supervising state-licensed financial institutions such as banks, credit unions, and money transmitters.

The Department's Money Transmitter Division licenses and regulates money transmitters in California. Money transmitters receive money for transmission, plus sell and issue payment instruments such as checks, drafts, money orders, traveler's checks, or other instruments for the transmission or payment of money or monetary value.

A part of the licensing process for money transmitters in California is obtaining a surety bond.

Obligee and Surety Bond:

California's Department of Business Oversight is the obligee that requires money transmitters to obtain a security, such as a cash deposit or a surety bond.

Licensees that sell or issue payment instruments or stored value may have no less than $500,000 bond or 50% of the average daily outstanding payment instrument and stored value obligations in California, whichever is greater, not to exceed $2 million.

Licensees that receive money for transmission must have a security in an amount greater than the average daily outstanding obligations for money received in California, no less than $250,000 and not to exceed $7 million.

A security must cover claims for at least four years after the licensee ceases to provide services in the state. The Commissioner may allow the security to be reduced or eliminated, or submit a different form of security.

License and Application:

A money transmitter license authorizes domestic and international money transmission, issuing and selling payment instruments, and issuing and selling stored value.

License Fees:

• $5,000 license application
• $15 for a credit report on each control person
• $3500 fee for filing an application for approval to acquire control of a licensee
• $125 fee for each licensed branch office in the state
• $25 fee for each agent branch office in the state
• $75 hour fee when the Commissioner examines a licensee or any agent of a licensee, plus any expenses for travel outside of the state
• $75 hour when the Commissioner examines an applicant, plus expenses if traveling outside the state

Application Requirements:

• Complete the license application on the National Mortgage Licensing System (NMLS)
• Submission of Company Form (MU1) that serves as the application
• Financial Statements
• Authorized Agents (Delegates) Locations
• Other Trade Names
• Registered Agent
• Primary Contact Employees
• Approvals and Designation - if applicable, enter the FinCen Registration Confirmation Number and Filing Date
• Bank Account Information
• Disclosure Questions
• Control Person (MU2) Attestation
• Credit Report
• AML/BSA Policy (Anti-Money Laundering/Bank Secrecy Act)
• Business Plan
• Certificate of Authority/Good Standing Certificate
• Document Samples
• Flow of Funds Structure
• Management Chart
• Organizational Chart/Description
• Surety Bond

How Much Will This Bond Cost?

The premium that you pay for a California Money Transmitter Surety Bond is dependent on credit and the bond amount required. Our rates start at 1.5% of the bond amount with good credit. Personal and business financial statements are required for underwriting purposes. Contact our Surety Bond Specialists for a free quote that fits your specific situation.

Did You Know?

Money transmitter licenses are managed through the NMLS.

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