Washington DC's Department of Insurance, Securities and Banking (DISB) administers and enforces the state's laws and regulations for financial institutions that do business in the District of Columbia. This includes regulating the state's money transmitters.
A money transmitter is in the business of transmitting money either within the U.S. or abroad, by any means including payment instruments, wires, facsimiles, or electronic transfers.
A payment instrument can be a written or electronic check, draft, money order, travelers check or other written instrument or order for the transmission of payment or money. This does not include credit card vouchers, letters of credit, or other instrument that is redeemable by the issuer for goods or services.
Money transmitters in the District of Columbia must be licensed and a part of the licensing process includes obtaining a surety bond or other type of security. A surety bond guarantees the faithful performance of a money transmitter to receive, handle, transmit, or pay money.
The District of Columbia's Department of Insurance, Securities and Banking is the obligee requiring the security. A surety bond or irrevocable letter of credit must be in the amount of $50,000 plus $10,000 for each additional location, with a maximum amount of $250,000.
If a licensee would like to submit a different type of security, they may request a substitute in writing, and explain why they are asking for a substitution and why another form of security should be acceptable. The Department will review the request to determine if the request is satisfactory to secure the faithful performance of the applicant, and if reasonable cause exists for a substitute. Substitutes may include cash, interest-bearing stocks and bonds, notes, debentures.
The security device must remain in place for five years after money transmissions have ceased. The Commissioner may allow the security to be reduced or eliminated prior to that time, or substitute a letter of credit or other security at the time the licensee ceases operations.
Money transmitters in the District of Columbia will need to apply for a license through the National Mortgage Licensing System (NMLS) website. The license fee and renewal fee is $500 plus $25 for each additional location, with a maximum fee of $2500.
A net worth of at least $100,000 is required, plus an additional $50,000 for each extra location, up to a maximum requirement of $500,000.
The Department may conduct on-site investigations and/or examinations of applicants and authorized delegates. The fee for investigations is $60 an hour per person. The examination fee is $250 per examination, plus $60 per hour. For both the investigation and examination, the licensee must also pay for costs that include airfare, lodging, food, parking, car usage, and mileage.
Licensees must complete an annual renewal report. Failure to submit the report will result in a fine of $50 a day from the due date until the date the report is submitted.
The premium that you pay for a District of Columbia Money Transmitter Surety Bond is dependent on credit and the bond amount required. Bond amounts over $50,000 require business and personal financial statements for underwriting review.
MSBs (Money Services Businesses) must register with the U.S. Treasury Department within 180 of the start of operations.
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