The Idaho Department of Finance (the Department) regulates money transmitters, collection agents, banks and credit unions, consumer lending agencies, mortgage brokers and loan originators, securities and escrow agencies. The Department issues licenses for money transmitters through the National Multistate Licensing System (NMLS), ensures conformance of state laws, can enforce penalties and fines against licensees failing to meet state requirements including revocation of licenses, and provides a security device element in the event a licensee fails to perform the duties to meet the state requirements.
The obligee is the entity that requires the bond. The Idaho Department of Finance requires a application for licensing and a minimum $10,000 security device. The security device can be a surety bond, an irrevocable letter of credit, or a similar security device. A surety bond ensures compliance of regulations and state laws. Failure to comply or perform as required by state laws and regulations may result in a claim filed against the bond by the Department. In the instance of a surety bond, if the Department files a claim against the surety bond, the owner (named as the principal on the bond form) will be responsible for repayment of the claimed amount if the claim is paid out by the surety. If another form of security device was used, the device will be forfeited when a valid claim has been made.
The surety bond must be in place from the time the license is issued, during all business operations and for the following two years after operations cease. The premium will renew on the bond on an annual basis. If the money transmission business changes ownership, a replacement bond is required to fulfill the security device conditions. Failure to maintain or replace the bond or security device will result in penalties by the Department.
When a surety bond is chosen as the security device, the bond amount is based on the number of locations. A minimum $10,000 surety bond is required and will increase by $5,000 for each additional business location up to a maximum total of $500,000.
The original surety bond will need to be submitted to the Idaho Department of Finance directly when applying for a license or a rider to the bond if adding additional locations after the initial license is issued. The bond form should not be sent to the NMLS.
The premium that you pay for an Idaho Money Transmitter Surety Bond is dependent on credit and the number of business locations. Bond amounts exceeding $50,000 will require business and personal financial statements.
Money transmitters are defined as money and wire remitters, money order issuers and sellers, traveler check issuers and sellers, payment processors, virtual currency exchangers, delayed delivery of currency or stored value providers, open and semi-closed loop prepaid and stored value cards.
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