Iowa Money Servicers /Transmitter Surety Bonds

Iowa's Division of Banking works to provide citizens of Iowa safe, sound, and profitable financial and banking services. The Division licenses and regulates these industries, including money services and money transmitter businesses.

"Money services" are industries that transmit money or exchange currency. Money transmitters are a money services business which involves selling or issuing payment instrument, such as a check, draft, money order, traveler's check, stored-value, or other means. They also receive money or monetary value for transmission and receive money for obligors for the purpose of paying the obligor's bills, invoices, or accounts.

Money services businesses must be licensed. Operating without a license is considered to be an aggravated misdemeanor. One aspect of the licensing requirements includes obtaining a security such as a surety bond.

Obligee and Surety Bond:

The Division of Banking in Iowa is the obligee that requires a money services and money transmitter businesses to obtain a security. This can be a surety bond, a letter of credit, or other security of $50,000 plus $10,000 per location, with a maximum amount of $300,000. The Superintendent may increase the amount to a maximum $1 million depending on the financial condition of a licensee.

The Superintendent may investigate the applicant's financial condition and responsibility, financial and business experience, character, and general fitness. The Superintendent may conduct on-site investigation, and the applicant must pay the expenses.

A surety bond must cover claims for at least five years after the licensee ceases to provide money services in the state. The Superintendent may allow the amount to be reduced or eliminated during this period.

Money Services or Money Transmitter License Requirements:

Licensing Fees:

• $1000 Application fee - check goes to the Superintendent of Banking
• $500 License/Registration fee
• $500 Renewal fee plus $10 for each location in the state, not to exceed $5,000
• Uniform Authorized Agent Reporting Annual Processing Fee: Annual fee of $.25 for each active authorized agent/delegate location reported through the NMLS. There is no fee for first 100 active agents reported. The fee is capped at $25,000 per licensee in any one year.

Activities Allowed with a Money Service License:

• Electronic Money Transmitting
• Issue and Sell Traveler's Checks
• Issue and Sell Money Orders
• Bill Paying
• Issue and Sell Drafts
• Issue and Sell Prepaid Access/Stored Value
• Foreign Currency Dealing or Exchanging

Requirements in NMLS:

• Submission of Company Form (MU1) - serves as the application for the license/registration
• Financial Statements that show a company net worth of $100,000
• Authorized Agents (Delegates) Locations
• Other Trade Names
• Resident/Registered Agent
• Primary Contact Employees
• Disclosure Questions
• Control Person (MU2) Attestation
• Obtain a surety bond in an amount as follows: $50,000 plus $10,000 for each location. If the applicant does not have any locations in the state, then the bond is set at $300,000. The surety will upload the bond into the NMLS system.
• Business Plan
• Certificate of Authority/Good Standing Certificate
• Document Samples
• Formation Documents
• Management Chart
• Organizational Chart/Description
• Criminal History Record Check Request Form - for the directors and officers of a corporation
• SEC Filing

How Much Will This Bond Cost?

The premium that you pay for an Iowa Money Services or 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. Surety bond amounts exceeding $50,000 will require personal and business financial statements for underwriting purposes. Contact our Surety Bond Specialists for a free quote that fits your specific situation.

Did You Know?

Money services licensees in Iowa must have a net worth of $100,000, plus $10,000 for each authorized delegate.

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