Kentucky Money Transmitter Surety Bond

Kentucky's Department of Financial Institutions (KFI) supervises the financial services industry, and charters, licenses and registers various financial institutions, securities firms and professionals. The Department also works to protect consumers from financial fraud by assisting with investigation of complaints. One of the businesses that the Department oversees is money transmitters.

A money transmitter engages in the business of receiving money or monetary value to transmit to another location by any and all means, including but not limited to wire, facsimile, electronic transfer, or issuing stored value. One of the licensing requirements of a Kentucky money transmitter is to obtain a surety bond.

Obligee and Surety Bonds:

Kentucky's Department of Financial Institutions is the obligee that requires a surety bond or other security for money transmitters. All license applications must include a surety bond of at least $500,000. The Commissioner may increase the amount up to $5 million, depending on the applicant's financial condition.

The money transmission business surety bond is required to ensure that the licensee conducts faithful performance of their obligations with respect to the receipt, handling, transmission, and payment of money.

The surety bond is continuous and remains in effect until cancelled. A licensee must give the Commissioner no less than 30 days' written notice of intent to cancel.

The suretybond must remain in place for at least five years after the date of any violation by the licensee or its agent, or the date the licensee ceases providing money transmission services in the state, whichever date occurs last. The commissioner may permit the licensee to reduce or eliminate the surety bond prior to the expiration of the five years.

Money Transmitter Licensing:

The Department of Financial Institutions uses the NMLS to manage licenses. This includes initial applications, renewals, and amendments.

The initial license cost is $1,100, which includes the NMLS processing fee. Annual renewals cost $500 with a $100 processing fee.

Pre-requisites for a license application:

• Net worth of at least $500,000
• Surety Bond or other security of at least $500,000. The Commissioner may increase the bond up to $5 million.
• Registration as a Money Services Business with the US Treasury Department

Documents to upload in the NMLS for licensing are:

• Supporting documents for any 'yes' answers to disclosure questions
• Financial statements
• Business plan
• Certificate of Authority/Good Standing Certificate
• Formation Documents
• Document Samples
• Management Chart
• Organizational Chart
• Background Check
• Credit Check
• Agent Information

Documents to send to the Department of Financial Institutions:

• Company New Application Checklist
• Surety bond or other security
• Anti-Money Laundering Program
• State License Confirmation Form

How Much Does This Bond Cost?

The premium that you pay for a Kentucky 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. Business and personal financial statements will be required for underwriting purposes. Contact our Surety Bond Specialists for a free quote that fits your specific situation.

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