Louisiana Sale of Checks and Money Transmitter Bonds
The Louisiana Office of Financial Institutions regulates the Sale of Checks and Money Transmitter industry in the state. Those who engage in the business of money transmission or selling of checks as a service or for a fee or other consideration must apply for a license through the NMLS. A requirement of the application process includes obtaining a security, such as a surety bond.
Obligee and Surety Bond
The Louisiana Office of Financial Institutions is the obligee that requires a security for licensing, which includes a minimum $25,000 surety bond. The Commissioner determines the bond amount based on information provided by the applicant, which may not be over $500,000.
The bond protects the Office of Financial Institutions and creditors of the licensee or agent for any liability incurred by the licensee or agent. Claims may be brought against the bond, or the Attorney General may bring suit on behalf of claimants.
In lieu of a surety bond, applicants may deposit cash, certificates of deposit, interest-bearing stocks and bonds, notes, debentures, or other guaranteed securities.
Applicants must show the following pre-requisites:
- Have a net worth of $100,000 (computed according to generally accepted accounting principles)
- Obtain a surety bond or other security of at least $25,000, up to a maximum of $500,000, as determined by the Commissioner.
- New applicants must submit a business plan which includes, at a minimum, anticipated volume of checks to be sold and/or money to be transmitted for the calendar year, as well as the anticipated number of transmission or selling locations.
- Exhibit financial responsibility, business experience, character, and general fitness in order to warrant the commissioner to believe that the applicant's business will be conducted honestly, carefully, and efficiently.
- Each applicant must register with the Louisiana Secretary of State. The registered agent entered on the company application must be the same person recorded with the Secretary of State.
Licensing fees include:
- Application fee: $800
- FBI Criminal Background Check Authorization: $36.26
- Investigation fee: $25 for each location (includes headquarters and agent locations) up to a maximum of $5,200.
- Credit reports are NOT required. Applicants may leave the box blank that is entitled "Request a new credit report." Applicants who check that box will be charge a $15 credit report fee.
- Renewal fees: $600, plus an additional $25 for each licensed transmission or selling location in the state, not to exceed $6,000 regardless of the number of locations.
Information needed to apply:
- Other trade name
- MU2 Individual FBI Criminal Background Check
- Bank Account
- Certificate of Good Standing
- Corporate Charter of Articles of Incorporation (if a corporation)
- Articles of Organization and Operating Agreement (if an LLC)
- Partnership Agreement (if a partnership)
- Louisiana Certificate of Authority
- Organizational Chart
- Disclosure Questions
- Out-of-State-Licensing Information
- Financial Statements
- Business Plan
- Obtain a surety bond in the minimum amount of $25,000 or provide another form of security
- Authorized Agents and/or Locations
- Instrument Samples
- Application Affidavit
- Certificate of Resolution
- Agent for Service of Process and Acknowledgement
How Much Does This Bond Cost?
The premium that you pay for a Louisiana Sale of Checks and Money Transmitters Surety Bond is dependent on credit and the bond amount required. Bond amounts over $50,000 will require business and personal financial statements.
Did You Know?
In Louisiana, no license is required of any agent or subagent of a licensee.
Related LinksNMLS: Louisiana Sale of Checks and Money Transmitters - Application ChecklistThe Sale of Checks and Money Transmission Act
More Surety Bond Questions?
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