Massachusetts Check Seller License Surety Bonds

The Massachusetts Division of Banks supervises state-chartered banks and credit unions, along with non-depository institutions doing business in Massachusetts. The Division implements and enforces consumer protection laws and educates consumers on how to make informed financial decisions. One of the industries that is licensed and regulated by the Division is check cashers who sell, issue, or register checks or money orders. A part of licensing for check cashers is to obtain a $100,000 surety bond.

Surety Bond Requirements

The Massachusetts Division of Banks is the obligee that requires check cashers to obtain a $100,000 surety bond. The bond must be submitted electronically through the NMLS. The surety bond is required to protect consumers in the event a check casher (the licensee) fails to comply with the state laws and regulations. If found in violation, a claim may be placed against the bond, and the licensee (the principal listed on the bond) is responsible for repayment of the claimed amount. If the surety pays the claim, the principal is required to reimburse the surety.

License Requirements

Licensees need to demonstrate that there is a public need for a check casher in the area where they plan to do business. Applicants need to review all laws and regulations for check cashers before submitting an application.

Licensing fees for Massachusetts Check Cashers are:

• Fees: License/Registration $1000
• Application fee $300 (investigation fee)
• Credit report for control persons $15
• FBI Criminal Background Check for MU2 Individual $36.25

The following are required to be uploaded in NMLS:

• Submission of Company Form (MU1): this is the application for the license/registration
• Financial Statements of the most recent fiscal year end, and the prior two fiscal years. Should include a balance sheet, income statement, and statement of cash flows and all relevant notes. The financial statement must show a positive company net worth.
• Other Trade Name: List all DBA's. The licensee first needs to have DBA's approved and licensed to conduct business in Massachusetts before applying for "Other Trade Name" licenses through the NMLS.
• Resident/Registered Agent
• Primary Contact Employees
• Non-Primary Contact Employees
• Bank Account information
• Approvals and Designations
• Disclosure Questions, provide explanations for any "yes" answers
• Qualifying individual
• Control Person (MU2) Attestation
• Credit Report
• MU2 Individual FBI Criminal Background Check Requirements
• Surety Bond: Submit and electronic surety bond via the NMLS for $100,000
• Anti-Money Laundering/Compliance Policy
• Independent Review
• Business Plan
• Certificate of Authority/Good Standing Certificate
• Formation Documents
• Management Chart
• Organizational Chart/Description

Required Documents to be submitted outside of NMLS:

• W-9 Form
• Agents -submit a list of proposed agents
• Parent Financial Statements - submit current and prior two year's financial statements
• Lines of Credit
• Business in other jurisdictions (this form is not required for applicants who are licensed/registered in jurisdictions that are on NMLS)

How Much Does This Bond Cost?

The premium that you pay for a Massachusetts 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. Our Surety Bond Specialists can supply you with a free quote that fits your specific situation.

Did You Know?

Anyone in Massachusetts who engages in cashing checks, drafts, or money orders for more than $1.00 per item must be licensed by the Division of Banks.

Related Links