Overview of Illinois Money Transmitter Bond Requirements

Under Chapter 205, Act 657 of the Illinois Compiled Statutes (ILCS) anyone who wants to act as a transmitter of money in the state must obtain a license and a money transmitter bond.

The amount of your bond must be “the greater of $100,000 or an amount equal to the daily average of outstanding payment instruments for the preceding 12 months or operational history, whichever is shorter, up to a maximum amount of $2,000,000.”

Who needs this bond?

Applicants for a money transmitter license from the state Department of Financial & Professional Regulation will need to post this bond to the NMLS when applying for a license. The bond is a central requirement and a license cannot be issued without it.

Why is this bond required?

This bond is a guarantee that the bonded money transmitter will comply with the provisions and requirements of the Transmitters of Money Act.

It also guarantees that if they violate the conditions of the bond and thereby cause damages to any person, the latter may file a claim to request compensation. Such compensation is extended by the surety that backs the bond and can be as high as the full penal sum of the bond.

If you are new to bonds, take a look at our ‘What is a surety bond' guide for a full explanation of how bonds work, and why they are required!

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See the sections below for more about the cost of this bond, how bond claims occur, and how you can get bonded!

If you want to know more about this or other bonds, call us at (866)-450-3412 anytime!

How Much Does it Cost to Get an Illinois Money Transmitter Bond?

The cost of your bond is a percentage of the total amount of your bond. When you apply, the surety which backs your bond will offer you a percentage (or rate) at which you can get bonded.

The amount of your bond will be based on the “daily average of outstanding payment instruments for the preceding 12 months or operational history, whichever is shorter”, and must be at least $100,000, and no more than $2,000,000.

If your bond amount is above $1,000,000, you can post a $1,000,000 bond and increase your net worth on a dollar-by-dollar basis, up to a maximum amount of $2,000,000.

When you apply for your bond, the surety will investigate several financial factors it deems important, in order to determine your rate.

What determines my bond premium?

Your personal credit score is the primary determining factor of your bond premium. The better your credit score, the lower your bond rate will be.

Apart from your credit score, sureties will frequently also have a look at:

  • Your personal and business financial statements
  • Your assets and liquidity
  • Your professional experience

Applicants who have a credit score of 700 FICO or above will typically be offered a bond rate in the range of 1%-4% of the total amount of their bond.

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What if I have a low credit score?

You can still get bonded even if you have a low credit score. Rates for applicants with lower scores are higher. This is due to the higher risk that sureties assume when bonding such applicants.

Yet, surety bond rates are quite flexible and can change significantly over time if an applicant consistently improves their credit score and other credit-related items.

Learn more about getting bonded with a low score at our Bad Credit Program page!

How Do Bond Claims Work?

Bond agreements' main purpose is to provide protection to ‘bond obligees' - the parties protected by the agreement. Bonds serve as a guarantee that the bonded party, in this case, the money transmitter, will comply with state law.

If an Illinois money transmitter violates the provisions of the Transmitters of Money Act, and thereby causes losses or damages to any person, that person may file a claim against their bond. When a claim is made against a bond, the surety that backs the bond will investigate the situation to assess the legitimacy and scope of the claim.

If the claim is legitimate, the surety will extend compensation to claimants, unless the money transmitter takes the necessary steps to resolve the situation. Compensation extended by the surety can be as high as the full amount of the bond.

Once a surety has covered a claim, the bonded money transmitter will need to repay it in full. This is because, under any bond agreement, the bonded party is ultimately liable for any claims against the bond.

Bond claims can be difficult and expensive to resolve which is why it is better to comply with the conditions of the bond than give rise to a claim.

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To get started with your application, complete our bond form. We'll get in touch with you shortly to provide you with a free and exact quote on your bond.

Not ready to apply? Then simply get a free no-obligations quote, so you can see our low prices!

If you have any further questions about the bonding requirements for money transmitters in Illinois, call us at (866)-450-3412!

Further Reading


About the author:
Todd Bryant
Todd Bryant is a graduate of Germantown Academy and the University of Pittsburgh College of Business Administration Honors College. He has been President of Bryant Surety Bonds, Inc., an A+ rated Business with the Better Business Bureau, since 2007. Licensed as a producer with the Department of Insurance, he has been published in the National Association of Surety Bond Producers newsletter and on numerous authoritative publications such as The Washington Post, Entrepreneur.com, Azcentral.com and many more.