Overview of North Carolina Money Transmitter Bond Requirements
To get licensed as a money transmitter in North Carolina, you will be required to post a money transmitter bond. The bond must be in an amount of $150,000 for first-time applicants, for money transmission volumes of no more than $1,000,000.
When you renew your license and bond, you may be required to get bonded for a higher amount, depending on the volume of money you have transmitted. Bond amounts are as follows:
- $150,000 bond - For transmission of up to $1,000,000
- $175,000 bond - $1,000,001 to $5,000,000
- $200,000 bond - $5,000,001 to $10,000,000
- $225,000 bond - $10,000,001 to $50,000,000
- $250,000 bond - More than $50,000,000
This license is regulated by the North Carolina Commissioner of Banks (NCCOB) but applicants must conduct the license application process through the Nationwide Multistate Licensing System & Registry (NMLS).
Why do I need to get bonded?
The purpose of this bond is to serve as a financial guarantee that you will comply with the provisions of the state Money Transmitters Act, and all the obligations which you accept in becoming licensed.
If you violate these provisions and cause losses to any one person as a result, they may file a claim against your bond to secure compensation.
The surety that backs your bond must then compensate claimants for an adequate amount, depending on their losses. Such compensation may potentially be as high as the full amount of your bond.
If you've never gotten bonded before, see our detailed ‘What is a surety bond' guide to learn more about how bonds work!
See the sections below for more information about the cost of your bond, how bond claims work, and how you can apply to get bonded!
If you have any questions about this bond or how bonds work, call our bond experts at 866.450.3412 anytime!
What's The Cost of Getting a North Carolina Money Transmitter Bond?
The cost of your bond, also known as the bond premium, is equal to a fraction of the total amount of your bond. The surety that issues your bond determines your premium, based on a variety of financial information about you as an applicant.
Factors that determine your bond premium
An applicant's personal credit score is the first and most important factor that sureties consider when offering a bond rate to an applicant. Credit score is considered an indicator of applicants' financial strength and reliability, so the higher the score - the lower the premium is likely to be.
For example, applicants with excellent scores, above 700 FICO, are usually bonded in the range of .75% and 1.5% of the full amount of their bond.
Those with good to moderate scores can expect to be offered a rate of as much as 5%, and those with low or so-called bad scores are bonded at rates upward of 5% and as much as 15%.
But your credit score is not the only factor that determines your premium. Your surety will likely also request to review some of the following information:
- Personal and business financial statements
- Fixed and liquid assets
- Work experience and record
Have a look at the table below for an estimate of your bond cost, based on your credit score!
| North Carolina Money Transmitter Bond Cost Based on Credit Score | |||||
|---|---|---|---|---|---|
|
License type |
Bond Amount |
Credit Score | |||
| Above 700 | 650-699 | 600-649 | Below 599 | ||
| North Carolina money transmitter | $150,000 | $1,125-$2,250 | $1,500-$3,750 | $3,750-$7,500 | $7,500-$11,250 |
| $175,000 | $1,312-$2,625 | $1,750-$4,375 | $4,375-$8,750 | $8,750-$13,125 | |
| $200,000 | $1,500-$3,000 | $2,000-$5,000 | $5,000-$10,000 | $10,000-$15,000 | |
| $225,000 | $1,687-$3,375 | $2,250-$5,625 | $5,625-$11,250 | $11,250-$16,875 | |
| $250,000 | $1,875-$3,750 | $2,500-$6,250 | $6,250-$12,500 | $12,500-$18,750 | |
How Do Bond Claims Occur?
Chapter 53, Article 16B of the NC General Statutes states that the bond required of applicants for a transmitter's license is intended to guarantee their obligations as specified in the Chapter.
These obligations concern the “receipt, handling, transmission, and payment of money or monetary value in connection with the sale and issuance of payment instruments, stored value, or transmission of money."
If a licensed transmitter violates their obligations with regards to these activities, and causes losses to any person who makes use of their services, the latter may file a claim against the bond.
Upon being notified of the claim, a surety must investigate the matter and determine whether and what amount of compensation to extend to claimants. When the surety covers the claim, the licensed transmitter must repay it in full - a standard condition in every bond agreement.
The safest way to avoid giving rise to a claim is by strictly complying with all the requirements of your license.
How to Apply For Your Bond
If you're ready to get bonded, click on the banner below, and complete the brief application form. We'll contact you shortly with specific information about the cost of your bond, and how to finalize the bonding process.
If you need more information about this bond or require assistance with your application, call us at 866.450.3412!
Further Reading
