Colorado Money Transmitter Bond Requirements
When you apply to get a money transmitter license in Colorado, you will need to submit a money transmitter bond to the Department as part of your application.
The standard amount of this bond is $1,000,000 but this amount can be decreased by the Banking Board to a minimum of $250,000 or increased to a maximum of $2,000,000. This will depend on the specifics of each individual license application.
To get licensed, you must complete a number of forms and submit these to the Department, along with your bond.
Why Do I Need a Bond?
The bond’s purpose is to guarantee your compliance with the provisions of Article 11 of Title 110 - Money Transmitters of the CRS. If you violate these provisions, a claim can be filed against your bond to secure compensation to anyone who is harmed by your actions.
Such compensation is extended by your surety if the claim against your bond is legitimate. Depending on the specific case, the surety may extend compensation for as much as the full penal sum of your bond.
If you’ve never gotten bonded before, see our ‘What is a surety bond’ guide for a full explanation about the purpose of surety bonds!
In the sections below you can find out more about how much your bond might cost, why bond claims occur, and how to apply for your bond.
If you have any further questions or need advice about getting bonded, contact us at 866.450.3412!
How Much Does it Cost to Get a Colorado Money Transmitter Bond?
The surety bond cost, or the bond premium, is the amount of money you need to pay to the surety to get bonded. It is equal to a certain percentage of the full amount of your bond.
The premium, or bond cost, is set by your surety based on various financial factors.
Factors That Determine Your Bond Premium
Your personal credit score is the most important factor that sureties consider when determining your bond rate. The higher your score is, the cheaper it will be for you to get bonded. This is because sureties consider a high credit score to be an indicator of a low likelihood of a bond claim.
Applicants with very high scores can therefore expect to get bonded at a rate between 1% and 3% of their full bond amount. Applicants with lower credit scores can still get bonded but at a slightly higher bond rate - between 3% and 5%.
In addition to your score, your surety will also want to review one or more of the following:
- Personal and business financial statements
- Fixed and liquid assets
- Work experience and record
For an estimate of the cost of your bond, based on your credit score, see the table below!
| Colorado Money Transmitter Bond Cost Based on Credit Score | |||||
| License type | Bond Amount | Credit Score | |||
| Above 700 | 650-699 | 600-649 | Below 599 | ||
| Colorado money transmitter | $1,000,000 | $10,000-$30,000 | $10,000-$30,000 | $10,000-$30,000 | $30,000-$50,000 |
Why Do Bond Claims Occur?
A bond claim occurs when a bonded party violates the conditions of their bond agreement. For money transmitters in Colorado, the bond is required as a guarantee for their compliance with the CRS and its provisions.
If a transmitter violates these and causes losses to any individual as a result, the latter may file a claim against the bond to seek compensation. The amount of compensation depends on the number of losses.
The surety which backs the bond must investigate the claim and the amount of compensation requested and determine whether it is legitimate. If it is, then the surety must compensate claimants in full, up to the full amount of the bond. While this settles the claim for the claimant, the surety must then also be reimbursed by the money transmitter.
All bond agreements include the condition that the surety is not liable for claims against the bond, and must be repaid in full if it covers a claim. Due to the potentially large amount of compensation that may be owed by a transmitter, it is always safer to strictly comply with the bond agreement.
How to Apply For Your Money Transmitter Bond
If you want to apply for a bond, simply click on the banner below and complete the application form. One of our surety experts will then get in touch with you to provide you with a quote and full information on completing the bonding process
If you have any other questions about getting bonded, call us at 866.450.3412 anytime!
Further Reading
