Overview of Nevada Money Transmitter Bond Requirements
To become a money transmitter in Nevada, you must apply for a license at the FID. As part of the licensing process, you will need to post a money transmitter bond in a minimum amount of $10,000, and a $5,000 bond every additional location where you will conduct business.
Why do I require a bond?
When you obtain this bond it serves as a guarantee that you will comply with the provisions of the NRS that regulate the conduct of money transmitters in Nevada. The bond also serves as financial security for the state and its public in instances in which a money transmitter commits a violation of their legal obligations.
In the latter case, anyone who has done business with a money transmitter, and who suffers losses due to such a violation, may file a claim against this bond. The bond company that has issued the bond must then investigate the claim and compensate claimants adequately, even for as much as the full amount of the bond, if necessary.
You can learn more about how bonds work and why businesses need them from our detailed ‘What is a surety bond' guide!
See the sections below for more about the cost of this bond, how bond claims occur, and how you can get bonded.
If you need further information about the bonding conditions for Nevada money transmitters, call us at 866.450.3412 anytime!
How Much Does It Cost to Get a Nevada Money Transmitter Bond?
To get bonded, you will need to pay a bond premium to the surety. This premium is equal to a certain percentage of the bond's total amount.
How much exactly you will need to pay depends on several financial factors.
Factors that determine your bond premium
Your Credit score is the primary factor that sureties consider when setting the rate at which they can issue a bond for you. According to surety companies,credit score is the best indicator of the likelihood of a claim against a bond occurring. So, the higher your score is, the cheaper you can get bonded.
Applicants with very high scores can typically get bonded for as little as .75% and 1.5%.
Those with good and average scores are usually offered a rate of up to 5%, and those with so-called bad scores are bonded at rates between 5% and 15%.
To more accurately determine your bond rate, your surety may also request to review:
- Personal and business financial statements
- Fixed and liquid assets
- Work experience and record
See the table below for an estimate of the cost of your bond, based only on credit score!
|Nevada Money Transmitter Bond Cost Based on Credit Score|
|Above 700||650-699||600-649||Below 599|
|Nevada money transmitter||$10,000||$100-$150||$100-$300||$250-$500||$500-$750|
How Do Bond Claims Occur?
Under Chapter 671 of the NRS, applicants for a Nevada money transmitter license require a surety bond in a minimum amount of $10,000.
The chapter states that the bond is intended to cover any actions or judgements against licensees by “any creditor or claimant arising out of business regulated by this chapter". In other words, any violation of the chapter's provisions by a licensed money transmitter may lead to a claim against their bond.
If an action is commenced against a money transmitter and a claim is filed against their bond, the surety must investigate the claim. It must determine whether and what amount of compensation to extend.
Once the surety compensates a claimant, the claim is resolved for them. But the bonded party still remains liable for whatever action caused the claim and must reimburse the surety in full for any compensation it extends.
To avoid having to deal with claims, money transmitters must make sure to comply with their legal obligations at all times. Then the only expense they have, associated with the bond, is the premium they pay to get bonded.
Apply For Your Money Transmitter Bond Here!
Ready to apply for your bond? Click on the banner below and complete the bond form. We will then contact you with a free and exact quote on your bond, as well as further details about the bonding procedure.
If you have any questions about this bond, call us at 866.450.3412!