Overview of Ohio Money Transmitter Bond Requirements
When you apply for a money transmitter license in Ohio, you will be asked to obtain a money transmitter bond in the amount of $300,000.
Licenses for money transmitters in the state are regulated by the DFI. To get licensed you can apply either through the Division directly or electronically through the Nationwide Multistate Licensing System & Registry (NMLS).
Why do I need a bond?
This bond guarantees that once you are licensed as an Ohio money transmitter, you will comply with all your legal obligations as they are specified in the ORC, and in any rules issued under it.
If you violate your obligations and the provisions of the Code, this may result in a claim against your bond being filed. Bond claims are a way for anyone who suffers a loss due to such a violation to take action and secure compensation.
When a claim is filed, the surety that backs the bond investigates the claim and determines the amount of compensation to extend. Depending on the losses suffered by claimants, compensation may even be as high as the full amount of the bond.
If this is your first time getting a bond, have a look at our detailed ‘What is a surety bond' guide to learn more about how bonds work, and why you need one!
See the following sections to find out how much your bond might cost, how bond claims work, and how to apply to get bonded.
If you have any questions about this bond, call us at 866.450.3412 anytime!
How Much Does It Cost to Get an Ohio Money Transmitter Bond?
When you apply for a bond, you will be asked to pay a bond premium. Your premium is equal to a fraction of the amount of your bond. It is determined by your surety, based on the following factors.
Factors that determine your bond premium
Your credit score is the factor that has the greatest influence on the cost of your bond. Sureties consider credit score a reliable indicator of the financial stability of an applicant, and the likelihood of a claim being made against your bond. Respectively, if you have a high credit score, you will be offered a low rate.
For applicants with excellent scores, the bond rate is typically somewhere between .75% and 1.5% of the total bond amount.
For applicants with slightly lower, so-called moderate scores, the bond rate can be up to 5%.
Finally, applicants with even lower scores can expect to be offered a rate between 5% and 15%.
Since personal credit score does not paint the full picture, your surety may also want to see your:
- Personal and business financial statements
- Fixed and liquid assets
- Work experience and record
To get a sense of the possible cost of your bond, based on credit score, see the table below!
| Ohio Money Transmitter Bond Cost Based on Credit Score | |||||
|---|---|---|---|---|---|
|
License type |
Bond Amount |
Credit Score | |||
| Above 700 | 650-699 | 600-649 | Below 599 | ||
| Ohio money transmitter | $300,000 | $2,250-$4,500 | $3,000-$7,500 | $7,500-$15,000 | $15,000-$22,500 |
How Do Bond Claims Occur?
Chapter 1315 of the Ohio Revised Code sets the amount of the money transmitter bond required in the state at $300,000.
The chapter also defines the purpose of the bond as securing the faithful performance of transmitters' obligations, and being for the benefit of any claimants against a transmitter.
If a transmitter violates the provisions of the chapter by, for example, committing fraud, anyone who suffers a loss as a result may bring action against them. Such action is brought to the state Superintendent of Financial Institutions who may either file a claim against the bond or allow claimants to bring their own suit against the bond.
When a claim is filed, the surety that backs the bond must investigate the case and determine the appropriate amount of compensation to extend to claimants. Depending on the losses suffered by claimants, compensation can even be as high as the full amount of the bond.
Once a surety compensates a claimant, the bonded transmitter must reimburse the surety in full. This is the way surety bond agreements function. Of course, it is best to avoid giving rise to a claim, given how complicated and costly it may be to resolve it.
Apply For Your Bond Here!
Ready to get your money transmitter bond? Simply click on the banner below and complete the application form.
We will then provide you with a free quote on your bond and more information about how to finalize the bonding process.
If you have any additional questions about getting your Ohio money transmitter bond, call us at 866.450.3412!
Further Reading
