Did you know that 48 states regulate money transmitters and require money transmitters to be licensed before they can conduct business?
Utah is no exception, and the new Senate Bill 24 that was signed into legislature on March 27th of this year regulates the licensing process even more. If you sell or issue payment instruments (check, money order, traveler’s check, or draft) or receive money for transmission in the state of Utah, you will need to get licensed and bonded.
What are the Requirements to get Licensed?
To get licensed as a Utah money transmitter, you will need to meet the following requirements:
- Financial statement proving net worth of at least $1,000,000
- Completed licensing application (including name, address and location of business records)
- History of material litigation and criminal convictions, if any, during the last 7 years
- Description of business activities conducted and planning to conduct
- List of authorized agents in the state
- Sample authorized agent contract
- Sample form of payment instrument
- $100 licensing fee
- $50,000 money transmitter bond
What is a Money Transmitter Bond?
A money transmitter bond is a type of surety bond. Like all surety bonds, it is a three party agreement between a principal, an obligee, and a surety.
- Principal: you, the money transmitter; the one who needs the bond
- Obligee: your clients; the ones who are protected by the bond
- Surety: surety bond company; the one who issues the bond
A money transmitter bond helps safeguard your client’s well-being. A money transmitter bond ensures you will take are of people’s money to the best of your ability. If a problem does occur, a money transmitter bond protects your clients from loss. Money transmitters in Utah must get a Utah Money Transmitter Bond before they can begin servicing clients.
How Do I Get a Utah Money Transmitter Bond?
To get bonded, you will need to work with a surety bond company who can issue you a bond. The surety company will examine your financial and business history to ensure you are good candidate for a bond and to determine your bond rate.
When you purchase a Utah Money Transmitter Bond, you do not pay the entire bond amount, which in Utah is $50,000. Instead, you pay a portion of this amount, generally 1-15%. The percentage you pay is based on your business and credit history. Those with good credit (over 700) will be able to secure their bond at a lower rate than those with not-so-perfect credit.
What Do I Need To Know About The Utah Money Transmitter Bond?
When you get a Utah Money Transmitter Bond, it will need to be in a minimum amount of $50,000. The Utah Department of Administrative Services requires bonds to be renewed each year. Bonds expire on December 31st of each year.
Maintenance of your bond must be met for three years after you cease to conduct money transmission activities in the state. If you plan to cancel your bond, you must give a 30 day notice to the commissioner, and expiration only takes effect until the bond is cancelled.
If you think you have what it takes to become a money transmitter in Utah, or if you are simply needing a Utah Money Transmitter Bond, you get free quotes through Surety Solutions.