DC Check Casher Bond: A Comprehensive Guide

April 12, 2021

DC Check Casher Bond

This guide provides information for insurance agents to help check cashers obtain DC Check Casher Bonds

At a Glance:

  • Average Cost: Between $100 to $375 per year based on the check casher’s credit
  • Bond Amount: $5,000
  • Who Needs it: All check cashers seeking to obtain a license in the District of Columbia
  • Purpose: To ensure the public will receive compensation for any damages should the check casher fail to comply with licensing law
  • Who Regulates Check Cashers in DC: The District of Columbia Department of Insurance, Securities, and Banking

Background

DC Statute 26-302 requires all check cashers operating in the district to obtain a license with the Department of Insurance, Securities and Banking. The DC legislature enacted the licensing laws and regulations to ensure that check cashers engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, check cashers must purchase and maintain a $5,000 surety bond to be eligible for licensure.

What is the Purpose of the DC Check Casher Bond?

DC requires check cashers to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the check casher fails to comply with the licensing regulations. In short, the bond is a type of insurance that protects the public if the check casher breaks licensing laws.

 DC Check Casher Bond Form

DC Check Casher Bond Form

How Can an Insurance Agent Obtain a DC Check Casher Surety Bond?

BondExchange makes obtaining a Check Seller Bond easy. Simply login to your account and use our keyword search to find the “check” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

Is a Credit Check Required for the DC Check Casher Bond?

Surety companies will run a credit check on the owners of the check cashing company to determine eligibility and pricing for the DC Check Casher bond. Owner’s with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.

How Much Does the DC Check Casher Bond Cost?

The DC Check Casher surety bond can cost anywhere between $100 to $375 per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on a $5,000 bond requirement.

$5,000 Check Casher Bond Cost

Credit Score Bond Cost (1 year)
625+ $100
574 – 624 $188
550 – 574 $250
500 – 549 $375

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

How Does DC Define “Check Casher?”

To paraphrase DC Statute 26-301, a check casher is any individual or business entity who cashes checks. Check cashers primarily services individuals who are unable to open checking accounts.

How do Check Cashers Apply for a License in DC?

Check cashers in DC must navigate several steps to secure their license. Below are the general guidelines, but license applicants should refer to the NMLS’s application guidelines for details on the process.

License Period – The DC Check Casher License expires on December 31 of each year and must be renewed before the expiration date

Step 1 – Meet the Liquid Assets Requirements

Applicants for the DC Check Casher license must demonstrate the availability of $25,000 of capital per branch location and must continuously maintain $5,000 in capital for each branch location where check cashing services are conducted.

Step 2 – Purchase a Surety Bond

Check cashers must purchase and maintain a $5,000 surety bond per branch location

Step 3 – Request a NMLS Account

The DC Check Casher License application is submitted electronically through the Nationwide Multistate Licensing System (NMLS). To submit a license application, applicants must first request to obtain an NMLS account.

Step 4 – Complete the Application

All DC Check Casher License applications can be completed online through the NMLS. Applicants must complete the entire application, and pay a $300 licensing fee.

How Do DC Check Cashers Renew Their License?

Check cashers can renew their license online through the NMLS. License holders need to simply login to their account to access their renewal application. The DC Check Casher License expires on December 31 of each year and must be renewed before the expiration date.

What Are the Insurance Requirements for the DC Check Casher License?

The District of Columbia does not require check cashers to obtain any form of liability insurance as a prerequisite to obtaining a business license. Check cashers must purchase and maintain a $50,000 surety bond.

How Do DC Check Cashers File Their Bond?

Check cashers should submit the completed bond form, including the power of attorney, electronically through the NMLS. The surety bond requires signatures from both the surety company that issues the bond and a representative from the check cashing company. The surety company should include the following information on the bond form:

  • License type (check casher)
  • Legal name and address of entity/individual(s) buying the bond
  • Surety company’s name
  • Bond amount
  • Date the bond goes into effect
  • Date the bond is signed

What Can DC Check Cashers Do to Avoid Claims Against Their Bond?

In order to avoid claims made against their bond, check cashers in DC must follow all license regulations in the district. Including some of the most important issues below that tend to cause claims:

  • Pay all required taxes and fees
  • Properly account for all funds recieved by consumers
  • Do not engage in any acts af fraud

What Other Insurance Products Can Agents Offer Check Cashers in DC?

DC does not require check cashers to purchase any form of liability insurance as a prerequisite to obtaining a business license. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for DC Check Casher Customers?

The NMLS conveniently provides a public database to search for check cashers in DC. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

2021-12-28T15:21:06-05:00