Delaware Casher of Checks, Drafts or Money Orders Bond: A Comprehensive Guide

April 16, 2021

Delaware Casher of Checks, Drafts or Money Orders Bond

This guide provides information for insurance agents to their customers obtain Delaware Casher of Checks, Drafts, or Money Orders Bonds

At a Glance:

  • Average Cost: Between $100 to $375 per year based on the applicant’s credit
  • Bond Amount: $5,000
  • Who Needs it: All businesses seeking to obtain a Casher of Checks, Drafts, or Money Orders License in Delaware
  • Purpose: To ensure the public will receive compensation for any damages should the licensee to comply with licensing law
  • Who Regulates Cashers of Checks, Drafts, or Money Orders in Delaware: The Office of the State Bank Commissioner

Background

Delaware Statute 2711 requires businesses who cash checks, drafts, or money orders operating in the state to obtain a license with the Office of the State Bank Commissioner. The Delaware 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, cashers of checks, drafts, or money orders must purchase and maintain a $5,000 surety bond to be eligible for licensure.

What is the Purpose of the Delaware Casher of Checks, Drafts, or Money Orders Bond?

Delaware requires cashers of checks, drafts, or money orders 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 licensee fails to comply with the licensing regulations. In short, the bond is a type of insurance that protects the public if the licensee breaks licensing laws.

Delaware Casher of Checks, Drafts, or Money Orders Bond Form

Delaware Casher of Checks, Drafts, or Money Orders Bond Form

How Can an Insurance Agent Obtain a Delaware Casher or Checks, Drafts, or Money Orders Surety Bond?

BondExchange makes obtaining a Delaware Casher of Checks, Drafts, or Money Orders Bond easy. Simply login to your account and use our keyword search to find the “casher” 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 Delaware Casher of Checks, Drafts, or Money Orders Bond?

Surety companies will run a credit check on the owners of the check, draft, or money order cashing company to determine eligibility and pricing for the Delaware Casher of Checks, Drafts, or Money Orders 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 Delaware Casher of Checks, Drafts, or Money Orders Bond Cost?

The Delaware Casher of Checks, Drafts, or Money Orders 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 Casher of Checks, Drafts, or Money Orders Bond

Credit Score Bond Cost (1 year)
650+ $100
600 – 649 $200
550 – 599 $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.

Who is Required to Obtain a License?

Delaware Statute 2711 requires all businesses who cash checks, drafts, or money order to obtain a license.

How do Cashers of Checks, Drafts, or Money Orders Apply for a License in Delaware?

Cashers of checks, drafts, or money orders in Delaware must navigate several steps to secure their business license. Below are the general guidelines, but license applicants should refer to the licensing statutes for details on the process.

License Period – The Delaware Casher of Checks, Drafts, or Money Orders License expires on December 31 of each year and must be renewed before the expiration date

Step 1 – Meet the Liquid Assets Requirements

License applicants are required to maintain a minimum of $5,000 in liquid assets at all times

Step 2 – Designate a Registered Agent

License applicants must appoint a designated agent who is located in Delaware and is authorized to cash checks, drafts, or money orders. The designated agent can be the license applicant, an individual, another business entity located in Delaware.

Step 3 – Purchase a Surety Bond

Cashers of checks, drafts or money orders must purchase and maintain a $5,000 surety bond

Step 4 – Complete the Application

All Delaware Casher of Checks, Drafts, or Money Orders License applications should be mailed to the following address:

State of Delaware Office of the State Bank Commissioner
1110 Forest Avenue
Dover, Delaware 19904

Businesses must complete the application it its entirety, and submit the following items:

    • Financial statements indicating liquid assets of at least $5,000
    • Personal resumes and financial statements of all company owners/officers
    • The company’s FinCen registration confirmation number and filing date
    • Company business plan
    • Three business references who are currently doing business with the applicant

Applicants must pay the following fees when submitting their license application:

    • $150 investigation fee per branch location ($200 for mobile units)
    • $200 license fee per branch location ($200 for mobile units)

How Do Delaware Cashers of Checks, Drafts, or Money Orders Renew Their License?

License holders can mail their completed renewal application to the following address:

State of Delaware Office of the State Bank Commissioner
1110 Forest Avenue
Dover, Delaware 19904

The Delaware Casher of Checks, Drafts, or Money Orders License expires on December 31 of each year and must be renewed before the expiration date.

What Are the Insurance Requirements for the Delaware Casher of Checks, Drafts, or Money Orders License?

The State of Delaware does not require casher of checks, drafts, or money orders to obtain any form of liability insurance as a prerequisite to obtaining a business license. Licensees must purchase and maintain a $5,000 surety bond.

How Do Delaware Cashers of Checks, Drafts, or Money Orders File Their Bond?

Cashers of checks, drafts, or money orders should mail the completed bond form, including the power of attorney, to the following address:

State of Delaware Office of the State Bank Commissioner
1110 Forest Avenue
Dover, Delaware 19904

The casher of checks, drafts, or money orders surety bond requires signatures from both the surety company that issues the bond and the bond applicant. The surety company should include the following information on the bond form:

  • Legal name and address of entity/individual(s) buying the bond
  • Surety company’s name and address
  • Date the bond is signed

What Can Delaware Cashers of Checks, Drafts, and Money Orders Do to Avoid Claims Against Their Bond?

In order to avoid claims made against their bond, cashers of checks, drafts, or money orders in Delaware must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:

  • Do not engage in any acts of fraud
  • Ensure full payment of funds to consumers

What Other Insurance Products Can Agents Offer Cashers of Checks, Drafts, or Money Orders in Delaware?

Delaware does not require cashers of checks, drafts, or money orders to purchase any form of liability insurance as a prerequisite to obtaining a 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 Delaware Cashers of Checks, Drafts, or Money Order Customers?

Delaware conveniently provides a public database to search for active casher of checks, drafts, or money orders in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

2021-12-28T15:21:03-05:00