Minnesota Electronic Financial Terminal Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain Minnesota Electronic Financial Terminal Bonds
At a Glance:
- Lowest Cost: $375 per year or $38 per month based on the applicant’s credit
- Bond Amount: $5,000 per Electronic Financial Terminal (aka ATMs)
- Who Needs it: All owners of Minnesota ATMs
- Purpose: To ensure the public will receive compensation for any damages should the ATM owner fail to comply with licensing law
- Who Regulates Electronic Financial Terminals in Minnesota: The Minnesota Department of Commerce
Minnesota statute 47.62 requires all ATM owners operating in the state to obtain a license with the Department of Commerce. The Minnesota legislature enacted the licensing laws and regulations to ensure that ATM owners engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, ATM owners must purchase and maintain a $5,000 surety bond (per ATM) to be eligible for licensure.
What is the Purpose of the Minnesota Electronic Financial Terminal Bond?
Minnesota requires ATM owners 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 ATM owner fails to comply with the regulations set forth in Minnesota statutes 47.61-74. Specifically, the bond protects the public in the event the ATM owner engages in any acts of fraud or fails to pay money due to ATM users. In short, the bond is a type of insurance that protects the public if the ATM owner breaks licensing laws.
How Can an Insurance Agent Obtain a Minnesota Electronic Financial Terminal Surety Bond?
BondExchange makes obtaining a Minnesota Electronic Financial Terminal Bond easy. Simply login to your account and use our keyword search to find the “electronic” bond in our database. Don’t have a login? Gain access 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.
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Is a Credit Check Required for the Minnesota Electronic Financial Terminal Bond?
Surety companies will run a credit check on the ATM owners to determine eligibility and pricing for the Minnesota Electronic Financial Terminal bond. Owners 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 Minnesota Electronic Financial Terminal Bond Cost?
The Minnesota Electronic Financial Terminal bond can cost anywhere between 1% to 2% of the bond amount 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 $25,000 bond requirement.
$25,000 Electronic Financial Terminal Bond Cost
|Credit Score||Bond Cost (1 year)||Bond Cost (1 month)|
Who is Required to Purchase a Bond?
Minnesota statute 47.62 requires all individuals and business entities who own and operate electronic financial terminals (ATMs) to obtain a license and purchase a $5,000 surety bond per ATM.
The following entities are exempt from the licensing and bonding requirements:
- State or federal saving associations
- State or federal savings banks
- State or federal credit unions
- State or national banking associations
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do ATM Owners Apply for a License in Minnesota?
ATM owners in Minnesota must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the NMLS’s application guidelines for details on the process.
License Period – The Minnesota Electronic Financial Terminal license does not expire
Step 1 – Purchase a Surety Bond
ATM owners must purchase and maintain a surety bond with a limit of $5,000 per ATM
Step 2 – Request a NMLS Account
The Minnesota Electronic Financial Terminal 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 3 – Complete the Application
ATM owners must pay the following fees when submitting their license application:
- $100 license fee
- $0.25 fee for each ATM owned and operated by the applicant (there is no fee for the applicant’s first 100 ATMs)
What are the Insurance Requirements for the Minnesota Electronic Financial Terminal License?
Minnesota does not require ATM owners to purchase any form of liability insurance as a prerequisite to obtaining a business license. ATM owners must purchase and maintain a surety bond with a limit of $5,000 per ATM.
How Do Minnesota ATM Owners File Their Bond?
ATM owners 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 company that owns the ATM(s). The surety company should include the following information on the bond form:
- Legal name and NMLS number 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 Minnesota ATM Owners Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, ATM owners in Minnesota 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 ATM users
What Other Insurance Products Can Agents Offer ATM Owners in Minnesota?
Minnesota does not require ATM owners 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 Minnesota ATM Owner Customers?
The NMLS conveniently provides a public database to search for active ATM owners in Minnesota. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.