Missouri Money Order/Money Transmitter Bond: A Comprehensive Guide

July 2, 2021

Missouri Money OrderMoney Transmitter Bond

This guide provides information for insurance agents to help their customers obtain Missouri Money Order/Money Transmitter Bonds

At a Glance:

  • Average Cost: Between $1,000 to $7,500 per year based on the applicant’s credit
  • Bond Amount: $100,000
  • Who Needs it: All money transmitters and check sellers operating in Missouri
  • Purpose: To ensure the public will receive compensation for any damages should the money transmitter/check seller fail to comply with licensing law
  • Who Regulates Money Transmitters and Check Sellers in Missouri: The Missouri Division of Finance

Background

Missouri statute 361.705 requires all money transmitters and check sellers operating in the state to obtain a license with the Division of Finance. The Missouri legislature enacted the licensing laws and regulations to ensure that money transmitters and check sellers engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, money transmitters and check sellers must purchase and maintain a $100,000 surety bond to be eligible for licensure.

What is the Purpose of the Missouri Money Order/Money Transmitter Bond?

Missouri requires money transmitters and check sellers 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 regulations set forth in Missouri statute 361.711. Specifically, the bond protects the public in the event the licensee engages in any acts of fraud or fails to pay any required fees. In short, the bond is a type of insurance that protects the public if the money transmitter or check seller breaks licensing laws.

Missouri Money Order/Money Transmitter Bond Form

Missouri Money Order/Money Transmitter Bond Form

How Can an Insurance Agent Obtain a Missouri Money Order/Money Transmitter Surety Bond?

BondExchange makes obtaining a Missouri Money Order/Money Transmitter Bond easy. Simply login to your account and use our keyword search to find the “consumer” 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 Missouri Money Order/Money Transmitter Bond?

Surety companies will run a credit check on the owners of the money transmission or check selling company to determine eligibility and pricing for the Missouri Money Order/Money Transmitter 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 Missouri Money Order/Money Transmitter Bond Cost?

The Missouri Money Order/Money Transmitter Bond can cost anywhere between $1,000 to $7,500 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 the $100,000 bond requirement.

$100,000 Money Order/Money Transmitter Bond Cost

Credit Score Bond Cost (1 year)
800+ $1,000
625 – 799 $1,500
575 – 624 $3,750
550 – 574 $5,000
500 – 549 $7,500

Who is Required to Obtain a License?

The Missouri Division of Finance requires all individuals and business entities who sell money orders and travelers checks, electronically transmit funds, pay consumer bills, or issue of stored value cards to obtain a money transmitter and sale of checks license.

How do Money Transmitters and Check Sellers Apply for a License in Missouri?

Money transmitters and check sellers in Missouri must navigate several steps to secure their licenses. Below are the general guidelines, but applicants should refer to the NMLS’s application guidelines for details on the process.

License Period – The Missouri Money Transmitter and Sale of Checks License expires on April 15 of each year and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

Money transmitters and check sellers must purchase and maintain a $100,000 surety bond

Step 2 – Request an NMLS Account

The Missouri Money Transmitter and Seller of Checks 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

All Missouri Money Transmitter and Check Seller License applications can be completed online through the NMLS. Applicants must complete the entire application, and submit the following items:

    • Audited company financial statements prepared by a CPA
    • List of all company authorized agents
    • Primary company and consumer complaint contact information
    • Company FinCen registration number and filing date
    • Company flow of funds structure
    • Management chart showing the company’s hierarchy
    • Organizational chart showing the company’s ownership structure

Money transmitters and check sellers must pay the following fees when submitting their license application:

    • $300 license fee
    • $0.25 fee for each active authorized agent (the company’s first 100 agents are exempt)

How Do Missouri Money Transmitters and Check Sellers Renew Their License?

Money transmitters and check sellers can renew their license online through the NMLS. License holders need to simply login to their account to access their renewal application. The Missouri Money Transmitter and Sale of Checks License expires on April 15 of each year and must be renewed before the expiration date.

What are the Insurance Requirements for the Missouri Money Transmitter and Check Seller License?

Missouri does not require money transmitters and check sellers to purchase any form of liability insurance as a prerequisite to obtaining a business license. Money transmitters and check sellers must purchase and maintain a $100,000 surety bond.

How Do Missouri Money Transmitters and Check Sellers File Their Bond?

Money transmitters and check sellers 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 money transmission or check selling company. The surety company should include the following information on the bond form:

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

What Can Missouri Money Transmitters and Check Sellers Do to Avoid Claims Against Their Bond?

To avoid claims on their bond, money transmitters and check sellers in Missouri 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
  • Pay all required taxes and fees
  • Ensure full payment of all funds owed to consumers

What Other Insurance Products Can Agents Offer Money Transmitters and Check Sellers in Missouri?

Missouri does not require money transmitters and check sellers to purchase any form of liability insurance as a prerequisite to conducting business. 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 Missouri Money Transmitter and Check Seller Customers?

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

2021-12-28T15:19:37-05:00