Nevada Money Transmitter Bond: A Comprehensive Guide

July 30, 2021

Nevada Money Transmitter Bond

This guide provides information for insurance agents to help their customers obtain Nevada Money Transmitter Bonds

At a Glance:

  • Average Cost: Between 1% to 12.5% of the bond amount per year based on the applicant’s credit
  • Bond Amount: $10,000 plus an extra $5,000 for each additional Nevada branch location up to a maximum limit of $250,000
  • Who Needs it: All money transmitters operating in Nevada
  • Purpose: To ensure the public will receive compensation for any damages should the money transmitter violate licensing law
  • Who Regulates Money Transmitters in Nevada: The Nevada Department of Business and Industry

Background

Nevada statute 671.040 requires all money transmitters operating in the state to obtain a license with the Department of Business and Industry. The Nevada legislature enacted the licensing laws and regulations to ensure that money transmitters engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, money transmitters must purchase and maintain a surety bond to be eligible for licensure.

What is the Purpose of the Nevada Money Transmitter Bond?

Nevada requires money transmitters 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 money transmitter fails to comply with the regulations set forth in Nevada revised statutes 671. Specifically, the bond protects the public in the event the money transmitter engages in any acts of fraud or fails to transmit funds owed to consumers. In short, the bond is a type of insurance that protects the public if the money transmitter breaks licensing laws.

Nevada Money Transmitter Bond Form

Nevada Money Transmitter Bond Form

How Can an Insurance Agent Obtain a Nevada Money Transmitter Bond?

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

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

The Nevada Money Transmitter Bond can cost anywhere between 1% to 12.5% 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 $10,000 bond requirement.

$10,000 Money Transmitter Bond Cost

Credit Score Bond Cost (1 year)
720+ $100
680 – 719 $150
650 – 679 $200
600 – 649 $400
550 – 599 $750
500 – 549 $1,250

How Does Nevada Define “Money Transmitter?”

To paraphrase Nevada statute 671.010, a money transmitter is any business entity who receives money for transmission or who sells checks.

How do Money Transmitters Apply For a License in Nevada?

Money transmitters in Nevada must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the application checklist for details on the process.

License Period – The Nevada Money Transmitter License expires on June 30 of each year and must be renewed before the expiration date

Step 1 – Meet the Net Worth Requirements

Applicants for the New Jersey Money Transmitter License must have a company net worth (assets – liabilities) of at least $10,000. Applicants must submit a certified financial statement verifying their net worth when submitting their license application. Money transmitters who do not meet this requirement may stay qualify for licensure if they purchase a surety bond that is double the required amount.

Step 2 – Purchase a Surety Bond

Money transmitters must purchase and maintain a surety bond with a limit of $10,000 plus an extra $5,000 for each additional Nevada branch location maximum limit of $250,000.

Step 3 – Complete the Application

All Nevada money transmitter license applications must be mailed to the following address:

State of Nevada
Financial Institutions Division
Department of Business and Industry
ATTN: Application Processing
1830 E. College Pkwy, STE 100
Carson City, NV 89706

Money transmitters must complete the application in its entirety, and submit the following items:

    • Certified company financial statements indicating a net worth of at least $100,000
    • The personal history, personal financial history, and three sets of fingerprints of all members of the organization authorized to initiate transactions to the company’s trust account
    • Nevada state business license
    • Lease agreement for the company’s business address
    • Copy of the company’s municipal business license
    • Designated agent form

Money transmitters must pay a $375 application fee and a $300 licensing fee when submitting their application.

How Do Nevada Money Transmitters Renew Their License?

Money transmitters should mail their completed renewal application, including a $300 renewal fee, to the following address:

State of Nevada
Financial Institutions Division
Department of Business and Industry
ATTN: Application Processing
1830 E. College Pkwy, STE 100
Carson City, NV 89706

The Nevada Money Transmitter License expires on June 30 of each year and must be renewed before the expiration date.

What Are the Insurance Requirements for the Nevada Money Transmitter License?

Nevada does not require money transmitters to purchase any form of liability insurance as a prerequisite to obtaining a license. Money transmitters must purchase and maintain a surety bond with a limit of $10,000 plus an extra $5,000 for each additional Nevada branch location maximum limit of $250,000.

How Do Nevada Money Transmitters File Their Bond?

Money transmitters should mail the completed bond form, including the power of attorney, to the following address:

State of Nevada
Financial Institutions Division
Department of Business and Industry
ATTN: Application Processing
1830 E. College Pkwy, STE 100
Carson City, NV 89706

The money transmitter surety bond requires signatures from both the surety company that issues the bond and a representative from the money transmission company. 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
  • Bond amount
  • Date the bond is signed
  • Date the bond goes into effect

What Can Nevada Money Transmitters Do to Avoid Claims Against Their Bond?

To avoid claims on their bond, money transmitters in Nevada must follow all license regulations in the state, including some of the most important issues below that tend to cause claim

  • Do not engage in any acts of fraud
  • Do not breach any contracts made with consumers
  • Transmit all funds owed to consumers

What Other Insurance Products Can Agents Offer Money Transmitters in Nevada?

Nevada does not require money transmitters 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 Nevada Money Transmitter Customers?

Nevada conveniently provides a public database to search for active money transmitters 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.

2021-12-28T15:18:42-05:00