Washington Money Transmitter Bond

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Washington Money Transmitter Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain a Washington Money Transmitter Bond

At a Glance:

  • Lowest Cost: 2% of the bond amount per year based on the applicant’s credit
  • Bond Amount:  Between $10,000 to $550,000 (more on this later)
  • Who Needs it: All money transmitters operating in Washington
  • Purpose: To ensure the public will receive compensation for any damages should the money transmitter fail to comply with licensing law
  • Who Regulates Money Transmitters In Washington: The Washington Department of Financial Institutions
Washington Money Transmitter Bond Form
Washington Money Transmitter Bond Form


Washington statute 19.230.030 requires all money transmitters operating in the state to obtain a license with the Department of Financial Institutions. The Washington legislature enacted the licensing laws and regulations to ensure that money transmitters engage in ethical business practices. 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 Washington Money Transmitter Bond?

Washington 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 Washington statute 19.230.050. Specifically, the bond protects the public in the event the money transmitter engages in any acts of fraud or fails to pay all money owed to consumers. In short, the bond is a type of insurance that protects the public if the money transmitter breaks licensing laws.

How Can an Insurance Agent Obtain a Washington Money Transmitter Surety Bond?

BondExchange makes obtaining a Washington 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? 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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How is the Bond Amount Determined?

Washington statute 19.230.050 dictates that the limit on the money transmitter bond be based on the annual dollar amount of money transmitted or payment instruments sold. The bond must be a minimum of $10,000, and money transmitters must add an additional $10,000 for every $1 million of money transmitted to a maximum bond limit of $550,000, as referenced in the table below.

Money Transmitted Bond Amount
$0 to $999,999 $10,000
$1 million to $1,999,999 $20,000
$2 million to $2,999,999 $30,000
Keep adding $10,000 for every $1 million
$54 million or more $550,000

Is a Credit Check Required for the Washington 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 Washington 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 Washington Money Transmitter Bond Cost?

The Washington Money Transmitter Bond can cost anywhere between 2% to 7.5% of the bond amount per year. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $10,000 bond requirement.

$10,000 Money Transmitter Bond Cost

Credit Score Bond Cost (1 year) Bond Cost (1 month)
650+ $200 $20
600 – 649 $400 $40
550 – 599 $750 $75

*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 Washington Define “Money Transmitter?”

Washington statute 19.230.010 defines a money transmitter as any business entity who receives funds for transmission or who sells payment instruments.

Washington Money Transmitter Bond

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 Money Transmitters Apply for a License in Washington?

Money transmitters in Washington 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 Washington Money Transmitter License expires on December 31 of each year and must be renewed before the expiration date

Step 1 – Meet the Net Worth Requirements

Applicants for the Washington Money Transmitter License must have a company net worth (assets – liabilities) of at least $10,000 for every $1 million of money transmitted or payment instrument sold, to a maximum requirement of $3 million. All money transmitters must have at least a $10,000 net worth, except for virtual currency/cryptocurrency MT companies who must have a net worth of at least $100,000. Money transmitters must submit audited company financial statements, prepared by a CPA, when submitting their license application.

Step 2 – Purchase a Surety Bond

Money Transmitters must purchase and maintain a surety bond (limits outlined above)

Step 3 – Obtain a Business License

Money transmitters who service Washington consumers must first obtain a standard Business License prior to submitting their money transmitter license application

Step 4 – Register with the Washington Secretary of State (If Applicable)

Money transmitters who are not sole proprietors must register their business with the Washington Secretary of State.

Step 5 – Register with the Washington Department of Revenue (If Applicable)

Washington requires certain businesses to register with the Department of Revenue (DOR) prior to obtaining a business license. To check if they must register with the DOR, money transmitters should consult the DOR’s website.

Step 6 – Request an NMLS Account

The Washington Money Transmitter 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 7 – Complete the Application

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

    • Audited company financial statements
    • Locations of all company authorized agents
    • Primary company and consumer complaint contact information
    • Company’s FinCEN confirmation number and filing date
    • Disclosure questions
    • Company’s independently reviewed AML/BSA policy
    • Company business plan containing the following information:
      • Executive summary of the business
      • Products/Services intended to be offered under the license
      • Target markets and marketing strategies, including fee schedule
      • Management and organization of the business
      • Operational plan, including flowchart of a typical transaction
      • Assessment tracking methods to be utilized
    • The following document samples:
      • Money transmission receipts
      • Contracts used with authorized agents
    • Flow of funds structure
    • Company management and organizational charts
    • List of all countries the company will be transmitting funds to and from
    • Dollar value of funds transmitted in Washington over the past 12 months

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

    • $1,000 WA application fee
    • $100 NMLS initial processing fee
    • $100 fee for each additional location
    • $36.25 background check fee (per person)
    • $15 credit report fee (per person)
    • $0.25 annual fee for all authorized agents (the first 100 agents are exempt from this fee)

How Do Washington Money Transmitters Renew Their License?

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

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

Washington does not require money transmitters to obtain any form of liability insurance as a prerequisite to obtaining a business license. Money transmitters must purchase and maintain a surety bond (limits outlined above)

How Do Washington Money Transmitters File Their Bond?

Money transmitters 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 company. The surety company should include the following information on the bond form:

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

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

To avoid claims on their bond, money transmitters in Washington 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
  • Properly account for all funds received
  • Pay all funds owed to consumers

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

Washington 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 Washington Money Transmitter Customers?

The NMLS conveniently provides a public database to search for active money transmitters in Washington. The database can be accessed here. Contact BondExchange for help developing a marketing piece. Agents can also leverage our print-mail relationships for discounted mailing services.

Washington Money Transmitter Bond