Georgia Money Transmitter Bond: A Comprehensive Guide

April 21, 2021

This guide provides information for insurance agents to help money transmitters obtain Georgia Money Transmitter Bonds

At a Glance:

• Average Cost: Between 2% to 7.5% of the bond amount per year based on the applicant’s credit
• Bond Amount: Between $100,000 to $2 million (more on this later)
• Who Needs it: All money transmitters operating in Georgia
• 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 Georgia: The Georgia Department of Banking and Finance

Background

Georgia Statute 7-1-681 requires all money transmitters operating in the state to obtain a license with the Department of Banking and Finance. The Georgia 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 Georgia Money Transmitter Bond?

Georgia 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 licensing regulations. 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 Georgia Money Transmitter Surety Bond?

BondExchange makes obtaining a Georgia 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.

How is the Bond Amount Determined?

Georgia Statute 7-1-683.2 mandates the limit on the money transmitter bond be determined on a case by case basis by the Department of Banking and Finance. The bond amount is determined by calculating the money transmitter’s “average daily outstanding orders to transmit not yet paid.” The limit will range from between $100,000 to $2 million.

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

The Georgia Money Transmitter surety bond can cost anywhere between 2% to 7.5% 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 $100,000 bond requirement.

$100,000 Money Transmitter Bond Cost

*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 Georgia Define “Money Transmitter?”

To paraphrase Georgia Statute 7-1-680, a money transmitter is any business who engages in the business of receiving money for transmission.

How do Money Transmitters Apply for a License in Georgia?

Money Transmitters in Georgia 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 – All Georgia Money Transmitter Licenses expire on December 31 of each year and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

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

Step 2 – Request a NMLS Account

The Georgia 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 4 – Complete the Application

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

• • Complete list of all of the company’s authorized agents and their locations
  • A primary company and consumer complaint contact
  • Company formation documents
  • Company business plan containing the following information:
    • Products/Services
    • Target markets
    • Fee schedule
    • Operating structure the applicant intends to employ
    • Plans to use authorized agents/delegates
    • Marketing strategies
  • Management chart indicating the company’s hierarchy
  • Organizational chart detailing the company’s ownership structure
  • Flow of funds diagram
  • Company’s active or proposed AML/BSA policy
  • Verification of Lawful Presence Affidavit
  • State background check authorization 

*License applicants may be required to submit financial statements at the discretion of the Department of Banking and Finance

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

• • $1,150 license fee
  • $36.25 background check fee (per person)
  • $15 credit report fee (per person)
  • $0.25 fee for each active authorized agent

How Do Georgia 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. All Georgia Money Transmitter Licenses expire on December 31 of each year and must be renewed before the expiration date.

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

The State of Georgia 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 Georgia 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 business address of entity/individual(s) buying the bond
• Surety company’s name, state and county
• Bond amount
• Date the bond goes into effect
• Date the bond is signed

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

In order to avoid claims made against their bond, money transmitters in Georgia 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 consumers on time and in full

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

Georgia does not require money transmitters 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 Georgia Money Transmitter Customers?

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