Mississippi Check Casher Bond: A Comprehensive Guide

July 8, 2021

This guide provides information for insurance agents to help their customers obtain Mississippi Check Casher Bonds

At a Glance:

• Average Cost: Between $150 to $750 per year based on the applicant’s credit
• Bond Amount: $10,000
• Who Needs it: All businesses operating in Mississippi who cash checks
• Purpose: To ensure the public will receive compensation for any damages should the check casher fail to comply with licensing law
• Who Regulates Check Cashers in Mississippi: The Mississippi Department of Banking and Consumer Finance

Background

The Mississippi Check Cashers Act requires all check cashers operating in the state to obtain a license with the Department of Banking and Consumer Finance. The Mississippi legislature enacted the licensing laws and regulations to ensure that check cashers engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, check cashers must purchase and maintain a $10,000 surety bond to be eligible for licensure.

What is the Purpose of the Mississippi Check Casher Bond?

Mississippi requires check cashers 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 check casher fails to comply with the regulations set forth in the Mississippi Check Cashers Act. Specifically, the bond protects the public in the event the check casher engages in any acts of fraud or breaches any contracts made with consumers. In short, the bond is a type of insurance that protects the public if the check casher breaks licensing laws.

How Can an Insurance Agent Obtain a Mississippi Check Casher Bond?

BondExchange makes obtaining a Mississippi Check Casher Bond easy. Simply login to your account and use our keyword search to find the “check” 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 Mississippi Check Casher Bond?

Surety companies will run a credit check on the owners of the check cashing company to determine eligibility and pricing for the Mississippi Check Casher 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 Mississippi Check Casher Bond Cost?

The Mississippi Check Casher Bond can cost anywhere between $150 to $750 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 $10,000 bond requirement.

$10,000 Check Casher Bond Cost

How Does Mississippi Define “Check Casher?”

Mississippi statute 75-67-503 defines a check casher as any individual or business entity who exchanges cash or other value for any check, draft, money order, personal money order, or other instrument for the transmission or payment of money, except travelers checks and foreign drawn payment instruments.

How do Check Cashers Apply For a License in Mississippi?

Check cashers in Mississippi 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 Mississippi Check Casher License expires on September 1 of each year and must be renewed before the expiration date

Step 1 – Meet the Net Worth Requirements

Applicants for the Mississippi Check Casher License must have a company net worth (assets – liabilities) of at least $20,000, plus an additional $5,000 per business location (not including the principal place of business). Applicants must submit a company financial statement, signed by an executive officer, verifying their net worth when submitting their license application.

Step 2 – Purchase a Surety Bond

Check cashers must purchase and maintain a $10,000 surety bond

Step 3 – Request a NMLS Account

The Mississippi Check Casher 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 Mississippi Check Casher License applications can be completed online through the NMLS. Applicants must complete the entire application, and submit the following items:

• • Company financial statements
  • The following company contacts:
    • Primary
    • Primary consumer complaint
    • Licensing
    • Exam Delivery
    • Consumer Complaint (Regulator)
    • Legal
  • Company’s FinCEN registration confirmation number and filing date
  • Certificate of Good Standing
  • Company formation documents

Check cashers must pay the following fees when submitting their license application:

• • $750 license fee
  • $36.25 background check fee (per person)

How Do Mississippi Check Cashers Renew Their License?

Check cashers can renew their license online through the NMLS. License holders need to simply login to their account to access their renewal application. The Mississippi Check Casher License expires on September 1 of each year and must be renewed before the expiration date.

What are the Insurance Requirements for the Mississippi Check Casher License?

Mississippi does not require check cashers to purchase any form of liability insurance as a prerequisite to obtaining a business license. Check cashers must purchase and maintain a $10,000 surety bond.

How Do Mississippi Check Cashers File Their Bond?

Check cashers 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 check cashing company. The surety company should include the following information on the bond form:

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

What Can Mississippi Check Cashers Do to Avoid Claims Against Their Bond?

To avoid claims on their bond, check cashers in Mississippi 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
• Do not breach any contracts made with consumers

What Other Insurance Products Can Agents Offer Check Cashers in Mississippi?

Mississippi does not require check cashers 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 Mississippi Check Casher Customers?

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