Oklahoma Money Transmitter Bond: A Comprehensive Guide

August 10, 2021

This guide provides information for insurance agents to help their customers obtain Oklahoma 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: 
  • $50,000 plus an additional $10,000 per authorized delegate, not to exceed $500,000 for money transmitters who don’t meet any of the blow criteria
  • $200,000 for money transmitters who transmit money primarily through electronic means
  • $500,000 for money transmitters who also sell checks
• Who Needs it: All money transmitters operating in Oklahoma
• Purpose: To ensure the public will receive compensation for any damages should the money transmitter violate licensing law
• Who Regulates Money Transmitters In Oklahoma: The Oklahoma Department of Banking

Background

Oklahoma statute 85:15-3-1 requires all money transmitters operating in the state to obtain a license with the Department of Banking. The Oklahoma 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 Oklahoma Money Transmitter Bond?

Oklahoma 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 Oklahoma statute 85:15-3-3. Specifically, the bond protects the public in the event the money transmitter engages in any acts of fraud or fails to transmit any funds 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 an Oklahoma Money Transmitter Surety Bond?

BondExchange makes obtaining an Oklahoma 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 Oklahoma 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 Oklahoma 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 Oklahoma Money Transmitter Bond Cost?

The Oklahoma 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 $200,000 bond requirement.

$200,000 Money Transmitter Bond Cost

How Does Oklahoma Define “Money Transmitter?”

Oklahoma statute 85:15-1-2 defines a money transmitter as any business entity who receives money for transmission.

How Do Money Transmitters Apply for a License in Oklahoma

Money transmitters in Oklahoma 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 Oklahoma money transmitter license expires on December 31 of every year and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

Money transmitters must purchase and maintain a surety bond with the following limit:

• • $50,000 plus an additional $10,000 per authorized delegate, not to exceed $500,000 for money transmitters who don’t meet any of the blow criteria
  • $200,000 for money transmitters who transmit money primarily through electronic means
  • $500,000 for money transmitters who also sell checks

Step 2 – Request a NMLS Account

The Oklahoma 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 3 – Complete the Application

All Oklahoma 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 prepared by a CPA
  • Company business plan containing the following information:
    • Marketing strategy
    • Products
    • Target markets
    • Operating structure
  • Certificate of Good Standing
  • Samples of all documents used throughout the company’s regular course of business as it relates to money transmission
  • Management and organizational charts
  • Companies FinCen registration confirmation
  • Companies AML policy as well as a copy of the most recent independently reviewed audit of the policy

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

• • $3,000 application fee
  • $2,000 license fee
  • $100 processing fee
  • $50 fee per authorized delegate
  • $50 fee per individual with the authority to collect
  • $36.25 background check fee (per person)

How Do Oklahoma 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 Oklahoma money transmitter license expires on December 31 of every year and must be renewed before the expiration date.

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

Oklahoma does not require money transmitters to purchase any form of liability insurance as a prerequisite to obtaining a business license. Money transmitters must purchase and maintain a surety bond with the following limit:

• $50,000 plus an additional $10,000 per authorized delegate, not to exceed $500,000 for money transmitters who don’t meet any of the blow criteria
• $200,000 for money transmitters who transmit money primarily through electronic means
• $500,000 for money transmitters who also sell checks

How Do Oklahoma 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:

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

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

To avoid claims on their bond, money transmitters in Oklahoma must ensure that they 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
• Transmit all funds owed to consumers

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

Oklahoma 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 other types of 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 Oklahoma Money Transmitter Customers?

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