South Dakota Money Transmitter Bond

South DakotaThere is a new law regarding money transmitters in South Dakota titled HB 1009. The previous law required a cash deposit or securities of $100,000, and $5,000 for each extra location in the state. The maximum amount one could deposit was $250,000 under prior law. As a replacement for the deposit or securities, a surety bond was allowed to be posted in the same amount. Under law HB 1009, letter of credit, a surety bond, or other security is required in the sum of $100,000. The new law would permit the Director of the Division of Banking to increase the amount of the bond/security if the licensee’s financial condition is weakened, as evidenced by a reduction in financial losses, net worth, etc. The new law also raises the maximum amount of the bond/security from $250,000 to $500,000. Under existing law, the surety’s accountability would be limited to the penal sum of the bond; the bond is cancellable. The new law allows direct actions to be taken on the bond/security from any applicant in opposition to the licensee. The Director of the Division of Banking would be allowed to take action against the bond or security.