Surety Bond News

Money transmitters must abide by a new law that was presented in Mississippi State. The new law is named SB 2652 and alters the quantity of the surety bond required for sellers of checks and it also reclassifies them as money transmitters. The previous law required a surety bond or other security at a minimum of $25,000 and an added $15,000 for every additional company location, which was capped at $250,000. The new legislation requires a surety bond of $25,000 or a quantity equivalent to the amount of outstanding money transmissions in Mississippi. SB 2652 amplifies the cap on the surety bond to $1 million. Additionally, depending on the financial state of the licensee, the Commissioner of Banking and Consumer Finance has the option to require a surety bond in surplus of $1 million.

Money transmitters in the state of Arkansas are affected by a new law update named SB 450. The new law was enacted on March 19th, 2009 and eradicates the alternative types of security that is allowed to be submitted under present law for the license bond requirements for money transmitters; only a surety bond is authorized under the new law. SB 450 was introduced on 2/23/2009.

In Florida, a new law was enacted relating to money services businesses titled SB 2158. The new law raises the required license bond requirement amount for money transmitters and would require licensure as oppose to the present registration requirements. The prior law had the Financial Services Commission establish the amount required which could be up to $250,000. Under particular circumstances, the Financial Services Commission was able to boost the required amount up to $500,000 in extraordinary cases. SB 2158 states that the surety bond must be at least $50,000 and it permits the commission to amplify it up to $2 million. The SFAA backed this increase, but informed on the limitations it could produce in availability.

There 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.