Washington Money Transmitter Bond

The Washington Money Transmitter Bond is a legal requirement for businesses and individuals engaged in money transmission within the state. This bond protects consumers by ensuring licensed money transmitters comply with state laws and regulations. Any person or entity involved in receiving money for transmission, issuing payment instruments, or engaging in similar financial services in Washington needs this bond.

A Washington Money Transmitter Bond is a type of surety bond mandated by the Washington State Department of Financial Institutions (DFI) for licensed money transmitters. It ensures that businesses follow the rules outlined under the Washington Uniform Money Services Act. If a money transmitter fails to meet obligations, the bond provides financial recourse for harmed consumers. You can learn more about general bond functions in this money transmitter bond resource.

The cost depends on the bond amount set by the DFI and the applicant’s creditworthiness. While the DFI sets the required bond amount, the actual cost (premium) is a percentage of that amount.

Bond Amount

In Washington, the bond amount ranges from $10,000 to $550,000, based on the annual dollar volume of money transmissions. The Washington Department of Financial Institutions (DFI) determines the specific amount during the licensing process.

Premium

Surety companies typically charge between 1% and 5% of the total bond amount annually. For example:

• A $50,000 bond at a 2% premium costs $1,000 per year.
• A $150,000 bond at a 3% premium costs $4,500 per year.
   

Bond Term

The bond term usually runs for one year, aligning with the transmitter’s license period. Sureties may offer multi-year options for convenience and cost savings.

Renewals

Bond renewals are typically straightforward, involving payment of the annual premium. Sureties often send renewal notices well before the due date to prevent lapses.

The DFI requires applicants to meet specific qualifications before obtaining a bond. These requirements help ensure only financially sound and law-abiding businesses operate in the state.

Financial and Legal Qualifications

Applicants must demonstrate adequate financial stability, meet net worth requirements, and provide business records. The DFI also reviews background checks to ensure compliance with state and federal laws. Official details can be found on the Washington DFI website.

Bond Duration and Cancellation

The bond remains active as long as the license is valid. Sureties can cancel the bond with proper notice—typically 30 days—to the DFI. This allows time for the licensee to replace or reinstate the bond.

Obtaining this bond involves several key steps, starting with the NMLS application process.

Apply Through the NMLS System

Applications for a Washington Money Transmitter license and bond must be filed through the Nationwide Multistate Licensing System(NMLS).

Prepare Financial Documents

Applicants need to submit audited financial statements, business plans, and other financial disclosures required by the DFI.

Obtain a Surety Bond

Work with a licensed surety provider to secure your bond. If you are new to the process, follow the steps outlined in this guide on how to get a money transmitter license.

Submit Application

Once the bond and documents are ready, submit them via NMLS along with applicable fees. The DFI will review your application before issuing a license.

Annual Renewal

Licenses and bonds must be renewed each year through NMLS to remain active.

After securing the bond, you must meet all filing requirements with the DFI.

Purchase the Required Surety Bond

Make sure the bond meets the exact amount specified by the DFI based on your transaction volume.

File the Bond Electronically

Bonds are filed through NMLS, ensuring quick verification by the DFI.

Include Bond Details

The bond form must include the licensee’s name, address, and bond amount, as well as the surety company’s details.

Maintain Net Worth

Washington requires a minimum net worth of $10,000 or higher depending on business volume. This is verified through financial statements filed annually.

To maintain compliance, transmitters must keep their bond active without lapses. Renewal is simple—respond to reminders from your surety, pay the premium, and confirm with NMLS that the bond remains valid.

Operating without a valid bond or failing to meet bond requirements can result in license suspension, civil penalties, and legal action from the DFI. In serious cases, customers harmed by non-compliance can file claims against the bond.

In addition to the bond, money transmitters may be required to carry liability insurance, maintain anti-money laundering programs, and comply with federal laws like the Bank Secrecy Act.

Washington State Department of Financial Institutions. (n.d.). Washington Uniform Money Services Act. Retrieved from
https://dfi.wa.gov

Nationwide Multistate Licensing System & Registry. (n.d.). Money services businesses. Retrieved from
https://mortgage.nationwidelicensingsystem.org

Bank Secrecy Act. (n.d.). Retrieved from
https://www.fincen.gov/resources/statutes-and-regulations/bank-secrecy-act

JW Surety Bonds. (n.d.). How to get a money transmitter license. Retrieved from
https://www.jwsuretybonds.com/licensing/money-transmitters/

JW Surety Bonds. (n.d.). Money transmitter bond. Retrieved from
https://www.jwsuretybonds.com/license-bonds/money-transmitter-bond