Specific bonding requirements vary by state, but in general, any business entity applying for initial licensure as a money transmitter is required to purchase a money transmitter bond. The dollar amount of the bond is established by each state in its capacity as the “obligee” requiring the bond.
When a money transmitter bond expires (usually at the time the license is due for renewal), the money transmitter, known as the bond’s “principal,” must purchase a new one so that coverage is continuous. Unless an active bond is always in force, the principal is subject to license suspension or revocation.
