Maine Money Transmitter Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain Maine Money Transmitter Bonds
At a Glance:
- Lowest Cost: $1,500 per year or $150 per month based on the applicant’s credit
- Bond Amount: $100,000
- Who Needs it: All money transmitters and money order/travelers check issuers operating in Maine
- Purpose: To ensure the public will receive compensation for any damages should the money transmitter fail to comply with licensing law
- Who Regulates Money Transmitters in Maine: The Maine Bureau of Consumer Credit Protection
Background
Maine statute 6103 requires all money transmitters operating in the state to obtain a license with the Bureau of Consumer Credit Protection. The Maine 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 $100,000 surety bond to be eligible for licensure.
What is the Purpose of the Maine Money Transmitter Bond?
Maine 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 Maine statutes 6101-6129. Specifically, the bond protects the public in the event the money transmitter engages in any acts of fraud or fails to pay all 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 a Maine Money Transmitter Surety Bond?
BondExchange makes obtaining a Maine 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? Gain access 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.
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Is a Credit Check Required for the Maine Money Transmitter Bond?
Surety companies will run a credit check on the owner’s of the money transmission company to determine eligibility and pricing for the Maine 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 Maine Money Transmitter Bond Cost?
The Maine Money Transmitter bond can cost anywhere between $1,500 to $7,500 per year or $150 to $750 per month. 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 the $100,000 bond requirement.
$100,000 Money Transmitter Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 800+ | $1,500 | $150 |
| 650 – 799 | $2,000 | $200 |
| 600 – 649 | $4,000 | $400 |
| 550 – 599 | $7,500 | $750 |
How Does Maine Define “Money Transmitter?”
Maine statute 6102 defines a money transmitter as any business entity who sells or issues payment instruments or who transmits money by any means, including but not limited to, payment instrument, wire, facsimile or electronic transfer.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do Money Transmitters Apply for a License in Maine?
Money transmitters in Maine 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 Maine Money Transmitter License expires on December 31 of each year and must be renewed before the expiration date
Step 1 – Meet the Net Worth Requirements
Applicants for the Maine Money Transmitter License must have a company net worth (assets – liabilities) of at least $100,000 plus an additional $50,000 per branch location to a maximum of $500,000. Applicants must submit an audited financial statement, prepared by a CPA, verifying their net worth when submitting their license application.
Step 2 – Purchase a Surety Bond
Money transmitters must purchase and maintain a $100,000 surety bond
Step 3 – Request a NMLS Account
The Maine 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 4 – Complete the Application
All Maine 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
- Name and location of all company authorized agents
- Account information for the company’s letter of credit, operating, and/or primary trust bank accounts
- List of all company permissible investments
- Statement detailing the company’s business volume in the previous 12 month period
- Company business plan containing the following information:
- Marketing strategies
- Products
- Target markets
- Fee schedule
- Operating structure
- Certificate of Good Standing
- Copy of the company’s authorized delegate agreement
- Samples of all documents used throughout the regular course of business
- Company formation documents
- Management chart detailing the company’s hierarchy
- Organizational chart detailing the company’s ownership structure
- Trust account authorization
Money transmitters must pay the following fees when submitting their license application:
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- $250 license fee
- $50 registration fee for each company authorized agent up to a maximum of $2,500
How Do Maine 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 Maine Money Transmitter License expires on December 31 of each year and must be renewed before the expiration date.
What Are the Insurance Requirements for the Maine Money Transmitter License?
The State of Maine does not require money transmitters to obtain any form of liability insurance as a prerequisite to obtaining a business license. Money transmitters must purchase and maintain a $100,000 surety bond.
How Do Maine 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:
- Legal name and location of entity/individual(s) buying the bond
- Surety company’s name and state of incorporation
- Date the bond is signed
What Can Maine Money Transmitters Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, money transmitters in Maine must 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
- Pay all funds owed to consumers
- Pay all required taxes and fees
What Other Insurance Products Can Agents Offer Money Transmitters in Maine?
Maine does not require money transmitters to purchase any form of liability insurance as a prerequisite to obtaining a license. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability 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 Maine Money Transmitter Customers?
The NMLS conveniently provides a public database to search for active money transmitters in Maine. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
