Alabama Money Transmitter Bond Overview
- Purpose: To ensure money transmission companies operate honestly and legally
- Who Needs It: All money transmitter licensees in Alabama
- Regulating Body: The Alabama Securities Commission
- Bond Amount: $100,000–$500,000
- Minimum Price: $1,000 or 1%
What Is an Alabama Money Transmitter Bond?
An Alabama money transmitter bond is a financial guarantee required for businesses that sell and transmit money or other payment instruments. It is similar to insurance, but protects consumers rather than the business.
The Alabama Securities Commission requires a minimum $100,000 money transmitter bond to protect the public from fraudulent actions and non-compliant practices.
Bond Coverage Requirements for Alabama Money Transmitters
All money transmission companies need a $100,000 surety bond for initial licensing. Alternatively, you can submit a letter of credit, but a surety bond is typically the more affordable and efficient option.
Your required bond coverage may increase to match the average daily liability for money received for transmission plus 50% of the average daily outstanding payment instrument and stored value obligations in Alabama.
How Much Do Money Transmitter Bonds Cost in Alabama?
Alabama money transmitter bonds typically cost 1–10% of the total coverage amount. Applicants with strong credit and financials often pay just $1,000–$2,000 for $100,000 bonds. Apply for your personalized quote today.
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does an Alabama Money Transmitter Bond Work?
A money transmitter bond joins three parties into a legally- and financially-binding contract.
| Bond Party | Description |
|---|---|
| 1) Principal | The money transmission business owner(s) |
| 2) Obligee | The Alabama Securities Commission |
| 3) Surety | The issuing surety provider |
As the principal, you are responsible for upholding your obligation to the Securities Commission (the obligee). That means following all Alabama licensing rules, regulations and laws.
If you fail to uphold your obligation, harmed parties can file bond claims, which the surety reimburses. However, you will then need to repay the surety.
How Do I Get a Money Transmitter Bond in Alabama?
Start the bonding process by submitting a quote request form with SuretyBonds.com. We’ll provide a quote within one business day or less.
You can pay your premium and sign the bond documents online at your convenience. We’ll email you the official bond form. Then, you must upload the bond to your NMLS profile in the “Document Uploads” section of the Company Form (MU1).
How Do I Renew My Bond?
To renew your bond each year, just pay your renewal premium invoice when prompted. If you work with us, we’ll start notifying you 90 days prior to the expiration date to ensure you don’t have a lapse in coverage.
No additional documentation is needed, unless you need to make a change to the bond.
How to Get a Money Transmitter License in Alabama
The Alabama manages money transmitter license applications through the Nationwide Multistate Licensing System (NMLS). Prepare all your documents and upload them to NMLS as instructed. To submit, you’ll pay a $1,000 license registration fee and a $120 NMLS processing fee.
You’ll also need to email two documents to the Alabama Securities Commission at [email protected]: company reference letters and a statement of prior money transmission activity. See the resources linked below for more guidance.
