Nebraska money transmitters will calculate their surety bond amount differently following the passage of Legislative Bill 186. The bill took effect with its passage on March 29, 2017.
Under current law, Nebraska money transmitters must post a $100,000 bond when becoming licensed; the director of the Department of Banking and Finance can increase that bond up to $250,000 “for good cause.” Each location—in addition to the first—licensed under the same applicant where money transmission services are offered increases the surety bond amount by $5,000. For example, if a money transmitter license applicant wanted to do business from four locations, they would need to increase their initial surety bond amount by $15,000.
LB 186 will adjust some of these requirements by eliminating the $5,000 per location surety bond amount for Nebraska money transmitters. The initial surety bond amount will still range from $100,000 to $250,000. At license renewal, the licensee’s surety bond amount will be determined by the total value of money transmitter transactions in the past four calendar quarters, as follows:
- $0-$2,000,000 in money transmitter transactions—$100,000 surety bond
- $2,000,000.01-$4,000,000 in money transmitter transactions—$150,000 surety bond
- $4,000,000.01-$6,000,000 in money transmitter transactions—$200,000 surety bond
- Over $6,000,000 in money transmitter transactions—$250,000 surety bond
Nebraska money transmitters must become bonded to prevent the mishandling of customers’ funds. Licensees with no or insufficient surety bonds are given a 30-day notice by the Department to comply with the law. Money transmitters also have the option of posting other types of financial security, including letters of credit.
Nebraska money transmitters apply for their license through the Nationwide Multi-state Licensing System (NMLS). Some of the information required in their application includes the following:
- Money Services Business (MSB) registration number, obtained by registering with the United States Department of the Treasury
- Other trade names or DBAs
- Permissible investment worksheet for new applicants
- List of all Nebraska business locations
- Formation document, if business is an LLC, corporation or partnership
- Detailed business plan
- $1,000 application fee
- Business document samples
The licensing checklist assembled for Nebraska money transmitters by the Department provides more details about the information required of applicants. Licensees must file a license renewal application, along with a $250 fee, on or before December 31 each year. License renewal applications must also include a report that includes a recent audited financial statement, among other information.