California Money Transmitter Bond Overview
- Purpose: To protect consumers by ensuring money transmissions are completed properly
- Who Needs It: All licensed money transmitters providing services for people in California
- Regulating Body: The California Department of Financial Protection and Innovation (DFPI)
- Bond Amount: $250,000–$7,000,000
- Minimum Price: $5,000 or 2% of the coverage amount
What Is a California Money Transmitter Bond?
A California money transmitter bond is a financial guarantee that businesses involved with transmitting money will be compliant with state and federal laws.
The surety bond is required by the California DFPI as part of the license approval process. It ensures that businesses have funds available to cover potential claims and helps shield clients from fraud and mismanagement of funds.
Bond Coverage Requirements for California Money Transmitters
The bond amount varies from a minimum of $250,000 to a maximum of $7,000,000. The amount must be greater than the average daily outstanding obligations for money received for transmission in the state, provided it is within the above range.
How Much Do Money Transmitter Bonds Cost in California?
The bond premium rate starts at 2% of the total money transmitter bond coverage. For example, the minimum $250,000 bond amount starts at $5,000 for applicants with strong credit.
Apply for your free, personalized quote. Rates vary based on credit score and other financial risk factors.
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does a California Money Transmitter Bond Work?
A California money transmitter bond creates a financial guarantee contract between three parties.
- Principal: The money transmission business owner(s)
- Obligee: The California Department of Financial Protection and Innovation (DFPI)
- Surety: The issuing surety provider
When you file the bond as the principal, you promise to uphold your professional and legal obligations to the DFPI.
If you don’t and clients are harmed or you owe the state money, they can file bond claims for quick reimbursement. The surety validates and pays those claims, but then you have to reimburse the surety.
How Do I Get a Money Transmitter Bond in California?
Get your official California money transmitter bond by following these steps:
- Determine your required coverage amount
- Apply for a free quote
- Provide any additional information if requested
- Purchase and sign documents
- Select shipping option
Remember to file the bond with the state to become officially bonded. When you submit your initial license, contact your DFPI Portfolio Manager to arrange electronic delivery of the bond form.
How Fast Can I Get My Bond?
When you work with SuretyBonds.com, you can expect a response to your quote request within one business day or less.
Once you purchase, the California DFPI requires the original, physical bond form. We provide three-day, two-day or next-day FedEx shipping options ($20–$40) with tracking.
How Do I Renew My Money Transmitter Bond?
These bonds expire after one year. To maintain license compliance, renew your bond annually before it expires.
We’ll start providing your updated renewal invoice 90 days before the expiration date. Complete your purchase online or over the phone. You’ll receive a confirmation email with any follow up steps required.
How Do I Update My Bond Information?
You can update your bond coverage amount when you renew if your California money transmission surpasses $25,000.
How to Get a Money Transmitter License in California
First register your business with the California Secretary of State and as a money services business with FinCEN.
Then, you can begin the money transmitter licensing process through the Nationwide Multistate Licensing System (NMLS).
You’ll submit the MU1 company form with all supporting documents, including proof that you meet the minimum net worth requirements. Any control persons or owners will also need to complete the MU2 individual form and submit fingerprint-based FBI background checks.
Follow along with the NMLS licensing checklist linked below to ensure you include all the required materials.
