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How much does a New Mexico money transmitter bond cost?
The Financial Institutions Division of the New Mexico Regulation and Licensing Department requires all who engage in money transmission services to become licensed and submit a surety bond.
The bond amount is determined by the amount of business engaged in by the money transmitter. More specifically, the bond must be the greater of $300,000 or 1% of the total annual dollar volume of business in New Mexico. However, new applicants will be required to submit a bond in the amount of the total volume of business conducted within the state during the first year of licensure. The law also states that the bond amount shall not exceed $2,000,000 unless the licensee’s financial condition is inadequate, in which case the bond amount may be set as high as $5,000,000.
Because the bond amount varies for each individual, the premium owed by the applicant will also vary depending on several factors, including their personal credit and experience in the money transmission business. Applicants may also find themselves needing to provide underwriters with financials in order to demonstrate stability.
Assuming an applicant has stellar credit, as well as experience in the business, they may be quoted for as little as 1% of the total bond amount each year.
Give us a call at 1 (800) 308-4358, or contact a surety specialist online now to get a quote!
Contact us online to start your application. Or give us a call at 1 (800) 308-4358 to speak with a surety expert.
Why do I need this bond?
The passage of the Uniform Money Services Act requires money transmitter licensees to submit a surety bond as part of the licensing process in order to protect the public from potential harm resulting from the licensee’s failure to abide by all rules and regulations set forth in the Act.
By submitting the bond, the licensee is guaranteeing that money is available to cover the cost of any reparations, if necessary. Should someone suffer damages, they may file a claim up to the full bond amount. If the claim is found to be valid, the surety will pay out to settle the claim. Once the claim has been settled, the surety company will then look to the licensee for reimbursement for all money paid out in the settlement.
What’s the fine print?
Money transmitter bonds remain in effect for 12 months and must be renewed annually for as long as the business wishes to keep their license active in New Mexico.
The surety may opt to cancel the bond at any point during the term by providing the Division with 30 days’ written notice. However, they are not absolved from liability until after the 30 days has passed.
How to become an appraisal management company in New Mexico
Aside from submitting a surety bond, applicants looking to become licensed money transmitters in New Mexico must complete all other requirements established by the Act, including, but not limited to:
- A completed application including the legal name and address of the business
- Submit information to the Nationwide Mortgage Licensing System and Registry
- Pay a $2,000 non-refundable application fee
- Provide additional information if applicant is a corporation, LLC, partnership, etc.
For a complete list of the licensing requirements, please refer to Section 202 of the Act as well as the NMLS New Application Checklist in the Additional Resources section of this page below