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Texas Money Services Bond
Those involved in currency exchange or the transmission of money within the State of Texas must be licensed with the Department of Banking (DOB), and require a custom Money Services Bond.
Jet Insurance Company provides the Money Services Bond as a guarantee to the Department of Banking that reimbursement is available should the licensed currency exchanger or money transmitter fail to follow state regulations and/or fulfill contractual obligations.
With Jet you can receive better rates and comprehensive service across all your organization's surety bond needs when you set up an account with Jet. Get you Ohio bond first and start working with our underwriters today.
How Is the Bond Limit Determined for the Texas Money Services Bond? What Is the Cost?
According to the Texas Department of Banking, the Money Services Bond amount will depend on the license type you currently hold or are applying for.
Individuals that engage in the business of currency exchange only require a $2,500 bond amount.
Those who perform money transmitter services must obtain a bond in an amount that is equal to 1% of their yearly total volume of business transmissions; the bond limit shall be a minimum of $300,000 with a maximum $2,000,000 limit and DOB approval is needed.
At Jet, applicants seeking a currency exchanger license can purchase the $2,500 Money Services Bond for the guaranteed price of $100 annually. You can also choose to purchase the bond for just $10 per month or multi-year options are available at $175 for two years and $250 for three years!
As for applicants of the money transmitter license, the cost of the Money Services Bond starts at $120 monthly or $1,200. Rates are based on experience and financial status.
| Bond Type | Bond Limit | Monthly | Annual |
|---|---|---|---|
| $2,500 Currency Exchange Service Bond | $2,500 | $10 | $100 |
| $300,000 Money Transmitter Bond | $300,000 | $120 | $1,200 |
Why Is the Currency Exchanger Bond or Money Transmitter Bond Required?
The Texas Department of Banking is responsible for protecting the interests of consumers, which includes individuals who use money services and businesses. Due to a history of negligence (inaccurate money transmissions) and fraud, the DOB now requires the Money Services Bond of all money transmitter and currency exchanger license applicants as a way to ensure that financial regulations will be followed and that consumers will be protected from financial damages if a license violation is committed.
How to Apply for the Texas Money Services Bond With Jet
Our online application process is quick and easy! We only ask for information that is absolutely necessary to get you appropriate bond rates, which includes your contact details, the bond limit required by the DOB, and your social security number for a soft credit check (this only applies to money transmitter licensees).
If you are applying as a currency exchanger licensee, then you can simply purchase the Money Services Bond right away, no credit check necessary. A copy of your bond form and receipt will be sent to you once the purchase has been completed.
Regarding money transmitter licensees, a Jet underwriter will need to conduct a quick review of your application before providing a rate. If any additional info is needed, such as your business financials, we will get in touch with you. Once this process is complete, approved rate options will be emailed to you that you can purchase directly online. You will then receive an email with a copy of the bond and your receipt as soon as payment has been fulfilled.
How Does the Texas Money Services Bond Get Filed to the Department of Banking?
The Texas Department of Banking utilizes the Nationwide Multistate Licensing System (NMLS) to electronically manage most licensing paperwork, which includes the filing of surety bonds.
Once you have purchased your Money Services Bond with Jet, it must be uploaded to the NMLS website. In order to have Jet file your bond form, you must grant us permission to act as your surety company (Jet Insurance Company NAIC #16379). Once the bond is officially on file, you can contact us at any time to make any necessary changes.
Take a look at the graphic below for our outline of the NMLS bond filing process.
For further licensing information and application details, take a look at the NMLS State Licensing Requirements webpage.
Can I Cancel My Texas Money Services Bond and Get a Refund?
If you need to cancel your Money Services Bond for whatever reason, you can do so by sending a written cancellation request to us at [email protected]. Once received, we will send a termination notice to the Department of Banking. The surety bond will then be officially cancelled and released of liability within 30 days of the receipt of the notice by the DOB.
As for refunds, Jet will review your bond term for any unused premium, and if any is available, you will receive a reimbursement for such.
It is important to note that our monthly subscribers must make one last payment for the required liability period as your bond is technically active during this time. Once this step has been taken care of, all future payments will cease.
How to Renew the Money Services Bond
The surety bond is continuous which means that the bond will remain active as long as you make your renewal payments with Jet! However, if you pay monthly, you won’t even have to worry about renewing. Your bond will stay active with Jet so long as we continue to receive payments from your preferred account.
If you purchased the Money Services Bond in full and upfront, the Jet team will send you an invoice prior to the bond term expiration date. Just fulfill payment and your bond will set for another term. It’s that easy!
How Does a Texas Currency Exchanger or Money Transmitter Avoid Bond Claims?
Licensed currency exchangers and money transmitters are expected to comply with regulations pursuant to Chapter 151 of the Texas Finance Code. By following the code, you can ensure that disciplinary action, including a bond claim, can be avoided.
Claims on your Money Services Bond typically derive from license transgressions such as gross negligence, misrepresentation, or fraud. For example, failing to fulfill a client’s money transmission or currency exchange contract without probable cause is a violation and subject to action such as a bond claim.
If the Texas Department of Banking finds that you are in violation of your license regulations, they can choose to either bring suit on their own accord or on behalf of the damaged party, or they may encourage the claimant to take civil action themselves. Other possible actions by the DOB include suspending or revoking your license, requiring you to attend a mandatory hearing, and/or charging you with civil penalties.
It is in your best interest to be responsive and work with the DOB and/or any damaged client to try and resolve the matter before serious penalties such as a bond claim are inflicted.
What Happens if I Get a Texas Money Services Bond Claim?
If you receive a Texas court-ordered or DOB bond claim notice, immediately contact Jet! We will begin the process by asking that you provide us with all available information and documentation regarding your case. The Jet team will utilize these details for our own investigation of the alleged license violation.
Per the Money Services Bond form, Jet is legally obligated to make payment for claims that are found to be justified. Claim payouts will never exceed the bond amount. You, the licensee, are responsible for your own actions, and therefore must reimburse Jet for the claim payment made on behalf of your license transgression. An omission to comply with this requirement may lead to future difficulties in obtaining surety bonds in the State of Texas, especially bonds that are needed for licensure as a currency exchanger or money transmitter.
