Surety Bond Encyclopedia

Money Transmitter - NMLS Bond - Statewide in Colorado

Brief Summary

Colorado money transmitters no longer work from the old $250,000 to $2,000,000 bond rule. Under the 2025 Money Transmission Modernization Act the bond is sized to your own Colorado transmission volume, with a $250,000 floor and a $1,000,000 ceiling. Posting a bond means paying an annual premium instead of tying up that much cash, and a bond at the $1,000,000 maximum spares you the quarterly liability math entirely.

Every applicant for a Colorado money transmission license, and every licensee for as long as it holds the license, must keep security on file with the Colorado State Banking Board under C.R.S. 11-110-1002. The amount is the greater of $250,000 or 100% of the licensee's average daily money transmission liability in Colorado over the most recently completed three month period, capped at $1,000,000. With Board approval a deposit can stand in place of the bond.

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How to Apply for a Money Transmitter - NMLS Bond:

Work out your average daily Colorado money transmission liability for the latest completed three month period, or plan on the $1,000,000 maximum.
Set the bond amount at the greater of $250,000 or that liability figure, up to $1,000,000.
Use the exact legal name and NMLS ID that appear on the license application.
Complete the bond application and the owner credit review.
Pay the premium and have the bond executed in the form the Banking Board accepts.
File the bond as directed by the Division of Banking and keep it in force for the life of the license.
Recheck the amount as volume changes and increase the bond when your liability rises.

Detailed Information About the Colorado Money Transmitter - NMLS Bond:

The law changed in 2025

House Bill 25-1201 repealed Colorado's old Money Transmitters Act and reenacted Article 110 of Title 11 as the Money Transmission Modernization Act. Pages and guides written before that still quote the old rule, where the bond was tied to outstanding payment instruments and could run to $2,000,000. That is no longer the formula.

How much bond you need

C.R.S. 11-110-1002 sets the security at the greater of $250,000 or 100% of your average daily money transmission liability in Colorado, calculated for the most recently completed three month period. The amount tops out at $1,000,000. A new applicant with little Colorado volume starts at $250,000. As volume grows, the bond has to grow with it until it reaches the cap.

If you carry the full $1,000,000, the statute says you do not need to calculate your average daily liability for bond purposes at all. Some licensees choose the maximum for that reason alone.

Who has to post it

Any person engaging in money transmission in Colorado who needs a license under Article 110. The act exempts a number of entities from licensing, including federally insured depository institutions, credit unions and bank holding companies, government agencies and their agents, the U.S. Postal Service, registered broker dealers and futures commission merchants acting in those roles, payment system operators handling clearing and settlement, and agents of a payee that meet the written agreement test in C.R.S. 11-110-301. An exempt entity does not need the license and therefore does not post this bond.

The bond is only one prudential requirement

The same part of the act requires a tangible net worth of at least $100,000 or a percentage of total assets, whichever is greater, shown on financial statements at application. Licensees must also hold permissible investments at least equal to all outstanding money transmission obligations. The bond does not satisfy either of those.

Filing and renewal

The bond must be in a form satisfactory to the Banking Board, and the act authorizes the Board to run licensing through NMLS. A license expires December 31 of the year it was issued, unless it was issued between November 1 and December 31, in which case it runs through December 31 of the following year. Licenses renew annually, with the renewal fee due no more than 60 days before expiration. Confirm the current bond form and NMLS filing steps with the Colorado Division of Banking before the bond is issued.

Eligibility and Requirements for a Colorado Money Transmitter - NMLS Bond:

Colorado State Banking Board as obligee.
Bond amount between $250,000 and $1,000,000 based on Colorado transmission liability.
Continuous coverage while licensed, since a licensee must maintain security at all times.
Tangible net worth of at least $100,000 or the asset based percentage in C.R.S. 11-110-1001.
Permissible investments at least equal to outstanding money transmission obligations.
Annual license renewal, with each license term ending December 31.

Colorado Money Transmitter - NMLS Bond FAQs:

Is the Colorado bond still $1,000,000 with a possible increase to $2,000,000?

No. That came from the old rules. Since HB25-1201, C.R.S. 11-110-1002 sets the bond at the greater of $250,000 or 100% of average daily Colorado transmission liability, with a ceiling of $1,000,000.

Do I have to recalculate my liability every quarter?

Only if your bond is below the cap. A licensee that keeps a bond at the $1,000,000 maximum is not required to calculate average daily money transmission liability for bond purposes.

Can I post cash instead of a bond?

With the Banking Board's approval, a deposit can be used instead of a surety bond. It has to meet the same amount rule.

Our company is a bank. Do we need this bond?

Federally insured depository institutions, credit unions organized under state or federal law, and bank holding companies are exempt from Article 110 licensing, so they do not post this bond.

When does the license expire?

December 31 of the year it was issued. A license first issued between November 1 and December 31 runs through December 31 of the next year. After that it renews each year.