Surety Bond Encyclopedia

Money Transmitter Bond - Statewide in Ohio

Brief Summary

Ohio sets the money transmitter bond by formula, not by a fixed figure. You owe the greater of $300,000 or 0.5% of your annual Ohio transmission volume, up to $2,000,000, and the volume is measured every quarter on a rolling basis. We write the bond at the amount your current Ohio volume calls for and raise it when a quarter pushes the number up.

Ohio Revised Code 1315.07 requires every licensed money transmitter to keep a security device, usually a surety bond, that runs to the Superintendent of Financial Institutions for the benefit of claimants. The Division of Financial Institutions calculates it as the greater of $300,000 or 0.5% of the licensee's total annual dollar volume of money transmission in Ohio, with a $2,000,000 ceiling. Applicants also need $500,000 in net worth and apply through NMLS.

We can help with all Ohio bonds!

How to Apply for a Money Transmitter Bond:

Pull your total annual dollar volume of money transmission in Ohio for the most recent rolling 12 month period.
Multiply that volume by 0.5% and compare it to $300,000. The larger figure, capped at $2,000,000, is your bond amount.
Have the legal entity name and NMLS ID exactly as shown on the Ohio license record.
Have current financial statements ready for the surety's underwriting review.
Approve the quote, receive the bond naming the Superintendent of Financial Institutions, and file it with the Ohio application.
Recheck the amount after each quarter end and increase the bond if your volume requires it.

Detailed Information About the Ohio Money Transmitter Bond:

How the amount is calculated

The statutory floor in ORC 1315.07 is $300,000, and the superintendent may require more, up to $2,000,000. The Division of Financial Institutions applies that as the greater of $300,000 or 0.5% of the licensee's total annual dollar volume of money transmission in Ohio.

The volume is calculated quarterly on a rolling basis, using the 12 months ending March 31, June 30, September 30 and December 31. A licensee whose Ohio business is growing can owe a larger bond partway through the year, not only at renewal.

The arithmetic is simple. The $300,000 minimum covers annual Ohio volume up to $60 million. Above that, 0.5% takes over, and the $2,000,000 cap is reached at $400 million of annual Ohio volume.

What the bond guarantees

The security device secures the faithful performance of the licensee's obligations for money received from persons in Ohio for transmission. Under a bond, the superintendent may sue on behalf of claimants, individually or successively, or authorize claimants to bring their own actions.

A surety bond is one option. ORC 1315.07 also allows a pledge of cash or interest bearing United States, state or municipal obligations under a control agreement, or another device the superintendent approves.

Cancellation and closing down

A surety bond remains in effect until cancelled, and cancellation requires 30 days' written notice to the superintendent. Cancelling does not erase liability that accrued while the bond was in force. A licensee that stops transmitting must keep the security device until outstanding amounts are satisfied or reported to the Division of Unclaimed Funds, with reductions permitted as outstandings fall.

The rest of the license

ORC 1315.04 requires a minimum net worth of $500,000, and the DFI resources page lists a $5,000 application fee. Licensees must also hold permissible investments equal to outstanding transmission amounts. The license stays in force until surrendered, suspended or revoked, and the annual assessment is billed June 1 and due July 1. Applications are filed through NMLS.

ORC 1315.02 exempts, among others, the United States and its agencies, banks, credit unions and savings institutions, and persons the superintendent determines would not serve the purposes of the chapter.

Eligibility and Requirements for a Ohio Money Transmitter Bond:

Security device of at least $300,000, or 0.5% of annual Ohio volume if higher, up to $2,000,000.
Bond runs to the Ohio Superintendent of Financial Institutions for the benefit of claimants.
Minimum net worth of $500,000 under ORC 1315.04.
Permissible investments at least equal to outstanding transmission obligations.
30 days' written notice to the superintendent before the bond can be cancelled.

Ohio Money Transmitter Bond FAQs:

We moved $100 million through Ohio over the last 12 months. What bond do we need?

0.5% of $100 million is $500,000, which is higher than the $300,000 minimum, so the bond is $500,000. If volume keeps climbing, the amount climbs with it until it reaches the $2,000,000 cap at $400 million of annual Ohio volume.

When is $300,000 enough?

Whenever 0.5% of your annual Ohio volume comes to $300,000 or less, which means annual Ohio volume of $60 million or less. A new licensee with little Ohio history starts at the minimum.

How often does Ohio look at the amount?

The Division calculates annual volume quarterly on a rolling basis, for the 12 month periods ending March 31, June 30, September 30 and December 31. A strong quarter can raise the required bond before your annual assessment comes due.

Can we pledge cash instead of buying a bond?

Yes. ORC 1315.07 accepts a pledge of cash or of interest bearing United States, state or municipal obligations held under a control agreement approved by the superintendent, or another security device the superintendent approves. A surety bond keeps that capital free.

What happens to the bond if we stop transmitting money in Ohio?

You keep the security device in place until outstanding amounts are paid out or reported to the Division of Unclaimed Funds. The superintendent can allow a smaller device as those outstandings drop. A surety bond can only be cancelled after 30 days' written notice to the superintendent.