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Virginia bonds

Virginia — Money Order Seller And Money Transmitter - NMLS Bond

The Virginia Money Order Seller and Money Transmitter bond is a required security for applicants and licensees operating under Chapter 19.1 of the Virginia Code. This bond protects the public and the Commonwealth by ensuring that licensees maintain the required financial security to fulfill their obligations while providing money transmission services within the state.

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Recorded state
Virginia
Bond type
Money Transmitter / Money Services Bond
Category
Financial services

What this bond does

This bond serves as a financial guarantee that a money transmitter will comply with Virginia state regulations and fulfill their fiscal responsibilities. It provides a source of security that remains in place throughout the licensee's operations and for a period after those activities cease.

Who needs it
This bond is intended for individuals and business entities applying for or maintaining a money transmission license through the Virginia State Corporation Commission and the NMLS.
Who it protects
The bond protects the Commonwealth and potential claimants by ensuring financial accountability. If a licensee fails to meet their obligations as defined under state law, the bond provides a mechanism for addressing liabilities incurred during the term of coverage.

Your bond option

This is the option on record for this bond.

The bond amount describes the limit of the bond obligation, not the price. A listed amount does not establish what the requesting party requires. The premium is what you pay and must be confirmed for the actual option. An E&O limit, where listed, is separate errors and omissions insurance.

Licensing and Security Mandates

Applicants for a money transmission license in Virginia must provide and maintain security in a form satisfactory to the Commission. This security is typically provided through a surety bond, though the Commission may approve a deposit as an alternative.

The minimum bond amount is determined by the licensee's average daily money transmission liability or tangible net worth. Specifically, the bond amount is generally the greater of $100,000 or the licensee's average daily liability, capped at $1 million. Alternatively, licensees with a tangible net worth exceeding 10 percent of total assets may satisfy the requirement with a $100,000 bond.

Coverage and Cancellation Terms

The security device must remain effective while the licensee is active and continue for five years after the licensee ceases money transmission activities in Virginia. The Commission may authorize a reduction or elimination of the security before the five-year mark if the licensee's outstanding transaction volume decreases significantly.

Cancellation of a surety bond requires providing 90 days of written notice to the Commission. Cancellation does not relieve the surety or the licensee of responsibility for claims or liabilities that were incurred or accrued while the bond was active.

Filing and Maintaining Compliance

Licensees must actively manage their bond to ensure the amount accurately reflects their current financial liability in the Commonwealth. Those maintaining a $1 million bond under the daily liability calculation or a $100,000 bond under the net worth provision are exempt from performing the average daily transmission liability calculation.

The Commission retains the authority to approve alternative security devices, such as letters of credit, especially when a licensee transitions out of the money transmission business. All filings must be consistent with the regulations established in Chapter 19.1 of the Code of Virginia.

Sources

Have these ready

  1. Verify your average daily money transmission liability for the most recent quarter.
  2. Assess your tangible net worth to determine if you qualify for the $100,000 bond tier.
  3. Confirm the bond form meets the specific standards required by the Virginia State Corporation Commission.
  4. Prepare to provide 90 days of notice to the Commission should you eventually need to cancel your bond.

Questions about this bond

What is the minimum bond amount required?

The minimum is $100,000, though it may be higher based on your average daily money transmission liability, up to a maximum of $1 million.

Can I provide a deposit instead of a surety bond?

Yes, with the express approval of the Commission, a deposit may be used in accordance with Virginia law as a substitute for a surety bond.

How long must I maintain the bond if I stop operating?

The security must generally remain in place for five years after you cease money transmission activities, though the Commission may allow for reductions based on outstanding transaction levels.

Does cancelling the bond remove liability for past actions?

No. Cancellation does not affect the rights of claimants regarding liabilities that were incurred or accrued during the period the bond was in force.

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