North Dakota ups bond amount for money brokers

North Dakota passed changes March 14 to its code regarding surety bond requirements for money brokers under the Money Brokers Act.

The law requires a surety bond of not less than $25,000, but effective Aug. 1, the new minimum will be $50,000.

The rest of Code Section 13-04.1-04.1 will remain the same:

  1. Each licensee shall maintain a surety bond in an amount not less than fifty thousand dollars. The surety bond must be in a form prescribed by the commissioner.
  2. When an action is commenced on a licensee’s bond, the commissioner may require the filing of a new bond.
  3. Immediately upon recovery upon any action on the bond, the licensee shall file a new bond.

The legislation also amended other aspects of the Money Brokers Act, including posting of license information, annual renewal fees, and annual report.

Before the amendment, the act required the licensee to keep the license clearly displayed in its place of business and to provide customers in the state with its license number.

Starting in August, licensees will be required to keep a notice that includes the license number and instructions for customers to look up the licensee on the Nationwide Multistate Licensing System & Registry for license verification. The licensee must clearly post the notice in its place of business and must still provide the same notice to its customers in North Dakota.

The amendment altered annual renewal fees from a flat $450 to a charge of $500 or “one-fourth of one percent of the money transmission dollar volume in North Dakota for the 12 months ending June 30, whichever is greater. The fee may not exceed $2,500.” In other words, if you have a transmission dollar volume of more than $20,000 in that time frame, you’re going to be paying more than $500.

Finally, the amendment changed the annual report due date from Aug. 1 to Jan. 1. This composite annual report must be filed by the parent company of the licensee with the commissioner.

Leave a Comment