Many states require check cashing businesses to apply for a license before they can offer services. In some cases, filing a surety bond is part of the licensing process. States such as Delaware and Nevada, and the District of Columbia, all require a bond as part of their licensure. Depending on where your business is located, your regulatory authority may refer to this policy as either a check casher/cashing bond or a payday lender bond.
Like other types of surety bonds, your check casher bond is a contract between three parties:
Governing agencies will often require bonds for industries or services that feature heavy regulatory oversight, and in cases where contracts or loans are issued between a business and a consumer.
The cost of your bond will vary based on three main factors:
Each governing agency will determine the required bond amount for your license. This amount can vary based on your state and other factors, including the number of locations of your check cashing business.
Premium costs for check casher bonds will vary and are largely dependent upon your credit history. Below, you can find pricing information for states in which NNA Surety Bonds features this policy.
*Cost can vary depending on the bond amount required and your credit rating.
Similar to other surety bonds, a check casher policy helps protect your customers and encourage your business to abide by licensing laws and regulations. Here's how it works:
Upheld claims can make applying for or renewing a bond policy difficult in the future. As a bond is required to maintain licensure in your state, this can jeopardize your business. In this way, a surety bond helps mitigate harm while encouraging best legal practices.
In some states—such as Mississippi, Nevada, and Kentucky—check cashers are required to post a surety bond as part of their business licensing. If you operate in one of these states, or within Washington, D.C., you cannot legally offer check cashing services without proper bond coverage.
Often, a bond is made a licensing requirement when the state feels extra protection must be afforded to consumers. This is especially true for financial services, where industry regulations may be complex and consumers can be misled.
Always check with your state or local government to determine their full licensing process.
If you need to apply for or renew your bond policy, NNA Surety Bonds will provide a free quote. Contact our representatives to apply for your bond today.