Michigan Money Transmitter Bond

Anyone operating a money transmission business in Michigan must secure a money transmitter bond as part of the state licensing process. This bond protects customers from financial loss caused by fraud, mismanagement, or regulatory violations. Below, you’ll learn who needs this bond, how much it costs, how to file it through the NMLS, and how to apply for one using Lance Surety’s Get a Quote page.

Money transmission businesses move funds or value between parties — including wire transfers, payment processing, money orders, and virtual currency exchanges. Because these activities involve handling customer funds, Michigan law requires companies to obtain a license from the Michigan Department of Insurance and Financial Services (DIFS) and file a surety bond before operating legally in the state.

While money transmitters must comply with federal AML rules and register with Financial Crimes Enforcement Network (FinCEN), the Michigan money transmitter bond itself specifically guarantees compliance with Michigan’s Money Transmission Services Act, which aligns with those federal standards.

It protects consumers if a licensed transmitter fails to deliver funds, misappropriates payments, or violates the Money Transmission Services Act in any way..

This bond is a core part of Lance Surety’s broader money transmitter bond program, which helps financial businesses meet bonding requirements in every U.S. state.

A Michigan money transmitter bond is a type of license bond that guarantees a business will operate in accordance with Michigan’s Money Transmission Services Act (Public Act 250 of 2006). It provides financial recourse for consumers and the state if a company fails to uphold its obligations.

In short, the bond ensures that licensed money transmitters:

• Properly remit funds to customers and recipients
   
• Comply with DIFS regulations
   
• Avoid fraudulent or deceptive business practices
   
• Report and handle transactions in line with AML laws

If a licensed business violates these terms, a claim can be filed against the bond. The surety company compensates valid claims up to the bond amount, and the transmitter must reimburse the surety for the payout.

The bond amount is set by Michigan DIFS based on your company’s financial condition and transaction volume. The minimum required bond is $500,000, though DIFS may require a higher amount depending on business activity. Higher volumes generally require larger bonds to provide adequate consumer protection.

Businesses applying for this bond must already be registered with FinCEN and maintain records of compliance with federal AML requirements.

The cost of a Michigan money transmitter bond is only a fraction of the total bond amount. While the state may require coverage of $500,000 or more, most applicants pay between 1% and 5% of that figure annually — known as the bond premium.

For example:

• A $500,000 bond may cost between $5,000 and $12,500 per year.
• A $1,000,000 bond could cost around $10,000 to $25,000 annually, depending on underwriting results.

Several factors influence the premium rate:

• Credit score and financial strength of the owner or company
• Business experience and licensing history
• Company net worth and liquidity
• Previous claims or legal issues

Strong applicants with excellent credit and financials typically secure rates near the lower end of the range. Those with less-established credit can still qualify at slightly higher rates.

Rates can improve over time through consistent renewals and clean compliance history. More information about what affects surety pricing is available in Lance Surety’s Surety Bond Cost resource.

For businesses ready to start, applications can be submitted in minutes through our secure Get a Quote form.

Obtaining a Michigan money transmitter bond involves several coordinated steps with both Lance Surety and state regulators. The process is straightforward:

1. Determine your required bond amount.
    The minimum bond required by Michigan DIFS is $500,000, but it may increase depending on transaction volume and the type of money services offered.
    
2. Apply through a licensed surety bond provider.
    Start your application through Lance Surety’s Get a Quote form to receive personalized rates from top-rated surety carriers.
    
3. Undergo underwriting review.
    The surety company will evaluate your credit, financial statements, and business background. Most qualified applicants are approved within 24 hours.
    
4. File your bond electronically through NMLS.
    Michigan uses the Nationwide Multistate Licensing System (NMLS) for license management. All money transmitter bonds must be submitted through the NMLS’s Electronic Surety Bond (ESB) system.
    
5. Maintain and renew annually.
    Bonds must remain active throughout the life of the license. Renewal reminders are typically sent 30–60 days before expiration to ensure continuous compliance.

If you’re new to the process, Lance Surety’s how to get bonded guide provides clear steps on preparing your financials and documentation before applying.

Once your bond is active and filed, DIFS issues your license, authorizing you to transmit funds legally within Michigan.

Yes. Even with less-than-perfect credit, you can still qualify for a Michigan money transmitter bond. Lance Surety Bonds works with a broad network of A-rated sureties that specialize in helping applicants with lower credit or limited financial history.

Underwriters evaluate each case individually, focusing on financial performance, experience in money transmission, and overall business stability. While applicants with low credit may face slightly higher premiums (often around 5–8%), most are still approved for bonding.

Over time, consistent renewals and strong financial management can help reduce your rate. Transparent communication during the application process ensures faster approvals and better pricing.

Who needs a Michigan money transmitter bond?

Any company or individual engaged in transmitting money, issuing payment instruments, or facilitating electronic transfers for Michigan customers must obtain a license and surety bond through DIFS.

How long does it take to get bonded?

Most qualified applicants receive bond approval within one business day. The bond is then filed electronically through NMLS, allowing the license to be finalized quickly.

What happens if my bond is canceled or not renewed?

If your bond lapses, your money transmitter license becomes invalid until a new bond is issued. DIFS requires continuous bond coverage; failure to maintain it can lead to suspension or revocation of your license.

Can the bond amount change over time?

Yes. DIFS may require an increase in bond coverage if your company’s transaction volume grows or if there are compliance concerns. Keeping your financial statements updated helps ensure the correct bond amount remains on file.

Lance Surety Bonds. (n.d.). Money transmitter bonds.
https://www.lancesuretybonds.com/license-bonds/money-transmitter-bonds

Lance Surety Bonds. (n.d.). Surety Bond Cost.
https://www.lancesuretybonds.com/learn/surety-bond-cost

Lance Surety Bonds. (n.d.). How to get bonded.
https://www.lancesuretybonds.com/learn/how-to-get-bonded

Lance Surety Bonds. (n.d.). Get a Quote.
https://www.lancesuretybonds.com/surety-bond-quote

Michigan Department of Insurance and Financial Services (DIFS). (n.d.). Home page.
https://www.michigan.gov/difs

Nationwide Multistate Licensing System. (n.d.). NMLS Resource Center.
https://mortgage.nationwidelicensingsystem.org/

Financial Crimes Enforcement Network (FinCEN). (n.d.). Official website.
https://www.fincen.gov/