What is a Wisconsin Community Currency Exchange Bond?
A Wisconsin Community Currency Exchange Bond is designed to ensure that professionals and enterprises in the industry that operate within the state will comply with the provisions of Section 218.05 of the Wisconsin Statutes.
This type of surety bond is “a guarantee of payment instead of a guarantee of collection.” It works by protecting against liabilities that may be sustained by the currency exchange due to financial fraud or mismanagement.
According to the Wisconsin Statutes, community currency exchange refers to any person or company engaged in the business of providing facilities for “cashing checks, drafts, money orders and all other evidence of money acceptable to such community currency exchange for a fee, service charge or other consideration.” This exempts banks, loan associations, and credit unions organized under the laws of the state.
Community currency exchange enterprises mainly cash checks but also offer a range of other financial services to clients, such as money orders. With currency being handled by exchange enterprises, the state implemented community currency exchange bonds to secure protection for its clients.
What are the bond conditions?
- The Surety must be authorized to conduct business in the State of Wisconsin.
- The bond shall be for the benefit of any creditors of the community currency exchange for any liability incurred for any sum due to any payee of any check, draft, or money order left with the community currency exchange for collection, and also for any penalties.
- If the bond is found to be doubtful, an additional bond in the like amount to be approved by the Wisconsin Department of Financial Institutions shall be filed by the licensee within 30 days after written demand by the division.
- The bond will remain continuous unless otherwise canceled by the Surety.
- The Surety may be released from liability by giving written notice indicating when the cancellation will take effect to the State Department of Financial Institutions. This notice must be received at least 60 days before the effective date of cancellation.
What is the bond amount?
Before any license is issued to a community currency exchange, the applicant must file annually with a surety bond in the principal sum of $5,000.
For every additional location of business that the applicant owns or plans to do business in the state, an additional license must be issued along with a surety bond in the amount of $5,000.
The bond cost is a percentage of the bond amount, which can range from 1%-5%.
For more information about your bond costs, get your FREE quote HERE!
How do I obtain a Community Currency Exchange Bond?
Community currency exchange licenses must be renewed annually, along with a surety bond. The initial application fee is $600 ($300 investigation fee and $300 annual fee), and the annual licensing fee is $300. The exam fee is $54/hour.
According to the License, Permit, and Registration Services of Wisconsin, applicants must:
- be trustworthy and reputable;
- have business experience qualifying the applicant to competently conduct, operate, own, or become associated with a community currency exchange;
- have a good business reputation;
- and be worthy of a license
In order to secure this type of bond, the community currency exchange first-time license applicant or those who are renewing their licenses must seek the assistance of a reputable surety bond company.
You will be asked to apply for this bond. If you’re ready to apply for one right now, you may easily do so HERE!
Once the application is received, the surety bond company will immediately process it. A surety bond expert will guide you through the whole process and ensure that you understand all the conditions before issuing the bond.
A certified surety underwriter will evaluate the following:
- Your financial strength
- Your job/business performance history
- Your credit score
- Your copy of the bond form (which can be obtained from the State Department of Financial Institutions)
Once the pre-qualification process is fulfilled, we will issue the bond and send it to you!
Take the first step in the licensing process by fulfilling the surety bond requirement. Get started now!