New York Money Transmitter Bond
New York's Department of Financial Services requires a surety bond of at least $500,000 to hold a Money Transmitter License under Banking Law §643 — the highest flat statutory minimum among the largest state money transmission programs. Sell traveler's checks too, and 3 NYCRR 406.13 requires an additional $750,000 bond, for $1,250,000 combined. Unlike California's $9M cap or Florida's $2M cap, §643 sets no statutory ceiling — DFS can require more on 30 days' notice as your business grows.
- Who requires it: The New York Department of Financial Services (DFS), under Banking Law §643 and 3 NYCRR 406.13.
- Amount: At least $500,000 to hold a Money Transmitter License, with no statutory ceiling. Selling traveler's checks adds a separate $750,000 bond, $1,250,000 combined. DFS can require more on 30 days' notice.
- Timing: We submit complete applications to the carrier promptly; most quotes within one business day.
A floor with no ceiling, split by instrument type
New York doesn't scale the bond to your transaction volume the way Florida does, and it doesn't run a net-worth test the way Texas does. Article 13-B ties the amount to which instruments you sell — and then leaves the ceiling open-ended.
New York Banking Law § 643 — bond by instrument type
Additional, not alternative: a licensee selling both posts both bonds
Payment instruments — § 643
$500,000 minimum
Covers money orders, wire transfers, and drafts sold or issued as New York instruments. This is the statutory floor for every Money Transmitter License.
Traveler's checks — 3 NYCRR 406.13
+ $750,000 minimum
An additional, separate bond required only if the licensee also sells or issues New York traveler's checks. Stacks on top of the $500,000 bond.
N.Y. Banking Law § 643; 3 NYCRR 406.13
The part that catches applicants off guard: §643 doesn't say the Superintendent's increase authority tops out anywhere. Once your business is licensed, DFS can require a higher bond “upon thirty days’ notice” if it determines an increase is necessary — there's no statutory number where that authority stops. Budget for the possibility that your bond grows with your business, not just at renewal.
How New York's formula differs from the other big state programs
New York has not adopted the CSBS Money Transmission Modernization Act that roughly 31 states have enacted in some form. It runs its own framework under Article 13-B, and the mechanics look nothing like the three other high-volume state programs.
Money transmitter bond structure — New York vs. the other largest state programs
Minimum bond, basis for the number, and statutory ceiling (if any)
| State | Minimum bond | How it scales | Statutory cap |
|---|---|---|---|
| New York | $500,000 (+$750,000 for traveler's checks) | Fixed by instrument type — not volume-scaled | None — DFS may increase on 30 days' notice |
| California | $250,000 (receiving-money) or $500,000 (instruments) | Scaled to average daily outstanding CA obligations | $7,000,000 + $2,000,000 = $9,000,000 combined |
| Florida | $50,000 | 2% of prior-year New York-instrument-style volume | $2,000,000 |
| Texas | $100,000 (net-worth test) | Net worth or volume-based, whichever governs | $500,000 |
N.Y. Banking Law § 643; 3 NYCRR 406.13; Cal. Fin. Code § 2037; Fla. Stat. § 560.209
The takeaway for multi-state applicants: don't assume your Texas or Florida bond calculation transfers to New York. New York's number depends only on which instruments are on your license application, not on your projected or actual transaction volume — see the Texas money transmitter bond and California money transmitter bond pages for how those states calculate differently.
Payment instruments only, or traveler's checks too? That answer sets your bond amount.
Tell us your instrument mixThe bond is often the smallest number in your DFS compliance stack
Two different New York requirements get confused constantly: the §643 surety bond, and the §651 permissible-investments requirement. They aren't the same thing, and satisfying one doesn't satisfy the other.
§643 — the surety bond (or securities deposit)
A third-party guarantee, capped at its own penal sum ($500,000–$1,250,000+). Instead of buying a bond, §643 lets a licensee deposit approved U.S. or New York government securities of equal value with DFS — collateral in lieu of premium. Either way, this satisfies the licensing condition, not your ongoing balance-sheet obligation.
§651 — permissible investments
A separate, ongoing requirement: every licensee must “at all times maintain permissible investments” with a market value “at least equal to the aggregate” of all outstanding New York payment instruments and traveler's checks — effectively 100% collateral against what you currently owe customers (or 80% under the net-carrying-value alternative).
For a transmitter processing real volume, §651's permissible-investments requirement is almost always the larger capital commitment by a wide margin — a company with $10 million in outstanding New York obligations needs roughly $10 million in permissible investments on top of its $500,000–$1,250,000 bond. Sizing your capital plan around the bond alone misses the bigger number.
Official New York Requirements
"Every licensee shall at all times maintain permissible investments having... a market value at least equal to the aggregate of the amount of all its outstanding payment instruments and all its outstanding traveler's checks."New York Banking Law • N.Y. Banking Law § 651
This bond covers Article 13-B, not the BitLicense — but crypto firms often need both
New York regulates virtual currency through a completely separate framework: the BitLicense, codified at 23 NYCRR Part 200, which has governed “virtual currency business activity” in New York since June 24, 2015. It has its own capital, custody, and cybersecurity requirements — and it does not require this §643 bond.
The confusion happens because DFS administers both licenses and both are common in fintech. A crypto exchange that only custodies and trades virtual currency for New York users typically needs a BitLicense alone. But the moment that same company also wires U.S. dollars, sells stablecoins redeemable through a fiat rail structured as money transmission, or otherwise engages in Article 13-B activity, it needs a Money Transmitter License — and this bond — in addition to the BitLicense. Two licenses, two separate DFS filings, and only one of them carries a surety bond requirement.
Before you assume your BitLicense covers your fiat operations (or vice versa), map each specific activity against its own statute. DFS evaluates activities, not company labels.
Who's exempt from the New York MTL — and this bond
Banking Law §641 requires a license to “engage in the business of selling or issuing checks” or “receiving money for transmission” in New York — but it exempts a specific list of regulated entities so they aren't double-licensed: banks, trust companies, private bankers, foreign banking corporations licensed to do business in the state, savings banks, savings and loan associations, national banking associations, federal reserve banks, and federal savings banks or savings and loan associations.
Agent-of-a-bank and agent-of-a-payee
§641 also exempts anyone acting solely as “an agent of a licensee or as agent of a payee.” DFS has interpreted the agent-of-payee route narrowly in its published banking interpretations: an entity that receives payments and forwards them to a payee under a genuine agency relationship is not itself transmitting money. An agent of an exempt bank is exempt to the same extent the bank itself is exempt. Neither exemption is self-executing — DFS has issued opinion letters rejecting arrangements that call themselves “agents” without the underlying legal relationship to match. Confirm your structure against a current DFS interpretation before assuming you're exempt.
Getting licensed: DFS application → NMLS bond filing
Open an NMLS company account and file Form MU1
Set up a Primary and Secondary Account Administrator in NMLS, then submit the MU1 license application along with two years of audited financial statements, fingerprints for control persons, an AML program, and the $3,000 non-refundable DFS filing fee.
Confirm which instrument types you're licensing for
Payment instruments alone sets the bond at $500,000. Adding traveler's checks adds the $750,000 bond under 3 NYCRR 406.13. This is the single biggest driver of your required amount — confirm it before underwriting starts.
Underwrite and issue the bond(s) on DFS's form
The surety reviews company financials and issues each required bond on DFS's prescribed form — or you arrange the alternative securities deposit if you'd rather post collateral than pay premium. Start your New York quote once you know your instrument mix.
File electronically through NMLS and stay current on §651
The bond attaches to your license record in NMLS. Once licensed, track your permissible-investments position under §651 continuously — it's the requirement DFS examinations scrutinize most closely, separate from the bond itself.
When New York regulators tap the bond
Under 3 NYCRR 406.13, the bond's proceeds “constitute a trust fund for the exclusive benefit” of the purchasers and holders of the New York instruments (or traveler's checks) it covers — the bond protects consumers and the Superintendent, not the licensee. If DFS finds a licensee violated Article 13-B, or the licensee becomes insolvent, the trust proceeds are payable to the Superintendent for distribution to affected instrument holders, up to the bond's penal sum. A paid claim also triggers §643's replenishment requirement: the licensee must furnish a new or additional bond so the total principal sum equals the amount originally required. The surety then seeks reimbursement from the licensee under the indemnity agreement — the bond fronts the loss, it doesn't absorb it.
More on this bond and New York DFS filings
New York money transmitter bond questions
Why doesn't New York cap its money transmitter bond the way California and Florida do?
Banking Law §643 sets a floor — "the principal amount of such bond shall be no less than five hundred thousand dollars" — but nowhere sets a ceiling. Compare that to California, which caps its combined §2037 bonds at $9,000,000 total, or Florida, which caps its 2%-of-volume formula at $2,000,000. New York instead gives the Superintendent of DFS open-ended authority under §643 to require an increase "upon thirty days' notice" whenever the Superintendent determines it's necessary — no dollar limit is written into the statute. In practice this means a large New York transmitter's bond can be raised at DFS's discretion in a way a Texas or Florida transmitter's cannot, once you're past the initial minimum.
Do I need a $500,000 bond or a $750,000 bond — or both?
It depends on what you sell. §643 sets a $500,000 minimum bond covering New York payment instruments (money orders, wire transfers, drafts). If you also sell or issue New York traveler's checks, 3 NYCRR 406.13 requires an additional, separate bond of at least $750,000 for that activity — the regulation calls it exactly that: an "additional bond." A licensee doing only payment-instrument business posts $500,000. A licensee doing both posts $500,000 plus $750,000, for $1,250,000 in combined bond coverage. Check your MU1 application to see which activities you actually checked before assuming you only need the $500,000 floor.
Can I use a securities deposit instead of buying a surety bond?
Yes — §643 gives you a choice DFS doesn't advertise heavily. Instead of a corporate surety bond, a licensee may deposit "interest-bearing stocks and bonds, notes, debentures or other obligations of the United States... or of this state" with DFS, in an amount equal to the bond otherwise required. This ties up your own capital rather than paying annual premium, so it tends to make sense only for well-capitalized applicants who'd rather post collateral than buy insurance. Most licensees still choose the surety bond because it requires far less upfront cash — but the statutory alternative exists if your treasury team prefers it.
If I already have a BitLicense, do I still need this bond?
Only if you also engage in the fiat activity this bond covers. The §643 bond attaches to a Money Transmitter License (MTL) issued under Banking Law Article 13-B (§641) — it has nothing to do with virtual currency by itself. New York's BitLicense (23 NYCRR Part 200) is a completely separate license for "virtual currency business activity" and does not require this surety bond. The overlap happens when a single company does both: a crypto exchange that also wires U.S. dollars for customers, or a stablecoin issuer that also sells money orders, needs an MTL — and this bond — in addition to its BitLicense. A firm that only custodies, exchanges, or transmits virtual currency, with no fiat money-transmission activity, generally needs the BitLicense alone.
How is the Section 651 permissible-investments requirement different from the bond?
They solve different problems and both apply on top of each other. The §643 bond is a third-party guarantee — a surety (or your own posted securities) that pays out if you violate Article 13-B, capped at the bond's penal sum. Section 651 is a separate, ongoing balance-sheet requirement: "every licensee shall at all times maintain permissible investments" with a market value "at least equal to the aggregate... of all its outstanding payment instruments and all its outstanding traveler's checks" — effectively 100% collateralization of everything you currently owe customers (or 80% under the net-carrying-value option). For a transmitter processing meaningful volume, the §651 permissible-investments requirement is almost always the larger capital commitment — the $500,000–$1,250,000 bond is often the smallest line item in your DFS compliance stack, not the largest.
Does New York money transmitter licensing run through NMLS like other states?
Yes. DFS accepts the license application (Form MU1) and manages the license through the Nationwide Multistate Licensing System (NMLS), the same platform used for money transmitter licensing in most other states. You'll need a company NMLS account with a Primary and Secondary Account Administrator, audited financial statements from the two most recent fiscal years, fingerprints for control persons, and a $3,000 non-refundable filing fee submitted through the system. The §643 bond itself is issued on DFS's prescribed form and filed into your NMLS record once your underwriting is complete — if you're already NMLS-registered for other states, New York is a new filing against the same company record, not a new account.
All content is researched from official state and federal sources (.gov). BuySuretyBonds.com works with Treasury-listed surety carriers.
General information, not legal, financial, or underwriting advice. New York money transmitter bond requirements are set by Banking Law Article 13-B, specifically §643, and 3 NYCRR 406.13, administered by the Department of Financial Services (DFS). The BitLicense (23 NYCRR Part 200) and the §651 permissible-investments requirement are separate obligations discussed here for context but governed by their own rules. Amounts, exemptions, and filing procedures can change with statute, regulation, and DFS interpretation. Verify current requirements with DFS and through NMLS before filing.
Know your instrument mix before you file with DFS.
Tell us whether traveler's checks are part of your New York activity — we'll confirm whether you need the $500,000 bond alone or the full $1,250,000 combined bond, and quote accordingly.
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