A. Except as otherwise provided in Subsection B of this section, a surety bond, letter of credit, or other similar security acceptable to the director shall accompany an application for a license pursuant to Article 2 [58-32-201 to 58-32-206 NMSA 1978] of the Uniform Money Services Act. Except as otherwise provided in Subsections D and F of this section, the required security shall be in the amount of three hundred thousand dollars ($300,000) or an amount equal to one percent of the licensee's total yearly dollar volume of money transmission business in this state or the applicant's projected total volume of business in this state for the first year of licensure, whichever is greater, up to a maximum of two million dollars ($2,000,000).
B. The security shall be in form and substance and from an issuer satisfactory to the director and payable to New Mexico for the benefit of any claimant against the licensee to secure the faithful performance of the obligations of the licensee with respect to money transmission.
C. The aggregate liability on a surety bond shall not exceed the principal sum of the bond. A claimant against a licensee may maintain an action on the bond or the director may maintain an action on behalf of the claimant.
D. A surety bond shall cover claims for so long as the director specifies, but for at least five years after the licensee ceases to provide money services in New Mexico. However, the director may permit the amount of security to be reduced or eliminated before the expiration of that time to the extent the amount of the licensee's payment instruments or stored-value obligations outstanding in New Mexico is reduced. The director may permit a licensee to substitute another form of security acceptable to the director for the security effective at the time the licensee ceases to provide money services in New Mexico.
E. In lieu of the security prescribed in this section, an applicant for a license or a licensee may provide security in form and substance and from an issuer prescribed by the director.
F. The director may increase the amount of security required to a maximum of five million dollars ($5,000,000) if the financial condition of a licensee so requires, as evidenced by reduction of net worth, financial losses or other relevant criteria.
History: Laws 2016, ch. 88, § 203.
ANNOTATIONSEffective dates. — Laws 2016, ch. 88, § 1007 makes Laws 2016, ch. 88 effective January 1, 2017.