New Jersey Administrative Code
Title 3 - BANKING
Chapter 27 - MONEY TRANSMITTERS
Subchapter 4 - BONDING, SECURITY DEVICES
Section 3:27-4.1 - Bond or security device requirements

(a) A person who seeks an initial license to engage in the business of a money transmitter or in the business of foreign money transmitter shall comply with the requirements of 17:15C-8 and shall obtain a surety bond, utilizing a bond form provided by the Department, from a surety company authorized to do business in this State, or an irrevocable letter of credit, or a security device, authorized by the Commissioner in the amounts stated in chapter Appendix A which is incorporated herein by reference.

(b) The security device shall be in a form satisfactory to the Commissioner and shall run to the State for the benefit of any person injured by a wrongful act, default, or misrepresentation of the licensee, including its directors, officers, authorized delegates and employees, to secure the faithful performance of the obligations of the licensee with respect to the receipt, handling, transmission, and payment of money in connection with the sale and issuance of payment instruments, transmission of money, or both and for the benefit of the Department for unpaid examination bills, unpaid penalties and any other unpaid obligation of the money transmitter to the Department, including, but not limited to, returned items submitted to the Department in payment of bills, penalties, charges or fees.

(c) The security device shall remain in effect until cancellation, which may only occur after 30 days' written notice to the Commissioner. Cancellation shall not affect any liability incurred or accrued during the period the security device was in effect.

(d) The security device shall remain in place for no longer than five years after the licensee ceases money transmission operations in the State. The Commissioner may periodically review the amount of the licensee's payment obligations and the security device may be increased or reduced accordingly. However, notwithstanding this provision, the Commissioner may permit the security device to be reduced or eliminated prior to that time to the extent that the amount of the licensee's payment instruments outstanding in this State are reduced or eliminated. The Commissioner may also permit a licensee to substitute an irrevocable letter of credit or other form of security device acceptable to the Commissioner for the security device in place at the time the licensee ceases money transmission operations in the State by surrender, revocation or expiration of its license.

(e) Attorney's fees, pre-or post-judgment interest, court costs and similar charges are not recoverable through the security device, unless such charges are included in a final judgment against the money transmitter and the surety company was given prior notice of the court action and an opportunity to respond.

(f) The security device shall not be payable for claims made by business creditors.

(g) The security device shall not be payable for treble damage claims pursuant to the Consumer Fraud Act or any other State or Federal law.