Alabama § 8-7A-7 - Security.
Full text of Alabama Code of Alabama § 8-7A-7 — Security., with citation guidance and answers to common questions.
§ 8-7A-7. Security.
(a) A licensee shall maintain a surety bond, letter of credit, or other similar security in an amount, determined by rule or order of the commission, sufficient to secure faithful performance of the obligations of the licensee with respect to money transmission in Alabama.
(b) Security must be in a form satisfactory to the commission and payable to the commission for the benefit of any claimant against the licensee.
(c) A claimant against a licensee may maintain an action on the bond, or the commission may maintain an action on behalf of the claimant.
(d) A surety bond must cover claims for a minimum of five years after the licensee ceases to provide money transmission services in this state. The surety bond may be reduced or eliminated, at the discretion of the commission, to the extent the amount of the licensee’s outstanding payment instruments and stored-value obligations are less than the surety bond coverage.
(e) The commission has discretion to accept other forms of security in lieu of the bond.
(f) In no event shall the bond be set at an amount less than one hundred thousand dollars ($100,000), or the average daily outstanding obligations for money received for transmission in Alabama plus 50 percent of the average daily outstanding payment instrument and stored value obligations in Alabama, whichever is greater.
(g) The commission 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.
Frequently Asked Questions About Alabama § 8-7A-7
What does Code of Alabama § 8-7A-7 cover?
Section 8-7A-7 ("Security.") is part of the Code of Alabama, the codified statutory law of Alabama. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Alabama § 8-7A-7?
A common citation format is "Code of Alabama § 8-7A-7" (Alabama). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Alabama law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Alabama official source linked on this page or consult a licensed Alabama attorney.
How does Alabama § 8-7A-7 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Alabama can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in Alabama.