As of September, 2020 the state legislature created a new license framework for collection agencies. A California debt collector bond will be one of the requirements for final state approval. The new Debt Collection Licensing Act which will take effect on January 1, 2022, provides for licensure, regulation and oversight of debt collectors by the Commissioner of Business Oversight. The statute brings more uniform regulation to both traditional collection agency operations and well as to debt buyers, and streamlines licensing through the National Mortgage Licensing Service.
The California collection agency surety bond is addressed under 100019(e). Pursuant to the Code, each applicant must file a surety bond in a minimum amount of twenty-five thousand dollars ($25,000). The bond must run to the Commissioner and be issued by a surety company authorized to do business in Califonia. The instrument must be filed with the Commissioner within ten days of execution. The debt collector bond guarantees the recovery of expenses, fines, and fees levied by the Commissioner in accordance with the prevailing statute and any administrative regulations promulgated by the state agency. The Commissioner may require licensees to submit the surety bond electronically through the Nationwide Multistate Licensing System & Registry (NMLS).
The new law does not exempt debt collectors from compliance with the federal rules which regulate debt collection practices. The Fair Debt Collection Practices Act (FDCPA) is the federal code which governs debt collection practices. The FDCPA prohibits debt collection companies from using abusive, unfair or deceptive practices to collect debts and requires collection agencies to comply with local licensing and ethical standards.
California surety bond leader, SuretyOne.com is a specialist in the bonding needs of collection agencies. We offer both the surety and fidelity bonds needed by debt collection professionals in all fifty states, Puerto Rico and the U.S. Virgin Islands. Questions about this surety bond? Call us at (800) 373-2804, email us at Underwriting@SuretyOne.com or click here for live chat. A California debt collector bond is quick, easy and issued same-day.
Surety bond application review and quoting are free of charge. There is no obligation to purchase.