A California finance lender bond (a/k/a "finance broker bond") is one of the requirements of being granted a license by the California Department of Financial Protection &Innovation (DFPI). Per the Department, "The definition of “broker” includes any person engaged in the business of negotiating or performing any act as broker in connection with loans made by a finance lender. " A licensee must file an annual report by March 15th of each year from which an "annual assessment" is determined. This volume report is important to determining sufficiency of the surety bond and other loan business compliance measures.
The California finance lender bond must be issued by a surety company licensed in the states and written in a minimum amount of twenty five thousand dollars ($25,000). Per the Department's directive, "The Commissioner of the DFPI may require a higher bond amount from a licensee that employs one or more mortgage loan originators and who makes or arranges residential mortgage loans, based on the dollar amount of residential mortgage loans originated and any mortgage loan originators employed by that licensee. The surety bond amounts will be based on the aggregate dollar amount of residential mortgage loans originated (MLOs) by the licensee in the preceding calendar year, as follows:"
|Aggregate Loans||Bond Amount|
|0 - $1,000,000||$25,000|
|$1,000,001 - $50,000,000||$50,000|
|$50,000,001 - $500,000,000||$100,000|
Finance lenders that do NOT engage in residential lending activity do not appear at present to be obligated to adhere to the formulae above. The California finance lender bond form language guarantees that the licensee will conform to and abide by the provisions of the California Financing Law, all rules and regulations lawfully made by the Commissioner, and honestly and faithfully apply all funds received to those to whom they are due. The California finance lender bond allows for third party claims as well as claims from the state.
California surety bond leader, Surety One, Inc. is a specialist in the bonding needs of finance lenders, brokers, loan originators and loan servicers, including student loan servicers. We offer both the surety bonds and fidelity bonds needed by credit service 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 finance lender bond is quick, easy and delivered in hours.
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