California Debt Collector Bonds
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California Debt Collector Bond
The State of California requires that all finance lenders & debt collectors maintain a California Finance Lenders Surety Bond by January 1, 2022.
Who is Required to Secure this California Finance Lender and Debt Collector Bond
All persons applying for a California Finance Lender license are required to post and maintain a surety bond in the amount of $25,000 (California Financial Code Section 22112). A finance lender is defined as any person engaged in the business of making consumer or commercial loans. In addition to the bond, the finance lender must also maintain a net worth of $25,000 at all times.
California Finance Lender and Debt Collector Bond Requirement Specifics
The California Finance Lender and Debt Collector Bond is required by the State of California to be used for the recovery of expenses, fines, and fees levied by the commissioner in accordance with this division or for losses or damages incurred by borrowers or consumers as the result of a licensee’s noncompliance with the requirements of this division.
Who is protected Under this California Finance Lender and Broker Bond
The California Finance Lender and Broker Bond is payable to Commissioner of Corporations and protects any person who sustains a loss caused by the Finance Lender. Any person who sustains an injury covered by this bond may, in addition to any other remedy he or she may have, bring an action in his or her own name upon this bond for the recovery of any damages sustained
Once You Have Your California Finance Lender Bond
Once the California Finance Lender Bond has been approved and released to the applicant’s care, it must be filed with the Department of Corporations. The Department of Corporations will maintain the bond, which must remain effective at all times to prevent the revocation of the Finance Lender License. If for any reason the bond is suspended or canceled, the license will be suspended until the bond is restored or is replaced.