Washington consumer loan companies will see some small changes in their surety bond regulations in the new year, mostly in the form of legislative clarification. Keep reading to find out more about what’s new on January 1, 2018.
Currently, Washington consumer loan companies are regulated by the Washington Consumer Loan Act. As is becoming common for many financial professions, they submit their license applications to the Nationwide Multistate Licensing System (NMLS). The Washington State Department of Financial Institutions is consumer loan companies’ regulatory and licensing agency. Applicants must register with three state agencies:
- Secretary of State—corporate registration
- Business Licensing Services—business license
- Department of Revenue—must have an open account
The NMLS provides a complete checklist of information for new applicants, requiring $1,162.21 in fees plus fingerprinting and credit authorization report fees for each control person at $36.26 and $15 per person, respectively. Licensees need a toll-free phone number, web address with specific information, and registered agent information.
Surety bonds for Washington consumer loan companies are based on the amount of residential and/or nonresidential loans they originate, with bond amounts determined as follows:
- $0-$20,000,000�$30,000 surety bond
- $20,000,000 to $40,000,000�$50,000 surety bond
- $40,000,000 to $50,000,000�$100,000 surety bond
- $50,000,000 or more�$150,000 surety bond
If a consumer loan company only services (collects payments on) mortgage loans, their bond amount is based on the dollar amount of residential mortgage loans serviced:
- $0-$50,000,000 in loan principal�$30,000 surety bond
- $50,000,000 or more in loan principal�$50,000 surety bond
The new legislation (underneath the old legislation) clarifies that the amount of loans originated, whether residential or nonresidential, are determined from the previous year. If there is no prior year volume to use, the bond amount is set at $30,000. Washington consumer loan companies that both originate and service residential mortgage loans will use the same schedule above to determine their bond amount using the origination volume. Surety bond amounts have not changed, but the new legislation clears up some confusing language in the prior version.