Surety Bond News

The state of New Hampshire enacted new legislation concerning mortgage originators. The new law is labeled HB 610 and requires all mortgage originators to be licensed and to be covered under the license bond of the mortgage broker/banker of which the originator is a member of staff or an independent agent. The previous law required mortgage bankers to sustain a net worth and a $100,000 surety bond and asked mortgage brokers to acquire a $20,000 surety bond. HB 610 amplifies these quantities so that mortgage bankers must attain a surety bond no less than $100,000 and brokers must attain a surety bond of no less than $50,000. The amount of the surety bond has to be in a quantity that mirrors the dollar amount of the loans originated by the individual mortgage loan originators the mortgage banker/broker employs. The surety bond must also cover all the said originators.

State-charted banks are affected by a new law that was enacted in the state of Nebraska. The new law is titled LB 327 and authorizes state-charted banks to deposit, or have on deposit, funds from a fiduciary account that are managed by the bank’s trust department. Regarding any funds not insured or guaranteed by the Federal Deposit Insurance Corporation, LB 327 requires the bank to set to the side collateral as security under the management of suitable fiduciary officers and bank staff. Surety bonds will be authorized as alternative collateral, among other alternative financial instruments. LB 327 became active upon enactment.

Nevada enacted a new law concerning homes for individual residential care. The new law is referred to as AB 20 and requires homes for individual residential care to be licensed and to attain a surety bond in a quantity calculated by the amount of employees, just as present law requires for a variety of health care facilities. Under the present law, if a facility has less than seven staff, a $5,000 surety bond is required; a $25,000 surety bond is required if the home employs seven to 25 people; and a $50,000 surety bond is required for any more than 25 employees. These surety bonds must be issued and written by corporate sureties and have to be payable to the Aging Services Division for losses a patient has endured as a result of the licensee’s act or malfunction to act. The surety bond runs alongside with the license timeframe and can be terminated with 30 days notice to the Administrator of the Health Division under the present law.

HB 418 is a new law that was enacted in the state of Montana regarding equine (horse) slaughter facilities. The new law concerns the construction of equine slaughter or processing facilities; should a action be filed in court to confront the issuance of a license, permit, certificate, or other approval for an equine slaughter or processing facility, the challenger must attain a surety bond in a quantity equivalent to 20% of the anticipated building expenses of a proposed facility or the operational expenses of a operating facility.

In Minnesota, a new bill was introduced affecting debt settlement service providers. The new bill is named HB 2123 and subjects debt settlement service providers to the present surety bond requirements applied to debt management service providers. The present law requires debt management service providers to acquire a surety bond or other security in a quantity no less than $5,000. The Commissioner of Commerce establishes the amount required. HB 2123 was enclosed in one of the yearly budget bills, and the Governor’s line item veto did not influence the fresh license bond requirement.