Surety Bond News

A new bill was recently enacted concerning the Connecticut Airport Authority. The new bill is titled SB 1003 and requires the members of the Board of Directors for the Connecticut Airport Authority to acquire a $50,000 surety bond to guarantee that they fulfill their responsibilities; a $100,000 bond is required of the Executive Director of the Authority. A blanket bond is acceptable to satisfy the bond requirements for the board members as well as the Executive Director of the Authority. SB 1003 became active on July 1, 2011.

Connecticut State legislators have enacted a new bill affecting the board of directors relating to a health care exchange. The new bill is named SB 921 and launches a health care exchange to apply the new federal health care law. The new legislation forms a board of directors for the exchange who must obtain a $50,000 surety bond to guarantee the faithful execution of their responsibilities. In this case, blanket bonds that cover all members of the board and its employees will satisfy the new bond requirement; these bonds must be issued by a state licensed surety company.

There will always be dishonest people looking for an easy buck in this world, which means there will always be scams right around the corner that you should watch for. One of the most popular scams being perpetrated this past year in the tough economy is deceitful debt settlement companies offering their “services” to escape debt. These shifty companies are capitalizing on vulnerable homeowners by offering them a quick fix to eradicate their debt.

“There is no such thing as a quick
fix,” said Senator Bob Duff (D-Norwalk) co-chair of the General Assembly’s Banks Committee. “These debt settlement companies prey upon the vulnerability of desperate homeowners, using a variety of tactics to coerce homeowners in distress to trust that their foreclosure or debt worries will disappear if they pay a fee.” Duff went on to say, “In 2009, we passed legislation with the support of then-Attorney General Richard Blumenthal that targeted these types of companies. Under our law, for-profit and nonprofit debt negotiation companies are required to register with the state Department of Banking, pay a license fee and post a surety bond. Consumers in Connecticut who are struggling with their debts should check that any company that promises help is properly licensed and registered before entering into any sort of arrangement.”

The new Connecticut law debt settlement companies must abide by now hinders the deceptive companies by requiring them to be licensed with the state which also requires a surety bond. This will curtail many shady companies right off the bat because most are not willing to pay the license or bond fee in order to operate legally. The surety bond will also guarantee that the company obtaining the bond will follow the rules and regulations that are set by the state. If the debt settlement company does not honor the regulations set by the state, a claim will go out on the bond which will be paid by the surety company who issued the bond.

“These services can entail so much more than a ‘payment plan.’ They can involve complicated financial arrangements that directly affect our personal financial health and security, and our ability to pay our bills and honor our most basic commitments”, said William Tong (D-Stamford), who is also co-chair of the General Assembly’s Banks Committee.

The new law, Public Act 09-208 also forbids up-front fees and requires settlement companies to assess and inform the client of the probability of success in salvaging their home or decreasing their debt. A contract is also required detailing all fees and provides a client the right to withdraw their contract within three days.

This enactment requiring a surety bond to be filed with Connecticut benefits both the clients looking for financial aid and legitimate debt settlement companies running an ethical business. Other top scam businesses this past year according to the Better Business Bureau (www.bbb.org) include job hunter, work-from-home, lottery and sweepstakes, and advance fee loan scams.

New and used car dealers in the State of Connecticut must follow new legislation that was recently enacted. The new law, which is referred to as SB 414 boosts the surety bond that is required of both new and used car dealers from $20,000 to $50,000. The present legislation authorizes the Commissioner of Motor Vehicles to require a increased surety bond amount from a license applicant; this is calculated by the applicants financial circumstance.

The state of Connecticut enacted a new law concerning debt negotiators on July 7^th, 2009. SB 950, which is the new law, requires debt negotiators to obtain a $40,000 license surety bond conditioned on the following of the new law. SB 950 authorizes direct actions on the surety bond for any harm that is consequential of non-compliance or the licensee’s failure to execute any written agreements with a debtor. The state also may take claims on the surety bond to amass civil penalties compulsory to the licensee. The aggregate liability under the surety bond is restricted to the penal total of the surety bond. The sureties are able to terminate the surety bond so long as there is 30 days of written notice. SB 950 became active on October 1^st, 2009.