Surety Bond Blog » tx

Texas Debt Management Service Provider Bond

Eric Weisbrot — Tue, 31 Jan 2012 12:36:52 +0000

Texas debt management service providers must follow new surety legislation. The new law is titled SB 141 and requires debt management service providers to obtain a surety bond in a quantity equivalent to the average daily balance of the trust account holding funds for Texas consumers over a six-month period before the bond is issued. SB 141 states that the initial surety bond must be $50,000 if the provider doesn’t hold money paid by a consumer for distribution to creditors. The new law also requires the surety who writes the bond to be “A-” rated from a nationally known rating service.

Texas Mortgage Loan Originator Bond

Eric Weisbrot — Thu, 08 Dec 2011 16:42:37 +0000

Mortgage loan originators must abide by a new law in the state of Texas. The new law is named SB 17 and requires residential mortgage loan servicers/mortgage loan originators to register with the state; in order to do so they must obtain a surety bond of no more than $200,000. Should the servicer’s volume of sales be less than $1 million per year, then the bond amount is capped at $25,000. In the past Texas mortgage loan originators were not required to obtain surety bonds.

Public Officials Blindly Writing Surety Law

Eric Weisbrot — Fri, 23 Sep 2011 14:41:24 +0000

Legislatures in Texas have enacted a new law directly affecting the surety bond industry. When one looks at the changes included in the bill, it’s hard to see what it actually accomplishes; it raises the question of whether the legislators writing laws affecting the world of surety have adequate knowledge of the industry.

The new bill is named HB 1951 and allows non-Treasury listed surety companies to issue bonds up to $1,000,000 without proof of reinsurance. Although Texas sureties don’t need to be registered with the Department of Treasury now, they need to write bonds within the limits of 10% of their capital and surplus and still must write within state regulatory limits. The new bill doesn’t seem to hurt or improve anything, so what’s the reason for it?

The main issue here is legislators writing laws for industries they no little to nothing about. This kind of ignorance can create negative repercussions and can affect any industry in the country. Whatever the reasons are that made the authors write this bill are it seems that they don’t have enough knowledge of the surety business to be doing so. A close eye should be kept on legislatures and officials when they are making changes that affect whole industries.