Mortgage brokers, bankers and industrial loan companies must follow new rule concerning bond requirements in the state of Iowa. The new law, HB 2556, raises the amount of the license bond amount required for mortgage bankers and mortgage brokers from $50,000 to $100,000. The law requires either a surety bond or collateral. HB 2556 also requires industrial loan companies to obtain a surety bond of $25,000 from a surety company licensed within the state. The law formerly required solely licensure. The surety companies are allowed to terminate the bond with 30 days of notice to the Superintendent of Banking. The surety bond is for the state’s utilization, including any individuals with a cause of action against the license applicant, and it is conditioned on the applicant’s truthful conformance to and abiding by the industrial loan company laws in addition to any policy adopted to implement it. The sureties will be required to reimburse the state and any individual all funds owing to the state and such individuals under the law. In place of the bond, alternative types of collateral may be posted; only if the collateral provides the same protections as the surety bond for both the state and clients.
Eric is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry, he is also a contributing author to the surety bond blog.