Surety Bond Authority Weblog

As of July 1, 2009, HB 1359 established an increase in the license bond amount required for all exterminators of termites and structural pests operating in the state of Arkansas. The license bond amount doubled from $50,000 to $100,000. However, HB 1350 did not increase the surety bond amount required for Arkansas’ exterminators of house pests and rodents, keeping that bond at $50,000.

Effective upon the March 25, 2009 enactment of HB 1002/SB 26, all vendors in the state of Arkansas are now required to either obtain a lottery and lotto bond (type of surety bond), a letter of credit, or securities for contracts with the Arkansas Lottery Commission. All surety bond amounts shall be determined by the Commission.

Additionally, lottery retailers in Arkansas must also post a lottery and lotto bond for an amount no greater than the average tickets sales for two of the retailer’s billing periods.

Lastly, state employees handling the Arkansas Lottery Commission’s lottery revenue or other funds must also obtain a surety bond, of which the amount will once again be determined by the Commission.

For more information on “lottery and lotto bonds”, or to apply for a bond, click here.

Enacted on July 10, 2009, Arizona HB 2486 mandates that the state’s commercial mortgage brokers now be subject to the existing laws regulating residential mortgage brokers. This existing law requires that all mortgage brokers (residential and commercial) be both licensed by the state, and obtain the necessary mortgage broker bond. The surety bond amount shall be determined by each individual mortgage broker’s class of investors. Mortgage broker bonds for brokers with just institutional investors must be for $10,000. If any investors are “non-institutional”, the bond must be for $15,000.

Effective on October 2, 2009, Arizona House Bill (HB) 2143 mandates that all mortgage loan originators operating in the state must be officially employed by either a consumer lender, mortgage banker or a mortgage broker. These mortgage loan originators must also be covered by their employer’s surety bond (mortgage broker bond).

HB 2143 also created a recovery fund, which will be funded by: 1) an amount determined by the Superintendent of Banking for those originators attempting to acquire their original license; and 2) fees acquired via annual license renewals (only when recovery fund drops below $2 million). The recovery fund covers only actual out of pocket losses, as well as court costs and attorney fees, and has a $200K limit per claim against the fund.

Alabama SB 249, which was enacted on May 21, 2009, created a licensing requirement for all mortgage loan originators, as well as a requirement for them to be covered by a surety bond. However, the law does allow mortgage loan originators to use the surety bond of someone whom they are an employee or an exclusive agent of, as long as that person is subject to the Mortgage Brokers License Act (SB 232) or the Alabama Consumer Credit Act (SB 234). This license bond needs to provide ample coverage for each mortgage loan originator in an amount equal to the amount of the originated loans.

This new law became effective in Alabama on June 1, 2009, but the licensing requirements will not go effective until June 1 of this current year.

Enacted on May 22, 2009, Alabama SB 151 changed the way manufactured homes are regulated. While in the past, manufactured homes fell under the same titling law as motor vehicles, they are not treated separately.

Pertaining to motor vehicles, if the Department of Revenue is not satisfied with regards to the ownership of a particular vehicle they can either withhold the title or require that a cash deposit or surety bond be posted for 1.5 times the vehicle’s value.

SB 151 now requires a new surety bond to be obtained based on the age of the model of the specific manufactured home. Models older 10 years old or older must have surety bonds in the amount of $25,000, while models younger than 10 years old require bonds for $50,000.

These new requirements went into effect on January 1, 2010.

Enacted on May 22, 2009, Alabama SB 111 mandated a couple of changes to the surety bond requirements for public officials in every county. Under the new law, any county employee or official that the county commission designates will be required to obtain a surety bond. County commissions can mandate that any director or member of a public board must post a surety bond in order to guarantee that they faithfully carry out the duties of their office, or assigned position. In the past, these surety bonds were made payable to the state of Alabama, but now they are payable country treasuries. Specific bond amounts will be determined by the respective county commissions, however, bonds for each county official should be for 0.5% of the official’s annual budget. These bonds cannot exceed the amount of $50,000. Furthermore, SB 111 grants county commissions throughout Alabama to obtain a “blanket bond” for each of its employees.

Similar to my recent post about SB 232 (Mortgage Broker Bonds), Alabama SB 234 created a new surety bond requirement for the state’s consumer lenders. The new law, effective on November 21, 2009, grants the State Banking Department the authority to make consumer lenders obtain a license bond in place of meeting current net worth requirements. Once again, the Banking Department is authorized to determine the bond amounts. No such surety bonding requirement existed for consumer lenders prior to this enactment.

Effective on November 21, 2009, Alabama SB 232 created a new surety bond requirement for the state’s mortgage brokers. This bill allows the State Banking Department to require mortgage brokers to obtain a mortgage broker bond in place of meeting current net worth requirements. Surety bond amounts will be determined by the Banking Department.

On May 21, 2009, with the enactment of Alabama’s Senate Bill (SB) 98, the Alabama Boxing Commission was created. SB 98 also requires all Alabama-based boxing promoters to be officially licensed by the state, and to obtain and post a performance bond (license bond). Specific amounts and conditions for the surety bond will be determined by the newly created Alabama Boxing Commission.

On top of that requirement, boxing promoters must get a permit for each boxing match held in Alabama. The Alabama Boxing Commission may also require promoters to obtain a separate performance bond to go along with each fight permit, which would be in addition to the original surety bond required for them to be licensed promoters.