California Deferred Deposit Transaction Law License Bond
Learn the importance of this bond and how to easily get one!
What is a California Deferred Deposit Transaction Law License Bond?
It’s an agreement that persons who are engaged in the business of deferred deposit transactions must make with the California Department of Business Oversight regarding the compliance of the said persons to the California Deferred Deposit Transaction Law – also known as the Payday Lenders Law.
This license requirement must be submitted to the Commissioner along with the completed application form and license fee.
The deferred deposit transactions license applicant must obtain this bond before he or she can perform the following services:
- Offer, originate or make a deferred deposit transaction
- Arrange a deferred deposit transaction for a deferred deposit originator
- Act as an agent for a deferred deposit originator
- Assist a deferred deposit originator in the origination of a deferred deposit transaction
The deferred deposit transactions license applicant can be any of the following:
- Limited liability company
- Joint venture
- Joint-stock company
- Unincorporated organization
- Government entity
- Political subdivision of a government entity
This requirement is in pursuance of Section 23013 of the California Financial Code.
How does a California Deferred Deposit Transaction Law License Bond work?
This bond is a legally binding contract among three parties:
Principal – Deferred deposit transactions license applicant
Obligee – Commissioner of Business Oversight of the State of California
Surety – the guarantor of the Principal
The Principal is responsible for fulfilling the obligations of the bond. The Surety will provide an assurance to the Obligee regarding the Principal’s performance. The Surety will also guarantee that the Obligee will be indemnified in case the Principal fails to do so.
In the event of a default committed by the Principal, the Surety will conduct an investigation regarding the claim filed by an Obligee. If the claim is valid, the Surety will pay the Obligee; however, the Principal must reimburse the Surety after the payment has been made.
How much does a California Deferred Deposit Transaction Law License Bond cost?
The bond premium will start at 1% of the bond amount for license applicants who have excellent credit scores.
The bond amount is $25,000. This bond amount will cover multiple deferred deposit transactions licensed locations.
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How can I get a California Deferred Deposit Transaction Law License Bond?
The first step is to apply for this bond. You may apply for this bond HERE!
Once we’ve received the application, the next step will be the underwriting process.
An underwriter will evaluate the following:
- Your financial strength
- Your job/business performance history
- Your credit score
Once the underwriting process has been fulfilled, you will be asked to sign an indemnity agreement. Once signed, we will execute the bond and send it to you!
Ready to apply? START HERE!