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Army Veteran Owned | Expert Surety Bonds Since 2004
Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
One $25,000 bond covers every location you license under the California Deferred Deposit Transaction Law, even though each location needs its own license application. Have the bond in effect before DFPI issues the license, write it on the Exhibit B form the regulations prescribe, and the same bond stays with you as you add locations.
California Financial Code section 23013 requires every deferred deposit transaction licensee to maintain a $25,000 surety bond payable to the Commissioner of the Department of Financial Protection and Innovation. A licensee with several licensed locations needs only one $25,000 bond. The bond must be in effect before the license is issued, and it is separate from the $25,000 minimum net worth the licensee must also keep.
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The most common mistake is assuming each location needs its own bond. It does not. DFPI requires a separate license application for every location, each with a $200 application fee and a $100 investigation fee, and a short form application is available once you hold a license. The bond works differently. Financial Code section 23013 says that for licensees with multiple licensed locations, only one surety bond of $25,000 is required.
The bond is payable to the Commissioner and must be issued by an insurer authorized to do business in California. Section 23013 says it is used to recover expenses, fines and fees levied by the Commissioner, and losses or damages consumers suffer because a licensee did not comply with the law. The prescribed form, Exhibit B to California Code of Regulations, title 10, section 2020, also lets any injured person sue on the bond in their own name. The surety's total liability is capped at the bond amount.
The bond has to be in effect before the license is issued. The application instructions call for the original bond with the attorney in fact signature, the surety's power of attorney, the licensee's legal name and signature, and a notarial jurat for both signatures. After licensure, a copy of the bond and any rider or endorsement executed later must be filed with the Commissioner within 10 days of execution.
Applicants must also show a net worth of at least $25,000 in financial statements prepared under Generally Accepted Accounting Principles, and keep that net worth at all times after licensure. The bond does not satisfy the net worth requirement, and the net worth does not replace the bond.
No. Each location needs its own license application with a $200 application fee and a $100 investigation fee, but section 23013 requires only one $25,000 bond for a licensee with multiple licensed locations.
The Commissioner can use it to recover expenses, fines and fees levied under the law, and consumers can recover losses caused by a licensee's noncompliance. The Exhibit B form lets any injured person sue on the bond in their own name, up to the $25,000 total.
No. They are two separate requirements. The applicant shows at least $25,000 in net worth through GAAP financial statements and also keeps the $25,000 bond in force.
Before the license is issued. File the original executed bond, with notarized signatures and the surety's power of attorney, as part of the application. Riders and endorsements signed later are filed within 10 days of execution.
Yes. The Exhibit B form allows cancellation under California Code of Civil Procedure sections 996.320 and 996.330. Section 23013 requires a licensee to maintain the bond, so line up a replacement before any cancellation takes effect.
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