Debt Negotiator (Unsecured Debt) ($50,000) Bond - Statewide in Connecticut

Brief Summary

If you settle consumer debt for a fee in Connecticut, the Department of Banking will not issue or renew your debt negotiation license until this bond is on file through NMLS. You pay a yearly premium instead of tying up $50,000 per office, and the bond can be issued electronically so the license file keeps moving.

Connecticut requires a single surety bond from every debt negotiation licensee under CGS 36a-671d, in an aggregate amount of $50,000 for each licensed location. A company with a main office and one branch therefore needs $100,000 of bond, not $50,000. The bond runs for the benefit of debtors and mortgagors, must be maintained for the entire license period, and is filed with the Connecticut Department of Banking through the licensing system.

We can help with all Connecticut bonds!

How to Apply for a Debt Negotiator (Unsecured Debt) ($50,000) Bond:

• Count every location you will license. Multiply by $50,000 to get your bond amount.
• Have the legal entity name and NMLS ID exactly as they appear in your NMLS company record.
• Owner name, home address and Social Security number for the credit review.
• Complete the bond application and review the quoted premium.
• Pay the premium and have the bond issued electronically on NMLS.
• Submit the license application, the $800 fee and the Connecticut specific requirements to the Department of Banking.

Detailed Information About the Connecticut Debt Negotiator (Unsecured Debt) ($50,000) Bond:

The amount is per location

The most common mistake on this bond is the amount. CGS 36a-671d calls for one surety bond in an aggregate amount of $50,000 for each licensed location. A single office posts $50,000. Every branch you license adds another $50,000 to the same bond.

This page covers the unsecured debt version of the bond, for firms that negotiate credit card, medical and similar consumer debt. A licensee that sponsors and bonds mortgage loan originators as exempt registrants falls under a separate schedule in the same statute, where the penal sum rises with residential mortgage loan volume over the twelve months ending July 31.

Who needs the license and who does not

CGS 36a-671 makes it unlawful to engage or offer to engage in debt negotiation in Connecticut without a license, covering the main office and each branch. Debt negotiation means helping a debtor negotiate the terms of obligations with creditors or mortgagees for a fee. CGS 36a-671c exempts Connecticut attorneys offering the service as an ancillary part of representing a client, banks and credit unions and certain of their subsidiaries, licensed debt adjusters while performing debt adjuster services, persons acting under a court order, and bona fide 501(c)(3) nonprofits.

What the bond does

Debtors and mortgagors harmed by a licensee can proceed on the bond against the principal or surety. The Banking Commissioner can also proceed on it to collect penalties and examination costs. If the surety cancels and no replacement is filed, the commissioner automatically suspends the license on the cancellation date.

License term and fees

Licenses expire December 31 of the year approved, and a license approved on or after November 1 runs to December 31 of the next year. The statute sets an $800 license fee and an $800 renewal fee, both nonrefundable. Applications are made and processed on NMLS.

Eligibility and Requirements for a Connecticut Debt Negotiator (Unsecured Debt) ($50,000) Bond:

• A surety company authorized to do business in Connecticut.
• Penal sum of $50,000 for each licensed location, written as one bond.
• Bond conditioned for the benefit of debtors and mortgagors.
• Bond kept in force for the entire license period, renewed with each December 31 license renewal.
• Owner credit review. Credit drives the premium rate.

Connecticut Debt Negotiator (Unsecured Debt) ($50,000) Bond FAQs:

Official and Additional Resources for the Connecticut Debt Negotiator (Unsecured Debt) ($50,000) Bond: