Credit Services Organization ($50,000) - NMLS Bond - Statewide in Ohio

Brief Summary

Credit repair firms cannot take a dollar from an Ohio customer until this $50,000 bond is in place and a copy is with the Division of Financial Institutions. Getting it issued early lets you send the registration, your customer contract and proof of bond together in one filing.

Ohio Revised Code 4712.06 bars a credit services organization from doing business in Ohio without a $50,000 surety bond from a surety authorized in the state. A copy goes to the Division of Financial Institutions, the bond protects any person injured by a violation of the Credit Services Organization Act, and it must stay in force for at least two years after the business stops operating in Ohio.

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How to Apply for a Credit Services Organization ($50,000) - NMLS Bond:

• Check the exclusions in Ohio Revised Code 4712.01 against your business before applying.
• Have the legal name and address of the organization and of every 10 percent owner ready.
• Prepare the customer contract you will file with the registration.
• Apply for the $50,000 bond and complete the owner credit review.
• File the registration with the Division of Financial Institutions with the $100 fee and evidence of the bond.
• Renew before the certificate expires on April 30 each year, with the $100 renewal fee.

Detailed Information About the Ohio Credit Services Organization ($50,000) - NMLS Bond:

The bond outlives the business

Most owners expect to drop the bond the day they close. Ohio Revised Code 4712.06(A)(4) requires it to be maintained and in effect for at least two years after the credit services organization ceases to conduct business in Ohio. The amount is fixed at $50,000 by 4712.06(A)(3). There are no tiers.

Who counts as a credit services organization

Under 4712.01, a credit services organization is anyone who, for money or other valuable consideration, offers to improve a buyer's credit record, history or rating, obtain an extension of credit for a buyer, give advice or assistance on either of those, remove accurate adverse information that is not obsolete, or alter a buyer's identification to hide their credit record.

The statute then excludes a long list, including licensed lenders and loan collectors acting within their license, registered mortgage brokers, HUD approved lenders, mortgage bankers, banks, savings banks and savings and loan associations with their subsidiaries and affiliates, credit unions, nonprofit budget and debt counseling services, consumer reporting agencies in substantial compliance with the Fair Credit Reporting Act, government entities, colleges and universities, licensed motor vehicle dealers, and Ohio attorneys offering legal services. If you fit one of those, read the exact wording in 4712.01 before deciding the bond does not apply.

What a claim can reach

The bond is in favor of any person, and of the state for the benefit of any person, injured by a violation of sections 4712.01 to 4712.14. A claimant can sue both the organization and the surety. The surety pays only actual damages awarded under 4712.10(A)(2), not punitive damages, and its total liability to everyone is capped at the bond amount.

Registration and renewal

Section 4712.02 requires registration with the Division of Financial Institutions before doing business, with a $100 fee. The application includes the names and addresses of the organization and anyone owning or controlling 10 percent or more, a litigation and complaint disclosure or notarized statement, a copy of the contract you will use with customers, and evidence of the bond. Certificates expire every April 30 and renew with a $100 fee. The Division's Consumer Finance section takes Credit Services Organization Act filings through NMLS.

Eligibility and Requirements for a Ohio Credit Services Organization ($50,000) - NMLS Bond:

• Bond of $50,000 under Ohio Revised Code 4712.06(A)(3).
• Surety company authorized to do business in Ohio.
• Copy of the bond filed with the Division of Financial Institutions.
• Bond in favor of any person, and the state for the benefit of any person, injured by a violation of 4712.01 to 4712.14.
• Coverage kept in effect for at least two years after the organization stops doing business in Ohio.

Ohio Credit Services Organization ($50,000) - NMLS Bond FAQs:

Official and Additional Resources for the Ohio Credit Services Organization ($50,000) - NMLS Bond: