Surety Bond Encyclopedia

Debt Management Service Provider ($25,000) Bond - Statewide in Oregon

Brief Summary

Oregon treats credit repair, debt settlement and loan modification work as debt management services, and every registered provider carries a $25,000 bond payable to the director of DFR. Pay an annual premium rather than tying up cash, keep the bond in force through each December renewal, and your registration stays clean.

Oregon requires debt management service providers to register with the Division of Financial Regulation under ORS Chapter 697 and to keep a corporate surety bond in force. ORS 697.642 sets a $10,000 statutory minimum or an amount the director sets by rule, and the state's license directory lists the bonding requirement at $25,000. The bond is payable to the order of the director, and registrations expire December 31 each year.

We can help with all Oregon bonds!

How to Apply for a Debt Management Service Provider ($25,000) Bond:

Confirm your services fall under ORS 697.602 and that no exemption in ORS 697.612 applies.
Have the legal business name and NMLS ID exactly as they appear on your DFR registration application.
Complete the bond application and provide owner information for the credit review.
Pay the premium and receive the executed $25,000 bond payable to the director.
Submit the bond to DFR as instructed with your NMLS registration.
Keep the bond in force and renew the registration before December 31 each year.

Detailed Information About the Oregon Debt Management Service Provider ($25,000) Bond:

Who has to post this bond

The definition is broader than most people expect. Under ORS 697.602, a debt management service is any paid service that collects a consumer's money to distribute among creditors, improves a credit record or rating, changes the terms of a loan, or gets creditors to reduce principal, interest or fees. That pulls in debt consolidation, debt settlement, credit repair and loan modification companies. ORS 697.612 requires each of them to register with DFR before offering services to Oregon consumers.

Who is exempt

ORS 697.612 exempts a long list of people, including employees of a registered provider, attorneys providing the service in the course of practicing law, financial institutions and trust companies, licensed consumer finance companies, licensed mortgage bankers and brokers, consumer reporting agencies, public bodies, people acting under a court order, nonprofit budget and credit counseling agencies approved under 11 U.S.C. 111, and HUD approved housing counseling organizations. Check the statute for the exact conditions attached to each category.

What the bond says

ORS 697.642 requires a bond from one or more corporate sureties authorized in Oregon, payable to the order of the director. It is conditioned so that the surety or the provider pays, on the director's order or a court order, all amounts due for a violation of the provider's duties and obligations to consumers. The statute sets a floor of $10,000 or an amount the director specifies by rule, and the Oregon license directory lists the DFR requirement as $25,000.

The surety must give the director written notice by registered or certified mail at least 30 days before it cancels the bond, and again whenever it pays a loss.

Term and renewal

Under ORS 697.632, a registration is good until December 31 of the year it is approved and must be renewed to keep operating. Applications go through NMLS. Confirm with DFR how the bond itself should be submitted before it is issued.

Eligibility and Requirements for a Oregon Debt Management Service Provider ($25,000) Bond:

Bond amount of $25,000 as listed for DFR.
Payable to the order of the director of the Department of Consumer and Business Services.
Issued by a corporate surety authorized to do business in Oregon.
Conditioned to pay amounts due for violations of the provider's duties to consumers.
30 days written notice to the director before cancellation.

Oregon Debt Management Service Provider ($25,000) Bond FAQs:

I only do credit repair. Do I need this?

Very likely yes. ORS 697.602 counts paid services that improve a consumer's credit record or rating as debt management services, so credit repair companies register with DFR and post the bond unless an exemption applies.

We are a nonprofit credit counseling agency. Are we exempt?

A nonprofit budget and credit counseling agency approved under 11 U.S.C. 111 is exempt under ORS 697.612, as are HUD approved housing counseling organizations. Other nonprofits should read the statute's conditions closely.

Who can make a claim on the bond?

The bond pays, on the director's order or a court order, amounts due because the provider violated its duties and obligations to consumers. The surety then looks to the provider for repayment.

When does the registration expire?

December 31 of the year it was approved. It must be renewed each year, and the bond has to stay in force the whole time.

How is the premium set?

The surety looks at the owners' credit, the company's finances and its complaint history. Debt relief work is reviewed carefully, so expect questions about your fee structure and trust account handling.