Consumer Finance Lender Bond - Statewide in Virginia

Brief Summary

The bond is $25,000, flat, one bond for the company no matter how many offices you run. You post an annual premium instead of tying up $25,000 in cash, and the executed CCB-4409 form goes into the license application with your $500 check. Most applicants are quoted quickly because the amount is small and the form is standard.

Virginia requires every consumer finance company applicant and licensee to file and continuously maintain a surety bond of at least $25,000, running to the Commonwealth of Virginia and payable to the State Corporation Commission. The requirement sits in Va. Code 6.2-1523.3 and 10VAC5-60-15. The bond must be written on the Bureau of Financial Institutions form CCB-4409 by a surety licensed in Virginia, and the original is filed with application form CCB-4402 and a $500 nonrefundable fee.

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How to Apply for a Consumer Finance Lender Bond:

• Legal entity name exactly as registered with the Clerk of the State Corporation Commission, including any registered trade name. The bond must be issued in the exact name of the applicant.
• Owner, member, partner, director, senior officer and principal information for underwriting review.
• Complete the bond application and review the quoted premium.
• Pay the premium and receive the original executed $25,000 bond on form CCB-4409, signed and sealed by the surety, with a power of attorney attached if the signer is not a corporate officer.
• File the original bond with application form CCB-4402, a $500 check payable to the Treasurer of Virginia, and the rest of the application package with the Bureau of Financial Institutions.
• Keep the bond in force continuously for as long as the license is held.

Detailed Information About the Virginia Consumer Finance Lender Bond:

The amount is flat, and it is not per office

This is the fact most pages get wrong. Va. Code 6.2-1523.3 sets the bond at $25,000, "or such greater sum as the Commission may require, but not to exceed a total of $500,000." The regulation, 10VAC5-60-15, fixes the floor: "The minimum bond amount required shall be $25,000." There are no revenue tiers, no license classes, no loan volume brackets. One bond covers the licensee, not each location.

What is per location is a different requirement entirely. A licensee must hold at least $25,000 in unencumbered liquid assets for every location licensed or required to be licensed, and must keep that at all times. Applicants routinely read the two $25,000 figures as one thing and buy the wrong instrument. The liquid assets are cash in a checking or savings account, money market funds, commercial paper or treasury bills, verified by a statement from the institution holding them. A surety bond does not satisfy that, and the liquid assets do not satisfy the bond.

Nobody is grandfathered

10VAC5-60-15 reaches "every licensee and applicant for a license." There is no prior operation exemption, no date cutoff, no exemption for companies already licensed when the bond requirement was added by the 2020 Acts of Assembly, chapters 1215 and 1258. If you hold the license, the bond stays in force for as long as you hold it.

The exemptions that do exist are exemptions from the license itself, not from the bond. Under 6.2-1503 the chapter does not apply to banks, savings institutions, trust companies, building and loan associations, industrial loan associations or credit unions, to licensed pawnbrokers acting under their pawnbroker license, or to persons operating under other provisions of Title 6.2. Section 6.2-1501 also carves out access partners under 6.2-1523.1, mortgage lending under 6.2-325 through 6.2-328, and credit described in 6.2-312. If you are outside those carve outs and you make loans to individuals for personal, family, household or other nonbusiness purposes at more than the interest allowed by 6.2-303, you need the license, and the license carries the bond. Section 6.2-1501 makes a loan made without the license void, with no right to collect principal, interest or fees.

Additional offices

Opening a second or tenth office does not increase the bond. It takes prior Commission approval on form CCB-4410 with a $150 nonrefundable fee and proof of the $25,000 in unencumbered liquid assets for that location.

The bond does not come back to you

Once filed, the commissioner keeps the bond even if the application is withdrawn or denied, the license is surrendered, suspended or revoked, or the company stops doing business as a consumer finance company. The surety may terminate its obligation, but only on written notice to the principal and to the Commissioner of Financial Institutions at least 90 days before the termination date, and obligations that arose before that date survive.

Dates that actually matter

The license itself does not expire. Under 6.2-1509 it stays in full force until surrendered, revoked or suspended, so there is no license renewal deadline to chase. What recurs is the annual report, due to the Bureau on or before April 1 covering the prior calendar year, and the annual fee for examination, supervision and regulation, assessed on or before May 1 and payable on or before June 1. Under 10VAC5-60-60 that fee is a minimum of $150 plus $150 for each office the licensee was authorized to operate, with additional amounts calculated from net loans receivable and other assets as of December 31 of the prior year. Your bond, meanwhile, is continuous and just needs its premium paid to stay in force.

Eligibility and Requirements for a Virginia Consumer Finance Lender Bond:

• Bond amount of $25,000, the statutory and regulatory minimum. The Commission may require a greater sum, capped by statute at $500,000.
• Surety must be a corporate surety authorized to execute the bond in the Commonwealth of Virginia.
• Bond runs to the Commonwealth of Virginia, payable to the State Corporation Commission, on prescribed form CCB-4409.
• One bond per licensee. Additional offices do not raise the bond amount.
• Separate and unrelated to the bond: at least $25,000 in unencumbered liquid assets per licensed location, maintained at all times.
• Surety cancellation only on 90 days written notice to the principal and the Commissioner of Financial Institutions.

Virginia Consumer Finance Lender Bond FAQs:

Official and Additional Resources for the Virginia Consumer Finance Lender Bond: