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More NMLS Electronic Surety Bonds On the Horizon

As reported back in August, the Nationwide Multistate Licensing System & Registry, or NMLS, has begun requiring applicants and licensees to file electronic surety bonds to be in compliance with newly adopted licensing procedures. Although the State Regulatory Registry expects quite a few states to eventually adopt electronic surety bonds, it is currently only happening a few states at a time. In addition to the 9 states that switched to electronic bonds back in September, 11 states are set to make the switch effective January 23, 2017. For the majority of states adopting electronic bonds this time around, new applications submitted on or after January 23 must be done so electronically, with current licensees having until December 31 to file an electronic bond. However, there are several states—Louisiana, Mississippi, Rhode Island—that have not yet determined the conversion deadline for filing electronically.

Stay up to date on important dates and deadlines with the NMLS Electronic Surety Bond Adoption Table.

Why the switch to electronic surety bonds?

Traditionally, original surety bonds are required to be physically submitted to the appropriate state licensing entity. However, this process can be frustratingly slow and confusing for applicants and licensees who are looking to do business in multiple states—and must therefore be familiar with and abide by each state’s individual requirements. According to the NMLS website, “Electronic Surety Bond Tracking in NMLS will allow for the tracking of surety bond requirements and the maintenance of surety bond information validated by authorized Surety Companies and/or Surety Bond Producers.” In short, all licensees will have their bonds uploaded in one place, which allows various obligees to easily ensure that licensees have obtained surety bonds in amounts sufficient to keep their licenses active. By uploading bonds electronically, the principals (licensees) may also check the status of all their bonds online to ensure they are compliant. If it is discovered that the bond must be corrected, the applicant or licensee can contact their surety bond provider and amendments to the bond may be uploaded electronically.

In order to further simplify the licensing process, some surety companies will upload the bond and other supporting documents directly to the NMLS website on the licensee’s behalf, as long as they are given permission to do so.

What bonds are going electronic in January?

As of January 23, new applicants must submit many of the following bonds electronically via the NMLS website. The few exceptions include bonds in Mississippi, Rhode Island and several in Louisiana due to the fact that new applications will not be available until January 23.

  • Alaska: Mortgage Broker/Lender License, Registered Depository Institution License
  • Georgia: Money Transmitter License, Mortgage Broker/Processor License, Mortgage Lender License, Seller of Payment Instruments License
  • Illinois: Residential Mortgage License
  • Louisiana: Pawnbroker Main Office (in-state & out-of-state), Residential Mortgage Lending License, Sale of Checks and Money Transmitter License
  • Minnesota: Accelerated Mortgage Payment Provider License, Credit Services Organization License, Currency Exchange License, Electronic Financial Terminal License, Money Transmitter License, Residential Mortgage Originator License, Residential Mortgage Servicer License
  • Mississippi: Mortgage Broker License, Mortgage Lender License
  • Montana: Deferred Deposit Lender License, Escrow Business License, Independent Contractor Lender License, Mortgage Broker License, Mortgage Lender License, Mortgage Servicer License
  • North Carolina: Money Transmitter License
  • North Dakota: Collection Agency License, Debt Settlement Service Provider License, Exempt Company Registration, Money Broker License, Money Transmitter License
  • Rhode Island: Check Cashier License, Debt Management Services Registration, Electronic Money Transmitters, Lender License, Loan Broker License, Sales of Checks, Small Loan Lender, Third Party Loan Servicer License
  • South Dakota: Exempt Mortgage Company Registration, Mortgage Broker License, Mortgage Lender License

Also of note, Indiana converted to electronic surety bonds back in September, but has since added the requirement for current Loan Broker Licensees to provide an electronic surety bond by July 1, 2017. However, new applications submitted on or after January 23 must be done so electronically.

How can I keep track of what bonds are being converted?

If you wish to keep track of when more electronic bonds are being added to NMLS, the Surety Bond Insider will continue to cover the conversions as they happen. Applicants and licensees may also get more information regarding changes to their bonds by visiting the Electronic Surety Bond section of the NMLS website. If you are applying for your first license or need to get your bond renewed, call SuretyBonds.com at 1 (800)308-4358 and get your free, no obligation quote today!

About the Author

Jon Gottschalk
Jon Gottschalk is the Educational Outreach Director for Suretybonds.com and regularly blogs at the Surety Bond Insider to keep consumers informed on new legislation and updates in the commercial surety industry. He is also a licensed property & casualty insurance producer in Missouri.