§ 17:3140.5 — Surety bond; requirement

Louisiana § 17:3140.5

• Jurisdiction: Louisiana
• Title 17: Credit Union Law

Text

§3140.5. Surety bond; requirement
A. Each application for a license shall be accompanied by a surety bond in the
amount of ten thousand dollars. The bond shall be issued by a surety authorized to do
business in this state and shall be filed with the board. The term of the bond shall be
continuous but shall be subject to cancellation by the surety in the manner provided in this
Section.
B. The bond shall provide for the indemnification of any person suffering loss or
damage as a result of any of the following:
(1) Any fraud or misrepresentation used in procuring his enrollment.
(2) The failure on the part of the school to carry out and comply with each contract
and agreement made and entered into by the school, acting by and through its officers,
agents, or representatives with any student.
(3) The inability of the student to complete a program of study because the school
ceased operation or failed to furnish the facilities advertised or included in the contracted
agreement.
(4) The failure on the part of the school to adequately maintain all student records
including the failure to transfer the records in accordance with the provisions of this Chapter.
C. The bond shall be subject to a ten-year prescriptive period for actions or breach
of contract.
D. The surety bond shall cover the period of the license except when the surety is
released as provided in this Section.
E. A surety on the bond may be released after the surety has made a written notice
directed to the commission and the board at least thirty days prior to the release. The release
shall not affect the liability of the surety for acts arising prior to the release of the surety.
F. The surety may terminate the bond upon giving a sixty-day written notice to the
principal, the commission, and the board. However, the liability of the surety for the acts of
the principal and its agents shall continue during the sixty-day period. The notice shall not
release the surety from liability which accrues before the cancellation becomes final but
which is discovered after that date and which arose at any time during the term of the bond.
G. Unless the bond is replaced by that of another surety before the expiration of the
sixty-day period, the license shall be suspended by the board.
H. Any person required to file a bond may file in lieu thereof a certificate of deposit
in the amount of ten thousand dollars. The deposit shall be subject to the same terms and
conditions as required for surety bonds. Any interest or earnings on the deposits are payable
to the depositor.
I. Notwithstanding the provisions of this Section, a proprietary school may not be
required to post the surety bond if the school offers only programs that do not exceed four
weeks in length, the school has been in continuous operation for at least five years, and the
school has met all of the regulations and rules established by the board.

Legislative History

Acts 2019, No. 437, §1.