(a)Prior to issuance of a license, the applicant shall file with the Commissioner, and shall keep in force thereafter for as long as the license remains in effect, a bond in a form and substance to be approved by the Commissioner in which the applicant shall be the obligor, in such sum as the Commissioner may require. The aggregate liability for any and all claims on any bond shall in no event exceed the sum thereof. No surety obligation on a bond shall be terminated unless at least 60 days’ prior written notice is given by the surety to the obligor and the Commissioner. When one person is issued licenses to conduct the licensed activity at more than one office, the Commissioner may accept a single bond covering all such offices. The bond shall run to the State for the use of the State an
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(a) Prior to issuance of a license, the applicant shall file with the Commissioner, and shall keep in force thereafter for as long as the license remains in effect, a bond in a form and substance to be approved by the Commissioner in which the applicant shall be the obligor, in such sum as the Commissioner may require. The aggregate liability for any and all claims on any bond shall in no event exceed the sum thereof. No surety obligation on a bond shall be terminated unless at least 60 days’ prior written notice is given by the surety to the obligor and the Commissioner. When one person is issued licenses to conduct the licensed activity at more than one office, the Commissioner may accept a single bond covering all such offices. The bond shall run to the State for the use of the State and of any person or persons who may have cause of action against the obligor of such bond under the provisions of this chapter. Such bond shall be conditioned that the obligor will faithfully conform to and abide by the provisions of this chapter and of all rules and regulations lawfully made by the Commissioner hereunder, and will pay to the State and to any such person or persons any and all monies that may become due or owing to the State or to such person or persons from such obligor under and by virtue of the provisions of this chapter. The Commissioner shall require that the amount of the bonds shall be based upon the dollar amount of loans originated in Vermont and, at a minimum:
(1) For licensed lenders:
(A) who annually originate $0.00 to $1,000,000.00 in loans, a surety bond not less than $50,000.00;
(B) who annually originate $1,000,000.01 to $15,000,000.00 in loans, a surety bond not less than $100,000.00;
(C) who annually originate $15,000,000.01 or more in loans, a surety bond not less than $150,000.00.
(2) For mortgage brokers:
(A) who annually originate $0.00 to $2,000,000.00 in mortgage loans, a surety bond not less than $25,000.00;
(B) who annually originate $2,000,000.01 to $5,000,000.00 in mortgage loans, a surety bond not less than $50,000.00;
(C) who annually originate $5,000,000.01 to $15,000,000.00 in mortgage loans, a surety bond not less than $75,000.00;
(D) who annually originate $15,000,000.01 or more in mortgage loans, a surety bond not less than $100,000.00.
(3) The Commissioner may adopt regulations modifying the minimum bond requirements set forth in this subsection.
(b) Each mortgage loan originator shall be covered by a surety bond in accordance with this section. In the event that the mortgage loan originator is an employee of a person subject to this chapter, the surety bond of such licensed lender or licensed mortgage broker can be used in lieu of the mortgage loan originator’s surety bond requirement, provided that the surety bond shall provide coverage for each mortgage loan originator in an amount as prescribed in this section.
(c) A loan solicitation licensee shall maintain a surety bond in an amount not less than $25,000.00 or in such other amount as the Commissioner may require.
(d) When an action is commenced on a licensee’s bond, the Commissioner may require the filing of a new bond. Immediately upon recovery upon any action on the bond, the licensee shall file a new bond.
(e) Every applicant for a lender’s license shall also prove, in form satisfactory to the Commissioner, that the applicant has liquid assets of $25,000.00, or such greater amount as the Commissioner may require, available for the operation of such business at the location specified in the application. Every applicant wishing to make commercial loans shall prove liquid assets in an amount of $50,000.00 or such greater amount as the Commissioner may require.
(f) Notwithstanding subsections (a) and (e) of this section, the Commissioner may waive or modify the requirement for or amount of a bond or liquid asset set forth in this section, or accept other appropriate means of assuring the financial responsibility of a licensee.
(g) This section does not apply to a lender making only commercial loans. (Amended 1983, No. 35, § 2; 1995, No. 162 (Adj. Sess.), § 4, eff. Jan. 1, 1997; 2005, No. 36, § 3; 2009, No. 29, § 1; 2009, No. 134 (Adj. Sess.), § 24d; 2017, No. 22, § 21, eff. May 4, 2017.)