The California Department of Business Oversight is a state government regulation committee that oversees and regulates various financial institutions. This includes, but is not limited to, financial services, state-licensed financial institutions like banks, credit unions, money transmitters, securities brokers and dealers, investment advisers, and pay-day lenders.
With this regulatory insight, they have created a series of bylaws for individual businesses. The Department of Business Oversight uses surety bonds to ensure that licensed business owners and license holders are abiding by the rules and regulations set forth by the department.
Common surety bonds that the Department of Business Oversight requires include:
California Escrow Surety Bond
Escrow agents must obtain a license if they wish to perform services in the state of California. To obtain this license, they must have an Escrow License Bond. This is to help guarantee the delivery of the escrow.
California Deferred Deposit Surety Bond
A deferred deposit is the act in which a check casher holds off from depositing a check until a future date that was agreed upon in writing. If any person wishes to engage in business that requires the use of deferred deposits, they must obtain a surety bond.
California Finance Lender Surety Bond
Anyone who engages in the loan business must be licensed, This includes any business that makes commercial or consumer loans, businesses that negotiate loans, or businesses that act as brokers of loans. A California Finance Lender Bond is required before a license is issued. This is to help protect any third party who may be damaged by a misappropriation of funds or any violation of laws and regulations that are listed under the specific license.
California Money Transmitter Bond
Businesses that choose to engage in the transmission of funds must receive the proper license. This can be anything from wire transfers to electronic bank transfers. A surety bond is required to be issued this license. This is to create a financial guarantee in the form of a surety bond that all money will be handled properly and avoid any fraudulent or illegal acts.
California Mortgage Lender Bond
Getting a Mortgage Lender Bond is part of the process of getting a license for all mortgage professionals. These bonds are required to ensure that the mortgage professional follows all the laws and regulations that fall under their license. In California, the typical mortgage lender bond is a $25,000 1 or 3 year bond.
California Prorater Surety Bond
Proraters are in the business of receiving money from a debtor to distribute to creditors on the debtor’s behalf. These proraters are typically agents and managers who work on behalf of their clients, who become the debtors. They’ll pay bills and other debts as applicable. A bond of at least $25,000 is required.
California Check Seller Bond
Obtaining a Check Seller Bond is one of the steps to receiving a Check Seller’s license. These bonds are most often in the amount of $500,000 and state that the check seller will abide by and follow all laws and regulations as stated in their check seller’s license.
California Bill Payer Bond
A licensed Bill Payer in California must first pull out a California Bill Payer Bond before they are issued a license. These bonds are often set to cover the amount of $25,000 and are used to enforce the laws and regulations of the Bill Payer License.