Expanding Use of Electronic Surety Bonds

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The Department is expanding its use of Electronic Surety Bond (ESB) functionality in NMLS. Starting January 23, Consumer Loan applicants and licensees can utilize this functionality. The ESB functionality allows for issuing, signing, delivering and maintaining a bond electronically through NMLS. In addition to streamlining the process, the ESB eliminates mailing time involved in delivery of original bond documents.

Expanded use of the ESB means all Consumer Loan and Mortgage Broker applicants must have an ESB on NMLS before an application can be filed. Current licensees are strongly encouraged to convert their paper bond to an ESB at the bond’s renewal date or if they change surety companies. The Department has established the following deadlines for current licensees to convert paper bonds to an ESB:

  • Mortgage Brokers – December 31, 2017
  • Consumer Loan Companies – March 1, 2018

In order to issue or convert a surety bond as an ESB, the surety or producer must be entitled on NMLS, meaning they have an account on NMLS. Once this is completed, the applicant or licensee must grant authority to the surety bond issuer through NMLS. This allows the surety or producer to create an ESB. Some helpful resources include:

Mortgage Broker licensees who need to convert to an ESB should expect more detailed instructions by early February. Consumer Loan licensees will receive more detailed instructions in March. The Department is planning to expand the use of ESB to Money Services and Payday Loan licensees later this year.