§ 2203. Bond; liquid assets required
(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.)