Mississippi Debt Management Services Provider Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain Mississippi Debt Management Services Provider Bonds
At a Glance:
- Lowest Cost: $750 per year or $75 per month based on the applicant’s credit
- Bond Amount: $50,000
- Who Needs it: All debt management services providers operating in Mississippi
- Purpose: To ensure the public will receive compensation for any damages should the debt management services provider fail to comply with licensing law
- Who Regulates Debt Management Services Providers in Mississippi: The Mississippi Department of Banking and Consumer Finance
Background
Mississippi Senate Bill 2441 requires all debt management services providers operating in the state to obtain a license with the Department of Banking and Consumer Finance. The Mississippi legislature enacted the licensing laws and regulations to ensure that debt managers engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, debt managers must purchase and maintain a $50,000 surety bond to be eligible for licensure.
What is the Purpose of the Mississippi Debt Management Services Provider Bond?
Mississippi requires debt management services providers to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the debt manager fails to comply with the regulations set forth in Mississippi Senate Bill 2441. Specifically, the bond protects the public in the event the debt manager engages in any acts of fraud or breaches any contracts made with consumers. In short, the bond is a type of insurance that protects the public if the debt management company breaks licensing laws.
How Can an Insurance Agent Obtain a Mississippi Debt Management Services Provider Surety Bond?
BondExchange makes obtaining a Mississippi Debt Management Services Provider Bond easy. Simply login to your account and use our keyword search to find the “debt” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
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Is a Credit Check Required for the Mississippi Debt Management Services Provider Bond?
Surety companies will run a credit check on the owners of the debt management company to determine eligibility and pricing for the Mississippi Debt Management Services Provider bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.
How Much Does the Mississippi Debt Management Services Provider Bond Cost?
The Mississippi Debt Management Services Provider Bond can cost anywhere between $750 to $2,500 per year or $75 to $250 per month. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $50,000 bond requirement.
$50,000 Debt Management Services Provider Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 800+ | $750 | $75 |
| 650 – 799 | $1,000 | $100 |
| 600 – 649 | $2,000 | $200 |
| 450 – 599 | $2,500 | $250 |
How Does Mississippi Define “Debt Management Services Provider?”
Mississippi Senate Bill 2441 defines a debt management services provider as any individual or business entity who performs one or more of the following services:
- Receives money from a consumer for the purpose of distributing one or more payments to creditors of the consumer in full or partial payment of the consumer’s obligation
- Arranges or assists a consumer in arranging the distribution of one or more payments to or among one or more creditors of the consumer in full or partial payment of the consumer’s obligation
- Exercises control, directly or indirectly, or arranges for the exercise of control over funds of the consumer for the purpose of distributing payments to or among one or more creditors of the consumer
- Acts or offers to act, as an intermediary between a consumer and one or more creditors of the consumer for the purpose of adjusting, compromising, negotiating, settling, discharging or otherwise deferring, reducing or altering the terms of payment of the consumer’s obligation
- Improves or offers to improve a consumer’s credit record, history or rating
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do Debt Management Services Providers Apply for a License in Mississippi?
Debt management services providers in Mississippi must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the NMLS’s application guidelines for details on the process.
License Period – The Mississippi Debt Management Services Provider License expires on December 31 of each year and must be renewed before the expiration date
Step 1 – Purchase a Surety Bond
Debt management services providers must purchase and maintain a $50,000 surety bond
Step 2 – Request a NMLS Account
The Mississippi Debt Management Services Provider License application is submitted electronically through the Nationwide Multistate Licensing System (NMLS). To submit a license application, applicants must first request to obtain an NMLS account.
Step 3 – Complete the Application
All Mississippi Debt Management Services Provider License applications can be completed online through the NMLS. Applicants must complete the entire application, and submit the following items:
-
- Company financial statements prepared by a CPA
- The following company contacts:
- Primary
- Exam Billing
- Licensing
- Consumer Complaint (Public)
- Exam Delivery
- Consumer Complaint (Regulator)
- Legal
- Off-Site Exam Contact
- Certificate of Good Standing
- Sample debt management agreement
Debt management services providers must pay a $750 fee when submitting their license application
How Do Mississippi Debt Management Services Providers Renew Their License?
Debt management services providers can renew their license online through the NMLS. License holders need to simply login to their account to access their renewal application. The Mississippi Debt Management Services Provider License expires on December 31 of each year and must be renewed before the expiration date.
What are the Insurance Requirements for the Mississippi Debt Management Services Provider License?
Mississippi does not require debt management services providers to purchase any form of liability insurance as a prerequisite to obtaining a business license. Debt management services providers must purchase and maintain a $50,000 surety bond.
How Do Mississippi Debt Management Services Providers File Their Bond?
Debt management services providers should submit the completed bond form, including the power of attorney, electronically through the NMLS. The surety bond requires signatures from both the surety company that issues the bond and a representative from the debt management company. The surety company should include the following information on the bond form:
- Name and address of entity/individual(s) buying the bond
- Surety company’s name and address
- Bond term
- Date the bond is signed
What Can Mississippi Debt Management Services Providers Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, debt management services providers in Mississippi must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:
- Do not engage in any acts of fraud
- Do not breach any contracts made with consumers
What Other Insurance Products Can Agents Offer Debt Management Services Providers in Mississippi?
Mississippi does not require debt management services providers to purchase any form of liability insurance as a prerequisite to obtaining a business license. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Mississippi Debt Management Services Provider Customers?
The NMLS conveniently provides a public database to search for active debt management services providers in Mississippi. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.