Missouri Consumer Installment Lender Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain Missouri Consumer Installment Lender Bonds
At a Glance:
- Lowest Cost: $1,000 per year or $100 per month based on the applicant’s credit
- Bond Amount: $100,000
- Who Needs it: All consumer installment lenders operating in Missouri and who do not submit audited financial statements, prepared by a CPA, with their license renewal application
- Purpose: To ensure the public will receive compensation for any damages should the consumer installment lender fail to comply with licensing law
- Who Regulates Consumer Installment Lenders in Missouri: The Missouri Division of Finance
Background
Missouri statute 367.110 requires all consumer installment lenders operating in the state to obtain a license with the Division of Finance. The Missouri legislature enacted the licensing laws and regulations to ensure that consumer installment lenders engage in ethical business practices. In order to provide financial security for the enforcement of the licensing law, consumer installment lenders who do not submit audited company financial statements with their license renewal application must purchase and maintain a $100,000 surety bond to be eligible for licensure.
What is the Purpose of the Missouri Consumer Installment Lender Bond?
Missouri requires consumer installment lenders who do not submit audited company financial statements to purchase a surety bond as part of the application process to renew their business license. The bond ensures that the public will receive compensation for financial harm if the installment lender fails to comply with the regulations set forth in Missouri statute 367.100 to 408.170. Specifically, the bond protects the public in the event the installment lender 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 installment lender breaks licensing laws.
How Can an Insurance Agent Obtain a Missouri Consumer Installment Lender Surety Bond?
BondExchange makes obtaining a Missouri Consumer Installment Lender Bond easy. Simply login to your account and use our keyword search to find the “consumer” 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.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the Missouri Consumer Credit Lender Bond?
Surety companies will run a credit check on the owners of the lending company to determine eligibility and pricing for the Missouri Consumer Installment Lender 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 Missouri Consumer Installment Lender Bond Cost?
The Missouri Consumer Credit Lender bond can cost anywhere between $1,000 to $7,500 per year. 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 $100,000 bond requirement.
$100,000 Consumer Installment Lender Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 800+ | $1,000 | $100 |
| 625 – 799 | $1,500 | $150 |
| 575 – 624 | $3,750 | $375 |
| 550 – 574 | $5,000 | $500 |
| 500 – 549 | $7,500 | $750 |
How Does Missouri Define “Consumer Installment Lender”?
Missouri statute 408.510 defines a consumer installment lender as any individual or business entity who makes loans of any amount that must be paid in not less than four substantially equal installments over a period of not less than one hundred twenty days.
Who is Required to Purchase the Bond?
The Missouri Consumer Installment Lender bond is only required for consumer installment lenders who do not wish to submit audited company financial statements, prepared by a CPA, when renewing their business license.
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 Consumer Installment Lenders Apply for a License in Missouri?
All Missouri consumer installment lender regulatory license applications must be mailed to the following address:
Division of Finance
301 West High Street, Room 630
P.O. Box 716
Jefferson City, MO 65102
Consumer installment lenders must complete the application in its entirety, and pay the appropriate prorated application fee based on the month the application is submitted:
| Month Application is Submitted | Application Fee |
|---|---|
| January | $250.02 |
| February | $208.35 |
| March | $166.68 |
| April | $125.01 |
| May | $83.34 |
| June | $41.67 |
| July | $500 |
| August | $458.37 |
| September | $416.70 |
| October | $375.03 |
| November | $333.36 |
| December | $291.69 |
License Period – The Missouri Consumer Installment Lender License expires on June 31 of each year and must be renewed before the expiration date
How Do Missouri Consumer Installment Lenders Renew Their License?
Consumer installment lenders should mail their completed renewal application to the following address:
Division of Finance
301 West High Street, Room 630
P.O. Box 716
Jefferson City, MO 65102
Lenders who do not submit audited company financial statements with their renewal application must purchase and maintain a $100,000 surety bond. The Missouri Consumer Installment Lender expires on June 31 of each year and must be renewed before the expiration date.
What are the Insurance Requirements for the Missouri Consumer Installment Lender License?
Missouri does not require consumer installment lenders to purchase any form of liability insurance as a prerequisite to obtaining a business license. Lenders who do not submit audited company financial statements with their renewal application must purchase and maintain a $100,000 surety bond.
How Do Missouri Consumer Installment Lenders File Their Bond?
Consumer installment lenders should mail the completed bond form, including the power of attorney, to the following address:
Division of Finance
301 West High Street, Room 630
P.O. Box 716
Jefferson City, MO 65102
The consumer installment lender surety bond requires signatures from both the surety company that issues the bond and a representative from the lending company. The surety company should include the following information on the bond form:
- Name and location of entity/individual(s) buying the bond
- Surety company’s name
- Date the bond is signed
What Can Missouri Consumer Installment Lenders Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, consumer installment lenders in Missouri 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
- Faithfully adhere to all contractual obligations
What Other Insurance Products Can Agents Offer Consumer Installment Lenders in Missouri?
Missouri does not require consumer installment lenders to purchase any form of liability insurance as a prerequisite to conducting business. 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 Missouri Consumer Installment Lender Customers?
Missouri conveniently provides a public database to search for active consumer installment lenders in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.