Missouri Title Lender Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Missouri Title Lender bond (sometimes referred to as a Title Loan Lender bond).
At a Glance:
- Lowest Cost: $100 per year or $10 a month
- Bond Amount: Determined on a case-by-case basis (more on this later)
- Who Needs It: All title lenders operating in Missouri
- Purpose: To protect the public from financial harm if the title lender commits fraud or engages in unfair business practices
- Who Regulates Title Lenders in Missouri: The Missouri Division of Finance
Background
Missouri Revised Statute 367.506 requires all title lenders operating in the state to obtain a license from the Division of Finance. The Missouri Legislature enacted the licensing requirement to ensure that title lenders do not engage in unethical business practices. To provide financial security for the enforcement of the licensing law, title lenders must purchase and maintain a surety bond to be eligible for licensure.
What Is the Purpose of the Missouri Title Lender Bond?
Missouri requires all title lenders to purchase a surety bond as part of the application process to obtain a license. The bond ensures that restitution is available to any damaged party should the title lender fail to abide by the regulations outlined in the Missouri Revised Statutes Title XXIV, Chapter 367. Specifically, the bond protects claimants if the title lender commits fraud or engages in unfair business practices. In short, the bond is a type of insurance that protects the public if the title lender violates the terms of their license.
How Can an Insurance Agent Obtain a Missouri Title Lender Bond?
BondExchange makes obtaining a Missouri Title Lender bond easy. Simply log in to your account and use our keyword search to find the “title lender” bond in our database. Don’t have a login? Enroll 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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How Is the Bond Amount Determined?
According to Missouri Revised Statute 367.509, the Title Lender bond amount must be equal to $20,000 for each business location.
Is a Credit Check Required for the Missouri Title Lender Bond?
Surety companies will run a credit check on the Missouri title lender to determine eligibility and pricing for the Title Lender bond. Title lenders with excellent credit and work experience can expect to receive the best rates. Title lenders with poor credit may be declined by some surety companies or have to pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the applicant’s credit.
How Much Does the Missouri Title Lender Bond Cost?
The Missouri Title Lender bond can cost between $100 to $1,200 per year or $10 to $120 per month. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below briefly references the approximate bond cost on the $20,000 bond requirement.
$20,000 Missouri Title Lender Bond Cost
| Credit Score* | Bond Cost (1 Year) | Bond Cost (1 month) |
|---|---|---|
| 680 – 720+ | $100 | $10 |
| 660 – 679 | $140 | $14 |
| 649 – 659 | $200 | $20 |
| 629 – 648 | $300 | $30 |
| 600 – 628 | $500 | $50 |
| 580 – 599 | $700 | $70 |
| 550 – 579 | $800 | $80 |
| 525 – 549 | $1,000 | $100 |
| 500 – 525 | $1,200 | $120 |
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
How Does Missouri Define “Title Lender”?
To paraphrase Missouri Revised Statute 367.500, a title lender is a business that makes title loans. Title loans are generally short-term, high-interest loans that use a borrower’s titled personal property as collateral.
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 Title Lenders Become Licensed in Missouri?
Title lenders in Missouri must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the Division of Finance’s Title Lenders webpage for details on the process.
License Period – Missouri title lender licenses must be renewed by December 31st each year.
Step 1 – Purchase a Surety Bond
Missouri title lenders must purchase and maintain a surety bond.
Step 2 – Fulfill Following Requirements
Along with a completed Title Loan Licensing Application, the requirements listed below must be attached:
- Proof of $75,000 net worth
- General premises liability insurance policy pursuant to Missouri Revised Statute 367.530 in the amount of $1,000,000 per occurrence covering all locations licensed and operated by the business entity
- The address of the location where repossessed personal property is held (must be within 15 miles of the licensed location)
- $1,000 application fee (applies to each location transacting business)
How Do Title Lenders in Missouri Renew Their Licenses?
Missouri title lender licenses must be renewed by December 31st each year. A completed Title Lender Renewal Application and a fee of $1,000 is due to the Division of Finance at the time of renewal.
What Are the Insurance Requirements for Title Lenders in Missouri?
According to Missouri Revised Statute 367.530, title lenders must purchase and maintain premises liability insurance in an amount of one million dollars per occurrence for the benefit of customers and employees.
How Do Missouri Title Lenders File Their Bonds?
Title lenders should submit their completed bond forms, including the power of attorney when submitting their license applications to the Missouri Division of Finance (see the mailing address listed below).
Division of Finance
301 West High Street, Room 630
Jefferson City, MO 65102
The surety bond requires signatures from the surety company, as well as the title lender. The surety company should include the following information on the bond form:
- The legal name of the individual buying the bond
- Surety company’s name
- Date the bond is signed
What Can Missouri Title Lenders Do to Avoid a Claim Against Their Surety Bond?
To avoid claims against their bonds, title lenders in Missouri must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:
- Misrepresentation
- Unethical business practices
- Fraud
What Other Insurance Products Can Agents Offer Title Lenders in Missouri?
The Missouri Division of Finance requires title lenders to purchase coverage for a general premises liability insurance policy in the amount of $1,000,000 per occurrence covering all locations licensed and operated by the business entity. Bonds are our only business at BondExchange, so we do not issue any other types of 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 Title Lender Customers in Missouri?
Missouri conveniently provides a public database to search for active title 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.