Nevada Credit Service Organization Bond: A Comprehensive Guide

July 29, 2021

Nevada Credit Service Organization Bond

This guide provides information for insurance agents to help their customers obtain Nevada Credit Service Organization Bonds

At a Glance:

  • Average Cost: Between $1,000 to $7,500 per year based on the applicant’s credit
  • Bond Amount: $100,000
  • Who Needs it: All credit service organizations operating in Nevada
  • Purpose: To ensure the public will receive compensation for any damages should the credit service organization violate registration law
  • Who Regulates Credit Service Organizations in Nevada: The Nevada Division of Mortgage Lending

Background

Nevada revised statute 598.752 requires all credit service organizations operating in the state to register with the Division of Mortgage Lending. The Nevada legislature enacted the registration laws and regulations to ensure that credit service organizations engage in ethical business practices. In order to provide financial security for the enforcement of the registration law, credit service organizations must purchase and maintain a $100,000 surety bond to be eligible for registration.

What is the Purpose of the Nevada Credit Service Organization Bond?

Nevada requires credit service organizations to purchase a surety bond as part of the application process to obtain a business registration. The bond ensures that the public will receive compensation for financial harm if the credit service organization fails to comply with the regulations set forth in Nevada revised statute 598.752. Specifically, the bond protects the public in the event the credit service organization 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 credit service organization breaks registration laws.

Nevada Credit Service Organization Bond Form

Nevada Credit Service Organization Bond Form

How Can an Insurance Agent Obtain a Nevada Credit Service Organization Bond?

BondExchange makes obtaining a Nevada Credit Service Organization Bond easy. Simply login to your account and use our keyword search to find the “credit” 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.

Is a Credit Check Required for the Nevada Credit Service Organization Bond?

Surety companies will run a credit check on the owners of the credit service organization to determine eligibility and pricing for the Nevada Credit Service Organization 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 Nevada Credit Service Organization Bond Cost?

The Nevada Credit Service Organization Bond can cost anywhere between $1,000 to $7,500 of the bond amount 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 Credit Service Organization Bond Cost

Credit Score Bond Cost (1 year)
680+ $1,000
625 – 679 $1,500
575 – 624 $3,750
550 – 574 $5,000
500 – 549 $7,500

How Does Nevada Define “Credit Services Organization?”

Nevada statute 598.741 defines a credit service organization as any business entity who provides on or more of the following services:

  • Improves a consumer’s credit score, history, or rating
  • Obtains an extension of credit for a consumer
  • Provides counseling to consumers on establishing debt payment plan

Exemptions to this definition include:

  • Organizations licensed to make loans or issue extensions of credit
  • Banks, credit unions, and savings and loan institutions
  • Licensed real estate brokers
  • Licensed attorneys
  • Broker-dealers who are registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission
  • Registered debt managers

How do Credit Service Organizations Apply for a Registration in Nevada?

Credit service organizations in Nevada must navigate several steps to secure their registration. Below are the general guidelines, but applicants should refer to the application form for details on the process.

Registration Period – The Nevada Credit Services Organization Registration is valid for one year from the date of issuance and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

Credit service organizations must purchase and maintain a $100,000 surety bond

Step 2 – Complete the Application

All Nevada Credit Service Organization Registration applications should be mailed to the following address:

State of Nevada
Department of Business and Industry
Division of Mortgage Lending
1830 College Parkway, Suite 100
Carson City, NV 89706

Credit service organizations must complete the application in its entirety, submit the Business Practice Questionnaire, and pay a $25 application fee.

How Do Nevada Credit Service Organizations Renew Their Registration?

Credit service organizations should mail their completed renewal application, including a $25 renewal fee, to the following address:

State of Nevada
Department of Business and Industry
Division of Mortgage Lending
1830 College Parkway, Suite 100
Carson City, NV 89706

The Nevada Credit Services Organization Registration is valid for one year from the date of issuance and must be renewed before the expiration date.

What Are the Insurance Requirements for the Nevada Credit Service Organization Registration?

Nevada does not require credit service organizations to purchase any form of liability insurance as a prerequisite to obtaining a registration. Credit service organizations must purchase and maintain a $100,000 surety bond.

How Do Nevada Credit Service Organizations File Their Bond?

Credit service organizations should mail the completed bond form, including the power of attorney, to the following address:

State of Nevada
Department of Business and Industry
Division of Mortgage Lending
1830 College Parkway, Suite 100
Carson City, NV 89706

The credit service organization surety bond requires signatures from both the surety company that issues the bond and a representative from the credit service organization. The surety company should include the following information on the bond form:

  • Legal name and address of entity/individual(s) buying the bond
  • Surety company’s name and address
  • Bond premium
  • Date the bond is signed
  • Date the bond goes into effect

What Can Nevada Credit Service Organization Do to Avoid Claims Against Their Bond?

To avoid claims on their bond, credit service organizations in Nevada must follow all registration regulations in the state, including some of the most important issues below that tend to cause claim

  • Do not engage in any acts of fraud
  • Do not breach any contracts made with consumers

What Other Insurance Products Can Agents Offer Credit Service Organizations in Nevada?

Nevada does not require credit service organizations to purchase any form of liability insurance as a prerequisite to obtaining a business registration. 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 Nevada Credit Service Organization Customers?

Nevada conveniently provides a public database to search for active credit service organizations 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.

2021-12-28T15:18:42-05:00