Oregon Debt Management Service Provider Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain Oregon Debt Management Service Provider Bonds
At a Glance:
- Lowest Cost: $250 per year or $25 per month
- Bond Amount: $25,000
- Who Needs it: All debt management service providers operating in Oregon
- Purpose: To ensure the public will receive compensation for any damages should the debt management service provider violate registration law
- Who Regulates Debt Management Service Providers In Oregon: The Oregon Division of Financial Regulation
Oregon statute 697.602 requires all debt management service providers operating in the state to register with the Division of Financial Regulation. The Oregon legislature enacted the registration laws and regulations to ensure that debt managers engage in ethical business practices. In order to provide financial security for the enforcement of the registration law, debt managers must purchase and maintain a $25,000 surety bond to be eligible for registration.
What is the Purpose of the Oregon Debt Management Service Provider Bond?
Oregon requires debt management service providers 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 debt manager fails to comply with the regulations set forth in Oregon statute 697.642. 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 manager breaks registration laws.
How Can an Insurance Agent Obtain an Oregon Debt Management Service Provider Surety Bond?
BondExchange makes obtaining an Oregon Debt Management Service 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 Oregon Debt Management Service Provider Bond?
No, a credit check is not required for the Oregon Debt Management Service Provider Bond. Because the bond is considered relatively low risk, the same flat rate is offered to all debt managers in Oregon.
How Much Does the Oregon Debt Management Service Provider Bond Cost?
The Oregon Debt Management Service Provider Bond costs just $250 per year or $25 per month.
How Does Oregon Define Debt Management Service Provider?
Oregon statute 697.602 defines a debt management service provider as any business entity who provides one or more of the following services:
- Receives funds from consumers and then distributes these funds among the consumer’s creditors
- Improves a consumer’s credit record, history, or rating
- Modifies the conditions of any existing loans
- Obtains concessions from creditors regarding a consumer’s debt obligations
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 Service Providers Apply for Registration in Oregon
Debt managers in Oregon must navigate several steps to secure their registration. Below are the general guidelines, but applicants should refer to the NMLS’s application guidelines for details on the process.
Registration Period – The Oregon Debt Management Service Provider Registration expires on December 31 of every year and must be renewed before the expiration date
Step 1 – Purchase a Surety Bond
Debt managers must purchase and maintain a $25,000 surety bond
Step 2 – Request a NMLS Account
The Oregon Debt Management Service Provider Registration application is submitted electronically through the Nationwide Multistate Licensing System (NMLS). To submit a registration application, applicants must first request to obtain an NMLS account.
Step 3 – Complete the Application
All Oregon Debt Management Service Provider Registration applications can be completed online through the NMLS. Applicants must complete the entire application, and submit the following items:
- Unaudited company financial statements
- Primary company and consumer complaint contact information
- Information on all company trust accounts (accounts used to hold consumer funds must be located in Oregon)
- Disclosure questions
- Company business plan containing the following information:
- Marketing strategies
- Target markets
- Fee schedule
- Operating structure
- Location where client’s funds will be held
- Certificate of Good Standing
- Sample debt management agreement used with consumers
- Samples of all disclosures used with consumers and the company’s budget analysis
- Organizational chart detailing the company’s ownership structure
Debt managers must pay the following fees when submitting their license application:
- $350 application fee
- $36.25 background check fee (per person)
- $15 credit report fee (per person)
How Do Oregon Debt Management Service Providers Renew Their Registration?
Debt managers can renew their registration online through the NMLS. Registration holders need to simply login to their account to access their renewal application. The Oregon Debt Management Service Provider Registration expires on December 31 of every year and must be renewed before the expiration date.
What Are the Insurance Requirements for the Oregon Debt Management Service Provider Registration?
Oregon does not require debt management service providers to purchase any form of liability insurance as a prerequisite to obtaining a business registration. Debt managers must purchase and maintain a $25,000 surety bond.
How Do Oregon Debt Management Service Providers File Their Bond?
Debt management service 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
- Date the bond goes into effect
- Date the bond is signed
What Can Oregon Debt Management Service Providers Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, debt management service providers in Oregon must ensure that they follow all registration 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 distribute consumer funds to creditors
What Other Insurance Products Can Agents Offer Debt Management Service Providers in Oregon?
Oregon does not require debt management service providers 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 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 Oregon Debt Management Service Provider Customers?
The NMLS conveniently provides a public database to search for active debt management service providers in Oregon. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.