Wisconsin Payday Lender Bond

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Wisconsin Payday Lender Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain a Wisconsin Payday Lender Bond

At a Glance:

  • Lowest Cost: 1.5% of the bond amount per year based on the applicant’s credit
  • Bond Amount: $5,000 per office location
  • Who Needs it: All payday lenders operating in Wisconsin
  • Purpose: To ensure the public will receive compensation for any damages should the payday lender fail to comply with licensing law
  • Who Regulates Payday Lenders In Wisconsin: The Wisconsin Department of Financial Institutions
Wisconsin Payday Lender Bond Form
Wisconsin Payday Lender Bond Form


Wisconsin statute 138.14(2) requires all payday lenders operating in the state to obtain a license with the Department of Financial Institutions. The Wisconsin legislature enacted the licensing laws and regulations to ensure that payday lenders engage in ethical business practices. To provide financial security for the enforcement of the licensing law, payday lenders must purchase and maintain a $5,000 (per office location) surety bond to be eligible for licensure.

What is the Purpose of the Wisconsin Payday Lender Bond?

Wisconsin requires payday lenders 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 payday lender fails to comply with the licensing regulations set forth in Wisconsin statute 138.14(4). Specifically, the bond protects the public in the event the 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 payday lender breaks licensing laws.

How Can an Insurance Agent Obtain a Wisconsin Payday Lender Bond?

BondExchange makes obtaining a Wisconsin Payday Lender Bond easy. Simply login to your account and use our keyword search to find the “payday” 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 Wisconsin Payday Lender Bond?

Surety companies will run a credit check on the owners of the lending company to determine eligibility and pricing for the Wisconsin Payday 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 Wisconsin Payday Lender Bond Cost?

The Wisconsin Payday Lender Bond can cost anywhere between 1.5% to 7.5% of the bond amount per year. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on a $10,000 bond requirement.

$10,000 Payday Lender Bond Cost

Credit Score Bond Cost (1 year) Bond Cost (1 month)
800+ $150 $15
650 – 799 $200 $20
600 – 649 $400 $40
450 – 599 $750 $75

How Does Wisconsin Define “Payday Lender?”

To paraphrase Wisconsin Statute 138.14(k), a payday lender is any business entity who accepts post dated checks from a consumer, to be cashed at a later date, in exchange for issuing loans lasting 90 days or less.

Wisconsin Payday Lender Bond

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 Payday Lenders Apply for a License in Wisconsin?

Payday lenders in Wisconsin 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 Wisconsin Payday Lender License expires on December 31 of each year and must be renewed before the expiration date

Step 1 – Obtain a Zoning Permit

Payday lenders cannot operate in a city or county unless it has received a permit to do so from either the city council or county zoning agency. Lenders will need to obtain permits for each office location.

Step 2 – Meet the Net Worth Requirements

Applicants for the Wisconsin Payday Lender bond must amass a net worth (assets – liabilities) of at least $50,000 and at all times maintain positive working capital (current assets – current liabilities). Payday lenders must submit financial statements verifying their net worth when submitting their license application.

Step 3 – Purchase a Surety Bond

Payday lenders must purchase and maintain a surety bond with a limit of $5,000 per office location

Step 4 – Request an NMLS Account

The Wisconsin Payday Lender 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 4 – Complete the Application

All Wisconsin Payday Lender License applications can be completed online through the NMLS. Completed applications will include the following items:

    • Company financial statements
    • The following company contacts:
      • Primary
      • Primary consumer complaint
      • Licensing
      • Consumer complaint (public)
      • Exam delivery
      • Pre-exam contact
    • Disclosure questions
    • Company business plan containing the following information:
      • Marketing strategies
      • Products
      • Target markets
      • Fee schedule
      • Operating structure
      • Management team
    • Certificate of good standing 
    • The following document samples:
      • Loan agreements used with consumers
      • Consumer consent statement
      • Repayment plan agreement
    • Company management and organizational charts
    • Supplemental questions form

Payday lenders must pay the following fees when submitting their license application:

    • $500 license fee
    • $300 application fee

How Do Wisconsin Payday Lenders Renew Their License?

Payday lenders can renew their license online through the NMLS. License holders need to simply login to their account to access their renewal application. The Wisconsin Payday Lender License expires on December 31 of each year and must be renewed before the expiration date.

What Are the Insurance Requirements for the Wisconsin Payday Lender License?

Wisconsin does not require payday lenders to obtain any form of liability insurance as a prerequisite to obtaining a business license. Payday lenders must purchase and maintain a surety bond with a limit of $5,000 per office location.

How Do Wisconsin Payday Lenders File Their Bond?

Payday lenders 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 lending company. The surety company should include the following information on the bond form:

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

What Can Wisconsin Payday Lenders Do to Avoid Claims Against Their Bond?

To avoid claims made against their bond, payday lenders in Wisconsin must follow all license regulations in the state. Including some of the most important issues below that tend to cause claims:

  • Do not breach any contracts made with consumers
  • Properly account for all funds received
  • Do not engage in any acts of fraud

What Other Insurance Products Can Agents Offer Payday Lenders in Wisconsin?

Wisconsin does not require payday lenders 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 Wisconsin Payday Lender Customers?

The NMLS conveniently provides a public database to search for active Payday Lenders in Wisconsin. The database can be accessed here. Contact BondExchange for help developing a marketing piece. Agents can also leverage our print-mail relationships for discounted mailing services.

Wisconsin Payday Lender Bond