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Nevada - The Final Countersignature Law is Repealed

by The Surety & Fidelity Association of America

The Nevada Insurance Department decided not to appeal the Ninth Circuit Court’s decision that found that the State’s countersignature law to be unconstitutional. In letting the Court’s decision stand, Nevada became the final state to repeal its countersignature law. If SFAA members get inquiries from agents or others regarding whether a countersignature is needed from a local agent on a bond, the answer now is No in every state. Nevada and the Virgin Islands had been the only holdouts among the states in repealing these laws.  As with other states in which the repeal had to be accomplished by litigation rather than legislation, the Ninth Circuit found that the Nevada countersignature law violated the privileges and immunities clause of the US Constitution in that it discriminated against citizens of other states where there is no reason for the discrimination other than the fact that they are citizens of another state. The opinion can be found at Council of Agents and Brokers and Rebecca Restrepo vs. Alice A. Molasky-Aman, Nevada Commissioner of Insurance, (No 04-17271, Filed April 10, 2008).

Pennsylvania - New Correspondent Lender Bond Requirement

HB 2179: License Bond—Correspondent Lenders 

INTRODUCED: 02/06/2008 

ENACTED: 07/08/2008

HB 2179 subjects correspondent lenders to the current license bond requirements for mortgage brokers, which requires a $100,000 license bond. The new law also enhances the regulatory requirements for mortgage lenders, correspondents and brokers. It also creates a class of loan originators. The new law becomes effective 120 days from enactment on November 8, 2008

North Caronlina - Potential bond requirement for Mortgage Servicers

HB 2463: License Bond—Mortgage Servicers

INTRODUCED: 05/26/2008 

STATUS:   07/07/2008 To Governor 

HB 2463 would regulate mortgage servicers and would subject them to the same licensing, bond and qualification requirements as mortgage lenders. Existing law requires a surety bond in the amount of $150,000. Cash or securities in the same amount are accepted, as is a financial statement demonstrating a net worth of $250,000. Existing law already permits and gives priority to direct consumer claims. The recent committee substitutions did not change the proposed bond requirement.

Pennsylvania - Debt Management Services

HB 2294: License Bond—Debt Management Services 

INTRODUCED: 03/05/2008 

STATUS:   06/17/2008 From House Committee on Commerce. Reported as Amended.

HB 2294 would regulate debt management service providers, requiring licensure, a surety bond and proof of liability or fidelity insurance. The surety bond would have to be in the amount of $50,000 from a surety company licensed in the Commonwealth and approved by the Department of Banking. The bond would run to the Commonwealth for the benefit of consumers damaged by the provider's or his or her agent's violation of the bill's provisions and/or the regulations implementing it. The fidelity policy would have to insure against the dishonesty, fraud, theft or other malfeasance of the provider's employees, officers, directors or principals.

California - Possible Update to California Finance Lender Bond

SB 1604: License Bond—Finance Lenders and Brokers

STATUS:

05/22/2008                Passed Senate. To Assembly.

06/16/2008                From Assembly Committee On Banking And Finance

SB 1604 would require an increased bond amount for finance lenders and brokers that engage in the business of residential mortgages. Current law requires a bond in the amount of $25,000, which the bill would increase to $100,000. Originally, the bill would have increased the bond amount to $50,000 and it would have provided for an increase to $100,000 if it had been determined that violations had occurred.