As a result of recent legislation, licensed collection agencies in Indiana are required to switch to electronic surety bonds. All agencies seeking renewal for 2021 must follow the new requirements.
7/7/2020 11:00
The Indiana Secretary of State Securities Division issued a compliance alert detailing the changes in the law regarding the surety bond requirements for licensed collection agencies in effect since July 1, 2020.
As a result of recent legislation, beginning on July 1, 2020, the State Securities Division is transitioning away from the practice of requiring licensed collection agencies to obtain and post a paper surety bond. Instead, each collection agency will be required to obtain and post a single electronic surety bond using software provided by the NMLS, according to the compliance alert.
Agencies licensed in Indiana should contact their surety bond company to enact the changes required under Indiana law in a timely manner. The functionality is now live through the Nationwide Multistate Licensing System (NMLS) and the conversion to an electronic surety bond can now be completed.
ACA members who have their Indiana bond(s) through Collectors Insurance Agency will be automatically converted into an electronic format or contacted within a few weeks.
The alert continues:
“This new electronic format should prove more efficient for both licensees as well as the division. Accordingly, any new applicant seeking a collection agency license following July 1, 2020, will be required to obtain and upload to NMLS an electronic surety bond pursuant to I.C. § 25-11-1-3(f) (2020).
Additionally, all collection agencies seeking to renew their licenses for operation in 2021 must upload an electronic surety bond before their renewal applications will be approved. As a result, no collection agency will be permitted to operate in Indiana in 2021 without having made the transition to an electronic surety bond.
A collection agency shall comply with the bond requirement by obtaining a single electronic surety bond in an amount equal to $5,000 for each office the collection agency operates in Indiana. The division encourages collection agencies to begin the surety bond conversion process early to help ensure a smooth renewal period. More information surrounding the electronic surety bond uploading process may be found here: NMLS Electronic Surety Bond Training.
Members seeking more information on this alert may contact [email protected] or ACA International’s licensing staff at [email protected] or (952) 926-6547.