What is a Kansas Credit Service Organization Surety Bond?
Per the Kansas Credit Services Organization Act, anyone who engages in debt management services for a fee, compensation or gain, or the expectation of a fee, compensation or gain, must have a credit services organization license to conduct business. Debt management services include:
- Receiving or offering to receive funds from a consumer for the purpose of distributing the funds among creditors in full or partial payment of a consumer’s debt
- Improving or offering to improve a consumer’s credit record, history or rating
- Negotiating to defer or reduce a consumer’s obligations with respect to credit extended by others
A surety bond in the initial amount of $25,000 must accompany each credit services organization license application. However, the amount of the bond may be increased up to $1,000,000 by the State Bank Commissioner.
How does a Kansas Credit Service Organization Surety Bond work?
Kansas Credit Service Organization Surety Bonds guarantee that the CSO complies with all requirements of the Kansas Credit Services Organization Act and protects consumers who are damaged by the unlawful actions of the CSO. If the CSO does not comply with these terms, a claim can be filed with the surety company. If the claim is valid, the surety will pay up to the penal sum of the bond to resolve the claim. The CSO is then required to reimburse the surety for all monies paid out, including any attorney fees incurred.
What are the terms of the bond?
Kansas Credit Service Organization Surety Bonds are filed with the Office of the State Bank Commissioner Consumer and Mortgage Lending Division. The bond term is continuous and will remain in force and effect until cancelled by the surety or principal. The surety may cancel the bond at anytime by providing a 30-day written notice, via certified mail, to the State Bank Commissioner and principal prior the effective cancelation date. The aggregate liability of the surety will not exceed the penal sum of the bond in any event.
How do I get a Kansas Credit Service Organization Surety Bond?
The first step is to complete our quick online application for your free bond quote. Submission takes only five minutes, and our underwriting staff will be in contact with you within a couple of hours with pricing.
After you receive approval, you must sign an indemnity agreement with the surety and provide payment for your bond premium. In most cases, we can issue bonds the same day we receive your signed documents and payment.
How much does a Kansas Credit Service Organization Surety Bond cost?
Kansas Credit Service Organization Surety Bonds are subject to underwriting and the price you will pay depends on a review of your personal credit report. Pacific Surety is proud to offer a variety of approvals, regardless of credit, with rates starting at $250 annually for well-qualified applicants. It typically takes just a few hours from quote to issuance of the bond, and we have the ability to beat any competitors pricing. If you have any specific questions, feel free to contact our knowledgeable underwriting staff.