Deferred Deposit Surety Bonds, also referred to as Payday Lender Surety Bonds, are required for companies known as deferred deposit companies, who wish to provide payday loan services to their clients.
Payday loan services entail a company offering their clients small, unsecured, high-interest short-term cash loans. Clients typically provide the deferred deposit companies with a post-dated check for the amount they wish to borrow, including interest, which is to be cashed after the their next scheduled payday. Deferred Deposit Surety Bonds ensure that these companies do not issue loans which exceed the statutorily allotted amount, or the amount deemed feasibly returnable based on their client’s income, and function in accordance to all applicable laws and regulations. These license and permit surety bonds also guarantee that these companies do not charge any more interest than allowed by law.