Archive for January, 2012

Controversial Maryland Surety Bond Requirement

Written by Surety Bond Expert on January 31st, 2012. Posted in Commercial Bonds, Maryland, Surety Bond Blog

Debt Settlement Service Provider Bond law may not protect consumers as intended

Effective October 1, 2011, a new law requires debt settlement service providers to have a $50,000 surety bond from a state approved surety. Unfortunately, neither the surety bond requirement nor the law itself provide adequate consumer protection. The Maryland Senate Finance Committee, on pressure for the service provider industry, modified the fee cap that can be charged consumers from 30% to 25% of the debt enrolled with a company, but the cap actually results in higher fees for consumers, higher than the limits even proposed by the industry itself. Maryland Surety Bond RequirementThe law, Maryland Senate Bill 741 (PDF) actually rewards debt settlement firms for convincing consumers to enroll their debts, regardless of the success or failure of the debt settlement. In other words, companies can now accumulate fees without having to pay any of the consumers bills, which is exactly what they are doing (as shown in the video). Read more at the Maryland Consumers blog. Consumer interviews are available on video.

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Many States Require Car Dealers to Provide an Auto Dealer Bond – Part 3

Written by JoAnn Smith on January 24th, 2012. Posted in Surety Bond Blog

We’ve already visited the surety bond requirements for Florida and Texas, so now let’s take a look at what is required for California and Georgia. California The California Department of Motor Vehicles requires all new and used car dealers to provide a $50,000 auto dealer bond (Form OL 25). Motorcycle dealers, motorcycle lessor-retailers, all-terrain vehicle dealers and wholesale-only dealers are required to obtain a $10,000 auto dealer bond (Form OL 25B). The bond is designed to protect purchasers, sellers, financing companies and governmental agencies from fraudulent practices on behalf of the dealer. According to the California Department of Motor Vehicles, “the bond shall run concurrently with the license period for which the license is granted and the aggregate liability of the Surety shall not exceed the penal sum of the bond in any event.” Georgia In Georgia, only used car and used car parts dealers are required to obtain a surety bond. In addition to being registered and licensed, the Georgia State Board of Registration of Used Motor Vehicle Dealers and Used Motor Vehicle Parts Dealers require these dealers to purchase and maintain a $35,000 surety bond. The Georgia dealer license application and surety bond form can be found here. The Board defines used motor vehicle dealers as “motor vehicle brokers, independent motor vehicle leasing agencies which sell or offer to sell used motor vehicles, used motor vehicle auction companies and pawnbrokers who sell motor vehicles to the public. Used parts license include used parts dealers, rebuilders, and salvage dealers.”

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SBA Changes Surety Bond Rules for Disaster Areas

Written by JoAnn Smith on January 20th, 2012. Posted in Surety Bond Blog

The U.S. Small Business Administration has raised surety bond guarantee limits as part of changes to the Surety Bond Guarantee (SBG) Program that will help construction and other companies land larger contracts for projects in areas that have been impacted by disasters. These changes are related to the Small Business Disaster Response and Loan Improvements Act of 2008 [H.R. 6124], a law that increases the eligible amount for work related to a major disaster. The changes (published as part of a Proposed Rule in The Federal Register in April 2010) include the following:
    • For a non-federal contract or order up to $5 million, a bond guarantee may be issued if the products will be manufactured or the services performed in the disaster area.
 
    • For a federal contract or order up to $5 million, the performance site can be outside the disaster area if the contract or order will directly assist the disaster recovery efforts.
 
    • For a federal contract or order, the amount of the guarantee can be as much as $10 million at the request of the head of an agency that is involved in reconstruction efforts.
   U.S. Small Business Administration (SBA)SBA Administrator Karen Mills commented, “SBA is committed to mobilizing resources as quickly as possible following disasters to help begin economic recovery for communities, businesses and families. These changes to the Surety Bond Program will have a two-fold impact. Helping small businesses compete for and win contracting opportunities gives them the chance to grow and create jobs, while at the same time jump-starting economic activity and rebuilding efforts following a disaster when communities and regions need it most.” The larger amounts would apply during the 12 months following the disaster declaration, unless the Small Business Administration provides for an extension for a specific disaster. Read more about this change at the Minority Business Development Agency blog.

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Surety Bond Requirements for Kentucky’s Real Estate Appraisal Management Companies

Written by JoAnn Smith on January 16th, 2012. Posted in Kentucky, Surety Bond Blog

Kentucky Appraisal Management Company Surety BondKentucky’s House Bill 288 is new legislation that requires real estate appraisal management companies to register through the Kentucky Real Estate Appraisers Board. The registration process involves completing an application, paying a filing fee, submitting to a criminal history check and obtaining an Appraisal Management Company Surety Bond. While the required surety bond amount would vary, it would be determined by regulations and could not exceed $500,000, according to the initial proposed legislation. However, the Surety and Fidelity Association of America (SFAA) explained to the Kentucky lawmakers that requiring such a large surety bond amount regardless of the size of the real estate appraisal management company would be extremely problematic. Therefore, due to the SFAA comments, the proposed bond amount has been lowered to $25,000. Additionally, the surety’s aggregate liability must not exceed the principal sum of the surety bond. Any claim against a real estate appraisal management company may be made directly against the surety bond. The purpose of the bond is to guarantee that the real estate appraisal management company will perform faithfully and meet its obligations. Located directly across the Ohio River from Kentucky, BuySurety.com is uniquely positioned to provide the best rates on this bond. Founded in 1998, Buysurety.com is a full service surety bond broker with offices in the United States as well as an extensive internet reach. BuySurety.com offers competitive and affordable rates, quick turnaround times and ease of doing business. We have a team of highly experienced bond experts and a 14 year proven track record. If you are looking for a surety bond, look no further than BuySurety.com.

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Proposed Ohio Legislation Would Require Dog Breeders To Obtain Surety Bonds

Written by Surety Bond Expert on January 12th, 2012. Posted in Ohio, Surety Bond Blog

Puppy mills continue to come under scrutiny

Ohio surety bondsOhio is becoming one of the leading states in the country for puppy mills where dogs are recklessly bred for mass production with little or no veterinary care or human companionship. According to Karen Minton, director of the Humane Society of the United State’s Ohio office, “Ohio has become even more attractive to puppy mill breeders, as it is one of a handful of states where a lack of regulations or even basic humane standards of care provides a welcoming climate for puppy mills.” Designed to address the neglect and cruelty found in puppy mills, Ohio’s Senate Bill 130 would create new licensing and surety bond requirements and regulate care standards for high volume dog breeders, retailers and rescues. A high volume dog breeder is defined as “an establishment that keeps, houses and maintains adult breeding dogs that produce at least nine litters of puppies in any given calendar year, and in return for a fee or other consideration, sells 60 or more adult dogs or puppies per calendar year.” An adult dog is defined as “a dog that is 12 months of age or older.” According to this bill, high volume dog breeders would be required to obtain a high volume breeder license from a newly created Kennel Control Authority who would be responsible for inspecting kennels and enforcing regulations relating to feeding, care and living conditions. In addition to the licensing process, the bill would require high volume breeders to submit evidence of insurance or a surety bond, payable to the Kennel Control Authority, to ensure compliance. The value of the surety bond would vary according to the number of dogs kept by a breeder with a $5,000 surety bond required for up to 25 adult dogs, $10,000 for 26-50 adult dogs and $50,000 for more than 50 adult dogs. The surety bond could then be redeemed by the state if a kennel loses their license to operate. The bond’s funds would pay for the care of the dogs that are seized from the breeder’s kennel.

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