The Nationwide Multistate Licensing System (NMLS) will begin receiving and tracking Electronic Surety Bonds (ESB) on Sept. 12. Many state laws or regulations require financial services licensees to obtain a surety bond as a condition of licensure, in accordance with the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the SAFE Act).
State regulators or consumers can file claims against a surety bond to cover fines or penalties assessed or to provide restitution to consumers because of the failure of a licensee to comply with licensing or statutory requirements.
This is the second phase of implementing its support of the Electronic Surety Bond Tracking.
The first phase began Jan. 25, 2016, with the implement of account creation and association for surety companies and surety bond producers. In this phase, State Regulatory Registry will implement bond issuance, tracking and maintenance for select states – Idaho, Indiana, Iowa, Massachusetts, Texas, Vermont, Washington and Wisconsin.
“If you have not already done so, and especially if you are licensed or intend to become licensed in one of the eight states listed that will be implementing this new functionality in September, you should ensure that your surety bond company has created an account in the system and be aware of the new application and conversion deadlines that are listed on the NMLS ESB Adoption Map and Table,” Mayer Brown LLP’s Keisha L. Whitehall Wolfe wrote for Lexology.
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