Mississippi Title Pledge Act Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Mississippi Title Pledge Act bond.
At a Glance:
- Lowest Cost: $188 per year or $19 a month
- Bond Amount: Determined on a case-by-case basis (more on this later)
- Who Needs It: All title pledge lenders operating in Mississippi
- Purpose: To protect the public from financial harm if the title pledge lender commits fraud or engages in unfair business practices
- Who Regulates Title Pledge Lenders in Mississippi: The Mississippi Department of Banking and Consumer Finance
Background
Mississippi Statute 75-67-419 requires all title pledge lenders operating in the state to obtain a license from the Department of Banking and Consumer Finance. The Mississippi Legislature enacted the licensing requirement to ensure that title pledge lenders do not engage in unethical business practices. To provide financial security for the enforcement of the licensing law, title pledge lenders must purchase and maintain a surety bond to be eligible for licensure.
What Is the Purpose of the Mississippi Title Pledge Act Bond?
Mississippi requires all title pledge lenders to purchase a surety bond as part of the application process to obtain a license. The bond ensures that restitution is available to any damaged party should the title pledge lender fail to abide by the regulations outlined in Mississippi Statutes Title 75, Chapter 67, Article 9. Specifically, the bond protects claimants if the title pledge lender commits fraud or engages in unfair business practices. In short, the bond is a type of insurance that protects the public if the title pledge lender violates the terms of their license.
How Can an Insurance Agent Obtain a Mississippi Title Pledge Act Bond?
BondExchange makes obtaining a Mississippi Title Pledge Act bond easy. Simply log in to your account and use our keyword search to find the “title pledge act” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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How Is the Bond Amount Determined?
According to the Mississippi Department of Banking and Consumer Finance, the Title Pledge Act bond amount must be equal to $50,000 for each company or branch location under the title pledge lender license (the requirement institutes a $250,000 bond limit max).
Is a Credit Check Required for the Mississippi Title Pledge Act Bond?
Surety companies will run a credit check on the applicant to determine eligibility and pricing for the Mississippi Title Pledge Act bond. Title pledge lenders with excellent credit and work experience can expect to receive the best rates. Title pledge lenders with poor credit may be declined by some surety companies or have to pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the applicant’s credit.
How Much Does the Mississippi Title Pledge Act Bond Cost?
The Mississippi Title Pledge Act bond can cost between 0.5% to 5% of the bond amount per year. Monthly subscription options are also available. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below briefly references the approximate bond cost on the $50,000 requirement.
$50,000 Mississippi Title Pledge Act Bond Cost
| Credit Score* | Bond Cost (1 Year) | Bond Cost (1 month) |
|---|---|---|
| 720+ | $188 | $19 |
| 680 – 719 | $225 | $23 |
| 660 -679 | $350 | $35 |
| 649 – 659 | $500 | $50 |
| 629 – 648 | $750 | $75 |
| 600 – 628 | $1,250 | $125 |
| 580 – 599 | $1,750 | $175 |
| 550 – 579 | $2,000 | $200 |
| 525 – 549 | $2,500 | $250 |
| 500 – 525 | $3,000 | $300 |
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
How Does Mississippi Define “Title Pledge Lender”?
To paraphrase Mississippi Statute 75-67-403, a title pledge lender is any person that engages in the business of title pledge agreements. For example, title pledge agreements are generally short-term, high-interest loans that use a borrower’s titled personal property as collateral.
Exemptions to this definition include the following:
- Any bank which is regulated by the Department of Banking and Consumer Finance
- Banks or savings/loan associations whose deposits or accounts are eligible for insurance
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How Do Title Pledge Lenders Become Licensed in Mississippi?
Title pledge lenders in Mississippi must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the Department’s Title Pledge Forms and Applications webpage for details on the process.
License Period – The license period for Mississippi title pledge lenders is January 1st to December 31st.
Step 1 – Purchase a Surety Bond
Title pledge lenders operating within the State of Mississippi are required to purchase and maintain a surety bond.
Step 2 – Complete the Application
Applications for a title pledge lender license must be completed through the National Multistate Licensing System & Registry (NMLS). The application must include a background check (completed in NMLS) and a $750 initial license fee. In addition, proof of registration with the Mississippi Secretary of State is also required.
How Do Title Pledge Lenders in Mississippi Renew Their Licenses?
Title pledge lenders can renew their licenses online through the NMLS website. License renewal applications are due by December 1st of each year and are subject to a $475 standard fee.
What Are the Insurance Requirements for Title Pledge Lenders in Mississippi?
The Mississippi Department of Banking and Consumer Finance does not require title pledge lenders to purchase any form of liability insurance as a prerequisite to obtaining a license. Title pledge lenders must purchase and maintain a surety bond.
How Do Mississippi Title Pledge Lenders File Their Bonds?
Title pledge lenders should submit their completed bond forms, including the power of attorney, electronically through the NMLS. The surety bond requires signatures from the surety company, as well as a representative from the title pledge lender business. The surety company should include the following information on the bond form:
- Bond number
- The legal name of the individual buying the bond
- Surety company’s name
- Date the bond is signed
What Can Mississippi Title Pledge Lenders Do to Avoid a Claim Against Their Surety Bond?
To avoid claims against their bonds, title pledge lenders in Mississippi must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:
- Misrepresentation
- Unethical business practices
- Fraud
What Other Insurance Products Can Agents Offer Title Pledge Lenders in Mississippi?
Most reputable title pledge lenders will purchase business liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Title Pledge Lender Customers in Mississippi?
Mississippi conveniently provides a public database to search for active title pledge lenders in the state. The database can be accessed here (the most current list can be found on the bottom right of the page under the “Title Pledge” tab). Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
