Ohio Precious Metal Dealer Bond: A Comprehensive Guide
At a Glance:
- Average Cost: $100 per year or $10 per month
- Bond Amount: $10,000
- Who Needs it: All precious metal dealers who have a net worth of less than $10,000 operating in Ohio
- Purpose: To protect the public from financial harm if the precious metal dealer violates the terms of their license
- Who Regulates Precious Metal Dealers in Ohio: The Ohio Division of Financial Institutions
Background
Ohio Revised Code 4728.02 requires all precious metal dealers operating in the state to obtain a license with the Division of Financial Institutions before conducting business. The Ohio legislature enacted the licensing requirement to ensure that precious metal dealers engage in ethical business practices. To provide financial security for the enforcement of the licensing law, precious metal dealers must have a net worth of at least $10,000 or purchase and maintain a $10,000 surety bond to be eligible for licensure.
What is the Purpose of the Ohio Precious Metal Dealer Bond?
Ohio requires precious metal dealers who have a net worth of less than $10,000 to purchase a surety bond as part of the application process to obtain a precious metal dealer license. The bond ensures that the public will be protected from financial harm if the dealer fails to comply with the regulations set forth in Ohio Revised Code 4728.03. Specifically, the bond protects the public in the event the dealer engages in any acts of fraud or breaches consumer contracts. In short, the bond is a type of insurance that protects the public if the precious metal dealer violates the terms of their license.
How Can an Insurance Agent Obtain an Ohio Precious Metal Dealer Surety Bond?
BondExchange makes obtaining an Ohio Precious Metal Dealer bond easy. Simply log in to your account and use our keyword search to find the “Precious Metal Dealer” bond in our database. Don’t have a login? Gain Access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (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 ensure 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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Is a Credit Check Required for the Ohio Precious Metal Dealer Bond?
No, a credit check is not required for the Ohio Precious Metal Dealer bond. Because the bond is considered relatively low risk, the same low rate is offered to all precious metal dealers operating in the state, regardless of their credit history.
How Much Does the Ohio Precious Metal Dealer Bond Cost?
The Ohio Precious Metal Dealer bond costs just $100 per year or $10 per year.
Who is Required to Purchase the Bond?
Ohio requires precious metal dealers who have a net worth of less than $10,000 to purchase a surety bond as a prerequisite to obtaining a precious metal dealer license. To paraphrase Ohio Revised Code 4728.01, a precious metal dealer is a person who purchases precious metals or gems such as gold, silver, platinum, or palladium from the general public.
Exemptions to this definition include:
- Professionals with specific skills or knowledge in precious metals such as collectors, speculators, or investors
- National banks, state banks, credit unions, or savings and loan associations
- Licensed mortgage lenders or other lenders licensed under Chapter 1321
- Retail jewelry sales of jewelry purchased from wholesalers
- Coins, hallmark bars, registered ingots, and other collectible currency
- Purchases made under the supervision of a probate court
In lieu of a surety bond, applicants for a precious metal dealer license may choose to submit a financial statement prepared by a CPA that reflects a net worth of at least $10,000.
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 Ohio Precious Metal Dealers Obtain a License?
Precious metal dealers in Ohio must navigate several steps to secure a precious metal dealer license. Below are the general guidelines, but applicants should refer to the Nationwide Mortgage Licensing System’s (NMLS) website or application checklist for details on the process.
License Period – All Ohio Precious Metal Dealer Licenses expire on June 30 of each year and must be renewed before the expiration date.
Step 1 – Purchase a Surety Bond
Precious metal dealers who have a net worth of less than $10,000 must purchase a $10,000 surety bond.
Step 2 – Submit an Application
All Ohio Precious Metal Dealer License applications should be submitted online through the NMLS online here. Precious metal dealers must complete the application in its entirety and submit the following items:
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- $300 license fee
- $200 investigation fee
- $36.25 criminal background check fee
- Surety bond or financial statement
- Ohio Certificate of Authority
- Company formation documents
- Criminal background check
- Business plan and company policies
- Management and organizational charts
- Sample of the computer system and anti-virus software to be used
- Sample of the proposed purchase forms
License fees are prorated, so applicants who submit between July 1st to December 31st should only pay a $150 license fee. Contact the NMLS by phone or email for assistance in the application process.
How do Ohio Precious Metal Dealers Renew Their License?
To renew their license, precious metal dealers should submit a renewal application via the NMLS online here. Dealers must ensure that they renew their surety bond to avoid termination of their license. All Ohio Precious Metal Dealer Licenses expire on June 30 of each year and must be renewed before the expiration date.
What are the Insurance Requirements for Ohio Precious Metal Dealers?
Ohio does not require precious metal dealers to purchase any additional liability insurance. However, precious metal dealers must purchase and maintain a $10,000 surety bond.
How Do Ohio Precious Metal Dealers File Their Bonds?
Precious metal dealers should submit their completed bond forms, including the power of attorney, to the Nationwide Mortgage Licensing System (NMLS) online here.
The surety bond requires signatures from both the surety company, including witness signatures, that issue the bond and from the dealer. The surety company should include the following information on the bond form:
- Legal name, county, and address of the entity/individual(s) buying the bond
- Surety company’s name and address
- Date the bond is signed
- Date the bond goes into effect and expires
What Can Ohio Precious Metal Dealers do to Avoid Claims Against Their Bonds?
To avoid claims against their bonds, precious metal dealers in Ohio must ensure that they:
- Do not engage in any acts of fraud
- Faithfully honor all consumer contracts
- Do not purchase or sell any stolen goods
- Maintain all required records
What Other Insurance Products Can Agents Offer Precious Metal Dealers in Ohio?
Most reputable precious metal dealers will purchase liability insurance. Bonds are our only business at BondExchange, so we do not issue liability 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 Ohio Precious Metal Dealer Customers?
Ohio conveniently provides a database of actively licensed precious metal dealers operating in the state. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
