Wyoming Consumer Lender Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain a Wyoming Consumer Lender Bonds

At a Glance:

• Lowest Cost: 0.5% of the bond amount per year based on the applicant’s credit
• Bond Amount: Based on the annual dollar amount of residential mortgage loans originated (more on this later)
• Who Needs it: All consumer lenders who employ mortgage loans originators (MLOs)
• Purpose: To ensure the public will receive compensation for any damages should the lender’s MLO employees fail to comply with licensing law
• Who Regulates Consumer Lenders In Wyoming: The Wyoming Division of Banking

Background

Wyoming Statute  40-14-342 requires all consumer lenders operating in the state to obtain a license with the Division of Banking. The Wyoming legislature enacted the licensing laws and regulations to ensure that consumer lenders engage in ethical business practices. To provide financial security for the enforcement of the licensing law, consumer lenders who employ mortgage loan originators must purchase and maintain a surety bond to be eligible for licensure.

What is the Purpose of the Wyoming Consumer Lender Bond?

Wyoming requires consumer lenders who employ mortgage loan originators to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the lender fails to comply with the regulations set forth in Wyoming statute 40-14-637. Specifically, the bond protects the public in the event the lender engages in any acts of fraud or breaches any contracts made with consumers. In short, the bond is a type of insurance that protects the public if the lender’s MLO employees act unethically.

How Can an Insurance Agent Obtain a Wyoming Consumer Lender Bond?

BondExchange makes obtaining a Wyoming Consumer Lender Bond easy. Simply login to your account and use our keyword search to find the “consumer” 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 (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.

Do all Wyoming Consumer Lenders Need to Purchase a Surety Bond?

No, only consumer lenders who employ mortgage loan originators are required to purchase a surety bond.
<h2=’amount’>How is the Bond Amount Determined?

The required bond amount for all consumer lenders in Wyoming is based on the annual dollar amount of residential mortgage loans originated, as listed below:

Table 1.1

Is a Credit Check Required for the Wyoming Consumer Lender Bond?

Surety companies will run a credit check on the owners of the lending company to determine eligibility and pricing for the Wyoming Consumer Lender Bond. Lenders with excellent credit and work experience can expect to receive the best rates. Lenders with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the lender’s credit.

How Much Does the Wyoming Consumer Lender Bond Cost?

The Wyoming Consumer Lender surety bond can cost anywhere between 0.75% to 5% of the bond amount per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on a $25,000 bond requirement.

$25,000 Consumer Lender Bond Cost

Table 1.2

*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 Wyoming Define “Consumer Lender”?

To paraphrase the Wyoming Uniform Consumer Credit Code, a consumer lender is any business entity who extends consumer credit through loans or by taking assignment of the non-servicing rights of consumer loans that are not in default or who provides financing on behalf of sellers or lessors.

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 Consumer Lenders Apply for a License in Wyoming?

Consumer lenders in Wyoming must navigate several steps to secure their license. Below are the general guidelines, but lenders should refer to the NMLS’s application guidelines for details on the process.

License Period – The Wyoming Consumer Lender License expires on December 1 of each year and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

Consumer lenders who employ mortgage loan originators must purchase and maintain a surety bond (limits outlined in Table 1.1)

Step 2 – Request a NMLS Account

The Wyoming Consumer Lender License application is submitted electronically through the Nationwide Multistate Licensing System (NMLS). To submit a license application, lenders must first request to obtain an NMLS account.

Step 3 – Complete the Application

All Wyoming Consumer Lender License applications can be completed online through the NMLS. Consumer lenders must complete the application, including the following steps:

• • Unaudited company financial statements
  • The following company contacts:
    • Primary
    • Primary consumer complaint
    • Licensing
    • Consumer complaint (regulator)
    • Legal
    • Pre-exam
  • Disclosure questions
  • Certificate of Good Standing
  • Company formation documents
  • Company management and organizational charts

Consumer lenders must pay the following fees when submitting their license application:

• • $300 application fee
  • $50 license fee
  • $36.25 background check fee (per person)
  • $15 credit report fee (per person)

How Do Wyoming Consumer Lenders Renew Their License?

Consumer lenders can renew their license online through the NMLS. Lenders need to simply login to their account to access their renewal application. The Wyoming Consumer Lender License expires on December 1 of each year and must be renewed before the expiration date.

What Are the Insurance Requirements for the Wyoming Consumer Lender License?

Wyoming does not require consumer lenders to obtain any form of liability insurance as a prerequisite to obtaining a business license. Consumer lenders who employ mortgage loan originators must purchase and maintain a surety bond (limits outlined in Table 1.1).

How Do Wyoming Consumer Lenders File Their Bond?

Consumer lenders should submit the completed bond form, including the power of attorney, electronically through the NMLS. The Consumer lender surety bond requires signatures from both the surety company that issues the bond and a representative from the lending company. The surety company should include the following information on the bond form:

• Legal name and state of incorporation of entity/individual(s) buying the bond
• Surety company’s name and state of incorporation
• Bond amount
• Date the bond goes into effect
• Date the bond is signed

What Can Wyoming Consumer Lenders Do to Avoid Claims Against Their Bond?

To avoid claims against their bond, consumer  lenders in Wyoming must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:

• Do not breach any contracts made with consumers
• Do not engage in any acts of fraud

What Other Insurance Products Can Agents Offer Consumer Lenders in Wyoming?

Wyoming does not require consumer lenders to purchase any form of liability insurance as a prerequisite to obtaining a business license. However, most reputable lenders will seek to obtain this insurance anyway. 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 Wyoming Consumer Lender Customers?

The NMLS conveniently provides a public database to search for active consumer lenders in Wyoming. The database can be accessed here. Contact BondExchange for help developing a marketing piece. Agents can also leverage our print-mail relationships for discounted mailing services