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Requirements for a California Finance Broker License

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The California Department of Business Oversight, Financial Services Division oversees the licensure and regulations of finance brokers, mortgage and other non-bank lenders, payday lenders, mortgage servicers, escrow agents and escrow companies, and other financial service providers.

A finance lender is anyone who makes consumer or commercial loans.

A finance broker is a person who negotiates or performs an act in connection with loans made by a finance lender.

Section 22100 of the California Financial Code defines the requirements for license which includes a minimum net worth of at least $25,000 and requires a minimum $25,000 surety bond. None of the principals of the company can have a criminal history and must have a history of regulatory compliance.

License requirements are as follows:

1. Complete the application through the NMLS system and pay the applicable filing fee.
2. Submit the Checklist along with agency specific requirement attachments to the Department of Business Oversight NMLS Licensing Unit within 5 business days .
3. Submit fingerprint cards for each control person filing an NMLS individual form.
4. Provide copies of the following if applicable: a Certificate of Filing from the county clerk in which the fictitious business name was filed, if any questions answered “Yes” on the disclosure statement, provide supporting documents, Certificate of Authority or Good Standing Certificate obtained from the California Secretary of State, partnership agreement, and an organizational chart if owned by another entity, entities, or persons, subsidiaries, or affiliated entities.
5. Provide a Business Plan as to how business will be conducted.
6. Provide an unaudited financial statement within 90 days of the date of application. The financial statement must reflect a minimum real net worth of $250,000, unless licensed as a broker then the requirement is $50,000.
7. Provide a Management Chart that includes offices, managers, and divisions.
8. California finance broker licensees who originate mortgage loans are also required to keep a minimum $25,000 surety bond. The bond amount is based on the amount of activities conducted by the licensee. The surety bond amounts will be based on the aggregate dollar amount of residential mortgage loans originated by the licensee in the preceding calendar year, as follows:

Aggregate Loans Bond Amount
0 - $1,000,000 $ 25,000
$1,000,001 - $50,000,000 $ 50,000
$50,000,001 - $500,000,000 $100,000
Over $500,000,001 $200,000

Surety bonding requirements for CFLL licensees who do not originate residential mortgage loans will remain $25,000.

9. Complete the Attestation by an authorized person for the company.
10. Complete the Customer Authorization of Disclosure of Financial Records form. If executed in a state other than California, the form must be notarized.
11. Complete the Execution Section by an authorized person for the company.

Premiums for California finance broker bonds are dependent on credit and the bond amount required.

Did you know?

That finance lenders in California can write either secured or unsecured loans. Secured loans can be secured with personal property and if the loan is more than $5,000 it can be secured with a combination of personal and real property or by real property alone.

Related Links:

California Finance Lenders License FAQs
NMLS Registration Portal
California Request for Live Scan Service
California Finance Lenders Law License - New Application Checklist
State of California - Finance Lenders Law - Plan of Business
State of California - Finance Lenders Law - Plan of Business
California Finance Lenders Law - Licensee Information

Have Questions?

Contact our Surety Bond Specialists at:

Phone: 1‑844‑432‑6637
Emailinfo@suretygroup.com
Fax:     404-351-3237
Hours: 8:00-5:00 CST, Monday through Friday




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