Overview of Texas Credit Services Organization Bond Requirements
According to the Texas Finance Code, a credit services organization bond must be posted in order to obtain a business license as a CSO. This bond is in the amount of $10,000 and must be posted to the Texas Secretary of State.
Its purpose is to guarantee that credit services organizations in the state will comply with the requirements and rules set forth in Chapter 393 of the Finance Code. These are the faithful discharging of all their obligations, duties and responsibilities under the Code, including conducting business honestly and transparently.
If these rules are violated by the organization, resulting in damages and losses to their customers, a claim can be filed against the bond to provide remedies. Such remedies or compensation can be as high as the full penal sum of the bond.
If you are new to bonds and don’t know why you need one or how they work, see our ‘What is a surety bond’ guide for the full picture!
Below you can learn more about how much this bond will cost, how bond claims occur and how to get your bond.
Would you like to speak to someone personally? Call us at 866.450.3412 anytime for any bond-related questions!
Bond Cost
The amount of this bond as required by the Texas Financial Code is $10,000 for every location held by a credit services organization. The cost of getting bonded is a percentage of that amount.
The exact cost is determined by the surety when you apply for your bond(s). The cost is based on your personal credit score, your financial statements, and other financial indicators. The higher your score, the lower your bond rate will be.
For applicants with a score of 700 FICO or more this can mean a bond rate as low as 1% of the total bond amount. Get the exact cost of your bond by completing our bond application form. We will provide you with a free quote and additional information on how to get bonded.
Bad Credit Bond Program
In some cases, sureties may turn down applicants with low credit. With us, you don’t need to worry about this!
Our Bad Credit Program is specifically designed to make it possible for all applicants with low credit to get bonded.
Because of their lower scores, such applicants must pay slightly higher rates when getting bonded. Yet, all bonds are issued on a case-by-case basis, so make sure to submit an application form to receive your free and personal bond quote.
Claims Against Your Bond
A claim can be made against your bond when you violate its conditions. The bond is conditioned to guarantee compliance in particular with Chapter 393 of the Finance Code. It also guarantees compliance with any additional rules and regulations adopted by the Secretary of State that apply to credit services organizations.
One of the primary conditions of the bond is that it is put in place when customers are charged or pay in advance for the services provided by the organization. In this instance, the bond is required to guarantee that organizations will perform the services they have charged for, and so honestly and faithfully.
If a CSO is found to have breached the Code and its provisions, a claim can be filed against their bond to secure compensation for any losses and damages that result from such a breach. When a claim is made, the surety company which backs the bond may be required to pay compensation to claimants up to the full amount of the bond.
Under the bond agreement, such compensation may include compensation for actual damages, reasonable attorney fees and court costs. Once a surety extends compensation, the bonded CSO must repay the surety in full.
Get Your Bond Today!
To apply for your bond, complete our bond application form. We will contact you shortly with a free quote on your bond as well as additional details on finalizing your application.
Once your application has been approved, it will take about two working days for your bond to be issued. We will then forward it to you via standard mail and email.
Do you have any further questions? Give us a call at 866.450.3412 to speak to one of our bond experts!
