Nebraska Credit Services Organization Bond: A Comprehensive Guide
July 20, 2021
This guide provides information for insurance agents to help their customers obtain Nebraska Credit Services Organization Bonds
At a Glance:
- Average Cost: Between $1,000 to $7,500 of the bond amount per year based on the applicant’s credit
- Bond Amount: $100,000
- Who Needs it: All credit services organizations operating in Nebraska
- Purpose: To ensure the public will receive compensation for any damages should the credit services organization violate registration law
- Who Regulates Credit Services Organizations in Nebraska: The Nebraska Secretary of State
Background
Nebraska statute 45-806 requires all credit services organizations operating in the state to register with the Secretary of State. The Nebraska legislature enacted the registration laws and regulations to ensure that credit services organizations engage in ethical business practices. In order to provide financial security for the enforcement of the registration law, credit services organizations must purchase and maintain a $100,000 surety bond prior to conducting business operations.
What is the Purpose of the Nebraska Credit Services Organization Bond?
Nebraska requires credit services organizations to purchase a surety bond as part of the application process to register with the Secretary of State. The bond ensures that the public will receive compensation for financial harm if the credit services organization fails to comply with the regulations set forth in the Nebraska credit services organization statutes. Specifically, the bond protects the public in the event the credit services organization 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 credit services organization breaks registration laws.
How Can an Insurance Agent Obtain a Nebraska Credit Services Organization Bond?
BondExchange makes obtaining a Nebraska Credit Services Organization Bond easy. Simply login to your account and use our keyword search to find the “credit” 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.
Is a Credit Check Required for the Nebraska Credit Services Organization Bond?
Surety companies will run a credit check on the owners of the credit services organization to determine eligibility and pricing for the Nebraska Credit Services Organization bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners 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 owner’s credit.
How Much Does the Nebraska Credit Services Organization Bond Cost?
The Nebraska Credit Services Organization Bond can cost anywhere between $1,000 to $7,500 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 the $100,000 bond requirement.
$100,000 Credit Services Organization Bond Cost
| Credit Score | Bond Cost (1 year) |
|---|---|
| 680+ | $1,000 |
| 625 – 679 | $1,500 |
| 575 – 624 | $3,750 |
| 550 – 574 | $5,000 |
| 500 – 549 | $7,500 |
How Does Nebraska Define “Credit Services Organization?”
Nebraska statute 45-802 defines a credit services organization as any business entity who provides advice or assistance to a buyer in regards to improving their credit record, history, or rating or obtaining an extension of credit.
How do Credit Services Organizations Apply For Registration in Nebraska?
Credit services organizations in Nebraska must navigate several steps to secure their registration. Below are the general guidelines, but applicants should refer to the application form for details on the process.
Registration Period – The Nebraska Credit Services Organization Registration does not expire unless it has been suspended or revoked
Step 1 – Purchase a Surety Bond
Credit services organizations must purchase and maintain a $100,000 surety bond
Step 2 – Complete the Application
All Nebraska Credit Services Organization Registration applications should be mailed to the following address:
Secretary of State
State Capitol
1201 N Street, Suite 120
Lincoln, NE 68508
Credit services organizations must complete the application in its entirety, and submit a full and complete disclosure of any litigation or unresolved complaint with a Nebraska governmental agency regarding credit services.
Credit services organizations must pay a $100 fee when submitting their registration application.
Do Nebraska Credit Services Organizations Need to Renew Their Registration?
No, the Nebraska Credit Service Organization registration does not expire unless it has been suspended or revoked.
What Are the Insurance Requirements for the Nebraska Credit Services Organization License?
Nebraska does not require credit services organizations to purchase any form of liability insurance as a prerequisite to obtaining a business registration. Credit services organizations must purchase and maintain a $100,000 surety bond.
How Do Nebraska Credit Services Organizations File Their Bond?
Credit services organizations should mail the completed bond form, including the power of attorney, to the following address:
Secretary of State
State Capitol
1201 N Street, Suite 120
Lincoln, NE 68508
The credit services organization surety bond requires signatures from both the surety company that issues the bond and a representative from the credit services organization. The surety company should include the following information on the bond form:
- Legal name of entity/individual(s) buying the bond
- Surety company’s name
- Bond term
- Date the bond is signed
What Can Nebraska Credit Services Organizations Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, credit services organizations in Nebraska must follow all registration regulations in the state, including some of the most important issues below that tend to cause claim
- Do not engage in any acts of fraud
- Do not charge fees before completing all services
- Do not breach any contracts made with consumers
- Do not charge fees simply for referrals to retail sellers
- Do not advise consumers to make false or misleading statements
- Do not charge any fees relating to loans covered under the Nebraska Installment Loan Act
What Other Insurance Products Can Agents Offer Credit Services Organizations in Nebraska?
Nebraska does not require credit services organizations to purchase any form of liability insurance as a prerequisite to obtaining a business registration. However, most reputable businesses 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 Nebraska Credit Services Organization Customers?
Nebraska conveniently provides a public database to search for active credit services organizations in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
