6-704. Application for license; bonds; contract

A. An application for a license shall be in writing, under oath and in a form prescribed by the deputy director, and shall contain the name and address, both of the residence and place of business, of the applicant and if the applicant is an association or society, of every member thereof, and if a corporation or partnership, of every officer and director thereof and a copy of the articles of incorporation, and the specific address or addresses at which the business is to be conducted. The deputy director may require as part of the application a credit report and such other information as the deputy director deems necessary.

B. At the time of filing the application the applicant shall furnish a cash or surety bond payable to the people of the state in the sum of not less than $5,000 for licensees disbursing less than $100,000 each year and for the following amounts based on the amounts disbursed by the licensee in the previous license year:

Yearly disbursements    Amount of bond

$100,000 - $250,000     $10,000.00

$250,001 - $500,000     $15,000.00

$500,001 - $1,000,000   $20,000.00

More than $1,000,000    $25,000.00

C. Each bond prescribed in subsection B of this section shall be conditioned on the faithful accounting of all monies collected on accounts entrusted to such person engaged in debt management, and their employees and agents, and on the faithful observance of the provisions of this article and the contract between the licensee and the debtor. The bond shall be approved by the deputy director and filed in the office of the deputy director. The bond shall remain in force and effect until the surety is released from liability by the deputy director, or until the surety bond is canceled by the surety. The surety may cancel the surety bond and be relieved of further liability by delivering thirty days' written notice to the deputy director. The cancellation does not affect any liability incurred or accrued prior to the termination of the thirty-day period. Any person who suffers any loss or damage by reason of the neglect or default of a licensee or his employees or agents or by the licensee's violation of any of the provisions of this article or of the contract between the licensee and the debtor shall have a right of action against the licensee and the sureties on his bond. An action may not be brought on the bond by any person after the expiration of two years after the time when the act or default occurred. When an action is commenced on the bond of a licensee, the deputy director may require the filing of a new bond, and immediately on the recovery of any action on the bond the licensee shall file a new bond.  Failure to file a new bond within ten days after the recovery on a bond, or within ten days after notification that a bond is required, constitutes sufficient grounds for the suspension or revocation of a license.

D. In addition to the bond provided in subsection B of this section, the deputy director may require an applicant to obtain an adequate fidelity bond for each officer, employee, or agent having access to funds collected by or for the licensee or having authority to draw against such funds. The fidelity bond required to be filed in accordance with this section shall remain in force and effect until the surety is released from liability by the deputy director, or until the bond is canceled by the surety. The surety may cancel the bond and be relieved of further liability by delivering thirty days' written notice to the deputy director. The cancellation shall not affect any liability incurred or accrued prior to the termination of the thirty-day period.

E. Each applicant for a license shall file with his application a blank copy of the contract intended to be used between the licensee and the debtor and shall file with the deputy director a copy of all changes and amendments thereto.