Surety Bond Change for Washington Consumer Loan Companies in 2018

consumer loan

Surety bonds requirements will change for consumer loan companies in Washington per newly adopted regulations that take effect on January 1, 2018. Consumer loan companies issue mortgage and non-mortgage (personal) loans and are licensed with the Department of Financial Institutions.

Consumer loan licensees’ bond will be determined based on the volume of loans originated in previous years. If it is the company’s first year in business and no loans have been closed, the company will need to post a $30,000 surety bond. Consumer loan companies that originate nonresidential loans and companies that originate only residential mortgage loans will determine their bond amount as follows:

  • Zero to $20 million in loans originated—$30,000 surety bond
  • $20 to $40 million in loans originated—$50,000 surety bond
  • $40 to $50 million in loans originated—$100,000 surety bond
  • $50 million or more in loans originated—$150,000 surety bond

These bond amounts are not different, but the new regulations specify that companies with no prior loan volume need a $30,000 bond and clarify that bond amounts are based on loan origination volume.

Washington consumer loan companies that both service (meaning they collect payments on mortgages) and originate (meaning they process loan applications and disburse loans) residential mortgages will determine their bond amount in accordance with the list above using their loan origination volume.

Mortgage brokers who only broker residential mortgages will need to post a $30,000 surety bond when first becoming licensed. Then, the surety bond amount will be evaluated annually and will follow the list above, using the total annual principal amount of loans brokered.

Consumer loan companies that service only residential mortgage loans will have the option of posting a surety bond in lieu of maintaining the net worth that will be required of them. If they choose to post a surety bond, it must be a $1 million bond. Until January 1, 2018, mortgage loan servicers must post a $30,000 bond with initial licensing or if they serviced less than $50 million in loan principal in the previous year. Servicers servicing more than $50 million in loan principal are required to post a $50,000 surety bond.

Current law that will be in effect until this law takes effect is marked as such in the Washington Consumer Loan Act. Contact the Department of Financial Institutions with questions about the changing surety bond requirements. If you’re ready to get a Washington surety bond, give a surety expert a call at 1 (800) 308-4358.


About the Author

Melanie Baravik
Melanie is a senior at the University of Missouri - Columbia studying English with an emphasis in creative writing. She is a member of the marketing department and outreach team for, a leading provider of online bonding for clients nationwide.