Small loan lenders in New Hampshire will be required to post a mandatory $25,000 surety bond, effective January 1, 2016. Small loan lenders include title loan, payday loan and closed-end loan lenders. Previously, licensed lenders had the option of having proof of the availability of $25,000 for each business location or posting the surety bond. House Bill 644 was signed into law on June 2, 2015, making the bond mandatory. The new law also permits direct actions on the bond and allows claims to be filed against the bond for up to six years after the date of the act on which the claim is based.
To become a licensed small loan lender in New Hampshire, applicants must provide the following information to the Banking Department:
- applicant’s name, business name and contact information
- names and contact information for the principal licensing contact, employee authorized to respond to consumer complaints, employee to contact regarding legal matters and employee to contact regarding examinations
- the types of small loans that will be issued
- branch office application forms for any additional locations
New applicants must also register their business with the New Hampshire Secretary of State. The full list of required information and materials is detailed in the licensing application. Several required forms can be found on page eight of the licensing form, including the surety bond form. The bond remains in full force and effect unless cancelled with 30-days written notice to the Bank Commissioner.