NMLS Electronic Surety Bonds Frequently Asked Questions
The Nationwide Multistate Licensing System (NMLS) replaced the first traditional paper surety bond with the Electronic Surety Bond (ESB) in September 2016. An Electronic Surety Bond is uploaded to and managed within the NMLS.
As an industry leader in surety education, SuretyBonds.com wants to ensure you are staying on top of all your business and surety bond needs. To help you adjust to the new NMLS electronic surety bond system, we created this guide to answer a few of the questions we are most frequently asked.
Q: What is the NMLS?
A: The Nationwide Multistate Licensing System (NMLS) is an online system for managing state licensing. Originally, NMLS referred to the Nationwide Mortgage Licensing System & Registry, and was designed to help states manage licensing specifically for the mortgage industry. Now, the system has expanded to include other licenses related to financial services, such as collection agencies, money transmitters and other lenders. NMLS was created by the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR). Additionally, NMLS is owned and operated by the State Regulatory Registry LLC (SRR)—a subsidiary of CSBS.
Q: What is an Electronic Surety Bond (ESB)?
A: An Electronic Surety Bond (ESB) is the same legal instrument as a traditional paper surety bond. Both types of bonds use consistent language and offer the same level of protection for consumers, which will make for an easy transition to the new electronic system. The biggest difference between an ESB and a paper bond is the method of delivery. While a paper surety bond must be physically mailed and forwarded to an obligee, an ESB is issued and promptly uploaded to the NMLS portal.
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Q: What are the advantages of the NMLS Electronic Surety Bond system?
A: The biggest benefit of the electronic bonding process is the elimination of paper documents. NMLS offers online account management, ESB submission to relevant regulatory authorities and maintenance for all related parties. This switch in NMLS eliminates the need to mail applications and bonds. Additionally, NMLS has the ability to store bonds for anyone authorized to review at any particular time. Overall, the electronic system creates a much more streamlined and efficient bonding process.
Q: Which states are currently using Electronic Surety Bonds?
A: As of February 1, 2018, 26 states (and Guam) have adopted the ESB system. NMLS hopes to add more states to the list over time. Currently, there is no deadline as to when all 50 states must convert to electronic surety bonds. View the list of states included by clicking on the current ESB Adoption Table.
Q: What are the most common licenses that have transitioned to NMLS ESB?
A: The types of licenses making the transition to Electronic Surety Bonds vary depending on the state, because each state is responsible for developing its own NMLS implementation plan. The most common licenses making the move to NMLS thus far are as follows:
The ESB Adoption Table is a great resource to learn about licensing details in your state.
Q: Are there any fees for submitting bonds electronically with NMLS?
A: There are currently no fees linked to submitting an ESB through NMLS.
Q: I’m unfamiliar with some NMLS terminology. Where can I find more information?
A: NMLS offers a reference guide of all the terms you should know in regards to submitting and viewing your bonds electronically. The NMLS Resource Center also provides useful information, such as an elaborate guide on the electronic bonding process.
If you have any further questions, please give us a call at 1 (800) 308-4358. For more specific information regarding the Nationwide Multistate Licensing System (NMLS), contact the NMLS Call Center.