Collection Agency Surety Bond

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All States – One Application

Many states require collection agencies and/or debt buyers to obtain a license. To obtain the license, most states require a Collection Agency Surety Bond. A collection agency surety bond ensures that an agency fulfills its contract in an ethical manner. This bond ensures the agency will properly handle money it receives while pursuing outstanding debts. It also guarantees those funds are routed to the company with the outstanding debt. Scroll down to see each state’s requirement with a link to the specific license and bond requirements.

See our “What is a Surety Bond” Video.

If the collection agency misappropriates these funds, the state can file a claim on the agency’s bond. If the claim is determined to be valid, the face value of the bond is released by the surety company and paid by the collection agency.

The cost of the surety bond is usually between 1% and 3% of the bond amount, subject to a minimum premium and fees of $150 to$250. Surety1 will shop its many markets to procure the right price at the right terms.

Collection Agency Bond – State by State Requirements

The following states require a collections agency to get a bond as part of their business licensing process. Each state has specific provisions outlined in the bond that the principal must abide by in order to remain licensed and bonded. Some states utilize the NMLS to electrically file the bond. If the principal acts against the bond, the state has the legally ability to cancel the bond and revoke the business license.

This particular bond type can be referred to by several terms such as Debt Collector Bond, Collection Bond, Debt Collection Agency Bond, and others. Therefore, the specific term for the bond depends on the state. No matter what the bond name is, the bond type is the same for a collection agency.

If you are looking to get bonded in multiple states, make sure to let your bond agent know. We can take care of all your bonds at once! Below is a list of the states that require a collection agency surety bond:

• Alaska
  • Required by the Alaska Department of Commerce, Community and Economic Development in the amount of $5,000.
• Arizona
  • Required by the Arizona Department of Insurance and Financial Institutions. Minimum bond amount is $10,000, maximum is $35,000, based on collection volume in the state.
• Arkansas
  • Required by the Arkansas State Board of Collection Agencies. Minimum bond amount is $10,000. maximum $25,000, determined by number of collection agents.
• California
  • Required by the California Department of Financial Protection and Innovation. License managed via the NMLS. Surety bond amount is $25,000.
• Colorado
  • Required by the State of Colorado Department of Law. Minimum bond amount is $12,000, maximum is $20,000.
• Connecticut
  • Required by the Connecticut Banking Commissioner License managed via the NMLS and the bond amount is $50,000.
• Florida
  • Required by the Florida Office of Financial Regulation for Commercial Collection Agencies Only. No Bond requirement for Consumer Collection Agencies. Bond amount is $50,000.
• Hawaii
  • Required by the Hawaii  Department of Commerce and Consumer Affairs, bond amount is $25,000 + $15,000 for each additional branch office.
• Idaho
  • Required by the Idaho, Department of Finance, Consumer Finance Bureau.  License managed via the NMLS.  Bond amount is $15,000.
• Illinois
  • Required by the Illinois Department of Financial and Professional Regulation in the amount of $25,000.
• Indiana
  • Required by the Indiana Secretary of State, license managed via the NMLS.  Bond amount is $5,000 per office registered in Indiana.
• Maine
  • Debt Collectors Bond is required by the Maine Maine Department of Consumer Protection. Minimum Bond amount is $5,000 (Letter writing only) $20,000 for new direct collection applicants.
• Maryland
  • Required by the Maryland Commissioner of  Financial Regulation, license managed via the NMLS.  The bond amount is $5,000
• Massachusetts
  • Debt Collectors Bond is required by the Massachusetts Division of Banks, license managed via the NMLS.  The bond amount is $25,000
• Michigan
  • Required by the Michigan Department of Licensing and Regulatory Affairs, bond amount determined by the department of at least $5,000 to a maximum of $50,000.
• Minnesota
  • Required by the Minnesota Department of Commerce. Minimum bond amount $50,000, to a maximum of $100,000.
• Nebraska
  • Required by the Nebraska Collection Agency Licensing Board. Only collection agencies located in Nebraska need to be licensed. Debt buyers are not required to obtain a collection agency license. Surety bond amount is minimum of $5,000 and a maximum of $15,000.
• Nevada
  • Required by the Nevada Department of Business & Industry. Foreign (non Nevada based) collection agencies must post a $35,000 surety bond. For Nevada agencies, the bond amount varies is set by the average monthly balance of Nevada client funds in the trust account. Minimum bond amount is $35,000 and maximum is $60,000.
• New Jersey
  • Required by the New Jersey Secretary of State. Bond amount is $5,000.
• New Mexico
  • Required by the New Mexico Financial Institutions Division. Bond amount varies, minimum bond is $5,000 per branch office. Click here for New Mexico Collection agency bond amount calculator. 
• New York City (There is no State Surety Bond Requirement)
  • Required by the Department of Consumer and Worker Protection. Bond amount is $5,000.
• North Carolina
  • The bond is a requirement of the North Carolina Department of Insurance. initial bond amount is $10k, $20k for companies domiciled outside of the U.S.
• North Dakota
  • Required by the North Dakota Department of Financial Institutions in the amount of $50,000. License application is processed by the NMLS..
• Oregon
  • Required by the The Oregon Division of Financial Regulation. Out of state collection agency registrants must post a $15k bond, all others a $10k bond. License application is processed by the NMLS.
• Tennessee
  • Required by the Required by: Tennessee Department of Commerce & Insurance, Collection Service Board. Minimum surety bond amount is $15k for 1 – 4 employees and increases to $25k for 10+ employees.
• Texas
  • Required by the Texas Secretary of State in the amount of $10,000.
• Utah
  • Required by the Utah Department of Commerce in the amount of $10,000.
• Washington
  • A $5,000 surety bond is required for in state licensees only. Bond is requirement of the Washington Department of Licensing, Collection Agency Section.
• West Virginia
  • A $5,000 surety bond is required for a collection agency registration (license) by the West Virginia Tax Department.
• Wisconsin
  • The surety bond is required by the Department of Financial Institutions – Division of Banking. Bond amount is $25,000 for instate collection agencies and $35,00 for out of state collection agencies.
• Wyoming
  • Required by the Wyoming Department of Banking in the amount of $10,000 per location. License application is processed by the NMLS.

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