South Dakota Money Lender Bond

What is a money lender surety bond?

Like many states, South Dakota regulates and licenses money lenders. As part of the licensing process, money lenders are required to post a surety bond. Your bond acts as a legal contract between three parties:

• The surety: The company that issues the bond policy, such as NNA Surety Bonds
• The obligee: The authority requiring the bond, in this case, the South Dakota Division of Banking
• The principal: The money lender posting the bond

Unlike insurance, which protects your business, a money lender bond protects your customers from any damages as a result of unlawful or negligent lending practices.

In the event that your lending business violates any regulations, a claim can be made against your bond. If the claim is upheld, your bond will be used to pay for any damages. Afterward, you will be required to pay this amount back to the surety.

Upheld claims can make obtaining future bond policies difficult, if not impossible, thus jeopardizing your license and your business.

In this way, a bond helps to promote observance of South Dakota lending laws and regulations.

How much does a South Dakota money lender bond cost?

South Dakota requires a bond in an amount not to exceed $10,000 and an additional $2,500 for each licensed branch location of your lending business.

You will not have to pay for the full value of your bond. Instead, you only have to pay the surety a percentage of the bond amount. This percentage is called the bond's premium and is based on several factors, including:

• The financial and licensing history of your lending company
• Your personal credit score
• The amount of your bond

The premium rate for a money lending bond can range between 1% to 15% of the bond value and is heavily dependent on your credit rating. NNA Surety Bonds can help you get your money lender bond today.

Get your South Dakota Money Lender Bond. 

Which types of lenders need this bond?

South Dakota categorizes consumer lenders, payday lenders, and retail title lenders as "money lenders" for the purpose of licensing. Be sure to check with each state you plan to provide lending services in. Some states have separate license requirements for retail title and payday lenders.

Lastly, a South Dakota money lending license does not include money transmitters or mortgage lenders – there are separate requirements for these professions.