(1) A person who applies for registration as a debt consolidating agency shall file with the Director of the Department of Consumer and Business Services a bond with one or more corporate sureties authorized to do business in this state. The bond:
(a) Must be in the amount of $10,000.
(b) Must require the surety company to provide written notice to the director by registered or certified mail of any cancellation or revocation of the bond:
(A) At least 30 days in advance of the cancellation or revocation; or
(B) Upon any payment made for a loss under the bond.
(c) Must satisfy the provisions of subsection (2) or (3) of this section, whichever is applicable to the debt consolidating agency.
(2) If the debt consolidating agency for which registration is sought is not incorporated under subsection (c) of section 501 of the Internal Revenue Code of 1954 (as amended and in effect on April 1, 1983), the bond required under subsection (1) of this section shall be a surety bond payable to the order of the director and be conditioned that the applicant shall pay all amounts, upon order of a court or order of the director, resulting from any violation by the debt consolidating agency of its statutory duties and obligations to its clients under ORS 697.652 to 697.702.
(3) If the debt consolidating agency for which registration is sought is incorporated under subsection (c) of section 501 of the Internal Revenue Code of 1954 (as amended and in effect on April 1, 1983), the bond required under subsection (1) of this section shall be a fidelity bond, and shall be payable to the applicant.
(4) If the director has cause to believe that the proceeds of the fidelity bond required under subsection (3) of this section are not being used to pay damages to a client, then either upon order of a court or order of the director upon the holder of the proceeds of the bond, the proceeds shall be paid to the director to pay the damages for the purpose of satisfying the requirements of ORS 697.772 to 697.812.
(5) The bond required by this section shall be continuously on file with the director in the amount required by this section. Upon termination or cancellation of the bond or reduction of the bond to less than the required amount, the debt consolidating agency immediately:
(a) Shall file a replacement bond; or
(b) Shall surrender its registration to the director and cease operating as a debt consolidating agency. [1983 c.17 §6; 1989 c.209 §2]Section: Previous 697.620 697.622 697.625 697.630 697.632 697.635 697.640 697.642 697.645 697.650 697.652 697.655 697.657 697.660 697.662 Next
Last modified: August 7, 2008