As a leader in surety education, SuretyBonds.com is here to keep you up-to-date on all your license and bonding needs. We created this guide to answer common questions about NMLS Electronic Surety Bonds.
What Is the NMLS?
The Nationwide Multistate Licensing System (NMLS) is an online system for managing state licensing programs. Originally, it was designed to regulate mortgage lender licenses. Now, the system has expanded to include other financial service licenses such as collection agencies, money transmitters and other types of lenders.
The goal of the NMLS is to improve efficiency and transparency between the state, lending professionals, and consumers. It was created by the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR). The NMLS is also owned and operated by the State Regulatory Registry LLC (SRR) — a subsidiary of CSBS.
What Is an Electronic Surety Bond (ESB)?
The 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 system.
An ESB is the same legal instrument as a traditional paper surety bond. Both types of bonds use consistent language and offer the same protections for consumers. The biggest difference between electronic and paper bonds is the delivery method.
- A traditional bond must be physically mailed and forwarded to an obligee.
- An ESB is issued and uploaded to the NMLS portal by the surety provider.
What are the Advantages of the NMLS Bonding Process?
The NMLS system benefits licensees and state agencies by moving the full license and bonding process online. Formerly, documents had to be printed, signed and mailed to physical locations. Now, items can be instantly authorized and submitted online — reducing costs and saving time for all parties.
The biggest benefit of the electronic bonding process is the elimination of paper documents. NMLS can also store bonds for any authorized personnel to review at any time. Overall, the electronic system creates a more streamlined and efficient bonding process.
Which States Use NMLS Electronic Surety Bonds?
As of July 8th, 2024, 43 states have adopted the NMSL ESB system. The following states are not yet using EBS:
- Arizona
- Florida
- Maine
- New Mexico
- New York
- Pennsylvania
- Rhode Island
There is no current deadline for all 50 states to convert to electronic surety bonds.
What are the Most Common Licenses That Have Transitioned to NMLS Electronic Bonding?
The NMLS regulates all mortgage loan originators and financial service providers. However, each state is responsible for developing its own NMLS implementation plan, so not all license processes currently accept electronic bond submissions.
The most common license types with NMLS electronic bonding are as follows:
See the ESB Adoption Table for specific licensing details in your state.
Are There Any Fees for Submitting Bonds Electronically With NMLS?
While there may be NMLS application filing fees, there are currently no fees linked to submitting a surety bond through NMLS.
I’m Unfamiliar With Some NMLS Terminology. Where Can I Find More Information?
NMLS offers a policy guide containing all the terms you should know regarding submitting and viewing your electronic surety bond. The NMLS Resource Center also offers a free course on the electronic bonding process.
If you have more questions, please give us a call at 1 (800) 308-4358. For more specific information regarding the NMLS, contact the NMLS Call Center at 1 (855) 665-7123
