Louisiana Administrative Code › Title 10 - FINANCIAL INSTITUTIONS, CONSUMER CREDIT, INVESTMENT SECURITIES AND UCC › Part XV - Other Regulated Entities › Chapter 9 - Bond for Deed Escrow Agents › Section XV-909 - Irrevocable Letter of Credit, Surety Bond, Other Security

Current through Register Vol. 50, No. 6, June 20, 2024
A. No person shall engage in business as a
				bond for deed escrow agent without having first issued, in favor of the Office
				of Financial Institutions, an irrevocable letter of credit in an amount to be
				determined by the commissioner, but in no event less than $10,000, which letter
				of credit shall be issued by a federally insured financial institution. Each
				applicant shall enter into an Irrevocable Letter of Credit Agreement, an Escrow
				and Regulatory Agreement and Power of Attorney with the Office of Financial
				Institutions on forms supplied by the commissioner before being issued a
				license to commence business.
B. In
				lieu of such irrevocable letter of credit as required in Subsection A above,
				each applicant may post and maintain a surety bond issued by a bonding company
				or insurance company, either of which must be authorized to do business in
				Louisiana, in the amount of $10,000, to cover the first year of operation as a
				licensed bond for deed escrow agent. The bond shall be in a form acceptable to
				the commissioner and shall run to the Office of Financial Institutions for the
				benefit and use of the Office of Financial Institutions, parties to the bond
				for deed agreement or any persons with a right to the payments made on behalf
				of any parties to a bond for deed escrow agreement for any liability incurred
				as a result of the failure of the licensee to perform under a bond for deed
				escrow agent agreement. Persons who have claims against the licensee or its
				agents may bring suit directly on the bond. The Louisiana attorney general may
				bring suit on the bond on behalf of claimants either in one action or
				successive actions.
C. In lieu of
				such an irrevocable letter of credit, corporate surety bond, or any portion of
				such instruments required by this Section, the licensee may deposit in escrow
				with any federally-insured depository institution, or branch thereof, located
				in Louisiana, the substitution of cash in an amount not less than that required
				by the irrevocable letter of credit or corporate surety bond, or any portion
				thereof to be determined by the commissioner. A deposit of cash shall be made
				in an interest bearing account which must be pledged to the commissioner. The
				licensee shall be entitled to receive all interest and dividends on the deposit
				placed in escrow.
D. The amount of
				the irrevocable letter of credit, surety bond or cash escrow deposit after the
				first year of operation may be determined by the commissioner based upon the
				following nonexclusive factors:
1. the highest
				level of bond for deed transaction activity performed by the licensee during
				any one month in the preceding calendar year;
2. the risk to the general public, if any,
				commensurate with the continuance of the existing surety bond amount
				established during the preceding period;
3. in no event shall the total amount of
				security be less than $10,000.