2006 Louisiana Laws - RS 9:3573.4 — Bond; trust account

§3573.4.  Bond; trust account

A.  All credit repair services organizations required to be licensed by the commissioner shall obtain a surety bond issued by a company licensed to do business in Louisiana or establish a trust account as provided in this Section.

B.  The bond shall be filed with the Office of Financial Institutions.  If a trust account is established, a notarized or otherwise official notification of the deposit by the depository institution shall be filed with the Office of Financial Institutions.  Such notification shall include, at a minimum, the name of the financial institution, name of the credit repair services organization, account number, and verification that the account is established in accordance with the terms set forth in this Section.

C.  The bond or trust account required must be in favor of the state of Louisiana for the benefit of any person who is damaged by any violation of this Part.

D.  Any persons claiming against the bond or trust account for a violation of this Part may maintain an action at law against the credit repair services organization and against the surety or trustee.  The surety or trustee shall be liable only for damages awarded under R.S. 9:3573.10 and not the punitive damages permitted under that Section.  The aggregate liability of the surety or trustee to all persons damaged by a credit repair services organization's violation of this Part shall not exceed the amount of the bond or trust account.

E.  The bond or the trust account shall be in the amount of one hundred thousand dollars.

F.  A depository holding money in a trust account under this Part may not convey money in the account to the credit repair services organization that established the account or a representative of the credit repair services organization unless the credit repair services organization or representative presents a statement issued by the office of financial institutions indicating that R.S. 9:3573.5(E) has been satisfied in relation to the account.  The office of financial institutions may conduct investigations and require submission of information as necessary to enforce this Subsection.

G.  The credit repair services organization shall notify the commissioner in writing within thirty days after it has ceased to do business in this state.  The surety bond or trust account shall be maintained for two years after the date that the credit services organization ceases operations or the date that it has filed notice with the Office of Financial Institutions, whichever is later.

Acts 1992, No. 345, §1; Acts 2003, No. 1027, §1, eff. Dec. 31, 2003; Acts 2004, No. 79, §1, eff. May 28, 2004; Acts 2006, No. 190, §1.