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 Credit Service Organizations

Credit Companies

Who Must Register?

Businesses which offer to arrange, extend or repair credit in West Virginia are required to register as Credit Service Organizations (CSO).  Certain categories of companies are exempt.  Go to Exemptions to Registration for detailed information.

Disclosure:

All credit companies must comply with the disclosure statement, broker contract, and notice of cancellation provisions of WV Code §46A-6C-6 & §46A-6C-7.  Once registered, the Secretary of State will provide the appropriate disclosure form for CSOs to provide each customer.  A copy of the disclosure, signed by the customer, must be kept on file by the CSO for one year.

Law: Go to WV Code for the entire text of the CSO law.


First and Second Mortgage Brokers and Lenders


Registration as a Credit Service Organization:

All loan brokers who do not fall within one of the exemptions in Code §46A-6C-2, such as lenders actually providing the funds, nonprofit corporations, licensed real estate brokers, attorneys, accountants, must register as a CSO with the Secretary of State.  Go to Exemptions to Registration for detailed information.

Registration as a Broker:

Legislation requiring licensing as a broker with the Division of Banking became effective July 1, 2000.  However, this legislation did not alter the Credit Service Organization law to exempt mortgage brokers from CSO registration and disclosure requirements.   Details and application forms for the new mortgage broker and lender license are available online at the Division of Banking.  You may call (304) 558-2294 for more information.  Go to H. B. 4139 for the provisions of the broker licensing law.

Bonds:

Although loan brokers must obtain a bond from the banking commissioner under H.B. 4139 effective July 1, 2000, they need not obtain a bond from the Secretary of State unless they accept money from prospective borrowers prior to closing.

Disclosure:

All brokers must comply with the disclosure statement, broker contract, and notice of cancellation provisions of WV Code §46A-6C-6 & §46A-6C-7.  Once registered, the Secretary of State will provide the appropriate disclosure form for CSOs to provide each customer.  A copy of the disclosure, signed by the customer, must be kept on file by the CSO for one year.

Law: Go to WV Code for the entire text of the CSO law. 


Filing the Registration


Application:

Copies of the forms listed below are available on request.  Write theBusiness Division, call (304) 558-8000
or e-mail business@wvsos.com.

Business Registration:

Registration as a CSO is in addition to normal business licensing.  For example, an out-of-state corporation wanting to arrange loans or credit repair would also have to apply for a certificate of authority for the corporation and a business license.  Visit our Business Division for more information.

Bonding:

A basic decision for the CSO is whether to accept any payment before the completion of all services the company has agreed to provide the customer.  If any early deposit is accepted, even an advance payment made to the CSO to cover third party fees, the CSO must operate with a $15,000 surety bond in continuous effect, or have established a $15,000 surety trust account.  If the CSO agrees to accept no payment before completing services, it may operate without the bond or surety account.

 

Filing Steps:

 

Form:

 

Fee:

1  File the Statement of Registration
 
And, if any payments are accepted before the completion of services, either: 
  CSO-1     $50 
         
2  File $15,000 Surety Bond on state form with registration
or Establish $15,000 Trust Account and file:
CSO-2 No fee

 

  - Trust Account    CSO-3   No Fee
           
  - Deposit by Assignment in Trust Account in Lieu of Surety Bond   CSO-4   No Fee
           
  - Receipt for Notice of Assignment of Trust Account   CSO-5   No Fee
           
  Upon receipt of these three forms the Secretary of State will issue:         
           
  - Receipt for Security and Directions to Pay Earnings   CSO-6