DFPI Net Worth and Surety Bond Requirements for Independent Escrow Licensees
Separate capital, liquidity, branch additions, surety bonds and reporting deadlines for a California independent escrow licensee.
Capital, liquidity and a surety bond address different requirements. Check each separately, using the company's licensed locations and applicable trust-liability calculation.
Tangible net worth and liquidity
California Financial Code § 17210 requires a $50,000 tangible net worth, including at least $25,000 in liquid assets above current liabilities. Work with the company's CPA on asset classification; a positive bank balance alone does not establish either calculation.
The requirement continues while the company is licensed. Client trust funds are not company operating capital.
Branch-office additions
Section 17210 adds 50% of the base tangible-net-worth requirement for the first branch and 25% of that base for each later branch. The later increments are $12,500, not $25,000.
| Licensed locations | Tangible net worth minimum |
|---|---|
| Main office only | $50,000 |
| Main plus one branch | $75,000 |
| Main plus two branches | $87,500 |
| Main plus three branches | $100,000 |
These are the statutory calculations, not a recommendation that the minimum is adequate operating capital.
Surety bond
DFPI lists base surety-bond amounts of $25,000, $35,000 or $50,000 according to average trust liability, with another $5,000 for each additional licensed location. The bond is not required to equal every dollar held in trust.
Confirm the bracket, continuing coverage and any permitted substitute directly against the current requirements. A surety bond is not a promise that every wire-fraud, employee-theft or professional-liability loss will be reimbursed. Recovery depends on the bond, the conduct and applicable law; do not assume either automatic coverage or a categorical fraud exclusion.
Keep filing evidence
DFPI's annual audit report is generally due within 105 days after fiscal-year end. Its Report of Escrow Liability is due February 15 for each licensed location, not March 31. Keep the filed report, supporting calculation and receipt together.
Separate annual assessments and examination costs from capital maintained on the balance sheet. Use the current DFPI notice for the amount billed, rather than assuming a prior-year invoice or an article's historical comparison applies.
Respond to a shortfall
Identify which test failed, the calculation date and the source records. Escalate promptly to the responsible company officer, CPA and counsel, and address any regulator notice or reporting duty. Do not use client funds to repair an operating-capital shortfall.
Keep the operational boundary clear
Capital compliance does not authenticate a payment instruction. Review the evidence for each consequential disbursement under the office's procedures and retain the decision. A review record helps explain the action; it does not create insurance coverage or licensing authority.
Sources
One page in the file before money moves.
Your office decides. Veto records what was reviewed, what stayed open, and who reviewed it.