Section 16-307. BONDS OR OTHER SECURITY

 

307.1Each applicant for license as a dealer or automobile repossessor and each applicant, other than a bank or trust company, for a license as a sales finance company, shall upon notification by the Director of the approval of an application, file in the office of the Director a bond in such form as the Director shall approve in the penal sum of five thousand dollars ($ 5,000) running to the District of Columbia, with corporate surety authorized by the Secretary of the Treasury pursuant to Title 6, U.S. Code (1958 Ed.), and by the Superintendent of Insurance of the District, to do business in the District.

 

307.2Each bond shall be conditioned as required by and shall be subject to the provisions of § 3 of Pub. L. 86-431; 74 Stat. 71 (4-22-60).

 

307.3In lieu of a corporate surety bond required by § 307.1, an applicant for a license as a dealer or automobile repossessor or for a license as a sales finance company may deposit with the D.C. Treasurer other security for the protection of members of the public against financial loss by reason of the failure of the licensee, or of any officer, agent, employee, or other person acting on behalf of the licensee, to observe any statute or regulation in force in the District applicable to the licensee's conduct of his, her, or its business licensed pursuant to this chapter.

 

307.4The security which may be accepted by the D.C. Treasurer under § 307.3 shall be one of the following:

 

(a)Cash in the amount of five thousand dollars ($ 5,000);

 

(b)A certified check or cashier's check in the amount of five thousand dollars ($ 5,000) made payable to the order of the D.C. Treasurer; or

 

(c)Marketable bond(s) or note(s) having in the aggregate a maturity value of at least six thousand dollars ($ 6,000) issued by the United States government or by any agency or instrumentality of the U.S. Government, together with an irrevocable power of attorney and agreement in form provided by the D.C. Treasurer authorizing the D.C. Treasurer to collect or sell, assign and transfer any such bond or note: Provided, that no such bond or note shall be collected or sold until such time as it may be necessary to make payment to any person entitled to recover damages from the security which the bond represents.

 

307.5Cash, certified checks, and cashier's checks deposited for the purposes of this section and the proceeds of the collection or sale of any bond or note made pursuant to this section shall be deposited to the credit of a District of Columbia trust fund account and shall be available for the payment of any judgment rendered against the licensee in favor of any person who has sustained damage by reason of the violation by the licensee or by the licensee's officer, agent, employee, or other person acting on the licensee's behalf, of any statute or regulation in force in the District applicable to the licensee's conduct of the business licensed pursuant to this chapter. No payment from the security deposited pursuant to this subsection on account of any such judgment shall be made until the judgment has become final and the period for filing an appeal has expired or the judgment debtor has waived in writing the right to take an appeal.

 

307.6Whenever the security deposited pursuant this section is other than bonds or notes and is reduced below five thousand dollars ($ 5,000), or whenever pursuant to § 307.4(c) the security is in the form of marketable bonds or notes, and, by reason of the payment of or on account of any final judgment, is reduced to an amount less than six thousand dollars ($ 6,000), the licensee shall, within five (5) calendar days after having been notified in writing by the Director do to so, make an additional deposit to bring the amount on deposit with the D. C. Treasurer for the purposes of this section up to five thousand dollars ($ 5,000) or six thousand dollars ($ 6,000), as the case may be.

 

307.7Payment made from security deposited pursuant to this section for or on account of a judgment shall include interest and costs as specified in the judgment or as may be required by statute.

 

307.8Any security deposited pursuant to this section shall be retained by the D. C. Treasurer for at least three (3) years after the expiration of the license in connection with which the security was deposited.

 

307.9In addition to the requirements of § 307.8, if the D. C. Treasurer is notified in writing that a suit has been filed against any licensee as a result of which a judgment may be payable out of security held under § 307.8, the security shall be retained by the D.C. Treasurer until such time as the suit has been reduced to judgment and the period for filing an appeal from that judgment has expired or the judgment debtor has waived in writing the right to take an appeal or until the suit has been otherwise disposed of.