Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) The application filed by an industrial
loan company for authority to increase its ratio of certificates to capital and
surplus restricted as to payment of cash dividends pursuant to subdivisions
(b), (c) and (d) of Section
18320 of
the Financial Code shall be accompanied by the following documents:
(1) A balance sheet as of the month end prior
to the date of filing;
(2) An
income statement for the current calendar year and the prior year if the
current period is less than six months;
(3) Monthly income statements for the six
months prior to the date of filing;
(4) An analysis of the reserve for losses for
the current calendar year showing the balance at the beginning of the year and
all additions and charges to the reserve. If the period covered is less than
four months, the analysis should include the prior calendar year; and
(5) Any other report or schedules required by
the Commissioner.
(b) The
Commissioner may limit the ratio of certificates to capital and surplus to a
ratio less than provided in Section
18320 if in the Commissioner's
judgment such lower ratio is reasonable and necessary or advisable for the
protection of the public. The industrial loan company must demonstrate to the
Commissioner that it is entitled to the ratio permitted by Section
18320. In determining the ratio to
be permitted, the Commissioner will consider (together with all relevant
attendant circumstances) all of the following facts together with such other
information and facts as are relevant under the circumstances:
(1) It maintains adequate reserves for
losses, as defined in Article 4 of these Rules;
(2) The ratio of losses to volume of
receivables for the six-month period preceding its application is not greater
than the industry average for the last three years as shown by the latest
reports filed with the Commissioner pursuant to Section
18405 of
the Financial Code;
(3) The current
ratio of accounts which are three or more contractual payments past due and
unpaid to total receivables is not greater as shown by the company's most
recent report to the Commissioner than the industry average as shown on the
latest reports filed with the Commissioner pursuant to Section
18407 of
the Financial Code and 1250 of these Regulations;
(4) Uncollectible accounts are charged off
pursuant to the provisions of these Regulations;
(5) The company must have had net earnings
from operations for the six-month period prior to the date of filing of the
application and must have had net earnings from operations for each of the
three months prior to the date of filing of the application;
(6) The company must have diversification of
receivables, including but not limited to the character and source of loans
made and contracts purchased;
(7)
The company has created and maintains an adequate system of internal controls,
and;
(8) The company must have
demonstrated sound and efficient management in its dealings with borrowers and
thriftholders.
1. Change
without regulatory effect renumbering former section
1151.1 to new section
40.501 filed 8-19-97 pursuant to
section 100, title 1, California Code of
Regulations (Register 97, No. 34).
Note: Authority cited: Section
18347,
Financial Code. Reference: Section
18320,
Financial Code.
