Current through Register 2024 Notice Reg. No. 38, September 20, 2024
The procedures set forth in this section are applicable to
any person that is required to be licensed under section
22100, subdivision (a), or section
22100.5 of the Code, and that is
required to use NMLS under section
1422.4 of these rules. Except as
otherwise provided in subchapter 6 of these rules, a person subject to the
requirements of this section is not subject to the requirements of section
1422 of these rules.
(a) INITIAL APPLICATION: The application for
a license under subdivision (a) of section
22100 of the Code or section
22100.5 of the Code, and any
amendment to such application under section
1409.1 of these rules shall be
filed upon Form MU1 (NMLS Company Form), in accordance with the instructions of
NMLS for transmission to the Commissioner. All exhibits and supporting
documents related to the application or amendment shall also be filed with
NMLS, in accordance with the instructions of NMLS, for transmission to the
Commissioner. Exhibits that cannot be submitted through NMLS shall be submitted
directly to the Commissioner. The notices set forth in section
1422.7 of these rules are part of
every application. An applicant shall provide the following information,
exhibits and documentation in the manner provided:
(1) An applicant shall identify all
fictitious business names on Form MU1.
(A)
For each fictitious business name, an applicant shall upload to NMLS a copy of
the Fictitious Business Name Statement bearing the seal of the county
clerk.
(B) An applicant may not use
a fictitious business name until the Commissioner approves the use of the name.
An applicant may not permit a mortgage loan originator sponsored by the
applicant or a branch office to use any name not approved by the
Commissioner.
(C) Every applicant
and licensee shall comply with the rules governing the filing of a fictitious
business name set forth in Business and Professions Code section
17900-
17930.
(2) For every additional business location,
an applicant shall obtain a branch office license in accordance with section
1424 of these rules.
(3)
(A) An
applicant shall provide the names, personal history, and experience of
individual applicants, officers, directors, managing members (in the case of a
limited liability company), general and managing partners (in the case of a
partnership), and individual control persons (both direct and indirect) of the
applicant through NMLS on Form MU1 within the "Direct Owners and Executive
Officers" and "Indirect Owners" sections, as applicable, and on Form MU2. For
purposes of this section, an individual control person shall include (i) an
individual who owns 10 percent or more of the outstanding interests or the
outstanding equity securities of the applicant, and (ii) an officer, director,
managing member, or partner of an entity who owns 10 percent or more of the
outstanding interests or the outstanding equity securities of the applicant, if
that individual has the power to direct the management or policies of the
applicant's lending activities or PACE program administration in this
state.
(B) An applicant shall
provide the names, personal history, and experience of the individuals in
charge of each place of business through NMLS on Form MU1 within the
"Qualifying Individuals" section and on Form MU2.
1. The named individuals in Form MU1, for
whom a Form MU2 has been filed, shall provide authorization for, and subsequent
delivery of, fingerprints to NMLS or the California Department of Justice, or
both, as applicable.
2. An
applicant shall pay all fees required for the criminal history background
check.
(C) Under section
8 of Form MU2, a credit report is
not required for the individuals submitting the form.
(4) An applicant shall submit through NMLS as
an exhibit to Form MU1 financial statements prepared in accordance with
generally accepted accounting principles and acceptable to the Commissioner,
that includes applicant's fiscal year end date.
(A) The balance sheet shall be dated no more
than 90 days before the date that the application is submitted to the
Commissioner through NMLS.
(B) The
financial statements shall document the required minimum tangible net worth in
accordance with section
22104 of the Code. An applicant
who employs one or more mortgage loan originators must meet and maintain a
minimum net worth of $250,000 at all times, and all other applicants shall
maintain a minimum net worth of at least $25,000 at all
times.
(5) An applicant
shall provide through NMLS a Customer Authorization of Disclosure of Financial
Records form (Exhibit E to the application for license as a finance lender or
broker in section
1422 of these rules), and maintain
a copy in the applicant's books and records as provided in section
22156 of the Code. This
authorization is effective as of the date of execution and shall remain
effective until five years after the suspension, surrender, or revocation of
the license. The authorization may not be revoked.
(6) In addition to the identification of
business activities requested on Form MU1, an applicant shall submit to NMLS a
detailed description of the applicant's business plan.
(A) For persons engaged in the business of
making or brokering loans, the business plan must at a minimum provide the
following information, as applicable to the lending activity of the applicant:
1. The intended sources of capital.
2. The intended market for the loans,
including the credit worthiness of intended borrowers.
3. The intended methods for marketing the
loans.
4. The anticipated terms of
the loans.
5. The methods for
disbursing funds to the borrower.
6. Any products or services offered or
required in connection with the loans.
7. Any cobranding or joint agreements with
other organizations related to the making of the loans.
8. Whether the applicant intends to retain or
sell the loans, in whole or in part, and the intended purchasers, if
applicable.
9. Whether any other
business is solicited or engaged in at the same place as the proposed lending
activity.
10. Whether, and to what
extent, the applicant intends to use third parties to perform any of its
lending functions, such as marketing, underwriting, servicing, or any other
functions.
(B) For
persons engaged in the business of administering a PACE program, the business
plan must at a minimum provide the following information:
1. The intended sources of capital.
2. The intended market for the PACE
financing, including the credit worthiness of intended property
owners.
3. The intended methods for
marketing the assessment contracts.
4. The anticipated terms of the assessment
contracts.
5. The methods for
disbursing funds for the efficiency improvements.
6. Any products or services offered or
required in connection with the assessment contracts.
7. Whether any other business is solicited or
engaged in at the same place as the proposed financing activity.
8. A description of the arrangements with
public agencies for the administering of the PACE programs.
9. Whether the applicant will be purchasing
the bonds from a public agency, and if so, whether these bonds will be retained
or sold.
(7)
(A) If the applicant is owned by another
entity(s) or individual(s), the applicant must submit to NMLS an organizational
chart identifying each entity or individual owning or controlling 10 percent or
more of the outstanding interests or equity securities of the applicant and the
entity or owner's percentage of ownership in the applicant. Upon request, the
applicant shall provide a chart identifying subsidiaries and affiliated
entities where additional information is necessary to investigate the applicant
or owners, including to demonstrate that the applicant satisfies the California
Financing Law and no facts constituting reasons for denial are
present.
(B) Upon request, the
organizational chart shall identify the principal officers, directors, managing
members, general partners, and trustees, as applicable, for each entity owning
or controlling 10 percent or more of the outstanding interests or outstanding
equity securities of the applicant, where additional information is necessary
to investigate the applicant or owners, including to demonstrate that the
applicant satisfies the California Financing Law and no facts constituting
reasons for denial are present.
(8) An applicant shall submit to NMLS a
management chart displaying the applicant's directors, officers, and managers,
including individual names and titles.
(9) An applicant shall submit the surety bond
required by section
22112 of the Code through NMLS,
utilizing the NMLS electronic surety bond function and form, in accordance with
section 1437 of these rules.
(10) If an applicant intends to solicit or
engage in any other business within the place of business where the applicant
conducts the business of making loans or administering a PACE program, the
applicant shall submit this information through NMLS.
(11) A business entity applicant shall upload
the following documents to NMLS for transmission to the Commissioner:
(A) A corporate applicant shall upload a
certificate of qualification or good standing from the California Secretary of
State executed not more than sixty days before the filing of the application.
The certificate must show that the applicant is authorized to transact business
in the State of California.
(B) A
foreign corporation shall upload a certificate of qualification or good
standing from the Secretary of State of the state of incorporation executed not
more than sixty days before the filing of the application, showing that the
applicant is authorized to transact business in that state.
(C) A partnership applicant shall upload its
partnership agreement.
(D) A
limited partnership or limited liability company applicant shall upload a
certificate of qualification or good standing from the California Secretary of
State executed not more than sixty days before the filing of the application,
showing that the applicant is authorized to transact business in the State of
California.
(E) A foreign limited
partnership or limited liability company applicant shall upload a certificate
of qualification or good standing from the Secretary of State of the state of
formation executed not more than sixty days before the filing of the
application, showing that the applicant is authorized to transact business in
that state.
(F) Upon request, a
business entity applicant shall upload to NMLS a copy of its formation
documents, including, if requested, any subsequent amendments, relevant
resolutions, and a list of any name changes, where additional information is
necessary to investigate the applicant, including to demonstrate that the
applicant satisfies the California Financing Law and no facts constituting a
reason for denial are present.
(12) Every applicant shall provide a
registered agent for service of process that is located within the state of
California in the "Resident/Registered Agent" section of Form MU1.
(13) An applicant shall provide its website
information through NMLS on Form MU1.
(14) The individual attesting to the filing
of the Form MU1 must be a duly authorized individual who has submitted a Form
MU2, or who has been delegated to attest to the filing by an individual who has
submitted a Form MU2. The attestation provided pursuant to this paragraph shall
constitute an agreement to comply with the requirements of the California
Financing Law.
(15) An applicant
shall submit an Execution Section as set forth in the California Financing Law
license application in subdivision (b) of section
1422 of these rules, executed in
accordance with the instructions in that section.
(16) An applicant shall establish a
designated email address by registering for a DFPI Self-Service Portal Account
through the Department of Financial Protection and Innovation's website at
www.dfpi.ca.gov. The email account shall
be established and monitored in accordance with the requirements in Financial
Code section
331.5 and
Item Number 12 of the California Financing Law Application in subdivision (b)
of section
1422 of these rules. The email
address shall be provided directly to the Commissioner.
(b) FILING FEE: Pursuant to Financial Code
section
22103,
application fees ($200), investigation fees ($100) and fingerprint processing
fees ($20 per set to the Department of Financial Protection and Innovation,
plus Department of Justice and Federal Bureau of Investigation fees, as
applicable) related to the fingerprint and criminal background checks, shall be
paid through NMLS for transmission to the Commissioner. The payment of
fingerprint processing fees shall be filed directly with the Commissioner until
such time as the NMLS can accept the fee. Fees are not refundable.
(c) COMPLETION OF FILING and ISSUANCE OF
LICENSE: An application for licensure submitted through NMLS is not deemed
complete until all required fees, all required submissions, and all background
and investigative reports are received by the Commissioner. In accordance with
section 22109(b), the
Form MU1 application may be considered withdrawn if the Commissioner does not
receive the requested information contained in any written notification of a
deficiency within 90 days of the notification.
(d) FILING AN AMENDMENT: In the event of a
change to the information in the application, or exhibits thereto, the
applicant or licensee shall file an amendment to the Form MU1, MU2, or MU3
through NMLS in accordance with the procedures in section
1409.1 of these rules. Prior to
the issuance of a license, any amendment to an application shall be filed
within five (5) days. Any change that cannot be reported through NMLS shall be
reported directly to the Commissioner.
(e) EXISTING LICENSEES TRANSITIONING ONTO
NMLS: A licensee transitioning onto NMLS is not required to file the following
items through NMLS, if already on file with the Commissioner.
(1) Copies of Fictitious Business Name
Statements bearing the seal of the county clerk.
(2) Fingerprints for individuals identified
in the "Direct Owners and Executive Officers," "Indirect Owners," and
"Qualifying Individuals" sections of Form MU1, unless fingerprints have not
previously been submitted for an individual.
(3) Financial statements required of an
applicant pursuant to paragraph (a)(4).
(4) The Customer Authorization of Disclosure
of Financial Records form.
(5) A
business plan, except that a licensee transitioning to NMLS shall provide an
updated business plan if the plan previously submitted to the Commissioner is
no longer accurate.
(6) An
organizational chart, unless the organizational chart previously submitted to
the Commissioner is no longer accurate.
(7) A management chart, unless the management
chart previously submitted to the Commissioner is no longer accurate.
(8) A certificate of qualification or good
standing.
(9) A partnership
agreement.
(10) An Execution
Section as set forth in the California Financing Law license application in
subdivision (b) of section
1422 of these
rules.
1. New
section filed 4-1-2010 as an emergency; operative 4-1-2010 (Register 2010, No.
14). A Certificate of Compliance must be transmitted to OAL by 9-28-2010 or
emergency language will be repealed by operation of law on the following
day.
2. New section, including amendment of subsection (a)(5) and
repealer of subsection (e), refiled 9-28-2010 as an emergency; operative
9-28-2010 (Register 2010, No. 40). A Certificate of Compliance must be
transmitted to OAL by 12-27-2010 or emergency language will be repealed by
operation of law on the following day.
3. New section refiled
12-23-2010 as an emergency; operative 12-23-2010 (Register 2010, No. 52). A
Certificate of Compliance must be transmitted to OAL by 3-23-2011 or emergency
language will be repealed by operation of law on the following
day.
4. Certificate of Compliance as to 12-23-2010 order, including
amendment of first paragraph and subsections (a), (a)(3), (a)(4) and (a)(4)(B),
new subsection (a)(12) and amendment of NOTE, transmitted to OAL 3-14-2011 and
filed 4-25-2011; amendments operative 5-25-2011 (Register 2011, No.
17).
5. Amendment of section heading, section and NOTE filed
8-5-2021; operative 10-1-2021 (Register 2021, No. 32). Transmission deadline
specified in Government Code section
11346.4(b)
extended 60 calendar days pursuant to Executive Order N-40-20 and an additional
60 calendar days pursuant to Executive Order N-71-20. Filing deadline specified
in Government Code section
11349.3(a)
extended 60 calendar days pursuant to Executive Order N-40-20 and an additional
60 calendar days pursuant to Executive Order
N-71-20.
Note: Authority cited: Section
22150,
Financial Code. Reference: Sections
17900,
17910,
17913
and
17926,
Business and Professions Code; Section
1798.17, Civil
Code; Section
7473,
Government Code; Sections
331.5,
22000,
22100,
22100.5,
22101,
22101.5,
22102,
22103,
22104,
22105,
22105.2,
22106,
22107,
22108,
22109.6,
22112,
22153,
22154,
22156,
22157,
22159 and
22170,
Financial Code; Section
17520, Family
Code; and Section
11077.1, Penal
Code.
