(1)
Application. Each applicant for a license to engage in
the business of making small loans pursuant to M.G.L. c. 140, § 96; a
license as a sales finance company pursuant to M.G.L. c. 255B, a premium
finance agency pursuant to M.G.L. c. 255C, or a sales finance company pursuant
to M.G.L. c. 255D shall submit a written application on a form prescribed by
the commissioner, signed under the pains and penalties of perjury, containing
such information as the commissioner may from time to time require.
(2)
Requirements. An
Applicant shall be required to submit detailed information supporting the
following general requirements:
(a)
Financial Responsibility. An Applicant shall
demonstrate and provide the commissioner with evidence of its financial
responsibility and submit a sworn statement which states that the Applicant
meets the following requirements:
1. An
Applicant for a license under M.G.L. c. 140, § 96 shall demonstrate that,
after all organization and other initial expenses have been paid, it has a net
worth of not less than $75,000, and shall provide the commissioner with
evidence of its financial responsibility.
2. An Applicant for a license under M.G.L. c.
255B shall demonstrate that, after all organization and other initial expenses
have been paid, it has a net worth equal to at least $20,000. The minimum net
worth requirement may be waived by the commissioner when a license is being
renewed. If the commissioner approves an Applicant under M.G.L. c. 255B, he
may, in his discretion, require the Licensee to furnish a bond in a sum not to
exceed $10,000 executed by the Licensee and by a surety company approved by the
commissioner conditioned upon the faithful performance by the Licensee of the
duties and obligations pertaining to the business so licensed.
3. An Applicant for a license under M.G.L. c.
255C or c. 255D shall demonstrate and provide the commissioner with evidence of
its financial responsibility.
(b)
Financial
Statements. An Applicant shall submit financial statements
prepared in accordance with generally accepted accounting principles meeting
the following minimum requirements:
1.
Contents. The financial statements shall include, but
are not limited to, a Balance Sheet, Income Statement and Statement of Cash,
and all relevant notes thereto.
2.
Initial Application.
a. An Applicant for a license under M.G.L. c.
140, § 96 shall submit financial statements, for the preceding fiscal year
which have been either audited or reviewed by an independent Certified Public
Accountant. The financial statements must include a statement of condition, an
income statement and a statement of cash flows. In the discretion of the
Commissioner and under such conditions as he may impose, an Applicant's
unaudited financial statements may be submitted with audited consolidated
financial statements of its parent.
b. An Applicant for a license under M.G.L. c.
255B, c. 255C, or c. 255D shall submit audited financial statements for the
preceding fiscal year if such statements were prepared. If audited statements
were not prepared, an applicant must submit unaudited financial statements
including a statement of condition and income and expense. Unaudited statements
must include all supporting schedules and be completed in accordance with
generally accepted accounting principles. In addition, the statements must be
dated not more than 90 days prior to the date of application and must be signed
under the pains and penalty of perjury by an authorized officer of the
Applicant.
3.
Renewal Application. An applicant seeking to renew its
license under M.G.L. c. 140, § 96; c. 255B, c. 255C or c. 255D shall
submit unconsolidated, entity only, financial statements, which have been
either audited or reviewed by an independent Certified Public Accountant. The
financial statements must include a statement of condition, an income statement
and a statement of cash flows. In the discretion of the commissioner and under
such conditions as he may impose, an Applicant's unaudited, entity only
financial statements may be submitted with audited consolidated financial
statements of its parent.
4.
Filings of Certain Insurance Premium Finance Agencies.
The provisions of 209 CMR 20.03(2)(b)2. and 3. shall not apply to an insurance
premium finance agency as an applicant or a licensee whose business is
exclusively limited to financing its own customers' commercial insurance
policies. The Commissioner may consider the goodwill or value placed on
insurance renewals or other similar intangible value toward the net worth of
such an insurance premium finance agency applicant or licensee. The provisions
of 209 CMR 20.03(2)(b)4. shall cease to be effective on December 31,
1998.
(c)
Character and Fitness. An Applicant shall submit
information demonstrating that the Applicant possesses the character,
reputation, integrity and fitness to engage in the business of a sales finance
company or a premium finance agency in an honest, fair, sound and efficient
manner.
(d)
Business
Experience. An Applicant shall demonstrate to the commissioner's
satisfaction that the Applicant, and its applicable officers and employees,
possess the necessary educational and business experience to engage in the
business of a sales finance company or a premium finance agency.
(e)
Other
Information. An Applicant shall submit such other information as
the commissioner may deem necessary to properly evaluate an
application.
(3) A
Licensee in good standing as a mortgage lender under the provisions of M.G.L.
c. 255E, who intends to engage in the business of making small loans, shall be
exempt from the provisions of 209 CMR 20.03(1) and
20.06
but shall be required to file a letter application, with applicable application
fee, or supplementary information with its application pursuant to M.G.L. c.
255E, for a license pursuant to M.G.L. c. 140, § 96 setting forth its
licensed status and a brief description on the extent it intends to engage in
the making of loans of $6,000 or less and such other information as the
commissioner may require.
