Code of Massachusetts Regulations
209 CMR - DIVISION OF BANKS AND LOAN AGENCIES
Title 209 CMR 42.00 - The Licensing Of Mortgage Lenders And Mortgage Brokers
Section 42.08 - Minimum Financial Responsibility and Net Worth

Universal Citation: 209 MA Code of Regs 209.42

Current through Register 1531, September 27, 2024

(1) The financial responsibility and net worth requirements set out in 209 CMR 42.03(2)(a), 42.05(2)(a) and 42.11A are minimum acceptable standards for a Licensee whose overall financial condition is fundamentally sound, which is well managed and which has no material or significant financial weaknesses. Thus, the Commissioner is not precluded from requiring a Licensee to maintain a higher net worth based on the Licensee's particular risk profile. Where the Commissioner reasonably determines, as a result of an examination under M.G.L. c. 255E, § 8, the financial history or condition, managerial resources and/or active earnings prospects of a Licensee are not adequate, or where a Licensee has sizeable off- balance sheet or funding risks, excessive interest rate risk exposure, or a significant volume of classified or criticized assets, the Commissioner may prescribe a minimum net worth for a Licensee that is greater than the minimums specified in 209 CMR 42.03(2)(a), 42.05(2)(a) and 42.11A.

(2) The amount and time frames for attaining a higher net worth prescribed under 209 CMR 42.08 shall be set forth in either:

(a) a corporate resolution executed by the Licensee and approved by the Commissioner;

(b) a written Memorandum of Understanding or other agreement between the licensee and the Commissioner; or

(c) as a provision in a temporary or permanent Cease and Desist Order issued pursuant to M.G.L. c. 255E, § 7.

(3) The maintenance of the minimum financial responsibility and net worth standards specified under 209 CMR 42.08 shall be a requirement for continued licensure under M.G.L. c. 255E, § 2 and 209 CMR 42.00. Failure to meet and maintain such minimum standards may constitute grounds for the issuance of a cease and desist order under M.G.L. c. 255E, § 7 and may also constitute grounds for license suspension or revocation under M.G.L. c. 255E, § 6.

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