Permissibility To Establish A Loan Production Office - Q3 1999By the Division of Banks
Mass. Gen. Laws chapter 167, section 37 provides, in pertinent part, that a foreign corporation shall not conduct the business of a savings bank, cooperative bank, savings and loan association, credit union, trust company or banking company unless otherwise authorized to do so under the laws of the Commonwealth. It is the position of the Division that a New York trust company, with commercial banking powers, may establish a representative office that will conduct its lending operations solely in the manner performed traditionally by loan production offices. Specifically, the bank intends to limit the activities performed at the office to loan solicitation, loan processing and describing its array of deposit, credit, and other bank products for high net worth customers. It is the position of the Division that these activities do not constitute the business of banking. Accordingly, the bank need not obtain prior Division approval.