Liability Of Officers Providing Personal Financial Information In Relation To Their Employer's Mortgage Lender Application - Q4 1998By the Division of Banks
Mass. Gen. Laws chapter 255E and 209 CMR 42.00 et seq. require that senior officers of a corporation seeking a mortgage lender's license must provide financial statements prior to the granting of said license. Recent corporate applicants were concerned about whether filing such information could subject certain senior officers to personal liability for the corporation's activities, even though they have no ownership interest in the corporation. The Division is of the opinion that this issue of personal liability is outside its jurisdiction and typically is one that is decided in an adjudicatory process. The purpose of the filing requirement is to determine whether senior officers of prospective mortgage lenders are financially responsible and possess the requisite character, fitness and integrity. This information goes to whether the applicant corporation could operate in the public's interest, honestly, soundly and in compliance with applicable law. Information submitted in support of an application becomes a matter of public record.