By the Division of Banks

Possible Means For Securing Home Equity Lines Of Credit Subject To The Small Loan Act

Mass. Gen. Laws chapter 140, section 108 requires discharges upon payment or tender of the amount legally due on certain loans " . . . secured by a security interest or pledge of personal property." Although it appears that said section does not apply to loans secured by a mortgage in real estate, other statutes such as Mass. Gen. Laws chapter 183, sections 54 through 67, provide similar consumer protections for loans secured by a mortgage in real estate. It is the position of the Division that none of the provisions of M.G.L. c. 140 § 96 - 114C limit or restrict the type of collateral used to secure a loan subject to the Small Loans Act. Therefore, a home equity line of credit subject to those provisions of the Small Loans Act may be secured by real estate.