Small Loan Licensing Exemption - Q2 2000By the Division of Banks
A non-stock, non-profit corporation formed within the meaning of Section 501(c)(3) of the Internal Revenue Code requests an exemption from the small loan licensing requirement in the Commonwealth based on its status as a non-profit entity.
Mass. Gen. Laws chapter 140, section 96, the Small Loan Act, establishes the framework for licensing entities to make loans of $6,000.00 or less in this state. Section 96 prohibits any person or entity from making loans of $6,000.00 or less for personal, family or household purposes without first obtaining a license from the Commissioner of Banks. The statute contains one specific exemption from the licensing for a non-profit, public or independent post secondary educational institution with the Commonwealth authorized by law to grant degrees. However, neither section 96 nor 114A allows an exemption from licensing simply based on an entity's non-profit status. Therefore it is the position of the Division the non-profit corporation is not exempt from being licensed as a small loan agency in the Commonwealth.