Out Of State Bank Maintaining An LPO In Massachusetts - Q4 2000By the Division of Banks
A bank headquartered in Providence, Rhode Island, desires to qualify to do business with the Massachusetts Secretary of State. The bank proposes to engage in the origination of mortgage loans and other loans to Massachusetts consumers. The bank will maintain loans production offices in the Commonwealth. The bank is not authorized to conduct a banking business and thus no banking business will be conducted by the Bank within the Commonwealth.
Massachusetts General Laws chapter 167, sec. 37 provides, in part, that a foreign corporation shall not solicit or receive deposits or transact any business whatsoever in the manner described in chapters 167, 167C thru G, and 168 thru 172A, unless authorized to do so under the laws of the Commonwealth.
Said section 37 also provides that such a corporation may not make use of any sign at the place where its business is transacted or use any written or printed materials having thereon any name or other words indicating that such place or office is a bank. Additionally, the statute prohibits a foreign corporation from transacting business under any name or title which contains the word "bank". The purpose of the statute is to prohibit the practice of unauthorized banking in the Commonwealth and to prevent an entity from creating the impression that might lead the public to believe that its business is that of a bank.
The bank does not intend nor is it seeking authorization to conduct a banking business in the Commonwealth. Rather, it purposes to engage in the origination of mortgage loans and other loans to Massachusetts' consumers, and is seeking to qualify to do business pursuant to applicable corporate statutes under jurisdiction of the Commonwealth's Office of the Secretary of State. The Secretary of State has final jurisdiction over the use of corporate names. It is the position of the Division that, for the reasons set forth, the prohibitions set forth in General Laws chapter 167, sec. 37 are not applicable to these circumstances.