The Division of Banks serves as the prudential state regulator of the mortgage lending, money service business, and sales finance industries designated below. The Non-depository Institution Supervision (NDIS) Section is responsible for conducting compliance examinations/inspections of the Massachusetts-licensed entities and individuals operating in these financial services industries. The examinations/inspections are the process by which the Division assesses the level of compliance with consumer protection laws, as well as determines that the entities are operating in a safe and sound manner. In addition, the NDIS Section is responsible for reviewing initial license applications and processing annual license renewal applications for each of the license types. These industries are required to be licensed by specific statute and their conduct is governed by regulations.
Mortgage Lenders and Brokers
The Division of Banks licenses mortgage lenders and brokers and mortgage loan originators. A mortgage lender makes or issues commitments for mortgage loans, whereas a mortgage broker directly or indirectly assists consumers in finding a residential mortgage loan. A loan originator provides or accepts residential mortgage loan applications, or assists consumers in completing such applications. Those applying for a license from the Division to become a mortgage lender or broker, or mortgage loan originator, are subject to a review of responsibility, character, reputation, integrity and general fitness. The business is expected to operate honestly, fairly, soundly and efficiently in the public interest.
The Division of Banks licenses all finance companies, including insurance premium finance companies, motor vehicle finance companies, retail installment finance companies, and small loan companies. An insurance premium finance company acquires insurance agreements from insurance agents or brokers, or is an insurance agent or broker who is licensed as a premium finance agency and holds insurance agreements. A motor vehicle finance company refers to an entity that purchases motor vehicle retail installment contracts, or a company holding motor vehicle retail installment contracts from consumers purchasing motor vehicles. A retail installment finance company finances goods, services or merchandise certificates. The sale of such goods or services involves a sales agreement, a finance charge, and installment payments. Finally, a small loan company is defined as an entity making loans of $6,000 or less, with an interest rate of 12% or greater.
Money Service Businesses
The Division of Banks licenses all money transmitters, including foreign transmittal agencies and check sellers. The Division of Banks also licenses all check cashers. Money transmitters are defined as all persons who engage or are financially interested in the business of receiving deposits of money for the purpose of transmitting the funds to foreign countries. A check seller is an individual that sells, issues or registers checks or money orders, whereas a check casher is a person or entity engaged in cashing checks, drafts or money orders.
Debt Collectors and Loan Servicers
The Division of Banks licenses all debt collectors and registers all loan servicers. A debt collector is a person who collects or attempts to collect a debt owed or due on behalf of someone else. A loan servicer is a person who services a loan directly or indirectly that is owed or due on behalf of someone else.
Select this hyperlink for copies of individual statutes and regulations pertaining to Licensees, or for a fee from the State House Bookstore at (617) 727-2834.
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