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This opinion was issued during the first quarter of 2000.
A company operates several websites and invites internet visitors to provide information regarding the purchase of motor vehicles, sport utility vehicles, and light trucks. In addition to requesting the type of vehicle, the company also processes personal and financial information based upon a form questionnaire or application. The company does not offer any advice or assistance with regard to or participate in any way in, underwriting decision, nor does it become a party to any loan or contract entered into or fund any loan applied for.
Upon completion of the information by the website visitor, the information is submitted to the company, who then, without change, addition, or comment, submits the information to a licensed lender with whom the company has contracted. Once the information is forwarded to the lending institution, every step of the lending and purchase process and ultimate purchase of the vehicle is between the lending institution and the website visitor. Any denial, approval, or request for additional information would come for the relevant lender directly to the website visitor.
The company does not receive any advance fee or compensation from anyone, and never receives any fee from the website visitor. The company only receives a contract fee from the lender, if any at all, upon the lender's funding of a loan applied for through the company's internet information center.
Massachusetts General Laws Chapter 140, Section 96 states, in part, that no person shall directly or indirectly engage in the business of making loans of six thousand dollars or less, if the amount to be paid on any such loan for interest and expenses exceeds in the aggregate an amount equivalent to twelve per cent per annum upon the sum loaned, without first obtaining a license from the Commissioner. It further states that any person directly or indirectly engaging, for a fee, commission, bonus or other consideration, in the business of negotiating, arranging, aiding or assisting the borrower or lender in procuring or making loans of six thousand dollars or less, for which the amount paid or to be paid for interest and expenses, including all amounts paid or to be paid to any other party therefor, exceeds in the aggregate an amount equivalent to twelve per cent per annum, whether such loans are actually made by such person or by another party, shall be deemed to be engaged in the business of making small loans, and shall be subject to sections ninety-six to one hundred and twelve, inclusive.
The Division concludes that the company is engaging in assisting the lender in procuring loans, and is receiving a fee. If those loans are in the amount of six thousand dollars or less, and if the amount to be paid on any such loan for interest and expenses exceeds in the aggregate an amount equivalent to twelve per cent per annum upon the sum loaned, the company must be licensed by the Division as a small loan agency pursuant to said section 96 of chapter 140.
The Division has determined that this activity does not fall within the definition of a sales finance company according to Massachusetts General Laws Chapter 255B and would not be required to obtain a license thereunder.