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This opinion was issued in the 4th quarter of 1999.
A non-profit corporation is organized under the laws of Missouri for the purpose of furthering extension activities of a church nationally. The primary lending activity of the corporation is to provide funds to churches and schools for the purchase and construction of buildings and equipment. It obtains funds through the sale of notes which is generally limited to people who are members of the church. The organization is considering making direct loans to employees of the church for educational, residential, and debt consolidation purposes. It enjoys tax-exempt status under the Internal Revenue Service Code.
Relative to residential mortgage lending to borrowers in the Commonwealth, Massachusetts General Laws chapter 255E requires that any person or entity which originates 5 or more residential mortgage loans on 1-4 family, owner-occupied property in a consecutive twelve month period must first obtain a mortgage lender license from the Division. Section 2 of chapter 255E contains an exemption from licensing for "any nonprofit agency or corporation incorporated under the laws of the Commonwealth for the purpose of assisting low to moderate income households in the purchase or rehabilitation of family residences of four units or less and which holds tax-exempt status granted under the provisions of Section 501(c)(3) or 501 (c)(4) of the Internal Revenue Code."
Although the organization is a nonprofit corporation which holds tax-exempt status under the Internal Revenue Code, it is organized under the laws of Missouri, not under the laws of Massachusetts. Therefore, it is the position of the Division that the exemption found in section 2 of chapter 255E does not extend to the organization and a mortgage lender license would be required in order to originate mortgage loans to members in this state.
In the event that personal loans are for $6,000.00 or less, and the rate of interest is in excess of 12% per annum, Massachusetts General Laws chapter 140, section 96 requires the organization to obtain a small loan license from the Division. For personal loans in excess of $6,000.00, no license is required. There is no provision in said chapter 255E or chapter 140, section 96 which authorizes the Division to waive these licensing requirements.