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This opinion was issued in the 4th quarter of 1999.
A mortgage lender is a direct subsidiary of a federal savings bank, which owns 51% of the shares of its common stock. The mortgage lender meets the definition of "operating subsidiary" under the Code of Federal Regulations and it is regulated by the Office of Thrift Supervision ("OTS").
Massachusetts General Laws chapter 255E, section 2 requires that any person or entity originating 5 or more residential mortgage loans in a consecutive twelve month period must obtain a license from the Division unless otherwise exempted. Said section 2 contains an exemption for a federal savings bank or any subsidiary thereof.
It is the position of the Division that since the language of said section 2 does not make a distinction between wholly-owned subsidiaries and subsidiaries which are not wholly-owned, the subsidiary is exempt from being licensed as a mortgage lender in the Commonwealth provided that the federal savings bank continues to be the majority owner of its common stock.