Mass. Gen. Laws ch. 255E, sec. 8 — MA Code / Part III / Title IV / Chapter 255E / Section 8
Annual report; examination of business records
Status: in_force

Section 8. Each licensee shall annually, on or before a date determined by the commissioner, file a report with the commissioner containing such information as said commissioner may require concerning the business and operations conducted by the licensee in the commonwealth during the preceding calendar year. A licensee neglecting to file such report or failing to amend the same within fifteen days of notice from said commissioner directing the same shall, unless such neglect or failure is due to justifiable cause and not due to wilful neglect, pay to the commonwealth fifty dollars for each day during which such neglect or failure continues. A licensee shall keep and use such business records in such form and at such location as said commissioner shall, by regulation, determine, which shall enable said commissioner to determine whether such licensee is complying with the provisions of this chapter and any rules or regulations promulgated hereunder by said commissioner and any other law, rule or regulation applicable to the conduct of the business for which it is licensed under this chapter. Such regulations may contain provisions for the suspension or revocation of licenses for violations hereof and for such records to be recorded, copied or reproduced by photographic, photostatic, microfilm, microcard, miniature photographic, electronic, including, but not limited to, optical imaging, or other process which accurately reproduces or forms a durable medium for reproducing the original record or document or in any other form or manner authorized by the commissioner; provided, however, that nothing in this section shall be construed to permit any such licensee to destroy original records or documents. Each such licensee shall preserve all such business records for as long a period as the commissioner shall prescribe by regulation. Notwithstanding the provisions of any general or special law or the Massachusetts Rules of Civil Procedure to the contrary, service of a subpoena for business records upon a licensee, delivered to an office of such licensee located within the commonwealth shall be deemed to have been served at the location, whether within or outside the commonwealth, where the original business records or documents are kept or maintained. The commissioner shall inspect a licensee's relevant records and evidence of compliance with the provisions of this chapter or any rule or regulation issued hereunder and with any other law, rule or regulation applicable to the conduct of the business for which it is licensed under this chapter. For the purposes of such inspection, the commissioner or a representative of the commissioner shall have access to the offices and place of business, books, accounts, papers, records and files of all such licensees. The commissioner, and any person designated by him, may require the attendance and testimony of any person whom the commissioner deems necessary relative to the conduct and operation of such business. The total cost for any such inspection, which shall be paid by the licensee within 30 days after the receipt of an invoice therefore, shall be in accordance with fees determined annually by the commissioner of administration pursuant to section 3B of chapter 7, including expenses for necessary travel outside the commonwealth for the purposes of conducting such inspections. During the course of such inspection, a mortgage lender that has made 50 or more home mortgage loans in the last calendar year shall be examined for its compliance with fair lending laws including, but not limited to, the requirements of the federal Equal Credit Opportunity Act, Home Mortgage Disclosure Act, and the Predatory Home Loan Practices Act. Such examination shall also include an evaluation of such mortgage lender's: (a) origination of loans and other efforts to assist low and moderate income residents, without distinction, to be able to acquire or to remain in affordable housing at rates and terms that are reasonable considering the lender's history with similarly situated borrowers, the availability of mortgage loan products suitable for such borrowers, and consistency with safe and sound business practices; (b) origination of loans and other efforts to assist low and moderate income residents' ability to acquire or to remain in affordable housing; (c) origination of loans that show an undue concentration and a systematic pattern of lending resulting in the loss of affordable housing units; (d) efforts working with delinquent residential mortgage customers to facilitate a resolution of the delinquency; and (e) other efforts, including public notice of the scheduling of examinations and the right of interested parties to submit written comments relative to any such examination to the commissioner, as, in the judgment of the commissioner, reasonably bear upon the extent to which a mortgage lender is complying with the requirements of fair lending laws and helping to meet the mortgage loan credit needs of communities in the commonwealth. Upon the completion of such examination, the commissioner shall prepare a written evaluation of such lender's record of performance, which shall be open to public inspection upon request, and said written evaluation shall include: (a) the assessment factors utilized to determine the mortgage lender's descriptive rating; (b) the commissioner's conclusions with respect to each such assessment factor; (c) a discussion of the facts supporting such conclusions; and (d) the mortgage lender's descriptive rating and the basis therefor. Based upon such examination, the mortgage lender shall be assigned 1 of the following descriptive ratings: (a) outstanding record of performance in meeting the mortgage loan credit needs of communities in the commonwealth; (b) high satisfactory record of performance in meeting the mortgage loan credit needs of communities in the commonwealth; (c) satisfactory record of performance in meeting the mortgage loan credit needs of communities in the commonwealth; (d) needs to improve record of performance in meeting the mortgage loan credit needs of communities in the commonwealth; or (e) substantial noncompliance in meeting the mortgage loan credit needs of communities in the commonwealth. Notwithstanding the foregoing, the commissioner may establish an alternative examination procedure for any mortgage lender, which, as of the most recent examination, has been assigned a rating of outstanding or high satisfactory for its record of performance in meeting its community mortgage loan credit needs. In considering an application from a licensed mortgage lender for a renewal of a license issued pursuant to this chapter, the commissioner shall consider, but not be limited to, the record of performance of any such lender in accordance with this section. Said record of performance may provide the basis for the denial of any such renewal application. For the purposes of this section, no mortgage lender may include a loan origination or loan purchase for consideration as part of its examination under this section if another mortgage lender claims the same loan origination or purchase for its review under this section or under section 14 of chapter 167. The commissioner shall adopt regulations implementing the requirements of this section. The commissioner shall preserve a full record of each such examination of a licensee, including a statement of its condition. All records of investigation and reports of examination by the commissioner, including work papers, information derived from such reports or in response to such reports, and any copies thereof in the possession of any licensee under the supervision of the commissioner, shall be confidential and privileged communications, shall not be subject to subpoena and shall not be a public record under clause Twenty-sixth of section 7 of chapter 4. For the purpose of this paragraph, records of investigation and reports of examinations shall include records of investigation and reports of examinations conducted by any bank regulatory agency of the federal government and any other state, and of any foreign government which are considered confidential by such agency or foreign government and which are in possession of the commissioner. In any proceeding before a court, the court may issue a protective order to seal the record protecting the confidentiality of any such record, other than any such record on file with the court or filed in connection with the court proceeding, and the court may exclude the public from any portion of a proceeding at which any such record may be disclosed. Copies of such reports of examination shall be furnished to a licensee for its use only and shall not be exhibited to any other person, organization or agency without prior written approval by the commissioner. The commissioner may, in his discretion, furnish to regulatory agencies of the federal government, of other states, or of foreign countries and any law enforcement agency, such information, reports, inspections and statements relating to the licensees under his supervision.

Section 8. Each licensee shall annually, on or before a date determined by the commissioner, file a report with the commissioner containing such information as said commissioner may require concerning the business and operations conducted by the licensee in the commonwealth during the preceding calendar year. A licensee neglecting to file such report or failing to amend the same within fifteen days of notice from said commissioner directing the same shall, unless such neglect or failure is due to justifiable cause and not due to wilful neglect, pay to the commonwealth fifty dollars for each day during which such neglect or failure continues.

A licensee shall keep and use such business records in such form and at such location as said commissioner shall, by regulation, determine, which shall enable said commissioner to determine whether such licensee is complying with the provisions of this chapter and any rules or regulations promulgated hereunder by said commissioner and any other law, rule or regulation applicable to the conduct of the business for which it is licensed under this chapter. Such regulations may contain provisions for the suspension or revocation of licenses for violations hereof and for such records to be recorded, copied or reproduced by photographic, photostatic, microfilm, microcard, miniature photographic, electronic, including, but not limited to, optical imaging, or other process which accurately reproduces or forms a durable medium for reproducing the original record or document or in any other form or manner authorized by the commissioner; provided, however, that nothing in this section shall be construed to permit any such licensee to destroy original records or documents. Each such licensee shall preserve all such business records for as long a period as the commissioner shall prescribe by regulation. Notwithstanding the provisions of any general or special law or the Massachusetts Rules of Civil Procedure to the contrary, service of a subpoena for business records upon a licensee, delivered to an office of such licensee located within the commonwealth shall be deemed to have been served at the location, whether within or outside the commonwealth, where the original business records or documents are kept or maintained.

The commissioner shall inspect a licensee's relevant records and evidence of compliance with the provisions of this chapter or any rule or regulation issued hereunder and with any other law, rule or regulation applicable to the conduct of the business for which it is licensed under this chapter. For the purposes of such inspection, the commissioner or a representative of the commissioner shall have access to the offices and place of business, books, accounts, papers, records and files of all such licensees. The commissioner, and any person designated by him, may require the attendance and testimony of any person whom the commissioner deems necessary relative to the conduct and operation of such business. The total cost for any such inspection, which shall be paid by the licensee within 30 days after the receipt of an invoice therefore, shall be in accordance with fees determined annually by the commissioner of administration pursuant to section 3B of chapter 7, including expenses for necessary travel outside the commonwealth for the purposes of conducting such inspections.

During the course of such inspection, a mortgage lender that has made 50 or more home mortgage loans in the last calendar year shall be examined for its compliance with fair lending laws including, but not limited to, the requirements of the federal Equal Credit Opportunity Act, Home Mortgage Disclosure Act, and the Predatory Home Loan Practices Act. Such examination shall also include an evaluation of such mortgage lender's: (a) origination of loans and other efforts to assist low and moderate income residents, without distinction, to be able to acquire or to remain in affordable housing at rates and terms that are reasonable considering the lender's history with similarly situated borrowers, the availability of mortgage loan products suitable for such borrowers, and consistency with safe and sound business practices; (b) origination of loans and other efforts to assist low and moderate income residents' ability to acquire or to remain in affordable housing; (c) origination of loans that show an undue concentration and a systematic pattern of lending resulting in the loss of affordable housing units; (d) efforts working with delinquent residential mortgage customers to facilitate a resolution of the delinquency; and (e) other efforts, including public notice of the scheduling of examinations and the right of interested parties to submit written comments relative to any such examination to the commissioner, as, in the judgment of the commissioner, reasonably bear upon the extent to which a mortgage lender is complying with the requirements of fair lending laws and helping to meet the mortgage loan credit needs of communities in the commonwealth.

Upon the completion of such examination, the commissioner shall prepare a written evaluation of such lender's record of performance, which shall be open to public inspection upon request, and said written evaluation shall include: (a) the assessment factors utilized to determine the mortgage lender's descriptive rating; (b) the commissioner's conclusions with respect to each such assessment factor; (c) a discussion of the facts supporting such conclusions; and (d) the mortgage lender's descriptive rating and the basis therefor.

Based upon such examination, the mortgage lender shall be assigned 1 of the following descriptive ratings: (a) outstanding record of performance in meeting the mortgage loan credit needs of communities in the commonwealth; (b) high satisfactory record of performance in meeting the mortgage loan credit needs of communities in the commonwealth; (c) satisfactory record of performance in meeting the mortgage loan credit needs of communities in the commonwealth; (d) needs to improve record of performance in meeting the mortgage loan credit needs of communities in the commonwealth; or (e) substantial noncompliance in meeting the mortgage loan credit needs of communities in the commonwealth.

Notwithstanding the foregoing, the commissioner may establish an alternative examination procedure for any mortgage lender, which, as of the most recent examination, has been assigned a rating of outstanding or high satisfactory for its record of performance in meeting its community mortgage loan credit needs.

In considering an application from a licensed mortgage lender for a renewal of a license issued pursuant to this chapter, the commissioner shall consider, but not be limited to, the record of performance of any such lender in accordance with this section. Said record of performance may provide the basis for the denial of any such renewal application.

For the purposes of this section, no mortgage lender may include a loan origination or loan purchase for consideration as part of its examination under this section if another mortgage lender claims the same loan origination or purchase for its review under this section or under section 14 of chapter 167.

The commissioner shall adopt regulations implementing the requirements of this section.

The commissioner shall preserve a full record of each such examination of a licensee, including a statement of its condition. All records of investigation and reports of examination by the commissioner, including work papers, information derived from such reports or in response to such reports, and any copies thereof in the possession of any licensee under the supervision of the commissioner, shall be confidential and privileged communications, shall not be subject to subpoena and shall not be a public record under clause Twenty-sixth of section 7 of chapter 4. For the purpose of this paragraph, records of investigation and reports of examinations shall include records of investigation and reports of examinations conducted by any bank regulatory agency of the federal government and any other state, and of any foreign government which are considered confidential by such agency or foreign government and which are in possession of the commissioner. In any proceeding before a court, the court may issue a protective order to seal the record protecting the confidentiality of any such record, other than any such record on file with the court or filed in connection with the court proceeding, and the court may exclude the public from any portion of a proceeding at which any such record may be disclosed. Copies of such reports of examination shall be furnished to a licensee for its use only and shall not be exhibited to any other person, organization or agency without prior written approval by the commissioner. The commissioner may, in his discretion, furnish to regulatory agencies of the federal government, of other states, or of foreign countries and any law enforcement agency, such information, reports, inspections and statements relating to the licensees under his supervision.