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Advance Fee/Deposit/Finance License Requirements by State
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Arizona Arkansas California Florida Georgia Idaho Iowa |
Kansas Kentucky Louisiana Maine Missouri New Jersey |
Nebraska New Mexico North Carolina North Dakota South Carolina California Law |
Arizona Revised Statutes, sec. 06-1303-1310 (1996)
Registration process: http://azdfi.gov/Licensing/AppPack/ALB_App.htm
Arkansas Code Annotate sec. 23-39-401 (1995)
http://www.corp.ca.gov/FSD/lender.
(*any transaction that is not a true rent or meets the accounting and tax rules or is re-sold as a loan or discount or has a nominal purchase option is considered under this nomenclature. ) (2)
Florida Statues, Chapter 687.14 (1992)
Idaho Code, sec. 26-2501 (1992) Illinois: Code, 815 ILCS 175/15-5.03 Under the Act, a" loan broker" means any person who, in return for a fee from any person, promises to procure a loan for any person or assist any person in procuring a loan from any third party, or who promises to consider whether or not to make a loan to any person. 815ILCS 175/15-5- 15(a)
Specifically excluded from the application of the Act, however, are (1) any bank …regulated by any service loans for the Federal National Mortgage Association… (3) any insurance producer or company authorized to do business in [Illinois], (4) any person arranging financing for the sale of the person's product, (note that this exception does not apply to any person selling someone else's product and only applies to "the" person's product, implying the exception is for the owner of the product arranging for financing), (5) any person authorized to conduct business under the Residential Mortgage License Act of 1987 and (6) any person authorized to do business in [Illinois] and regulated by the Department of Financial Institutions or the Office of Banks and Real Estate. "In the event that the Act is violated by the broker, the Secretary of State is empowered by the statute to make investigations and examinations, suspend or evoke the broker's approval, subpoena witnesses, compel the production of books and records, order depositions and obtain temporary restraining orders and injunctions against the broker. In the vent that a violate is found, the Secretary of State may impose a fine in the amount of $10,000 for each violation and the broker shall be liable to any person damaged in the amount of tactual damages plus attorneys fees." This appears as standard language on most states.
Iowa Code, sec. 535C (19920)
http://www.securities.state.ks.us/rules/loan.rtf
Kentucky Revised Statutes Annotated, sec. 367.380 (1992)
http://www.maine.gov/pfr/consumercredit/faqs/loan_broker_faq.htm#j
Mississippi: A broker or loans of money may not assess or collect an advance fee and can be fined up to $5,000 for each violation. Mississippi Code Annotated, sec. 81-19-17 (1997)
New Jersey Rev. Statutes, sec. 17:10B (1992)
Articles of Incorporation
Listing of all principals (including management)
A full financial Package (to meet their minimum requirements of liquidity)
Personal financial statements on all principals
Disclosure of all current or past suits (civil or criminal)
Attach a corporate surety bond
Include a $400.00 registration fee renewable yearly
(Certificate to engage in the business of a credit services organization in accordance with the provisions of Sections 4712.01 to 4712.14 of the revised code of Ohio, subject to all the provisions thereof and to the regulations of the division.) Ohio Department of Taxation requires a "Vendor's License" under provision 5739.17 of the Revised Code (...is hereby authorized to sell tangible personal property and selected services at the retail location specified below.) This also makes the lessor responsible for all taxes with penalties for not doing so.
California Law
From Tom McCurnin, Attorney, Barton, Klugman & Oetting:
I'd like to clarify this:
1. First the definition of a "broker" under the Financial Lender's Law is not what you and I consider to be a broker. A broker in leasing often includes someone who writes the lease as a lessor and immediately assigns it to the real lender in a table funding deal. Under the Financial Lenders Law, a broker is only someone who negotiates it or assists in the financing, and who is not the actual lessor. If that "broker" was a lessor, he or she would have to be licensed as a Finance Lender. Indeed, if one was licensed as a broker and actually was a lessor, one wonders whether it would have to assign the lease only to a licensed lender. I advise lessor brokers to be licensed as a lender, not a broker.
2. Finance Lenders may assign to anyone, not merely other Financial Lenders. Servicers, for example, do not have to be licensed.
3. There is no definition in the Financial Lenders Law as to what a "true lease" is. Presumably, the Department of Corporations would have to use the Uniform Commercial Code 1-201(37) [e.g., no nominal consideration for residual and 10% put is not nominal] but nowhere is that defined.
(In a response to a question, Tom added :)
If the "broker" is not in the paper trail, e.g., not a lessor (and just negotiating the deal and not a lessor), than yes, the leasing company accepting the paper must be licensed.
If the "broker" is an actual lessor, and is licensed it can assign to anyone to service. e.g., any licensed finance lender can assign to another lender, who does not have to be licensed. The entity originating the deal must be licensed, others down stream do not have to be licensed, as long as the first in the chain is licensed.
California Finance Lenders Law:
http://www.leasingnews.org/Conscious-Top%20Stories/cal_license.htm
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