Massachusetts Regulatory Update

Massachusetts Regulatory Update

The Massachusetts Division of Banks and Loan Agencies recently amended its regulations governing licensee record keeping, effective June 6, 2014.

 

MASSACHUSETTS 209 CMR 48.00

 

“Electronic” means relating to technology as having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

 

A licensee must keep all books, records, and accounts as required by state and federal law and regulation.  If the licensee is licensed as a debt collector or registered as a third party loan servicer, the licensee must maintain all books, records, and accounts for a minimum of 2 years.

 

If the licensee is licensed as a small loan company, retail installment sales finance company, mortgage lender, mortgage broker, or mortgage company, the licensee must maintain all books, records, and accounts for a minimum of 3 years.  This includes, but is not limited to, a complete customer account history for each transaction, including but not limited to, terms and conditions of the agreement, payment dates, the maturity or final payment due date, refunds, the refinancing date, collection, or legal action taken.

A licensee may keep books, records, and accounts at a location in Massachusetts.  The licensee must designate the location in Nationwide Mortgage Licensing System and Registry (“NMLS”), as well as the name of the individual responsible for providing access, and provide immediate access to the Commissioner of Banks (“Commissioner”) or the Commissioner’s designees in order to conduct an examination.

 

A licensee may also keep books, records, and accounts at a location outside of Massachusetts. The licensee must designate the location in NMLS, as well as the name of the individual responsible for providing access.  If the licensee keeps books, records, and accounts out of state, the licensee must:

  • Provide access, within 72 hours of an official request, to any books, records, and accounts at a suitable location in Massachusetts, as determined by the Commissioner or the Commissioner’s designee, for the purpose of an examination; and
  • For on-site examinations, provide immediate access to books, records, and accounts to the Commissioner or the Commissioner’s designees in order to conduct the examination.  A licensee must also separately reimburse the Commissioner for appropriate and necessary expenses for an examiner, or examiners, to conduct an examination at a location outside of Massachusetts.

 

A licensee must keep books, records, and accounts in a manner that will allow the Commissioner to determine if the licensee is in compliance with applicable state and federal laws and regulations.

 

A licensee may store books, records, and accounts as electronic records.  The licensee must make all electronic records accessible for examination through equipment available to the Commissioner or the Commissioner’s designees.  If there is no equipment available to conduct the examination, the licensee must procure and make available the equipment, at the licensee’s expense.

 

Prior to maintaining the books, records, and accounts electronically, the licensee must indicate in NMLS how the books, records, and accounts will be stored, including the name of the system utilized, and how the electronic records will be made accessible to the Commissioner or the Commissioner’s designees for the purpose of an examination.

 

A licensee must secure all books, records, and accounts against unauthorized access and damage.

If a licensee fails to comply with the provisions above, the Commissioner may modify, curtail, rescind, or otherwise limit a licensee’s authority to store books, records, and accounts in electronic form.

 

If a licensee fails to comply with the provisions above, the Commissioner may take enforcement actions against the licensee, including but not limited to the suspension or revocation of the licensee’s license.