Article 2. Applications of California Financial Code >> Division 7. >> Chapter 2. >> Article 2.
An application for authority to engage in the industrial
loan business shall be in such form and contain such information as
the commissioner may require and shall be accompanied by a filing fee
of four hundred dollars ($400).
Upon the filing of an application, the commissioner shall
make or cause to be made a careful investigation and examination
relative to the following:
(a) The background and experience of the organizers or
incorporators, the proposed officers and managers, and the proposed
stockholders and directors.
(b) The need for industrial loan facilities or additional
industrial loan facilities, as the case may be, in the community
where the proposed industrial loan company is to be located, giving
particular consideration to the adequacy of existing industrial loan
facilities in the community.
(c) The ability of the community to support the proposed
industrial loan company, giving consideration to (1) the competition
offered by existing industrial loan companies; (2) the previous
industrial loan history of the community; and (3) the opportunities
for profitable employment of industrial loan funds as indicated by
the average demand for credit, the number of potential investors, the
volume of industrial loan transactions and the business and
industries of the community with particular regard to their
stability, diversification and size.
(d) Such other facts and circumstances bearing on the proposed
industrial loan company as in the opinion of the commissioner may be
The commissioner, upon reasonable notice and opportunity to
be heard, may deny the application for any of the following reasons:
(a) The public convenience and advantage will not be promoted by
the establishment of the proposed industrial loan company.
(b) The industrial loan company is being formed for a purpose
other than the legitimate objectives contemplated by this division.
(c) The proposed capital structure is inadequate.
(d) Any proposed officer, director, or shareholder of the
applicant has, within the last 10 years, (1) been convicted of or
pleaded nolo contendere to a crime, or (2) committed any act
involving dishonesty, fraud, or deceit, which crime or act is
substantially related to the qualifications, functions, or duties of
a person engaged in business in accordance with the provisions of
(e) The applicant has not complied with all the applicable
provisions of this division.
(f) The proposed officers and directors do not have sufficient
banking, industrial loan, finance company, or other experience to
afford reasonable promise of successful operation.
(g) A false statement of a material fact has been made in the
(h) The applicant or any officer, director, or incorporator of the
applicant has violated any provision of this division or the rules
thereunder or any similar regulatory scheme of a foreign
Within 30 days after an application is filed for
authorization to establish an industrial loan company which intends
to sell and issue its investment certificates, the commissioner shall
give written notice of the filing of the application to each
industrial loan company subject to this division.
Before the commissioner issues a certificate of
authorization to operate as an industrial loan company, there must be
paid in cash for the benefit of the corporation, the minimum capital
stock and minimum paid-in surplus or reserve required pursuant to
Article 3 (commencing with Section 18130) of this chapter.