Code Section Group

Financial Code - FIN


  ( Division 7 repealed and added by Stats. 1976, Ch. 964. )

CHAPTER 2. Formation and Organization [18100 - 18166]

  ( Chapter 2 added by Stats. 1976, Ch. 964. )

ARTICLE 2. Applications [18115 - 18120]
  ( Article 2 added by Stats. 1976, Ch. 964. )


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).

(Amended by Stats. 1983, Ch. 725, Sec. 2.)


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 relevant.

(Amended by Stats. 1980, Ch. 974, Sec. 8.)


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 this division.

(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 application.

(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 jurisdiction.

(Amended by Stats. 1980, Ch. 974, Sec. 9.)


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.

(Amended by Stats. 1986, Ch. 1011, Sec. 3. Effective September 23, 1986.)


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.

(Amended by Stats. 1977, Ch. 264.)

FINFinancial Code - FIN2.