Cal. Code Regs. tit. 10 § 1021

Current through Register 2024 Notice Reg. No. 45, November 8, 2024

Section 1021 - [Operative 2/15/2025] Registration Application

The procedures set forth in this section are applicable to a person who is required to be registered pursuant to this subchapter. If an applicant is offering or providing more than one subject product, separate registration is required for each subject product. The application for registration shall be filed as follows:

(a) INITIAL APPLICATION: The applicant shall complete and file Form MU1 in accordance with this subchapter for transmission to the Commissioner. Unless otherwise specified below, an applicant shall complete all sections of Form MU1. All exhibits and supporting documents related to the application or amendment identified in this section shall also be filed with NMLS (unless otherwise specified), in accordance with this subchapter for transmission to the Commissioner. An applicant shall provide the following information, exhibits, and documentation in the manner provided below.

(1) ITEMS NOT REQUIRED: Applicants are not required to complete Item Number 9 (Approvals and Designations), Item Number 10 (Bank Account Information), or Item Number 17 (Qualifying Individuals) of Form MU1.

(2) BUSINESS ACTIVITIES: On Item Number 1 of Form MU1 (Business Activities), an applicant shall indicate that it will offer or provide a subject product according to the following instructions.

(A) For debt settlement services, the applicant shall select "Debt settlement/debt adjuster," "Debt management/credit counseling," and/or "Debt Negotiation" as applicable under the Debt section of the form.

(B) For student debt relief services, the applicant shall select "Debt settlement/debt adjuster," "Debt management/credit counseling," and/or "Debt Negotiation" as applicable under the Debt section of the form.

(C) For education financing, the applicant shall select "Private student loan lending" under the Consumer Finance section of the form.

(D) For income-based advances, an applicant shall select the applicable "Earned Wage Access" business activity under the Consumer Finance section of the form.

(3) IDENTIFYING INFORMATION: An applicant shall provide all identifying information on Item Number 2 of Form MU1, i.e., the entity's name, IRS employee identification number or social security number, legal name amendment, main address (not a P.O. Box), business phone number, toll-free number for consumers, fax line, email address, mailing address, and a statement as to whether the entity conducts business with consumers through branch offices or other business locations.

(4) OTHER TRADE NAMES: An applicant shall provide all fictitious business names on Item Number 3 of Form MU1. Every applicant and registrant shall comply with the laws governing the filing of a fictitious business name set forth in Business and Professions Code sections 17900 through 17930.

(5) RESIDENT/REGISTERED AGENT: An applicant shall list the contact information for its agent for service of process on Item Number 4 of Form MU1.

(6) WEB ADDRESSES: An applicant shall list the full web addresses and any separate website addresses for fictitious business names it uses to offer or provide consumer financial products and services to California residents and indicate whether the applicant transacts business through the websites on Item Number 5 of Form MU1.

(7) CONTACT EMPLOYEES: An applicant shall provide the name, title, physical address, email address, and phone and fax number of the contact employee to serve as the primary contact for compliance and licensing matters and the contact employee for consumer complaints (regulator) on Item Number 6 of Form MU1. The applicant may add additional contact employees for licensing and consumer complaints (regulator) on Item Number 7 of Form MU1.

(8) BOOKS AND RECORDS INFORMATION: An applicant shall provide the name, address, phone number, fax number, and email address of the custodian of records for the entity on Item Number 8 of Form MU1. This address may be the same as the entity's main address.

(9) LEGAL STATUS: An applicant shall provide information on its legal status on Item Number 11 of Form MU1, i.e., the entity's fiscal year end, the date and place the entity obtained its legal status, stock symbol if the entity is publicly traded, and the entity's legal status, e.g., corporation, limited liability company, etc.

(10) AFFILIATES/SUBSIDIARIES: An applicant shall provide information on each entity under common ownership (affiliates) and each entity under the applicant's control (subsidiaries) that provides consumer financial products or services to California residents on Item Number 12 of Form MU1, i.e., the name, address, and description of each affiliate and subsidiary and an organization chart or document describing the relationship and percentage of ownership.

(11) FINANCIAL INSTITUTIONS: An applicant shall provide information on whether it is controlled by certain financial institutions on Item Number 13 of Form MU1, i.e., the name, address, and the type of institution, and relationship of the institution to the applicant.

(12) DISCLOSURE QUESTIONS: An applicant shall disclose and provide complete information on its criminal history, regulatory actions, civil actions, and financial history, including complete details where the applicant answers "YES" to any disclosure question listed on Item Number 14 of Form MU1.

(13) DIRECT OWNERS, EXECUTIVE OFFICERS, AND INDIRECT OWNERS:

(A) An applicant shall provide the name and title, percentage of ownership of the applicant, NMLS identification number, and federal identification number or social security number of the following individuals on Item Numbers 15 and 16 of Form MU1:

i. Applicant (if an individual);

ii. Principal officers;

iii. Directors;

iv. Managing members (if the applicant is a limited liability company);

v. General and managing partners (if the applicant is a partnership);

vi. Trustees (if the applicant is a trust);

vii. Any other individual who, directly or indirectly, owns, manages, holds with the power to vote, or holds proxies representing, ten percent (10%) or more of the outstanding voting securities issued by the applicant and controls that applicant; and

viii. Any individual primarily responsible for the applicant's offering or provision of subject products in California.

(B) For each individual, the applicant shall complete Form MU2 in accordance with this subchapter for transmission to the Commissioner. The applicant shall complete Form MU2 except for J and K of Item Number 1 (Passport Issuing Country and Passport Number), Item Number 7 (Fingerprint Information), and Item Number 8 (Credit Report). The applicant must disclose and provide complete details where the applicant answers "YES" to any disclosure question listed on the individual's criminal history, regulatory actions, civil actions, and financial history in Item Number 6.

(14) MANAGEMENT CHART: An applicant shall file with NMLS a management chart identifying the following individuals by name and title:

(A) Directors;

(B) Principal officers;

(C) Any manager or other individual primarily responsible for the applicant's offering or provision of a subject product in California;

(D) General and managing partners;

(E) Managing members; and

(F) Trustees.

(15) DESCRIPTION OF BUSINESS: An applicant shall file with NMLS a detailed description of the applicant's business activities relating to the offering or provision of subject products in California that includes the following information:

(A) A description of all products or services offered or provided to California residents including, but not limited to, subject products.

(B) A detailed schedule of the charges associated with the products and services provided to California residents including, but not limited to, subject products. Where charges vary based upon the type of the transaction or other factors, the applicant shall provide a description of how charges are set or determined.

(C) A description of how the applicant markets to California residents who may be consumers of subject products, including identifying any websites, social media accounts, and third-party brokers or lead generators that the applicant uses to acquire potential California consumers for its products or services.

(D) Whether the applicant offers or provides subject products to California residents through a mobile application.

(16) ATTESTATION: The individual attesting to the filing of the Form MU1 must be a duly authorized individual who has submitted a Form MU2 or has been delegated to attest to the filing by an individual who has submitted a Form MU2.

(b) FEES:

(1) An application fee of $350 per applicant shall be paid through NMLS for transmission to the Commissioner.

(2) An annual NMLS renewal fee of $100 shall be paid by registrants to NMLS through NMLS.

(3) Fees are not refundable.

(c) COMPLETION OF FILING and ISSUANCE OF REGISTRATION: An application for registration is complete when all required fees and all information required by this section are received by the Commissioner. The filing of Forms MU1 and MU2(s) with NMLS does not constitute automatic approval of a registration. Within thirty (30) days of an applicant filing Forms MU1 and MU2(s) and other information, and paying all required fees, the Commissioner shall either:

(1) Inform the applicant in writing that the registration application has been approved; or

(2) Inform the applicant in writing that the applicant has not fully completed part(s) of the application, identify the part(s) that has not been fully completed, and state that the application will be considered abandoned if the applicant does not respond within sixty (60) days.

(d) SECOND REVIEW OF INCOMPLETE APPLICATION: If an applicant submits additional information within sixty (60) days after the date the Commissioner transmits through NMLS a notice of deficiency under subdivision (c)(2) of this section, the Commissioner shall, within thirty (30) days after receiving the additional information:

(1) Inform the applicant in writing that the registration application has been approved; or

(e) THIRD REVIEW OF INCOMPLETE APPLICATION: If an applicant submits additional information within sixty (60) days after the date the Commissioner transmitted through NMLS a notice of deficiency under subdivision (d)(2) of this section, the Commissioner shall, within thirty (30) days after receiving the additional information:

(1) Inform the applicant in writing that the registration application has been approved; or

(f) ABANDONMENT FOR FAILURE TO RESPOND: If an applicant fails to respond to a notice of deficiency provided under subdivision (c)(2) or (d)(2) of this section within sixty (60) days after the date the Commissioner transmitted through NMLS such notice, the Commissioner shall deem the application for registration abandoned.

(g) ABANDONMENT FOR INCOMPLETE APPLICATION: If the applicant fails to submit a complete application within 60 days after the date the Commissioner transmitted through NMLS a notice of deficiency under subdivision (e)(2) of this section, the Commissioner shall deem the application for registration abandoned.

(h) An application fee paid in connection with an abandoned application shall not be refunded. Abandonment of an application shall not preclude the applicant from submitting a new application and fee for a registration.

(i) The provisions in subdivisions (c) and (d) of this section apply to applicants for registration who have submitted Forms MU1 and MU2(s) and paid the application fee before the effective date of these regulations, except that the Commissioner is not required to respond to a filing within thirty (30) days.

(j) REFERENCES TO LICENSE AND LICENSEE: Any reference to the terms "license" and "licensee" on Forms MU1 and MU2 or other NMLS information means "registration" and "registrant" for purposes of this subchapter.

Cal. Code Regs. Tit. 10, § 1021

Note: Authority cited: Sections 90009 and 90010, Financial Code. Reference: Sections 90003, 90006, 90009, 90009.5, 90010 and 90018, Financial Code.

1. New section filed 10-11-2024; operative 2/15/2025 (Register 2024, No. 41).