March 12, 1997

Dear Ms. __________:

This is in response to your letter of January 15, 1997.

You asked whether a broker’s license is required for _______ to provide certain services for community banks. You described those services in your letter and in our telephone conversation of February 18, 1997 as follows:

________ acts as an agent for community banks in connection with home equity loans offered by such banks. ________ will solicit loan business for a bank by calling potential borrowers on behalf of the bank based on prospect lists furnished by the bank or a third party. It will also send interested persons loan applications and other written materials furnished by the bank. It will answer questions regarding the bank’s loan program and may take loan applications over the phone. It may also run a credit bureau check on potential borrowers. It will forward all such information to the bank, and the bank is exclusively responsible for any lending decision. ________ does not deal with bank customers or potential bank customer face-to-face. All contacts with potential borrowers will be by phone. ________ does not find lenders for potential borrowers and does not collect any fees from borrowers.

This Department administers the California Banking Law (Division 1 (commencing with Section 99) of the California Financial Code) which relates to the regulation of state banks. In our view, the activities that you described would not require the issuance of a license under the Banking Law. We offer no opinion as to any law that may be applicable to the proposed services other than the California Banking Law. In addition, our views relate exclusively to the facts discussed above. Should those facts change, our opinion might be different.

This Department does not regulate loan brokers. If you wish to determine whether the above-described activities require a license as a loan broker, we recommend that you contact the California Department of Real Estate.

If you have any questions, please feel free to contact me at (415) 263-8512.

Very truly yours,

Superintendent of Banks


Senior Counsel


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