Broker Change of Control Application
- Section 594-b of the New York Banking Law, makes it unlawful, except with the prior approval of the Superintendent for any action to be taken which results in the change of control of a registrant. Change of Control means the power, directly or indirectly, to direct the management or policies of a registrant through ownership or otherwise.
Note: Changes in officers or directors are not considered change of control; however, may require formal notification and approval (see instructions for Changes in Officers, Directors and Qualifier).
Given the requirements of Section 594-b, an application for change of control cannot be filed through Nationwide Mortgage Licensing System (NMLS). Changes in control require the prior approval of the Superintendent.
Applicants for a Change of Control are required to pay the following non-refundable fees: investigation fee - $1,500 payable to the Superintendent of Financial Services; and fingerprint processing fee- $105.00 (see fingerprint instructions).
Foreign corporations must obtain authority from the Secretary of State to conduct business in the State of New York prior to submitting a change of control application.
Background information is required for each control person that directly or indirectly owns 10 percent or more of the voting stock of the licensee, or possesses the power to direct or cause the direction of the management and policies of the licensee. Form MU2 must be completed for each control person, three most senior executive officers and directors.
Jurisdiction Specific Requirements
Change of control applicants must submit documentation directly to the State of New York Department of Financial Services at the following address:
State of New York Department of Financial Services
One State Street
New York, NY 10004
Attention: Mortgage Banking-Applications Unit
FINANCIAL STATEMENT. Corporate applicants must provide audited financial statements for the past two years prepared by a Certified Public Accountant in accordance with Generally Accepted Accounting Principles. Also provide unaudited financial statement for the most recent quarter signed and affirmed by an executive officer of the corporate applicant. Financials must be provided for all direct and indirect corporate owners of the applicant. Financial statements should include a Balance Sheet, Income Statement and Statement of Cash Flows and all relevant notes thereto.
SURETY BOND. Submit a letter from the Surety provider confirming that the surety bond remains in effect after the change of control.
CREDIT REPORT. Submit a credit report with tri-scores for each individual applicant or control person and the three (3) most senior officers and all directors of the new control entity. The report(s) must not be dated more than 30 days prior to the filing of the application.
- SECRETARY OF STATE DOCUMENTATION.
Domestic Companies (entities incorporated or chartered in the State of New York) provide the following:
Certificate of Good Standing, if the applicant has been incorporated for more than six months and one of the following:
Certified copy certificate of incorporation and filing receipt (if a corporation);or
The Articles of Organization and Operating Agreement (if a Limited Liability Company); or
- Partnership Agreement or Trust Agreement (if a partnership or established pursuant to a trust);
Foreign Companies (entities incorporated or chartered outside the State of New York) provide the following:
Certificate of Good Standing from the New York Secretary of State if the authority to conduct business in New York is more than six months old;
Copy of filing receipt and certified copy of Application for Authority from the New York Secretary of State; or
- Copy of filing receipt and certified Certificate of Fictitious name from the New York Secretary of State if you file for a Fictitious name;
Also provide one of the following:
Certified copy certificate of incorporation and filing receipt from the Secretary of State in which the entity was incorporated or chartered; or
Partnership Agreement or Trust Agreement or
The Articles of Organization and Operating Agreement, if a limited liability company
CHANGE IN OWNERSHIP LEGAL DOCUMENTS. Provide certified copies of all legal documents executed and associated with the change in ownership, including any applicable purchase and sales agreements, merger agreements, or consent to change in ownership agreements.
CORPORATE/PARTNERSHIP/TRUST RESOLUTION . For corporate entities, provide a corporate resolution, authorizing officer to execute the application on the entity’s behalf. Resolution must be signed by the corporate secretary and bear the seal of the corporation. For partnership or trust entities, provide an authorization signed by a managing member, general partner or trustee authorizing an amendment to the existing agreement.
STATEMENT OF PROPOSED OWNERSHIP. The applicant must indicate percentage ownership after the proposed change in control.
DESCRIPTION OF ACQUISITION. Submit a brief description of the acquisition indicating purpose, source of funds and financing terms, if applicable, and ability of the proposed owners to weather financial adversities. Describe changes in the corporate or entity structure, managerial and/or staffing changes contemplated.
OWNERSHIP STRUCTURE AND ORGANIZATION CHART. For corporate applicants, submit an organizational chart, detailing ownership structure and operating management structure. Reporting lines of executive officers and operating committees should be clearly delineated.
BUSINESS PLAN. Provide a business plan or statement outlining the impact, if any, of the proposed change of control on the licensee’s marketing strategy, products and services, operational structure and geographical services areas.
FAIR LENDING PLAN. Provide a fair lending plan addressing how the applicant ensures that loans are originated in conformance with fair lending laws. Also, provide a statement addressing any changes in the registrant’s current fair lending plan as a result of the change in control.
CERTIFICATE OF COMPLIANCE. All applicants must certify that it is in compliance with Section 296-a of the Executive Law.
NOTARIZED AFFIDAVIT OF EXPERIENCE. Applications for a change of control that involves a change in the qualifying individual must be accompanied by the Notarized Affidavit. The qualifying individual must actively participate in the New York operations of the mortgage broker and must have two years of verifiable experience in underwriting or credit analysis of residential mortgage loans or similar lending and credit evaluation experience. Refer to Part 410 of the Superintendent’s Regulations.
PERSONAL QUESTIONNAIRE. All direct and indirect owners, owning 10% or more of the voting stock of the applicant, three most senior executive officers, directors and qualifiers must submit personal questionnaire.
PERSONAL FINANCIAL STATEMENTS. All direct and indirect owners, owning 10 percent or more of the voting stock of the applicant, three most senior executive officers, directors and qualifiers must submit personal financial statement for the most recent quarter and year end.
WHO TO CONTACT:
If you require assistance in using the NMLS database or logging into the system, please contact the NMLS Call Center at (240) 386-4444.
For New York State Jurisdiction specific requirements contact the Department the via e-mail at email@example.com
YOU ARE NOT AUTHORIZED TO ACQUIRE CONTROL OF A NEW YORK REGULATED MORTGAGE BROKER UNTIL YOU HAVE RECEIVED APPROVAL FROM THE SUPERINTENDENT OF FINANCIAL SERVICES OF THE STATE OF NEW YORK.