Tenn. Comp. R. & Regs. 0180-18-.02 - RULES OF PRACTICE: APPLICATIONS, INSTRUCTIONS, FORMS, REPORTS, FEES, RECORDS

(1) Scope. This rule establishes regulations relating to application procedures, forms, instructions, reports, fees and record retention.

(2) Application Procedure.

(a) An applicant for a license to form and conduct a business as a BIDCO shall file with the commissioner a notice of intent to organize a BIDCO. The notice shall include the following information:

1. The name, address, occupation, social security number and date of birth of each director, officer, and principal shareholder of the applicant;

2. The name and address of an individual within the state to whom information regarding the application may be sent;

3. The total capitalization of the applicant, including the number of shares of each class and the par value, if any, of the shares of each class;

4. A statement of the method of financing and amount of the organizational expense fund;

5. The community in which the principal office of the BIDCO will be located;

6. A copy of the stock subscription agreement to be used by the incorporators in selling stock to the public; and

7. The notice of intent shall be originally signed by each of the incorporators.

(b) If the information in the notice of intent is in compliance with this chapter, the commissioner shall notify the applicant that an application to organize a BIDCO may be submitted. If the information is not in compliance with this chapter, the commissioner shall within twenty (20) days after receipt thereof return the notice to the applicant, calling attention to the defect or defects therein.

(c) The application shall include at a minimum the following:

1. A non-refundable investigation fee;

2. Name and mailing address of applicant;

3. Certificate of incorporation;

4. Resolution by board of directors of applicant authorizing applicant to make application on behalf of corporation;

5. Resumes of all officers and directors; including information concerning the experience of the management of the proposed BIDCO and how such experience relates to the execution of the business plan for the proposed BIDCO;

6. Information required by Section 8(b), Public Chapter 124, Acts of 1989;

7. Evidence that the applicant has, or has firm financing commitments from equity investors or debt sources for, cash or similar liquid assets sufficient to demonstrate that prior to the time such applicant is authorized to transact business as a BIDCO, such applicant will have liquid assets available to provide financing assistance to business firms in an amount adequate for such applicant to transact business as a BIDCO and in accordance with the business plan;

8. Evidence that the BIDCO has, or will have a capital structure as the commissioner deems necessary for the transaction of business, but in no event, not less than one million dollars ($1,000,000);

9. Any market studies which have been conducted by the applicant or as requested by the commissioner;

10. A compensation schedule for all officers and directors for a minimum period of three (3) years;

11. Name, resume, reference sources, and compensation schedule for any person(s) employed in an advisory capacity for the proposed BIDCO, and description of their purpose(s) and involvement(s) in the affairs of the proposed BIDCO;

12. Such other information which the applicant may provide to support the application; and

13. Such other information which the commissioner may require or deem appropriate to the application.

(d) The commissioner shall, upon the filing of the information required by subsection (c) above, notify the applicant in writing that the application has been accepted as officially filed. The commissioner shall be the sole judge of the adequacy of the information filed and may decline to accept the application as officially filed until such time as the applicant supplies such additional information as the commissioner may require.

(e) When the applicant receives notice from the commissioner that the application has been accepted for filing, as required by subsection (d) above, the applicant shall cause to be published in a newspaper of general circulation once in the community/communities in which the BIDCO will be located, public notice of the application to form a BIDCO. The notice shall contain, at a minimum, the following information:

1. The proposed name of the BIDCO;

2. The subject matter of the application;

3. The specific location of the proposed BIDCO;

4. The following statement:

"Any person wishing to comment on this application may file comments with the Commissioner of Financial Institutions, 414 Union Street, Suite 1000, Nashville, TN 37219. Anyone desiring to protest this application may do so if such protest is filed in writing within fifteen (15) days of the date of this publication."

(f) Immediately after publication, the applicant shall furnish the commissioner with a certification from the publisher and a tear sheet or clipping evidencing such publication.

(g) Upon receipt of the proof of publication, the commissioner shall cause an investigation of the subject application to begin, relative to the factors enumerated in Section 8(c) of the Act.

(h) If, on the basis of the information submitted, the commissioner concludes that the application for the proposed BIDCO should be approved, the commissioner shall issue an Order indicating the decision to approve the applicant's application for a license.

(i) Upon receipt of the applicant's payment of the appropriate licensing fee(s), the commissioner shall issue a license permitting the applicant to form and conduct business as a BIDCO.

(3) Fees.

(a) Each application submitted for the formation of a BIDCO shall be accompanied by a non-refundable investigation fee as set forth in Chapter 0180-7-.08, payable to the Treasurer, State of Tennessee.

(b) Each application submitted for the merger or acquisition of a BIDCO shall be accompanied by a non-refundable investigation fee as set forth in Chapter 0180-7-.08, payable to the Treasurer, State of Tennessee.

(c) The licensing fee for a BIDCO shall be such fee as set forth in Chapter 0180-7-.08. Such fee shall be assessed per location at which the BIDCO will operate, payable to the Treasurer, State of Tennessee prior to the issuance of a license and upon annual renewal thereof.

(d) For the purpose of defraying a portion of the cost of supervision and examination of a BIDCO, each licensee shall pay the actual personnel and travel expenses of examinations conducted by the commissioner. In addition, the licensee shall pay or reimburse the fees, costs, and expenses of any third parties retained by the commissioner to accomplish the purposes of the Act in accordance with Section 16 of the Act.

(e) The commissioner may require reimbursement of any other direct costs incurred in the application/regulation/supervision of a BIDCO.

(4) Minimum Requirements for Books, Accounts, and Other Records. Each licensee under the Act shall:

(a) Submit to the commissioner a complete copy of its corporate bylaws no later than thirty (30) days from the date of issuance of a license authorizing said corporation to conduct the business of and incidental to a BIDCO. Subsequent amendments to bylaws shall be submitted within thirty (30) days of the enactment date of the amendment.

(b) Post the license or copy of the license prominently in each licensed place of business of the licensee.

(c) Establish and maintain the following books and records on a current basis, either at the main office of the licensee or at alternate licensed offices, providing the information can be made available to the main office location within a seventy-two (72) hour period. There may be suitable variations to accommodate individual accounting systems, including automated and electronic record processing systems, provided the required data is kept on a current basis and is readily available to the examiners, when requested.

1. A licensee shall maintain a record of all transactions involving receipt or disbursement of money by that office each day. The record shall identify each transaction; show account numbers and names of the business firms assisted; show amounts disbursed; show amounts received and the distribution of such amounts among principal, interest, and other charges.

2. For each business firm to which financing assistance is provided, a licensee shall maintain a record containing all of the following information:

(i) Business firm's name and address;

(ii) Loan or account number;

(iii) Loan or investment date;

(iv) Loan or investment amount;

(v) Rate of charge and/or return on equity provisions;

(vi) Repayment terms;

(vii) Indication of management assistance provisions;

(viii) Description of collateral, if secured;

(ix) Indication of guarantors, if any;

(x) Description and amount of fees collected from the business firm;

(xi) Dates and amounts of all payments received and cash disbursements made;

(xii) Date to which interest charges are paid, and the unpaid principal balance due; and

(xiii) Any other services provided to the client by the BIDCO which are incidental to the conduct of the BIDCO and the fees derived from said services;

3. For each business firm in subsection (2), the following additional information at a minimum shall be maintained:

(i) Applications, credit decision documentation, and all correspondence;

(ii) Evidence and documentation regarding restructured loans;

(iii) Financial assistance agreements including any participation agreements and plans to exit from the loan or investment on maturity;

(iv) Management assistance agreements including identification of type, frequency, and costs involved;

(v) Documentation of management assistance provided; and

(vi) Loan performance evaluations including an evaluation of cash flows and income projections;

4. For each business firm to which financing assistance is denied, a licensee shall maintain a record containing all of the following information:

(i) Business firm's name and address; and

(ii) Applications, credit decision documentation and all correspondence.

(d) A licensee shall maintain consolidated reports showing its assets, liabilities, income and expenses. The reports shall be consolidated quarterly or at such specific intervals as the commissioner may otherwise request.

(e) All written correspondence between the Department of Financial Institutions and the licensee shall be retained by the licensee in a file designated as such and available for review at the main office location.

(f) All applicable procedural, interpretive, operational or other regulations issued pursuant to this chapter shall be maintained and available for review at the main office location.

(5) Reports.

(a) In addition to the reports required by Section 15 of the Act, each licensee shall submit to the commissioner by March 31 of each year a report of the aggregate statistics on each of the following for the period ending December 31 of the preceding calendar year:

1. The number and dollar amount of provisions of financing assistance made by the licensee to business firms;

2. The number and dollar amount of provisions of financing assistance made by the licensee to business firms classified in the following broad categories of industry:

(i) Agriculture, forestry and fishing

(ii) Mining

(iii) Construction

(iv) Manufacturing

(v) Transportation, communications, electric, gas and sanitary services

(vi) Wholesale trade

(vii) Retail trade

(viii) Finance, insurance and real estate

(ix) Services

(x) Public administration; and

3. The number and dollar amount of provisions of financing assistance made by licensee to minority-owned and to female-owned business firms. For the purpose of this regulation the term "minority-owned business" means a business which is solely owned, or at least fifty-one percent (51/%) of the assets or outstanding stock of which is owned, by an individual who personally manages and controls the daily operations of such business and who is impeded from normal entry into the economic mainstream because of past practices of discrimination based on race, religion, ethnic background, or sex. For the purpose of this regulation, the term "female-owned business" means a business which is solely owned, or at least fifty-one percent (51/%) of the assets or outstanding stock of which is owned by a female who personally manages and controls the daily operations of such business.

Notes

Tenn. Comp. R. & Regs. 0180-18-.02

Original rule filed December 27, 1989; effective March 28, 1990. Amendment filed December 30, 1993; effective March 31, 1993.

Authority: T.C.A. § 45-8-207.