§412:9-403  Service corporations. Subject to the approval of the commissioner, one or more depository financialservices loan companies may form and own a service corporation only under thefollowing conditions:

(1)  The depository financial services loan company orcompanies participating in the formation of the service corporation are in andwill remain in a safe and sound condition, and the depository financialservices loan company's or companies' solvency will not be adversely affectedby the formation or ownership of the service corporation;

(2)  A depository financial services loan company maynot own or invest in any capital stock, securities, or other interest of aservice corporation if, together with its investment in the capital stock,securities, or other interest of any other service corporations, its aggregateoutstanding investment in all service corporations will exceed fifty per centof the depository financial services loan company's capital and surplus;

(3)  No service corporation may be formed except uponwritten approval by the commissioner of an application submitted in a formsatisfactory to the commissioner.  The approval shall be subject to the writtenacknowledgment by the applicant that the service corporation shall be subject to:

(A)  The supervision of the commissioner;

(B)  Examination pursuant to this section; and

(C)  Any other terms and conditions as thecommissioner deems appropriate;

(4)  Every service corporation shall permit thecommissioner to examine its books, records, and activities from time to time,to the extent and whenever the commissioner deems necessary to determine thepropriety of any investment by a depository financial services loan company inthe service corporation and whether the activities of the service corporationpose a significant risk of loss to the parent depository financial servicesloan company.  The service corporation shall pay the entire cost of theexamination.  In addition, a service corporation, at its sole expense, shallcause an independent audit to be made of its books, records, and activities ifand when deemed necessary by the commissioner;

(5)  A service corporation may engage in any activitypermitted to its parent depository financial services loan company and anyother activity as the commissioner may approve;

(6)  A service corporation may engage in permittedactivities directly or through one or more subsidiaries or joint ventures;

(7)  Whenever a service corporation engages in anactivity that is not permitted under this section, and because of the activitya depository financial services loan company's investment in the servicecorporation would be improper, within ninety days following written notice fromthe commissioner to the depository financial services loan company:

(A)  The improper activity shall bediscontinued; or

(B)  The depository financial services loancompany shall divest itself of its ownership or investment in the servicecorporation.

The service corporation or the depositoryfinancial services loan company may appeal the commissioner's decision andrequest a hearing in accordance with chapter 91; and

(8)  The depository financial services loan companyshall notify the commissioner in writing within five days of closing a servicecorporation.  The notification shall provide the date of closing, the reasonsfor the closure, and the means by which the assets and liabilities of theservice corporation were disposed. [L 1993, c 350, pt of §1; am L 2006, c 228,§42]

 

Rules of Court

 

  Appeals, see HRCP rule 72.