AI-assisted research summary: Depository financial services loan companies may form and own a service corporation only with commissioner approval and only if specified safety, investment, and reporting conditions are met.
Subject to the approval of the commissioner, one or more depository financial services loan companies may form and own a service corporation only under the following conditions: (1) The depository financial services loan company or companies participating in the formation of the service corporation are in and will remain in a safe and sound condition, and the depository financial services loan company's or companies' solvency will not be adversely affected by the formation or ownership of the service corporation; (2) A depository financial services loan company may not own or invest in any capital stock, securities, or other interest of a service corporation if, together with its investment in the capital stock, securities, or other interest of any other service corporations, its aggregate outstanding investment in all service corporations will exceed fifty per cent of the depository financial services loan company's capital and surplus; (3) No service corporation may be formed except upon written approval by the commissioner of an application submitted in a form satisfactory to the commissioner. The approval shall be subject to the written acknowledgment 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 the commissioner deems appropriate; (4) Every service corporation shall permit the commissioner to examine its books, records, and activities from time to time, to the extent and whenever the commissioner deems necessary to determine the propriety of any investment by a depository financial services loan company in the service corporation and whether the activities of the service corporation pose a significant risk of loss to the parent depository financial services loan company. The service corporation shall pay the entire cost of the examination. In addition, a service corporation, at its sole expense, shall cause an independent audit to be made of its books, records, and activities if and when deemed necessary by the commissioner; (5) A service corporation may engage in any activity permitted to its parent depository financial services loan company and any other activity as the commissioner may approve; (6) A service corporation may engage in permitted activities directly or through one or more subsidiaries or joint ventures; (7) Whenever a service corporation engages in an activity that is not permitted under this section, and because of the activity a depository financial services loan company's investment in the service corporation would be improper, within ninety days following written notice from the commissioner to the depository financial services loan company: (A) The improper activity shall be discontinued; or (B) The depository financial services loan company shall divest itself of its ownership or investment in the service corporation. The service corporation or the depository financial services loan company may appeal the commissioner's decision and request a hearing in accordance with chapter 91; and (8) The depository financial services loan company shall notify the commissioner in writing within five days of closing a service corporation. The notification shall provide the date of closing, the reasons for the closure, and the means by which the assets and liabilities of the service corporation were disposed. [L 1993, c 350, pt of §1; am L 2006, c 228, §42] Rules of Court Appeals, see HRCP rule 72.