H1106

	SECTION 1: The General Laws are hereby amended by inserting after chapter 255F the following new chapter:-
	Chapter 255G: Shared Equity Investments
	Section 1: Definitions
	Section 1. As used in this chapter the following words shall, unless the context otherwise requires, have the following meanings:-
	"Agreed home value" means the value of the residential property at the time of origination, as agreed to by both the homeowner and the shared equity investor and does not include any discount or risk adjustment. 
	"Annualized cost" means the annualized cost of a shared equity investment, expressed as a percentage and calculated as follows: (((settlement payment / investment amount)^(365 / term days))-1). 
	“Beginning home equity" means the unencumbered equity in a homeowner's residential property after the shared equity investment is consummated, expressed as a percentage and calculated as follows: (1-((senior secured debt + investment amount)/ agreed home value)). 
	“Commissioner” means the Massachusetts commissioner of banks.
	“Control Person” means each member, director, principal officer, and office manager, controlling shareholder owning, directly or indirectly, at least twenty-five (25%) of a legal entity, and any other person with the authority to direct the management of the legal entity. 
	“Instrumentality created by the United States or any state” means a federal, state, municipal government, quasi-governmental entity or a nonprofit agency or corporation incorporated under the laws of the commonwealth that has a tax exempt status granted under the provisions of section 501(c)(3) of the federal Internal Revenue Code, which exclusively makes home equity investments on residential property to be financed with public funds, or negotiates, places, assists in the placement of, finds, or offers to negotiate, place, assist in the placement of or find home equity investments on residential property to be financed with public funds only under a contract with a federal, state, or municipal government, any instrumentality thereof or any quasi-governmental entity as determined by the Commissioner. The making of a home equity investment shall include being named as the investor on the investment agreement or other investment documents.
	“Homeowner” means the owner of the property that applies for or enters into a shared equity investment.
	"Investment amount" means the gross proceeds of a shared equity investment that is provided to the homeowner, before any deduction of third-party fees or amounts charged by the shared equity investor. 
	“Multi-state licensing system” means a system involving 1 or more states, the District of Columbia, or the Commonwealth of Puerto Rico for the sharing of regulatory information and the licensing and application processes, by electronic or other means, for home equity investors.
	“Residential property” means real property located in the commonwealth containing a dwelling house with accommodations for four or less separate households and occupied in whole or in part by either the homeowner who obtained the shared equity investment, or a renter who pays rent directly to the homeowner.
	"Senior secured debt" means any obligation secured by a lien on the residential property that would be senior to the lien securing obligations under the shared equity investment after application of any proceeds from the shared equity investment at closing to reduce the amount of any such senior obligations.
	"Settle" or "settlement" means the process by which a homeowner terminates a shared equity investment, as set out in the terms of the shared equity investment.
	"Settlement payment" means the dollar amount that the homeowner will pay to settle a shared equity investment, excluding any amounts paid by the homeowner pursuant to the terms of the shared equity investment as (i) reimbursement for payments made on behalf of the homeowner, (ii) administrative fees charged to the homeowner during the term of the shared equity investment, or (iii) interest required that is not otherwise prohibited by law.
	“Shared equity investment” means a non-recourse transaction whereby a shared equity investor grants an outright sum of money to a homeowner in exchange for an equity interest in the homeowner’s residential property or a future obligation to pay a sum upon the occurrence of one or more conditions subsequent. A shared equity investment is not a mortgage loan or other form of loan as defined in section 3 of chapter 167E.
	“Shared equity investor” means any person or legal entity engaged in the business of making or servicing shared equity investments.  The term shall not include: (i) a shared equity investment holder; or (ii) a person or entity that purchases or invests solely in an interest in real estate other than a shared equity investment.  
	"Shared equity investment application" means the submission of a homeowner's financial and property information for purposes of entering a shared equity investment.
	"Shared equity investment holder" means a person or entity that purchases and passively holds a pre-existing shared equity investment, or interest therein, which is serviced by a third-party shared equity investor who is licensed under this chapter.
	"Term days" means the exact number of days that passed between the date on which the investment amount is disbursed to the homeowner and the settlement date of the shared equity investment.
	Section 2: Shared equity investor license requirement; exempted entities
	(a) License Required. No person shall act as a shared equity investor with respect to residential property unless first obtaining a license from the Commissioner. 
	(b) Exemptions. The following persons shall be exempt from the requirements of this chapter:
	(i) any person who is employed by or associated with a licensed shared equity investor and acting under the direction of said licensed shared equity investor shall not be required to obtain such license. 
	(ii) any shared equity investor making twelve or fewer shared equity investments within any period of twelve consecutive months; provided, however, that in computing the number of shared equity investments, there shall be counted in the shared equity investments of more than one partnership, association, trust or corporation, the majority interest of which are owned or controlled directly or indirectly by the same person or persons, partnerships, associations, trusts or corporations and including in the loans of a partnership or company not incorporated the loans of the several members thereof. 
	(iii) a bank as defined in section one of chapter one hundred and sixty-seven, a national banking association, a federally chartered credit union, a federal savings and loan association, a federal savings bank, or any subsidiary or affiliate of the above, insurance company, or to any bank, trust company, savings bank, savings and loan association, credit union or insurance company organized under the laws of any other state; provided, however, that except as provided herein, such provisions shall apply to any subsidiary or affiliate, as defined by the Commissioner, of any such exempted entity and of a bank holding company established in accordance with state or federal law; 
	(iv) any instrumentality created by the United States or any state or to any nonprofit, public or independent post-secondary educational institution within the commonwealth authorized by law to grant degrees by the commonwealth, or by any agency or instrumentality thereof, for shared equity investments made by any such educational institution to its faculty or staff, or to any charitable organization originally created by a last will and testament before January first, nineteen hundred and fifty which makes no more than twelve shared equity investments during a twelve month period;
	(v) a real estate broker or real estate salesman as defined in section eighty-seven PP of chapter one hundred and twelve who, in connection with services performed in a prospective real estate transaction, provides shared equity investment information or assistance to a buyer if such real estate broker or real estate salesman is not compensated for the same in addition to the compensation received from the seller for such real estate services. 
	Section 3: License application; multi-state licensing system
	The application for a license shall be in a form prescribed by the Commissioner. Such application shall include the name and addresses where the business of the applicant is located, and if the applicant is a legal entity, the names and addresses of each Control Person. The Commissioner may require a background investigation of each applicant for a shared equity investment license, and each Control Person of an applicant, by means of fingerprint checks by the department of criminal justice information services pursuant to section 172 of chapter 6, and the Federal Bureau of Investigation for state and national criminal history record checks. Receipt of criminal history record information by a private entity shall be prohibited. Each application for a license shall be accompanied by an investigation fee. Investigation and license fees shall be determined annually by the Commissioner of administration under section 3B of chapter 7.
	The Commissioner may participate in a multi-state licensing system for shared equity investors. The Commissioner may establish requirements for participation by an applicant in a multi-state licensing system which may vary from the provisions set out in sections 3 and 5. The applicant shall pay directly to such multi-state licensing system any additional fee relating to participation in such multi-state licensing system. The Commissioner shall ensure that the multi-state licensing system adopts appropriate privacy, data security and security breach notification policies. Upon written request, the Commissioner shall make available within 30 days, a copy of the contract between the division and the multi-state licensing system that satisfies this section.
	Section 4: Issuance of license by Commissioner; notice of license denial; appeal
	Upon the filing of an application for a license, if the Commissioner finds that the financial responsibility, character, reputation, integrity and general fitness of the applicant, and of the partners or members thereof if the applicant is a partnership or association, and of the officers, directors and principal employees if the applicant is a corporation, are such as to warrant belief that the business will be operated honestly, fairly, soundly and efficiently in the public interest consistent with the purposes of this chapter, he shall thereupon issue the applicant a license to engage in the business of a shared equity investor. If the Commissioner shall not so find, he shall not issue a license and he shall notify the applicant of the denial. Within twenty days thereafter, he shall enter upon his records a written decision and findings containing the reasons supporting the denial and shall forthwith give written notice thereof by registered mail to the applicant. Within thirty days after the date of such notice, the applicant may appeal from such denial to the superior court for Suffolk county, sitting in equity. The court shall hear all pertinent evidence and determine the facts and upon the facts as so determined, review said denial and, as justice and equity may require, affirm the same or order the Commissioner to issue such license. The Commissioner shall approve or deny every application for a license within ninety days after the filing thereof, but any failure of the Commissioner to act within such period shall not be deemed to be an approval of any such application.
	Section 5: Information on license; changes; notice requirements
	Each license shall state the address at which the business is to be conducted and shall state the name of the licensee. Business shall at all times be conducted in the name of the licensee as it appears on the license. A copy of such license or license number shall be posted on the licensee’s website. 
	Such license shall not be transferable or assignable and shall expire annually on a date determined by the Commissioner. 
	Any change of location or closing of a place of business of the licensee, either at the address stated on the license or at a place other than said address stated on the license, shall require prior written notice thereof to the Commissioner. Such notice shall be in writing setting forth the reason therefor and shall be filed with the Commissioner at least thirty days prior to any such relocation or closing. 
	If there shall be any change among the Control Persons of any licensee, the licensee shall notify the Commissioner in a timely manner of the name, address and occupation of each new member, officer, partner or director, and provide such other information as the Commissioner may require.
	Section 6: License suspension or revocation; notice and hearing
	The Commissioner may suspend or revoke any license issued pursuant to this chapter if said Commissioner finds that:
	(i) the licensee has violated any provision of this chapter or any rule or regulation adopted hereunder, or any other law applicable to the conduct of its business; or
	(ii) any fact or condition exists which, if it had existed at the time of the original application for such license, would have warranted the Commissioner in refusing to issue such license.
	Except as provided in section seven, no license shall be revoked or suspended except after notice and a hearing thereon pursuant to chapter thirty A.
	A licensee may surrender a license by delivering to the Commissioner written notice that it thereby surrenders such license, but such surrender shall not affect the civil or criminal liability of the licensee for acts committed before such surrender.
	No revocation, suspension or surrender of any license shall impair or affect the obligation of any pre-existing lawful contract between the licensee and any person.
	Section 7: Commissioner’s order to cease and desist from unlawful act or practice; prior notice and opportunity for hearing; temporary order
	(a) If the Commissioner determines, after giving notice of and opportunity for a hearing, that a licensee has engaged in or is about to engage in an act or practice constituting a violation of a provision of this chapter or a rule, regulation or order hereunder, he may order such licensee to cease and desist from such unlawful act or practice and take such affirmative action as in his judgment will effect the purposes of this chapter.
	(b) If the Commissioner makes written findings of fact that the public interest will be irreparably harmed by delay in issuing an order under subsection (a) he may issue a temporary cease and desist order. Upon the entry of a temporary cease and desist order, the Commissioner shall promptly notify, in writing, the licensee affected thereby that such order has been so entered, the reasons therefor, and that within twenty days after the receipt of a written request from such licensee, the matter will be scheduled for hearing to determine whether or not such temporary order shall become permanent and final. If no such hearing is requested and none is ordered by the Commissioner, the order shall remain in effect until it is modified or vacated by the Commissioner. If a hearing is requested or ordered, the Commissioner, after giving notice of and opportunity for a hearing to the licensee subject to said order, shall, by written finding of facts and conclusions of law, vacate, modify or make permanent the order.
	(c) No order under this section, except an order issued pursuant to subsection (b), may be entered without prior notice of and opportunity for a hearing. The Commissioner may vacate or modify an order under this section upon finding that the conditions which required such an order have changed and that it is in the public interest to so vacate or modify.
	Any order issued pursuant to this section shall be subject to review as provided in chapter thirty A.
	Section 8: Annual report; examination of business records
	(a) Annual Report. Each licensee shall annually, on or before a date determined by the Commissioner, file a report with the Commissioner containing such information as said Commissioner may require concerning the business and operations conducted by the licensee in the commonwealth during the preceding calendar year. 
	(b) Recordkeeping. A licensee shall keep and use such business records in such form and at such location as said Commissioner shall, by regulation, determine, which shall enable said Commissioner to determine whether such licensee is complying with the provisions of this chapter and any rules or regulations promulgated hereunder by said Commissioner and any other law, rule or regulation applicable to the conduct of the business for which it is licensed under this chapter. Nothing in this section shall be construed to permit any such licensee to destroy original records or documents. Each such licensee shall preserve all such business records for a minimum of three (3) years, or such longer period as the Commissioner may prescribe by regulation. Notwithstanding the provisions of any general or special law or the Massachusetts Rules of Civil Procedure to the contrary, service of a subpoena for business records upon a licensee, delivered to an office of such licensee located within the commonwealth shall be deemed to have been served at the location, whether within or outside the commonwealth, where the original business records or documents are kept or maintained.
	(c) Examinations. The Commissioner shall inspect a licensee’s relevant records and evidence of compliance with the provisions of this chapter or any rule or regulation issued hereunder and with any other law, rule or regulation applicable to the conduct of the business for which it is licensed under this chapter. For the purposes of such inspection, the Commissioner or a representative of the Commissioner shall have access to the offices and place of business, books, accounts, papers, records and files of all such licensees. The Commissioner, and any person designated by him, may require the attendance and testimony of any person whom the Commissioner deems necessary relative to the conduct and operation of such business. The total cost for any such inspection, which shall be paid by the licensee within 30 days after the receipt of an invoice therefore, shall be in accordance with fees determined annually by the Commissioner of administration pursuant to section 3B of chapter 7, including expenses for necessary travel outside the commonwealth for the purposes of conducting such inspections.
	During the course of such inspection, a shared equity investor that has entered into 50 or more shared equity investments in the last calendar year shall be examined for its compliance with applicable anti-discrimination laws and laws prohibiting unfair, deceptive, or abusive acts or practices in consumer financial products or services. Such examination shall also include an evaluation of such shared equity investor’s: (a) origination of shared equity investments and consistency with safe and sound business practices; (b) efforts working with homeowners to resolve performance defaults; and (c) disclosure and education of homeowners about the terms of shared equity investment products. The Commissioner may make rules prescribing additional factors for measuring a licensee’s performance. 
	Upon the completion of such examination, the Commissioner shall prepare a written evaluation of such shared equity investor’s record of performance, which shall be open to public inspection upon request, and said written evaluation shall include: (a) the assessment factors utilized to determine the shared equity investor’s descriptive rating; (b) the Commissioner’s conclusions with respect to each such assessment factor; (c) a discussion of the facts supporting such conclusions; and (d) the shared equity investor’s descriptive rating and the basis therefor.
	Based upon such examination, the shared equity investor shall be assigned 1 of the following descriptive ratings: (a) outstanding record of performance; (b) high satisfactory record of performance; (c) satisfactory record of performance; (d) needs to improve record of performance; or (e) substantial noncompliance.
	In considering an application from a licensed shared equity investor for a renewal of a license issued pursuant to this chapter, the Commissioner shall consider, but not be limited to, the record of performance of any such shared equity investor in accordance with this section. Said record of performance may provide the basis for the denial of any such renewal application.
	The Commissioner shall adopt regulations implementing the requirements of this section.
	The Commissioner shall preserve a full record of each such examination of a licensee, including a statement of its condition. All records of investigation and reports of examination by the commissioner, including work papers, information derived from such reports or in response to such reports, and any copies thereof in the possession of any licensee under the supervision of the commissioner, shall be confidential and privileged communications, shall not be subject to subpoena and shall not be a public record under clause Twenty-sixth of section 7 of chapter 4. For the purpose of this paragraph, records of investigation and reports of examinations shall include records of investigation and reports of examinations conducted by any financial institution regulatory agency of the federal government and any other state, and of any foreign government which are considered confidential by such agency or foreign government and which are in possession of the Commissioner. In any proceeding before a court, the court may issue a protective order to seal the record protecting the confidentiality of any such record, other than any such record on file with the court or filed in connection with the court proceeding, and the court may exclude the public from any portion of a proceeding at which any such record may be disclosed. Copies of such reports of examination shall be furnished to a licensee for its use only and shall not be exhibited to any other person, organization or agency without prior written approval by the Commissioner. The Commissioner may, in his discretion, furnish to regulatory agencies of the federal government, of other states, or of foreign countries and any law enforcement agency, such information, reports, inspections and statements relating to the licensees under his supervision.
	Section 9: Shared equity investor obligations
	(a) Recission period. A shared equity investor shall provide at least three business days in which the homeowner may rescind their acceptance of the shared equity investment before such shared equity investment becomes effective and binding for the homeowner. The homeowner shall submit the rescission notice in writing to the shared equity investor within such designated rescission period.
	(b) Except in connection with a home purchase transaction, the homeowner's beginning home equity must be equal to or greater than 10 percent.  For purposes of this provision, if any portion of the investment amount will be used to pay down existing obligations secured by the residential property, the homeowner’s beginning home equity will be calculated after application of the investment amount to pay down such obligations.
	(c) All appraisals or other valuation reports used to determine the agreed home value must meet industry standards and be conducted by an independent third party, unless an affiliated appraisal or valuation is disclosed and consented to in writing by the homeowner. Copies of all valuation reports must be provided to the homeowner.
	(d) The annualized cost of a shared equity investment may not exceed 20 percent.
	Section 10: Disclosure requirements
	(a) Prior to entering into a shared equity investment, a shared equity investor shall provide a disclosure to the homeowner in a form prescribed by the Commissioner. The disclosure shall contain at least the following information:
	(i) A clear and conspicuous statement that (1) by entering into the shared equity investment, a lien will be placed on the property and that failure to comply with the terms of the shared equity investment or an inability to settle the shared equity investment may result in the homeowner losing their property, and (2) that the homeowner should obtain the advice of an attorney before proceeding with the transaction.
	(ii) A summary of the terms of the shared equity investment including:
	(1) The investment amount;
	(2) An itemization of any charges and payments to third parties and any fees paid to the shared equity investor which are deducted from the investment amount;
	(3) The net proceeds to be delivered to the homeowner after the expiration of the recission period;
	(4) The maximum term of the shared equity investment;
	(5) How the homeowner can settle the shared equity investment together with an explanation of how the settlement payment will be calculated; and
	(6) A summary of the types of fees that may be charged in connection with settling the shared equity investment.
	(iii)(1) The agreed home value without adjustment and the method used to determine the agreed home value; and (2) if the agreed home value is adjusted for any discounts, risk adjustments, or enhancements for purposes of the shared equity investment, the amount of such adjustments and the value of the property used for purposes of calculating the shared equity investor’s equity interest in the property;
	(iv) The method of determining the final value of the property that is the subject of the shared equity investment upon settlement of the shared equity investment;
	(v) The maximum equity interest in the property that the shared equity investor may receive under the terms of the shared equity investment or an explanation of any other limits on the amount that the shared equity investor may receive under the shared equity investment;
	(vi) Any other amounts charged in connection with the shared equity investment;
	(vii) Settlement examples for the shared equity investment after three years, five years, 10 years, 15 years, and 30 years, in each case up to the maximum term of the applicable shared equity investment. 
	(1) For each settlement time frame, examples shall be provided based on:
	(A) No change in the value of the property;
	(B) A total depreciation of 10 percent;
	(C) Annual appreciation of three and one half percent;
	(D) Annual appreciation of five and one half percent; and
	(E) The actual annualized change in value of residential real property in Massachusetts over the prior five year period, measured from the most recent available data point in the All-Transactions House Price Index as published by the Federal Reserve Bank of St. Louis.
	(2) For each combination of settlement time frame and property change in value specified in subsection (vii)(1) of this section, the homeowner shall be provided with:
	(A) The projected final value of the property;
	(B) The equity interest that the shared equity investor would be entitled to receive, expressed as a percentage of projected final property value; 
	(C) The dollar value of such equity interest, and if any cap applies, the capped dollar value required to settle the shared equity investment; and 
	(D) An annual percentage rate equivalent based on the investment amount, the gross estimated settlement cost, and the number of days from the disbursement of the investment amount to settlement.   
	(b) Shared equity investors may provide homeowners with additional disclosures provided that the form disclosure prescribed by the Commissioner is used and there is no inconsistency between such disclosures.
	Section 11: Prohibited acts
	A shared equity investor is prohibited from engaging in any of the following:
	(a) Charging any penalty for settling a shared equity investment before the end of the shared equity investment’s specified term;
	(b) Preventing the homeowner from renting or using the property as the homeowner chooses, provided that such use complies with applicable law. Nothing in this subsection prohibits a shared equity investment from:
	(1) Requiring that the homeowner notify the shared equity investor of a change in use;
	(2) Requiring the homeowner to obtain commercially appropriate property insurance in connection with any use of the property; or
	(3) Imposing risk-based pricing adjustments on properties that are not the homeowner’s primary residence;
	(c) Requiring the use of an appraisal or valuation report prepared or managed by an appraiser, appraisal management company, or other valuation service provider affiliated with the shared equity investor except the homeowner and shared equity investor may agree to the use of an affiliated appraiser or appraisal management company to the extent that such affiliation is disclosed and consented to in writing by the homeowner;
	(d) Agreeing to a valuation that differs from the value obtained by the appraisal or other third-party means unless:
	(1) At least one third-party valuation report is obtained and shared with the homeowner to provide an indication of market value; and
	(2) The value that differs from the appraisal or third-party valuation report is fully disclosed to the homeowner and the homeowner agrees to the alternative value in writing;
	(e) Including provisions in the shared equity investment that prohibit the homeowner from refinancing a mortgage or lien on a property that is the homeowner’s primary residence, provided that:
	(i) Nothing in this subsection obligates a shared equity investor or shared equity investment  holder to subordinate their lien to any other lien holder; and
	(ii) If the homeowner is seeking a cash out refinancing, the shared equity investment may require that the proceeds of such refinancing be used to settle the shared equity investment; and
	(f) Charging an amount to settle a shared equity investment that exceeds the amount permitted under Section 9(d) of this chapter, plus reimbursement for payments made on behalf of the homeowner or administrative fees charged to the homeowner during the term of the shared equity investment.
	Section 12: Civil actions filed by Commissioner
	The Commissioner may enforce the provisions of this chapter, or restrain any violations thereof, by filing a civil action in any court of competent jurisdiction.
	Section 13: Penalties
	Whoever violates section 2 or any rule or regulation promulgated thereunder shall be punished by a fine of not more than $2,000 or by imprisonment in the house of correction for not more than 2 1/2 years or by imprisonment in state prison for not more than 5 years, or both such fine and imprisonment. Each day such violation occurs or continues shall be deemed a separate offense. The penalty provision of this section shall be in addition to, and not in lieu of, any other law applicable to a licensee or other person for violating section 2 or any rule or regulation made thereunder.
	Section 14: Penalties; no limitation on civil action; review
	(a) Whenever the Commissioner finds that any licensee or exempt person under section 2 has violated this chapter or any rule or regulation adopted thereunder, or any other law of the commonwealth applicable to the conduct of the business of making home equity investments on residential property in the commonwealth, the Commissioner may, by order, in addition to any other action authorized under this chapter or any rule or regulation made thereunder, impose a penalty upon the person which shall not exceed $5,000 for each violation, up to a maximum of $100,000 for such violation plus the costs of investigation. The Commissioner may impose a penalty which shall not exceed $5,000 for each violation of this chapter, or any rule or regulation adopted thereunder, by a person other than a licensee or exempt person under section 2, plus the costs of investigation.
	(b) Nothing in this section shall limit the right of any individual or entity who has been injured as a result of any violation of this chapter by a licensee, or any person other than a licensee or exempt person under section 2, to bring an action to recover damages or restitution in a court of competent jurisdiction.
	(c) Any findings or order issued by the Commissioner pursuant to this section shall be subject to review as provided in chapter 30A.
	Section 15: Written notice of intention to prohibit; statement of facts; order of prohibition; service
	(a) Whenever the Commissioner determines that any person has, directly or indirectly, violated any section of this chapter or any rule or regulation adopted thereunder, applicable to the conduct of the business of making shared equity investments in the commonwealth, or any order issued by the Commissioner under this chapter or any written agreement entered between the licensee and the Commissioner, the Commissioner may serve upon that person a written notice of intention:
	(1) to prohibit the person from performing in the capacity of a principal employee on behalf of any licensee for a period of time that the Commissioner considers necessary to cure the condition giving rise to the Commissioner’s action;
	(2) to prohibit the person from applying for or obtaining a license from the Commissioner for a period up to 36 months following the effective date of an order issued under subsection (b) or (c); or
	(3) to prohibit the person from any further participation, in any manner, in the conduct of the affairs of a shared equity investor in Massachusetts or to prohibit the person from being employed by, an agent of, or operating on behalf of a licensee under this chapter or any other business which requires a license from the Commissioner.
	(b) A written notice issued under subsection (a) shall contain a written statement of the facts that support the prohibition and shall give notice of an opportunity for a hearing to be held thereon. The hearing shall be fixed for a date not more than 30 days after the date of service upon the Commissioner of the request for a hearing. If the person fails to submit a request for a hearing within 20 days of service of notice under subsection (a), or otherwise fails to appear in person or by a duly authorized representative, the party shall be considered to have consented to the issuance of an order of prohibition in accordance with the notice.
	(c) In the event of the consent under subsection (b), or if after a hearing the Commissioner finds that any of the grounds specified in the notice have been established, the Commissioner may issue an order of prohibition in accordance with subsection (a) as the Commissioner finds appropriate.
	(d) An order issued under subsection (b) or (c) shall be effective upon service upon the person. The Commissioner shall also serve a copy of the order upon the licensee of which the person is an employee or on whose behalf the person is performing. The order shall remain in effect and enforceable until it is modified, terminated, suspended, or set aside by the Commissioner or a court of competent jurisdiction.
	(e) Except as consented to in writing by the Commissioner, any person who, pursuant to an order issued under subsection (b) or (c), has been prohibited from participating in whole or in part in the conduct of the affairs of a shared equity investor in Massachusetts may not, while the order is in effect, continue or commence to perform in the capacity of a principal employee, or otherwise participate in any manner, if so prohibited by order of the Commissioner, in the conduct of the affairs of:—
	(1) any licensee under this chapter;
	(2) any other business which requires a license from the Commissioner; or
	(3) any bank, as defined under section 1 of chapter 167 or any subsidiary thereof.
	Section 16: Rulemaking
	The Commissioner may adopt, amend or repeal rules and regulations to prescribe safe and sound operating standards for licensees, the forms and process used for the license application process, and consumer protections, and to aid in the administration and enforcement of this chapter.