The Department of Banking News Bulletin
Bulletin # 2970 - Week Ending January 22, 2021
This bulletin constitutes the only official notification you will receive from this office concerning any of the following applications. Any observations you may have are solicited. Any comments should be in writing to Jorge L. Perez, Banking Commissioner, Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800. Written comments will be considered only if they are received within ten business days from the date of this bulletin.
STATE BANK ACTIVITY
Branch Activity
Section 36a-145 of the Connecticut General Statutes requires certain applications for a branch or limited branch at which loans will be made, address how the establishment of the branch will be consistent with safe and sound banking practices and promote the public convenience and advantage. Plans are submitted when such applications are filed and are available for public inspection and comment at the Department for a period of 30 days. Questions concerning branch activity should be directed to the Financial Institutions Division, (860) 240-8180.
DATE: January 19, 2021
BANK: Liberty Bank, Middletown
LOCATION: 2074 Park Street, Suite F1, Hartford, CT 06106
ACTIVITY-BRANCH TYPE: Approved to Establish Limited Branch
DATE: January 22, 2021
BANK: Newtown Savings Bank, Newtown
LOCATION: 104 Boston Avenue, Bridgeport, CT 06610
ACTIVITY-BRANCH TYPE: Approved to Establish Full Service Branch
CREDIT UNION ACTIVITY
On January 20, 2021, the Commissioner approved the merger of Groton Municipal Employees Federal Credit Union, a federal credit union, with and into America's First Network Credit Union, a Connecticut credit union, pursuant to Section 36a-468a of the Connecticut General Statutes.
CONSUMER CREDIT DIVISION ACTIVITY
Consent Order
On January 14, 2021, the Commissioner entered into a Consent Order with Edward T. Weber d/b/a Law Offices of Edward T. Weber, Fountain Valley, California (“Weber”). The Consent Order was based on an investigation by the Consumer Credit Division. As a result of such investigation, on September 10, 2020, the Commissioner issued a Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing against Weber (“Notice”). The Commissioner alleged in the Notice that Weber acted within this state as a consumer collection agency without a consumer collection agency license, in violation of Section 36a-801(a) of the Connecticut General Statutes, and that Weber used false, deceptive or misleading representations or means in connection with the collection of debt from a Connecticut resident, including representing that the debt was valid and a lawsuit would be filed imminently, in violation of Section 36a-809-11 of the Regulations of Connecticut State Agencies (“Regulations”). As part of the Consent Order, Weber agreed not to act as a consumer collection agency in this state without a license, in violation of Section 36a-801(a) of the Connecticut General Statutes, and not to use false, deceptive or misleading representations or means in connection with the collection of debt from a Connecticut resident, in violation of Section 36a-809-11 of the Regulations.
Notice of Automatic Suspension, Notice of Intent to Revoke Consumer Collection Agency License and Notice of Right to Hearing
On January 11, 2021, the Commissioner issued a Notice of Automatic Suspension, Notice of Intent to Revoke Consumer Collection Agency License and Notice of Right to Hearing (“Notice”) in the Matter of: Niagara Credit Solutions, Inc., NMLS # 954581, Lackawanna, New York (“Respondent”). The Notice was a result of an investigation by the Consumer Credit Division. The Commissioner alleges that Respondent failed to maintain a surety bond that runs concurrently with the period of its consumer collection agency license, in violation of Section 36a-802(a) of the Connecticut General Statutes. Respondent was afforded an opportunity to request a hearing with regard to the allegation set forth in the Notice.
Order to Cease and Desist and Order Imposing Civil Penalty
On January 12, 2021, the Commissioner issued an Order to Cease and Desist and Order Imposing Civil Penalty (“Order”) in the Matter of: Pedroso Legal Services LLC a/k/a ELAWNJ.COM and Filipe Pedroso, Newark, New Jersey (“Respondents”). The basis of the Order was that Respondents’ engaging or offering to engage in debt negotiation in this state without obtaining the required license constitutes violations of Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2017. The Commissioner ordered Respondents to cease and desist from violating Section 36a-671(b) of the Connecticut General Statutes, and imposed a civil penalty in the amount of $100,000 upon each Respondent. In addition, the Order to Make Restitution issued against Respondents on November 19, 2020, remains in effect and became permanent on December 9, 2020.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Volumetric Fund, Inc.
On January 19, 2021, the Banking Commissioner (“Commissioner”) entered into a Stipulation and Agreement (No. ST-20-202033-S) with Volumetric Fund, Inc. (“VFI”), of 87 Violet Drive, Pearl River, New York 10965.
On September 17, 2020, VFI self-reported, through a newly retained third-party service provider, that VFI had made sales of securities to persons having a Connecticut nexus absent compliance with Section 36b-16 of the Act. The majority of the purchasers purchased their shares at a time when they were located in New York State, and subsequently relocated to Connecticut. According to the newly retained third-party service provider, VFI had been under the impression that securities filings were only required in its home state.
The Securities and Business Investments Division (“Division”) of the State of Connecticut Department of Banking (“Department”) conducted a follow-up review of the information and documents supplied by VFI and its service provider; and ascertained that, of the six currently existing Connecticut shareholders of VFI, only three had purchased their shares while they resided in Connecticut.
On September 21, 2020, VFI submitted a curative filing and associated fee to the Division to ensure its compliance going forward.
VFI has represented to the Division that, once it was made aware of the error in its notice filing practices, it hired several professional firms in the financial services industry to provide regulatory guidance and professional advice, to wit, an outside law firm, a third-party filing service and a broker-dealer to assume responsibility for the future distribution of fund shares. Volumetric has also represented to the Division that it would follow the guidance and advice of these professional firms going forward to ensure compliance with Connecticut filing requirements.
VFI specifically assured the Commissioner that the violations alleged in the Stipulation and Agreement shall not occur in the future.
In resolution of the matter, the VFI agreed to pay ten thousand dollars ($10,000) to the Department. Of that amount, five thousand dollars ($5,000) constituted reimbursement for past due securities filing fees and five thousand dollars ($5,000) constituted an administrative fine.
VFI also agreed to refrain from offering or selling securities in or from Connecticut absent compliance with Section 36b-l6 of the Act, including timely compliance with the filing requirements in Section 36b 21(c) of the Act.
Dated: Tuesday, January 26, 2021
Jorge L. Perez
Banking Commissioner