The Department of Banking News Bulletin
Bulletin # 3048 - Week Ending July 22, 2022
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.
Section 36a-145 of the Connecticut General Statutes requires that 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 may be submitted when such applications are filed and any plans that are filed will be made 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 at (860) 240-8180.
DATE: July 18, 2022
BANK: Dime Bank, Norwich
LOCATION: 135 Talcottville Road, Vernon, CT 06066
ACTIVITY-BRANCH TYPE: Filed Notice to Establish Full Service Branch
PROPOSED CLOSING DATE: October 2022
CONSUMER CREDIT DIVISION ACTIVITY
Department of Banking Issues Consumer and Industry Advisory on Money Transmission
On July 20, 2022, the Department issued a Consumer and Industry Advisory on Money Transmission to highlight common activity requiring money transmission licensure in Connecticut and provide guidance for those engaging in such activity or considering money transmitter licensure in Connecticut. The Advisory provides a summary of various activities requiring money transmitter licensure in Connecticut, including virtual currency transmission activities, along with resources for additional information, and discusses the benefits of licensure, the licensure process and the actions the Department may take against those engaging in unlicensed activity. The Advisory can be found on our website.
On July 12, 2022, the Commissioner entered into a Consent Order with Optima Advocates, Inc., Irvine, California (“Optima”), and Optima Student Loan Services, LLC, Irvine, California (“SLS”). The Consent Order resolved allegations made by the Commissioner in an Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing against Optima and SLS, among other respondents, issued on January 11, 2022 (“Order and Notice”). The Order and Notice was the result of an investigation by the Consumer Credit Division. The Order and Notice alleged that: (1) Optima’s engaging or offering to engage in debt negotiation in this state without obtaining the required license constitutes at least one violation of Section 36a-671(b) of the Connecticut General Statutes, in effect at such time; (2) SLS’s engaging or offering to engage in debt negotiation in this state without obtaining the required license constitutes at least one violation of Section 36a-671(b) of the Connecticut General Statutes, in effect at such time; and (3) SLS’s offering, soliciting, brokering, directly or indirectly arranging, placing or finding a small loan for a prospective Connecticut borrower, without obtaining the required license, constitutes at least one violation of Section 36a-556 of the Connecticut General Statutes, in effect at such time.
As part of the Consent Order, Respondents paid $20,000 as a civil penalty, Optima paid $2,400 for back licensing fees, and SLS paid $3,600 for back licensing fees. Also as part of the Consent Order, Respondents shall refund monies in the amount of $61,610.47, plus interest, to six Connecticut consumers.
SECURITIES AND BUSINESS INVESTMENTS DIVISION
Pusser’s Holdings Investment LLC, Harbor Cap Partners LLC and Stuart Jamieson
On July 20, 2022, the Banking Commissioner entered a Consent Order (No. CO-22-201914440-S) with respect to Pusser’s Holdings Investment LLC (“PHI”) of 649 Fairfield Beach Road, Fairfield, Connecticut; Harbor Cap Partners LLC, manager of PHI; and Stuart Jamieson, managing member of Harbor Cap Partners LLC and the Chief Executive Officer of PHI. The Respondents had been the subject of a January 5, 2022 Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing (No. CRF-21- 201914440-S). The January 5, 2022 action had alleged that, at various times between 2015 and 2017, the Respondents violated Section 36b-16 of the Connecticut Uniform Securities Act by selling unregistered PHI Class A Units and unregistered PHI securities consisting of warrants and promissory notes to the investing public. Approximately $3.2 million was raised from investors in the two offerings.
The July 20, 2022 Consent Order noted that a third party had purchased the securities underlying the PHI debt and rights offering, and had repaid the affected investors in full. By contrast, investors who purchased PHI Class A Units had $1.6 million in outstanding investment losses. However, the Consent Order acknowledged that no purchasers of the PHI Class A Units had complained about the units’ unregistered status, and that all PHI Class A Unit purchasers had represented in writing that they had not been prejudiced by Respondents’ failure to claim an exemption from registration for those units. Since purchasers of the PHI debt and rights offering securities had been repaid, and given the statements of nonprejudice provided by the PHI Class A Unit purchasers, the Commissioner determined not to order restitution although he was authorized by law to pursue a restitutionary remedy.
The Consent Order directed the Respondents to cease and desist from regulatory violations. In addition, the Consent Order required that, for five years, Respondents, their affiliates and successors in interest retain the services of experienced securities legal counsel before offering or selling securities to ensure that they were in compliance with Connecticut law.
Based on Respondent Jamieson's demonstrated inability to pay the $10,000 fine that otherwise would have been imposed against Respondents, the Commissioner stayed imposition of the fine for three years. If, following expiration of the three year period, the Respondents remained unable to pay the administrative fine, the fine would be waived.
Jorge L. Perez