| * * * * * * * * * * * * * * * * * * * * * * * IN THE MATTER OF: GUARANTY FEDERAL FINANCIAL | * * * * * * * * * * * * * | CONSENT ORDER |
WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Part I of Chapter 668, Sections 36a-485 to 36a-534c, inclusive, of the Connecticut General Statutes, “Mortgage Lenders, Correspondent Lenders, Brokers and Loan Originators”;
WHEREAS, Guaranty Federal is a Connecticut corporation that is currently licensed in Connecticut as a mortgage correspondent lender under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes;
WHEREAS, the Commissioner, through the Consumer Credit Division of the Department of Banking, conducted an investigation pursuant to the authority granted by Section 36a-17 of the Connecticut General Statutes, as amended by Public Acts 14-7 and 14-89, and Section 36a-498f of the Connecticut General Statutes, into the activities of Guaranty Federal to determine if it had violated, was violating, or was about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner;
WHEREAS, on October 30, 2014, as a result of the investigation, the Commissioner, acting pursuant to Sections 36a-494(b), 36a-52(a) and 36a-50(a) of the Connecticut General Statutes, 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 (“Notice”) against Guaranty Federal, which Notice is incorporated herein by reference;
WHEREAS, the Commissioner alleged in the Notice that Guaranty Federal failed to file its mortgage call report (“MCR”) that was due on July 29, 2014 (“Standard Financial Condition – 2014”) in violation of Section 36a-534b(c)(3) of Connecticut General Statutes, as amended by Public Act 14-89. Such violation forms the basis to issue an order to cease and desist pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty pursuant to Sections 36a-494(b) and 36a-50(a) of the Connecticut General Statutes;
WHEREAS, on October 31, 2014, the Notice was sent by certified mail, return receipt requested, to Guaranty Federal (Certified Mail Nos. 70120470000147897333 and 70120470000147897340);
WHEREAS, on November 3, 2014, Guaranty Federal received the Notice and requested a hearing;
WHEREAS, Section 4-177(c) of the Connecticut General Statutes and Section 36a-1-55(a) of the Regulations of Connecticut State Agencies provide that a contested case may be resolved by consent order, unless precluded by law;
WHEREAS, the Commissioner and Guaranty Federal now desire to resolve the matters alleged in the Notice and set forth herein;
WHEREAS, Guaranty Federal admits that the Standard Financial Condition – 2014 MCR was not filed on its due date;
WHEREAS, Guaranty Federal acknowledges that this Consent Order is a public record and is a reportable event for purposes of the regulatory disclosure questions on the Nationwide Mortgage Licensing System and Registry (“NMLS”), as applicable;
WHEREAS, Guaranty Federal voluntarily agrees to consent to the entry of the sanction imposed below, solely for the purpose of obviating the need for further formal administrative proceedings concerning the allegation contained in the Notice and set forth herein;
WHEREAS, Guaranty Federal herein represents to the Commissioner that it has reviewed and updated its internal policies, procedures and controls for timely and accurately filing required reports with the Commissioner through NMLS as required or as otherwise permitted under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes;
WHEREAS, Guaranty Federal agrees that the Notice may be used in construing the terms of this Consent Order and agrees to the language of this Consent Order;
AND WHEREAS, Guaranty Federal, through its execution of this Consent Order, voluntarily agrees to waive any applicable procedural rights, including a right to a hearing as it pertains to the allegation contained in the Notice and set forth herein, and voluntarily waives its right to seek judicial review or otherwise challenge or contest the validity of this Consent Order.
CONSENT TO ENTRY OF SANCTION
WHEREAS, Guaranty Federal, through its execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing the following sanction:
No later than the date this Consent Order is executed by Guaranty Federal, Guaranty Federal shall remit to the Department of Banking by cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut”, the sum of Two Thousand Five Hundred Dollars ($2,500) as a civil penalty.
CONSENT ORDER
NOW THEREFORE, the Commissioner enters the following:
| 1. | The Sanction set forth above be and is hereby entered; |
| 2. | No later than the date this Consent Order is executed by Guaranty Federal, Guaranty Federal shall have satisfactorily filed on NMLS all MCRs required to date. In the future, Guaranty Federal shall timely and accurately file all required reports on NMLS or as otherwise permitted under Part I of Chapter 668 of the Connecticut General Statutes in connection with its current and any future license issued to Guaranty Federal; |
| 3. | Upon issuance of this Consent Order by the Commissioner, this matter will be resolved and the Commissioner will not take any future enforcement action against Guaranty Federal based upon the allegations set forth in the Notice or contained herein; provided that issuance of this Consent Order is without prejudice to the right of the Commissioner to take enforcement action against Guaranty Federal based upon a violation of this Consent Order or the matters underlying its entry, if the Commissioner determines that compliance with the terms herein is not being observed or if any representation made by Guaranty Federal and reflected herein is subsequently discovered to be untrue; |
| 4. | Subject to the foregoing, and so long as this Consent Order is promptly disclosed by Guaranty Federal and its control persons on NMLS, as applicable, nothing in the issuance of this Consent Order shall adversely affect the ability of Guaranty Federal to apply for or obtain licenses or renewal licenses under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes, provided all applicable legal requirements for such license are satisfied; and |
| 5. | This Consent Order shall become final when issued. |
Issued at Hartford, Connecticut
this 8th day of December 2014. _______/s/_________
Howard F. Pitkin
Banking Commissioner
I, Michael D. Diot, state on behalf of Guaranty Federal Financial Corporation d/b/a Guaranty Federal, that I have read the foregoing Consent Order; that I know and fully understand its contents; that I am authorized to execute this Consent Order on behalf of Guaranty Federal Financial Corporation d/b/a Guaranty Federal; that Guaranty Federal Financial Corporation d/b/a Guaranty Federal, agrees freely and without threat or coercion of any kind to comply with the sanction entered and terms and conditions ordered herein; and that Guaranty Federal Financial Corporation d/b/a Guaranty Federal voluntarily agrees to enter into this Consent Order, expressly waiving the procedural rights set forth herein as to the matters described herein.
By: ________/s/___________
Name: Michael D. Diot
Title: Vice President
Guaranty Federal Financial Corporation
d/b/a Guaranty Federal
State of: Connecticut
County of: Hartford
On this the 2nd day of December 2014, before me, Carolyn Autore, the undersigned officer, personally appeared Michael D. Diot who acknowledged himself/herself to be the Vice President of Guaranty Federal Financial Corporation d/b/a Guaranty Federal, a corporation, and that he/she as such Vice President, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation himself/herself as Vice President.
In witness whereof I hereunto set my hand.
_________/s/_________
Notary Public
Date Commission Expires: Nov. 30, 2019