* * * * * * * * * * * * * * * * * * * * * * * * * IN THE MATTER OF: EDUCATIONAL FUNDING COMPANY, INC. ("Respondent") * * * * * * * * * * * * * * * * * * * * * * * * * | * * * * * * * * * * * * * * * * * * * * * |
ORDER OF SUMMARY SUSPENSION NOTICE OF INTENT TO REVOKE NOTICE OF INTENT TO IMPOSE AND NOTICE OF RIGHT TO HEARING |
I. LEGAL AUTHORITY AND JURISDICTION
The Banking Commissioner (“Commissioner”) is charged with the administration of Part XII of Chapter 669, Sections 36a-800 to 36a-812, inclusive, of the Connecticut General Statutes, “Consumer Collection Agencies”, and Sections 36a-809-6 to 36a-809-17, inclusive, of the Regulations of Connecticut State Agencies (“Regulations”).
Pursuant to the authority granted by Section 36a-17 of the Connecticut General Statutes, the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, has investigated the activities of Respondent to determine if it has violated, is violating or is about to violate the provisions of the Connecticut General Statutes or Regulations within the jurisdiction of the Commissioner.
Section 36a-17(a) of the Connecticut General Statutes provides, in pertinent part, that:
The commissioner, in the commissioner’s discretion, may, subject to the provisions of section 36a-21 and the Freedom of Information Act, as defined in section 1-200, (1) make such public or private investigations or examinations within or outside this state, concerning any person subject to the jurisdiction of the commissioner, as the commissioner deems necessary to carry out the duties of the commissioner, (2) require or permit any person to testify, produce a record or file a statement in writing, under oath, or otherwise as the commissioner determines, as to all the facts and circumstances concerning the matter to be investigated or about which an action or proceeding is pending . . . .
Section 36a-51 of the Connecticut General Statutes provides, in pertinent part, that:
(a) The commissioner may . . . revoke . . . any license issued by the commissioner under any provision of the general statutes by sending a notice to the licensee by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt. The notice shall be deemed received by the licensee on the earlier of the date of actual receipt or seven days after mailing or sending. Any such notice shall include: (1) A statement of the time, place, and nature of the hearing; (2) a statement of the legal authority and jurisdiction under which the hearing is to be held; (3) a reference to the particular sections of the general statutes, [or] regulations . . . involved; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that the licensee may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice. If the commissioner finds that public health, safety or welfare imperatively requires emergency action, and incorporates a finding to that effect in the notice, the commissioner may order summary suspension of a license in accordance with subsection (c) of section 4-182 and require the licensee to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section, pending proceedings for . . . revocation . . . .
(b) If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice unless the licensee fails to appear at the hearing. After the hearing, the commissioner shall . . . revoke . . . the license for any reason set forth in the applicable licensing provisions of the general statutes if the commissioner finds sufficient grounds exist for such . . . revocation . . . . If the licensee does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall . . . revoke . . . the license. No such license shall be suspended or revoked except in accordance with the provisions of chapter 54.
Section 36a-52 of the Connecticut General Statutes provides, in pertinent part, that:
(a) Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any provision of the general statutes within the jurisdiction of the commissioner, or any regulation . . . adopted . . . thereunder, the commissioner may send a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt. The notice shall be deemed received by the person on the earlier of the date of actual receipt, or seven days after mailing or sending. Any such notice shall include: (1) A statement of the time, place, and nature of the hearing; (2) a statement of the legal authority and jurisdiction under which the hearing is to be held; (3) a reference to the particular sections of the general statutes, [or] regulations . . . alleged to have been violated; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice. If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice, unless the person fails to appear at the hearing. After the hearing, the commissioner shall determine whether an order to cease and desist should be issued against the person named in the notice. If the person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall issue an order to cease and desist against the person. No such order shall be issued except in accordance with the provisions of chapter 54.
(b) If the commissioner finds that the public welfare requires immediate action, the commissioner may incorporate a finding to that effect in the notice sent in accordance with subsection (a) of this section and issue a temporary order requiring the person to cease and desist from the activity which constitutes such alleged violation and to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section. Such temporary order shall become effective on receipt and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in the notice.
Section 36a-50(a) of the Connecticut General Statutes provides, in pertinent part, that:
(1) Whenever the commissioner finds as the result of an investigation that any person has violated any provision of the general statutes within the jurisdiction of the commissioner, or any regulation . . . adopted . . . thereunder, the commissioner may send a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt. The notice shall be deemed received by the person on the earlier of the date of actual receipt or seven days after mailing or sending. Any such notice shall include: (A) A statement of the time, place, and nature of the hearing; (B) a statement of the legal authority and jurisdiction under which the hearing is to be held; (C) a reference to the particular sections of the general statutes, [or] regulations . . . alleged to have been violated; (D) a short and plain statement of the matters asserted; (E) the maximum penalty that may be imposed for such violation; and (F) a statement indicating that such person may file a written request for a hearing on the matters asserted not later than fourteen days after receipt of the notice.
(2) If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice unless such person fails to appear at the hearing. After the hearing, if the commissioner finds that the person has violated any such provision, [or] regulation, . . . the commissioner may, in the commissioner’s discretion and in addition to any other remedy authorized by law, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person. If such person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner may, as the facts require, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person.
(3) Each action undertaken by the commissioner under this subsection shall be in accordance with the provisions of chapter 54.
Section 4-182(c) of the Connecticut General Statutes provides, in pertinent part, that:
No revocation, suspension, annulment or withdrawal of any license is lawful unless, prior to the institution of agency proceedings, the agency gave notice by mail to the licensee of facts or conduct which warrant the intended action and the specific provision of the general statutes or of regulations adopted by the agency that authorize such intended action, and the licensee was given an opportunity to show compliance with all lawful requirements for the retention of the license. If the agency finds that public health, safety or welfare imperatively requires emergency action, and incorporates a finding to that effect in its order, summary suspension of a license may be ordered pending proceedings for revocation or other action. These proceedings shall be promptly instituted and determined.
II. MATTERS ASSERTED
| 1. | Respondent is a Maryland corporation with its main office at 4740 Chevy Chase Drive, Suite 200, Chevy Chase, Maryland. |
| 2. | Respondent currently holds a license to act as a consumer collection agency in this state (No. 6844). |
| 3. | On August 12, 2014, an examiner from the Division attempted to conduct an examination of Respondent by sending a letter to Mark Cokinos, Vice President of Respondent (“Cokinos”), requesting certain information (“First Day Letter”) and the completion of a Consumer Collection Agency Manager’s Questionnaire and Information Request (“Manager’s Questionnaire”), which response was due September 3, 2014. |
| 4. | On August 28, 2014, the Division granted Respondents’ verbal request for an extension for providing the requested information until September 10, 2014. |
| 5. | On September 10, 2014, the Division received the Manager’s Questionnaire, but no other requested information. |
| 6. | By e-mail dated September 11, 2014, the examiner requested Cokinos to send the remaining documents requested in the First Day Letter, which response was due by September 18, 2014. |
| 7. | On September 18, 2014, the Division again received an incomplete response to the First Day Letter and the September 11, 2014 e-mail. |
| 8. | On October 29, 2014, the examiner sent a letter by certified mail, return receipt requested, to Respondent, pursuant to Section 4-182(c) of the Connecticut General Statutes (“Compliance Letter”), requesting again that Respondent provide certain information as part of its examination. The Compliance Letter gave Respondent an opportunity to show compliance with all lawful requirements for the retention of its consumer collection agency license. To date, no response has been received. |
III. STATUTORY BASIS FOR REVOCATION OF CONSUMER COLLECTION
AGENCY LICENSE, ORDER TO CEASE AND DESIST
AND IMPOSITION OF CIVIL PENALTY
Section 36a-17 of the Connecticut General Statutes provides, in pertinent part, that:
(c) For the purpose of any investigation, [or] examination . . . under this title the commissioner may . . . require written statements and require the production of any records which the commissioner deems relevant or material. The commissioner may require that certified copies of any such records be provided to the commissioner at the commissioner’s office. . . .
(d) Any person who is the subject of any such investigation, [or] examination . . . shall make its records available to the commissioner in readable form; . . . provide copies or computer printouts of records when so requested; furnish unrestricted access to all areas of its principal place of business or wherever records may be located; and otherwise cooperate with the commissioner. . . .
(f) As used in this section, “records” includes, but is not limited to, books, papers, correspondence, memoranda, agreements, diaries, logs, notes, ledgers, journals, visual, audio, magnetic or electronic recordings, computer printouts and software, and any other documents.
Section 36a-806(a) of the Connecticut General Statutes provides, in pertinent part, that:
The commissioner shall have power to examine the affairs of every consumer collection agency in this state in order to determine whether it has been or is engaged in any act or practice prohibited by sections 36a-805 to 36a-808, inclusive.
Respondent’s conduct, as more fully described in paragraphs 4 through 8, inclusive, of the Matters Asserted, constitutes a violation of Section 36a-17(d) of the Connecticut General Statutes. Such conduct constitutes sufficient grounds for the Commissioner to revoke Respondent’s license to act as a consumer collection agency in this state pursuant to subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, forms the basis to issue an order to cease and desist pursuant to Section 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty pursuant to Section 36a-50(a) of the Connecticut General Statutes. Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.
IV. FINDINGS AND STATUTORY BASIS FOR TEMPORARY ORDER
TO CEASE AND DESIST AND ORDER OF SUMMARY SUSPENSION
The Commissioner finds that public safety and welfare imperatively require emergency action to summarily suspend Respondent’s license to act as a consumer collection agency in this state under Section 4-182(c) of the Connecticut General Statutes, and finds that public welfare requires immediate action to issue a temporary order requiring Respondent to cease and desist from violating the law under Section 36a-52(b) of the Connecticut General Statutes, in that Respondent’s failure to produce copies of records to the Commissioner impedes the Commissioner’s ability to carry out his duties to examine Respondent’s activities in order to determine whether Respondent’s business will be operated soundly and efficiently, in the public interest and consistent with the purposes of Section 36a-800 to 36a-810, inclusive, and therefore adversely effects the public.
V. TEMPORARY ORDER TO CEASE AND DESIST, ORDER OF SUMMARY SUSPENSION,
NOTICE OF INTENT TO REVOKE CONSUMER COLLECTION AGENCY
LICENSE, NOTICE OF INTENT TO ISSUE ORDER TO CEASE AND
DESIST, NOTICE OF INTENT TO IMPOSE CIVIL PENALTY
AND NOTICE OF RIGHT TO HEARING
WHEREAS, the Commissioner has reason to believe that Respondent has engaged in acts or conduct which constitutes sufficient grounds for the Commissioner to revoke Respondent’s license to act as a consumer collection agency in this state pursuant to subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, forms a basis to issue an order to cease and desist against Respondent pursuant to Section 36a-52(a) of the Connecticut General Statutes and to impose a civil penalty upon Respondent pursuant to Section 36a-50(a) of the Connecticut General Statutes;
AND WHEREAS, the Commissioner has made the findings required under Sections 36a-52(b), 36a-51(a) and 4-182(c) of the Connecticut General Statutes.
THE COMMISSIONER THEREFORE ORDERS, pursuant to the authority granted in Section 36a-52(b) of the Connecticut General Statutes, that Educational Funding Company, Inc., immediately CEASE AND DESIST from any further violation of Section 36a-17(d) of the Connecticut General Statutes. This Temporary Order to Cease and Desist shall become effective upon receipt by Educational Funding Company, Inc., and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in this Temporary Order to Cease and Desist.
THE COMMISSIONER FURTHER ORDERS, pursuant to the authority granted in Sections 36a-51(a) and 4-182(c) of the Connecticut General Statutes, the license of Educational Funding Company, Inc., to act as a consumer collection agency in this state be and is hereby SUMMARILY SUSPENDED pending proceedings for revocation.
FURTHER, notice is hereby given to Respondent that the Commissioner intends to REVOKE Respondent’s license to act as a consumer collection agency in this state, issue an order requiring Respondent to CEASE AND DESIST from violating Section 36a-17(d) of the Connecticut General Statutes, and impose a CIVIL PENALTY upon Respondent as set forth herein, subject to Respondent’s right to a hearing on the allegations set forth above.
A hearing will be granted to Respondent if a written request for a hearing is received by the Department of Banking, Consumer Credit Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following Respondent’s receipt of this Temporary Order to Cease and Desist, Order of Summary Suspension, Notice of Intent to Revoke Consumer Collection Agency License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing as set forth in subsections (a) and (b) of Section 36a-51, and Sections 36a-a52(a) and 36a-50(a) of the Connecticut General Statutes. This Temporary Order to Cease and Desist, Order of Summary Suspension, Notice of Intent to Revoke Consumer Collection Agency License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing shall be deemed received on the earlier of the date of actual receipt, or seven days after mailing or sending. The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address. If Respondent will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as “pro se”. Once a written request for a hearing is received, the Commissioner may issue a notification of hearing and designation of hearing officer that acknowledges receipt of a request for a hearing, designates a presiding officer and sets the date of the hearing in accordance with Section 4-177 of the Connecticut General Statutes and Section 36a-1-21 of the Regulations of Connecticut State Agencies. If a hearing is requested, the hearing will be held on June 2, 2015, at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.
The hearing will be held in accordance with the provisions of Chapter 54 of the Connecticut General Statutes, unless Respondent fails to appear at the requested hearing. At such hearing, Respondent will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law to be considered by the Commissioner.
If Respondent does not request a hearing within the time prescribed, the Commissioner will issue an order revoking Respondent’s license to act as a consumer collection agency in this state from 4740 Chevy Chase Drive, Suite 200, Chevy Chase, Maryland, issue an order that Respondent cease and desist from violating Section 36a-17(d) of the Connecticut General Statutes, and may order a civil penalty not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon Respondent.
So ordered at Hartford, Connecticut
this 7th day of April 2015. ________/s/_________
Jorge L. Perez
Banking Commissioner Designate
CERTIFICATION
I hereby certify that on this 8th day of April 2015, the foregoing Temporary Order to Cease and Desist, Order of Summary Suspension, Notice of Intent to Revoke Consumer Collection Agency License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing was sent by certified mail, return receipt requested, to Educational Funding Company, Inc., Attention: Mark Cokinos, Vice President, 4740 Chevy Chase Drive, Suite 200, Chevy Chase, Maryland 20815, certified mail no 70120470000147903805.
________/s/_________
Doniel Kitt
Prosecuting Attorney