| * * * * * * * * * * * * * * * * * * * * * * * IN THE MATTER OF: FIDELITY ONE CREDIT, CORP | * * * * * * * * * | CONSENT ORDER |
WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Part III of Chapter 668, Sections 36a-555 to 36a-573, inclusive, of the Connecticut General Statutes, “Small Loan Lenders”, and the regulations promulgated thereunder, Sections 36a-570-1 to 36a-570-17, inclusive, of the Regulations of Connecticut State Agencies (“Regulations”);
WHEREAS, Fidelity One is a Utah corporation that has not been licensed to engage in the business of making loans in the amount of $15,000 or less and charge, contract for or receive a greater rate of interest, charge or consideration than 12% per annum therefor, and is not otherwise exempt from licensure under Part III of Chapter 668, Sections 36a-555, 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 Section 36a-17 of the Connecticut General Statutes, as amended by Public Acts 14-7 and 14-89, into the activities of Fidelity One to determine if it had violated, was violating or was about to violate the provisions of the Connecticut General Statutes and Regulations within the jurisdiction of the Commissioner;
WHEREAS, as a result of such investigation, the Commissioner alleges that Fidelity One, during the period of December 15, 2008 through July 1, 2013, engaged in the business of making loans in Connecticut in the amount of $15,000 or less and charged, contracted for or received a greater rate of interest than 12% per annum therefor (“small loans”), in violation of Section 36a-555 of the Connecticut General Statutes;
WHEREAS, as a result of such investigation, the Commissioner also alleges that in connection with the small loans, Fidelity One, during the period of December 15, 2008 through July 1, 2013, received interest in excess of 12% on such loans, in violation of Section 36a-573(a) of the Connecticut General Statutes;
WHEREAS, the Commissioner believes that such allegations would support initiation of enforcement proceedings against Fidelity One, including proceedings to issue a cease and desist order against Fidelity One pursuant to Sections 36a-573(c) and 36a-52(a) of the Connecticut General Statutes, and impose a civil penalty of up to one hundred thousand dollars ($100,000) per violation upon Fidelity One pursuant to Sections 36a-573(c) and 36a-50(a) of the Connecticut General Statutes;
WHEREAS, initiation of such enforcement proceedings would constitute a “contested case” within the meaning of Section 4-166(4) of the Connecticut General Statutes, as amended by Public Act 14-187;
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 agreed settlement, unless precluded by law;
WHEREAS, both the Commissioner and Fidelity One acknowledge the possible consequences of formal administrative proceedings;
WHEREAS, Fidelity One voluntarily agrees to enter into this Consent Order without admitting or denying the allegations set forth herein, and solely for the purpose of obviating the need for formal administrative proceedings concerning the allegations set forth herein;
WHEREAS, Fidelity One herein represents to the Commissioner that it has not acted within this state as a small loan lender since July 17, 2013, however, it is acknowledged by both parties that Fidelity One referred credit applications it received after July 17, 2013, to other lenders who may or may not have subsequently issued loans to Connecticut residents;
WHEREAS, by email dated June 6, 2014, Fidelity One provided the Commissioner with a list of Connecticut residents and herein represents that the Connecticut residents provided in such list represents all of the Connecticut residents who had obtained small loans from Fidelity One and the total interest such Connecticut residents paid to Fidelity One;
WHEREAS, Fidelity One herein represents to the Commissioner that it currently is not aware of any additional Connecticut resident who had obtained a small loan from Fidelity One from December 15, 2008 through the date that Fidelity One executes this Consent Order;
WHEREAS, in order to maximize the amount of refunds to Connecticut residents, the Commissioner has determined that no civil penalty will be imposed upon Fidelity One;
WHEREAS, Fidelity One specifically assures the Commissioner that the violations described herein shall not occur in the future;
AND WHEREAS, Fidelity One, through its execution of this Consent Order, voluntarily agrees to waive its procedural rights, including a right to notice and an opportunity for hearing as it pertains to the allegations 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 SANCTIONS
WHEREAS, Fidelity One, through its execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing the following sanctions:
| 1. | Fidelity One shall immediately cease and desist from engaging in the business of making small loans in Connecticut in the amount of $15,000 or less and charging, contracting for or receiving a greater rate of interest, charge or consideration than 12% per annum therefor, in violation of Section 36a-555 of the Connecticut General Statutes, and shall immediately cease and desist from receiving interest in excess of 12% on all outstanding loans, in violation of Section 36a-573(a) of the Connecticut General Statutes; |
| 2. | No later than thirty (30) days from the date Fidelity One executes this Consent Order, Fidelity One shall mail by registered or certified mail, with proof of mailing, a check to each Connecticut resident listed in Exhibit A attached hereto in the amount identified which represents interest paid by such Connecticut residents in excess of 12% per annum. Fidelity One shall provide evidence of such repayments to Carmine Costa, Director, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or carmine.costa@ct.gov; |
| 3. | Fidelity One shall promptly waive any interest added to a Connecticut resident’s loan that could not be legally added to such loan, which loan has not been paid by or collected from such Connecticut resident. Fidelity One shall provide proof of such adjustments to Carmine Costa, Director, Consumer Credit Division, in an excel spreadsheet or similar format; and |
| 4. | Fidelity One shall promptly withdraw information sent to credit reporting agencies regarding all Connecticut consumer debtors during the period in which it was not licensed and provide copies of each transmittal of such withdrawals to Carmine Costa, Director, Consumer Credit Division. |
CONSENT ORDER
NOW THEREFORE, the Commissioner enters the following:
| 1. | The Sanctions set forth above be and are hereby entered; |
| 2. | 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 Fidelity One based upon the allegations contained herein; provided that issuance of this Consent Order is without prejudice to the right of the Commissioner to take enforcement action against Fidelity One 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 Fidelity One and reflected herein is subsequently discovered to be untrue; |
| 3. | Nothing in the issuance of this Consent Order shall adversely affect the ability of Fidelity One to apply for or obtain a license or renewal license under Part II of Chapter 668, Sections 36a-555 et seq., of the Connecticut General Statutes, provided Fidelity One meets the statutory requirements for such license or renewal license; and |
| 4. | This Consent Order shall become final when issued. |
Issued at Hartford, Connecticut
this 15th day of January 2015. _______/s/_________
Howard F. Pitkin
Banking Commissioner
I, Alan Lustigson, state on behalf of Fidelity One Credit, Corp, 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 Fidelity One Credit, Corp; that Fidelity One Credit, Corp agrees freely and without threat or coercion of any kind to comply with the sanctions entered and terms and conditions ordered herein; and that Fidelity One Credit, Corp 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: Alan Lustigson
Title: Chief Operating Officer
Fidelity One Credit, Corp
State of: California
County of: San Diego
On this the 7th day of January 2015, before me, Bernadette Canlas Curtis, the undersigned officer, personally appeared Alan Lustingson who acknowledged himself to be the Chief Operating Officer of Fidelity One Credit, Corp, a corporation, and that he as such Chief Operating Officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as Chief Operating Officer.
In witness whereof I hereunto set my hand.
_________/s/_________
Notary Public
Date Commission Expires: March 25, 2016