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IN THE MATTER OF: UNITED GUARANTY COMMERCIAL ("Respondent") * * * * * * * * * * * * * * * * * * * * * * |
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NOTICE OF INTENT TO ISSUE 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-814, inclusive, of the Connecticut General Statutes, “Consumer Collection Agencies”, and the regulations promulgated thereunder, 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 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 . . . .
Section 36a-52(a) of the Connecticut General Statutes provides, in pertinent part, that:
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.
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 36a-804(b) of the Connecticut General Statutes provides, in pertinent part, that:
Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any of the provisions of sections 36a-800 to 36a-812, inclusive, or any regulation adopted pursuant thereto, . . . the commissioner may take action against such person . . . in accordance with sections 36a-50 and 36a-52.
II. MATTERS ASSERTED
| 1. | Respondent is a corporation organized under the laws of North Carolina with an office located at 230 North Elm Street, Greensboro, North Carolina. |
| 2. | On or about June 21, 2006, a Connecticut debtor executed and delivered to The Student Loan Corporation-CitiAssist Loan Program (“CitiAssist”), among other things, a promissory note (“Loan”). |
| 3. | On or about September 7, 2010, CitiAssist assigned all of its right, title and interest in the Loan to Respondent (“Assignment”). The Assignment was memorialized in a document entitled “Transfer of Ownership” and twice states that the Loan was “defaulted”. |
| 4. |
On or about January 15, 2015, Respondent notified the Connecticut debtor subject to the Loan that she was in default and demanded payment in full of the indebtedness due under the Loan. |
| 5. | The Connecticut debtor failed to pay the indebtedness due under the Loan, as assigned to Respondent, and as a result Respondent filed a complaint against the Connecticut debtor in Connecticut Superior Court to enforce the Loan. |
| 6. | In addition to the Connecticut debtor referenced in paragraphs 3 through 5, inclusive, above, Respondent has filed nearly identical complaints against additional Connecticut debtors concerning debt that creditors, including CitiAssist, assigned to Respondent when the debt was either delinquent or in default. |
| 7. | As a result of the foregoing, after October 1, 2013, Respondent acted as a consumer collection agency in Connecticut by engaging directly or indirectly in the business of collecting any account, bill or other indebtedness from a Connecticut debtor for Respondent’s own account, where the indebtedness was acquired from another person and where the indebtedness was either delinquent or in default at the time it was acquired. Respondent did so while having its place of business located outside of Connecticut and collecting from Connecticut debtors who reside within Connecticut for Respondent’s own account. |
| 8. |
At no time relevant hereto was Respondent licensed to act as a consumer collection agency in this state nor was Respondent exempt from such licensure.
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III. STATUTORY BASIS FOR ORDER TO CEASE
AND DESIST AND IMPOSITION OF CIVIL PENALTY
IV. NOTICE OF INTENT TO ISSUE ORDER TO CEASE AND DESIST,
NOTICE OF INTENT TO IMPOSE CIVIL PENALTY
AND NOTICE OF RIGHT TO HEARING
NOW THEREFORE, notice is hereby given to Respondent that the Commissioner intends to issue an order requiring Respondent to CEASE AND DESIST from violating Section 36a-801(a) 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 allegation 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 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 Sections 36a-52(a) and 36a-50(a) of the Connecticut General Statutes. This 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. To request a hearing, complete and return the enclosed Appearance and Request for Hearing Form 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 hearing 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 August 17, 2017, 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 or fails to appear at any such hearing, the allegation herein will be deemed admitted. Accordingly, the Commissioner will issue an order that Respondent cease and desist from violating Section 36a-801(a) of the Connecticut General Statutes, and may order a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon Respondent.
Dated at Hartford, Connecticut
this 8th day of June 2017. ________/s/_________
Jorge L. Perez
Banking Commissioner
CERTIFICATION
I hereby certify that on this 9th day of June 2017, I caused to be mailed by certified mail, return receipt requested, the foregoing Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing to United Guaranty Commercial Insurance Company of North Carolina, 327 Hillsborough Street, Raleigh, North Carolina 27603-1725, certified mail no. 70151520000018249214; and United Guaranty Commercial Insurance Company of North Carolina, 230 North Elm Street, Greensboro, North Carolina 27401-2438, certified mail no. 70151520000018249221.
________/s/_________
Amy Grillo
Secretary