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IN THE MATTER OF: YAPSTONE HOLDINGS, INC. YAPSTONE, INC. (collectively, "Respondents") |
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CONSENT ORDER |
WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Part V of Chapter 668, Sections 36a-595 to 36a-612, inclusive, of the Connecticut General Statutes, “Payment Instruments. Money Transmission”;
WHEREAS, YapStone is a Delaware corporation with its main office located at 2121 N. California Blvd., Suite 400, Walnut Creek, California;
WHEREAS, YapStone is a wholly-owned subsidiary of Yapstone Holdings, a Delaware corporation also located at 2121 N. California Blvd., Suite 400, Walnut Creek, California;
WHEREAS, on September 11, 2016, YapStone filed an application with the Commissioner on the Nationwide Multistate Licensing System and Registry (“NMLS”) to obtain a license to engage in the business of money transmission in Connecticut, which application is currently pending;
WHEREAS, the Commissioner, through the Consumer Credit Division of the Department of Banking, conducted an investigation pursuant to Sections 36a-17 and 36a-600 of the Connecticut General Statutes into the activities of YapStone and Yapstone Holdings to determine if they had violated, were violating or were about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner;
WHEREAS, as a result of such investigation, the Commissioner alleges that from approximately January 2014 to June 2016, Yapstone Holdings engaged in the business of money transmission in this state, transmitting a total volume of approximately $63.3 million, and from approximately May to June 2016, YapStone engaged in the business of money transmission in this state, transmitting a total volume of approximately $780,000;
WHEREAS, Yapstone Holdings represents that it was acting as an agent of a payee in connection with approximately $63 million of its money transmissions in this state, and YapStone represents that it was acting as an agent of a payee in connection with approximately $730,000 of its money transmissions in this state;
WHEREAS, on October 24, 2017, the Commissioner issued a memorandum to all Connecticut money transmission, small loan, consumer collection agency, student loan servicer and mortgage servicer licensees stating that the Department will take a no-action position concerning the absence of money transmission licensure for persons engaging in money transmission pursuant to an agent of payee relationship, in accordance with the criteria set forth in such memorandum;
WHEREAS, the Commissioner alleges that Yapstone Holdings and YapStone were not acting as agents of payees for a portion of their money transmissions in this state and, therefore, did not fall within the purview of the Department’s no-action position;
WHEREAS, the Commissioner alleges that Yapstone Holdings’ and YapStone’s engaging in the business of money transmission in this state without a license and without an agent of payee relationship violated Section 36a-597(a) of the Connecticut General Statutes;
WHEREAS, the Commissioner believes that such allegation would support the initiation of enforcement proceedings against Respondents, including, without limitation, proceedings to issue a cease and desist order pursuant to Section 36a-608(c) of the Connecticut General Statutes and Section 36a-52(a) of the Connecticut General Statutes, as amended by Public Act 17-233, to issue an order to make restitution pursuant to Sections 36a-608(c) and 36a-50(c) of the Connecticut General Statutes, and to impose a civil penalty of up to one hundred thousand dollars ($100,000) per violation pursuant to Section 36a-608(c) of the Connecticut General Statutes and Section 36a-50(a) of the Connecticut General Statutes, as amended by Public Act 17-233;
WHEREAS, initiation of such enforcement proceedings would constitute a “contested case” within the meaning of Section 4-166(4) of the Connecticut General Statutes;
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, both the Commissioner and Respondents acknowledge the possible consequences of formal administrative proceedings, and Respondents voluntarily agree to consent to the entry of the sanctions imposed below without admitting or denying the allegation set forth herein, and solely for the purpose of obviating the need for formal administrative proceedings concerning the allegation set forth herein;
WHEREAS, the Commissioner and Respondents now desire to resolve the matters set forth herein;
WHEREAS, Respondents specifically assure the Commissioner that the violation alleged herein shall not occur in the future;
WHEREAS, Respondents acknowledges that this Consent Order is a public record and is a reportable event for purposes of the regulatory disclosure questions on NMLS, as applicable;
AND WHEREAS, Respondents, through their execution of this Consent Order, voluntarily agree to waive their procedural rights, including a right to a notice and an opportunity for a hearing as it pertains to the allegation set forth herein, and voluntarily waive their right to seek judicial review or otherwise challenge or contest the validity of this Consent Order.
CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Yapstone Holdings and YapStone, through their execution of this Consent Order, consent to the Commissioner’s entry of a Consent Order imposing the following sanctions:
| 1. | Yapstone Holdings and YapStone shall cease and desist from engaging in the business of money transmission in this state without a license, in violation of Section 36a-597 of the Connecticut General Statutes; |
| 2. | No later than the date this Consent Order is executed by Yapstone Holdings and YapStone, Respondents shall remit to the Department of Banking by wire transfer, cashier’s check, certified check or money order, made payable to “Treasurer, State of Connecticut”, the sum of Ten Thousand Dollars ($10,000) as a civil penalty, of which Eight Thousand Eight Hundred Dollars ($8,800) shall be payable by Yapstone Holdings and One Thousand Two Hundred Dollars ($1,200) shall be payable by YapStone; and |
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No later than the date this Consent Order is executed by Yapstone Holdings, it shall remit to the Department of Banking by wire transfer, cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut”, the sum of Two Thousand Two Hundred Fifty Dollars ($2,250) as payment for back licensing fees. |
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 Yapstone Holdings and YapStone based upon the allegation set forth herein; provided that issuance of this Consent Order is without prejudice to the right of the Commissioner to take enforcement action against Yapstone Holding or YapStone 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 Yapstone Holdings or YapStone and reflected herein is subsequently discovered to be untrue; |
| 3. | Yapstone Holdings and YapStone shall not take any action or make or permit to be made any public statement, including in regulatory filings or otherwise, denying, directly or indirectly, any allegation referenced in this Consent Order or create the impression that this Consent Order is without factual basis; |
| 4. | Upon issuance of this Consent Order by the Commissioner, and so long as this Consent Order is promptly disclosed by Yapstone Holdings, YapStone and their control persons on NMLS, as applicable, nothing in the issuance of this Consent Order shall adversely affect the ability of Yapstone Holdings or YapStone to apply for or obtain a license or renewal license under Part V of Chapter 668, Sections 36a-595 et seq., of the Connecticut General Statutes, provided that all applicable legal requirements for such licenses are satisfied and the terms of this Consent order are followed; |
| 5. | This Consent Order shall be binding on Yapstone Holdings and YapStone and their successors and assigns; and |
| 6. | This Consent Order shall become final when issued. |
Issued at Hartford, Connecticut
this 29th day of January 2018. ______/s/__________
Jorge L. Perez
Banking Commissioner
I, David E. Durant, state on behalf of Yapstone Holdings, Inc. f/k/a Yapstone, Inc., 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 Yapstone Holdings, Inc. f/k/a Yapstone, Inc.; that Yapstone Holdings, Inc. f/k/a Yapstone, Inc., agrees freely and without threat or coercion of any kind to comply with the sanctions entered and terms and conditions ordered herein; and that Yapstone Holdings, Inc. f/k/a Yapstone, Inc., 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: David E. Durant
Title: Secretary and General Counsel
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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. |
County of: Contra Costa
On January 25, 2018, before me, Amanda Nelson, Notary Public, personally appeared David E. Durant, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
__________/s/___________
Notary Public
Date Commission Expires: July 11, 2018
I, David E. Durant, state on behalf of YapStone, Inc., 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 YapStone, Inc.; that YapStone, Inc., agrees freely and without threat or coercion of any kind to comply with the sanctions entered and terms and conditions ordered herein; and that YapStone, Inc., 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: David E. Durant
Title: Secretary and General Counsel
|
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. |
State of: California
County of: Contra Costa
On January 25, 2018, before me, Amanda Nelson, Notary Public, personally appeared David E. Durant, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
__________/s/___________
Notary Public
Date Commission Expires: July 11, 2018