The Department of Banking News Bulletin

Bulletin # 2134
Week Ending January 14, 2005

This bulletin constitutes the only official notification you will receive from this office concerning any of the following applications. Any observations you may have are solicited. Any comments should be in writing to John P. Burke, Commissioner of Banking, at the Connecticut Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800 or via E-mail to john.burke@ct.gov. Written comments will be considered only if they are received within ten days from the date of this bulletin.

BRANCH ACTIVITY
State Bank Activity

Section 36a-145 of the Connecticut General Statutes requires that each application for a branch, or for a limited branch at which loans will be made, be accompanied by a plan detailing how adequate services to meet the banking needs of all community residents will be provided. Plans are submitted when such applications are filed and are available for public inspection and comment at this Department for a period of 30 days. Questions concerning branch activity should be directed to the Financial Institutions Division, (860) 240-8180.

On January 13, 2005, pursuant to Section 36a-462b(d) of the Connecticut General Statutes, Corporate America Family Credit Union, Inc., Elgin, Illinois, filed a request for approval to expand its field of membership in the State of Connecticut to include employees of Dixwell/Newhallville Community Mental Health Services, New Haven.

CONSUMER CREDIT DIVISION ACTIVITY
Notice of Intent to Issue Order to Cease and Desist, Notice of Intent
to Refuse to Renew First Mortgage Lender Broker 
and Secondary Mortgage Lender/Broker Licenses
and Notice of Intent to Impose Civil Penalty Issued

On January 10, 2005, the Commissioner issued a Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Refuse to Renew First Mortgage Lender/Broker and Secondary Mortgage Lender/Broker Licenses, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing with respect to Ameriquest Mortgage Company, a licensed first mortgage lender/broker and secondary mortgage lender/broker having its principal place of business at 1100 Town & Country Road, Suite 450, Orange, California ("Ameriquest"), and Town & Country Credit Corporation, a licensed first mortgage lender/broker having its principal place of business at 2010 Main Street, Suite 800, Irvine, California, and a wholly-owned subsidiary of Ameriquest ("Town & Country"). The action alleged that on January 22, 2004, respondents entered into a Settlement Agreement with the Commissioner imposing sanctions, including a civil penalty, for violations of Section 36a-498a of the Connecticut General Statutes that occurred prior to August 2003. The action further alleged that during the period from August 1, 2003 to August 1, 2004: (a) Ameriquest violated Section 36a-498a of the Connecticut General Statutes, as amended by Public Act 04-69, by imposing prepaid finance charges in connection with the refinancing of at least 53 first mortgage loans that when aggregated with the prepaid finance charges imposed on previous financings by Ameriquest or one of its affiliates within two years of the current refinancing exceeded the greater of five percent of the principal amount of the initial loan or $2,000; and (b) Town & Country violated Section 36a 498a, as amended, by imposing prepaid finance charges in connection with the refinancing of at least two first mortgage loans that when aggregated with the prepaid finance charges imposed on previous financings by Town & Country or one of its affiliates within two years of the current refinancing exceeded the greater of five percent of the principal amount of the initial loan or $2,000.

The respondents were afforded an opportunity to request a hearing on the Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Refuse to Renew First Mortgage Lender/Broker and Secondary Mortgage Lender/Broker Licenses and Notice of Intent to Impose Civil Penalty.

Denial of Secondary Mortgage Lender/Broker Licenses

On January 12, 2005, the Commissioner denied the applications for Secondary Mortgage Lender/Broker Licenses filed by Ameriquest Mortgage Company ("Applicant") for the following locations: 5847 San Felipe Plaza, 14th Floor, Houston Texas; 281 Tressor Boulevard, Suite 503, Stamford, Connecticut; and 984 Southford Road, Middlebury, Connecticut ("Applications"). The action was based upon the fact that the Applicant, in violation of Section 36a-498a of the Connecticut General Statutes, as amended by Public Act 04-69, imposed prepaid finance charges in connection with the refinancing of at least 53 first mortgage loans that the Applicant or an affiliate of the Applicant had previously made to Connecticut consumers, which prepaid finance charges, when aggregated with the prepaid finance charges imposed by the Applicant or its affiliate for such previous financings, exceeded the greater of five percent of the principal amount of the initial loan or $2,000. Moreover, on January 22, 2004, the Applicant entered into a Settlement Agreement with this department imposing sanctions, including a civil penalty, for repeated violations of Section 36a-498a of the Connecticut General Statutes, for loans that occurred prior to August 1, 2003. The Commissioner was unable to find that the financial responsibility, character, reputation, integrity and general fitness of the Applicant and of its officers, directors and principal employees was such as to warrant belief that the Applicant's business will be operated soundly and efficiently, in the public interest and consistent with the purposes of Sections 36a-510 to 36a-524, inclusive, of the Connecticut General Statutes.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
 Arizona Firm Ordered to Cease and Desist From Sale
of Unregistered Business Opportunities;
Notice of Intent to Fine Issued

On January 10, 2005, the Commissioner issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing under the Connecticut Business Opportunity Investment Act against Taxback, L.L.C. of 10429 S 51st Street, Suite 201, Phoenix, Arizona. The Order to Cease and Desist and Notice of Intent to Fine alleged that Taxback, L.L.C. violated Section 36b-67(1) of the Act from April 2004 forward by offering and selling unregistered "Tax Review and Recovery" business opportunities to one or more Connecticut persons. The respondent was afforded an opportunity to request a hearing on the Order to Cease and Desist. A hearing on the Notice of Intent to Fine has been scheduled for March 3, 2005.

Notice of Intent to Issue Stop Order Revoking Effectiveness
of a Business Opportunity Registration, Notice of Intent to Fine Issued

On January 10, 2005, the Commissioner issued a Notice of Intent to Issue a Stop Order revoking the business opportunity registration of Taxback Opportunities, L.L.C. On the same day, the Commissioner issued a Notice of Intent to Fine against the respondent. The respondent maintains an address at 10429 S 51st Street, Suite 201, Phoenix, Arizona. The action alleged that the respondent violated Section 36b-65(f) of the Connecticut Business Opportunity Investment Act by failing to notify the Commissioner of material changes in information contained in the respondent's registration application and in failing to amend its disclosure document. Specifically, the changes concerned an October 12, 2004 Consent Order entered by the Securities Division of the State of Washington Department of Financial Institutions against Taxback, LLC, Shawn D. Hull and Lindsay J. Hull based upon the alleged sale of unregistered business opportunities in Washington state. The Commissioner's action also alleged that, in violating Section 36b-65(f) of the Act, the respondent failed to comply with the terms of the department's registration order which obligated the respondent to immediately notify the Commissioner of any material change in the information contained in the registration application and to make appropriate amendment of the disclosure document. The respondent was afforded an opportunity to request a hearing on the Notice of Intent to Issue Stop Order Revoking Effectiveness of a Business Opportunity Registration. A hearing on the Notice of Intent to Fine has been scheduled for March 3, 2005.