The Department of Banking News Bulletin

Bulletin # 2163
Week Ending August 5, 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, Banking Commissioner, 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.

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.

CREDIT UNION ACTIVITY

On August 3, 2005, pursuant to Section 36a-458a of the Connecticut General Statutes, Connex Credit Union, Inc., North Haven, Connecticut, received approval to offer member business loans.

CONSUMER CREDIT DIVISION ACTIVITY
Settlement Agreement

On July 27, 2005, the Commissioner entered into a Settlement Agreement with Oasis Partners LLC d/b/a American Cash Exchange ("ACE"). The Settlement Agreement was based on an investigation by the Consumer Credit Division. As a result of such investigation, the Commissioner alleged that ACE operated a check cashing general facility in Connecticut without a license. Pursuant to the Settlement Agreement, ACE agreed not to engage in the business of cashing checks for consideration without obtaining a license to operate a check cashing general facility or limited facility for each location where it conducts business and to remit to the Department $9,000 as a civil penalty.

Order of Summary Suspension, Notice of Intent to Revoke
First Mortgage Correspondent Lender/Broker and
Secondary Mortgage Correspondent Lender/Broker Licenses,
Notice of Intent to Issue Order to Cease and Desist,
Notice of Intent to Impose Civil Penalty and Notice Of Right to Hearing

On July 29, 2005, the Commissioner issued an Order of Summary Suspension, Notice of Intent to Revoke First Mortgage Correspondent Lender/Broker and Secondary Mortgage Correspondent Lender/Broker Licenses, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice Of Right to Hearing (collectively "Notice") with respect to Matrix Investment Corporation ("Matrix"), a licensed first mortgage correspondent lender/broker and secondary mortgage correspondent lender/broker having its principal place of business at 618 Poquonnock Road, Groton, Connecticut. The action alleged that: Matrix failed to timely disburse the loan proceeds in at least 10 refinancings of existing loans which constitutes a failure to perform written agreements with a borrower pursuant to Section 36a-494(a)(1)(D) of the Connecticut General Statutes; Matrix failed to timely disburse the loan proceeds in at least 3 refinanced loans in violation of Section 36a-758 of the Connecticut General Statutes; Matrix denied unrestricted access to all areas of its principal place of business or wherever records were located which constitutes a denial of access and failure to cooperate in violation of Section 36a-17(d) of the Connecticut General Statutes; Matrix failed to disclose on its renewal applications that there exist at least 3 civil actions involving the consumer credit business in which it is the defendant, which constitutes material misrepresentations pursuant to Section 36a-489 of the Connecticut General Statutes and failure to promptly notify the Commissioner, pursuant to Sections 36a-490(b) and 36a-515(b) of the Connecticut General Statutes; and Matrix failed to disclose on renewal applications the existence of at least one action brought by a regulatory agency against it, which constitutes material misstatements pursuant to Section 36a-489 of the Connecticut General Statutes.

In addition, the Commissioner found that public safety and welfare imperatively required emergency action with respect to Matrix's licenses and ordered, pursuant to Section 4-182(c) of the Connecticut General Statutes, that the licenses of Matrix to engage in the business of making first and secondary mortgage loans and to act as a first and secondary mortgage broker in Connecticut be summarily suspended pending proceedings for revocation; the Commissioner gave notice of his intention to issue an order requiring Matrix to cease and desist from violating Sections 36a-758, 36a-490(b), 36a-515(b) and 36a 17(d) of the Connecticut General Statutes; to revoke Matrix's first mortgage correspondent lender/broker and secondary mortgage correspondent lender/broker licenses; and to impose a maximum civil penalty of $700,000 upon Matrix subject to Matrix's right to a hearing on the allegations set forth in the Notice. Matrix was given the opportunity to request a hearing and if a hearing is requested, it will be held on August 24, 2005.