The Department of Banking News Bulletin
Bulletin # 2836 - Week Ending June 29, 2018
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 Jorge L. Perez, Banking Commissioner, Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800. Written comments will be considered only if they are received within ten business days from the date of this bulletin.
STATE BANK ACTIVITY
Branch Activity
Section 361-145 of the Connecticut General Statutes requires certain applications for a branch, of for a limited branch at which loans will be made, address how the establishment of the branch will be consistent with safe and sound banking practices and promote the public convenience and advantage. 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.
(Correction from Bulletin 2835 - revised address)
DATE: June 29, 2018
BANK: United Bank, Hartford
LOCATION: 124B Boston Post Road, Waterford, CT 06385
ACTIVITY-BRANCH TYPE: Filed to Establish Full Service Branch
CREDIT UNION ACTIVITY
Branch Activity
DATE: June 28, 2018
CREDIT UNION: Dutch Point Credit Union, Wethersfield
LOCATION: FROM: 8 West Main Street, Niantic, CT 06357
TO: 241 Main Street, Niantic, CT 06357
ACTIVITY-BRANCH TYPE: Filed to Consolidate Effective 10/9/2018
CONSUMER CREDIT DIVISION ACTIVITY
Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent
to Issue Order to Cease and Desist and Notice of Intent to Impose Civil Penalty
On June 22, 2018, the Commissioner issued a Temporary Order to Cease and Desist, Order to Make Restitution (“Order to Make Restitution”), 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”) in the Matter of: BlueChip Financial d/b/a Spotloan (“Respondent”), Belcourt, North Dakota. The Notice was the result of an investigation by the Consumer Credit Division. The Commissioner alleges that the Respondent: (1) engaged in the business of making loans without obtaining the required license, in violation of Section 36a-555(1) of the Connecticut General Statutes in effect prior to July 1, 2016; (2) made, offered or assisted Connecticut borrowers to obtain a small loan in Connecticut without the required license, in violation of Section 36a-555(2) of the Connecticut General Statutes in effect prior to July 1, 2016; (3) charged, contracted for and received interest at a rate greater than 12% on at least one small loan to a Connecticut resident in an amount less than $15,000 without the required license, in violation of Section 36a-573(a) of the Connecticut General Statutes in effect prior to July 1, 2016; (4) made at least one small loan to a Connecticut borrower without obtaining the required license, in violation of Section 36a-556(a)(1) of the Connecticut General Statutes; (5) offered or solicited small loans in Connecticut without the required licensed, in violation of Section 36a-556(a)(2) of the Connecticut General Statutes; (6) advertised a small loan in Connecticut without the required license, in violation of Section 36a-556(a)(6) of the Connecticut General Statutes in effect on or after July 1, 2016; and (7) represented to the Department that it had ceased making loans in Connecticut but continued to offer and make small loans in Connecticut, in violation of Section 36a-53a of the Connecticut General Statutes. As part of the Order to Make Restitution, Respondent was ordered to repay any interest received by Respondent from identified Connecticut residents, and repay any interest received by Respondent from a Connecticut resident in connection with small loans made on or after November 1, 2013. The Commissioner also found that the public welfare required the issuance of a Temporary Order to Cease and Desist against Respondent. Respondent was afforded an opportunity to request a hearing with regard to the allegations set forth in the Notice.
Order of Summary Suspension, Temporary Order to Cease and Desist,
Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist,
Notice of Intent to Revoke Consumer Collection Agency License
and Notice of Intent to Impose Civil Penalty
On June 29, 2018, the Commissioner issued an Order of Summary Suspension, Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Revoke Consumer Collection Agency License, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing in the Matter of: Debt Management, Inc. d/b/a Capital Recovery Systems, Mansfield, Massachusetts (NMLS # 931163), (“Respondent”) (collectively, “Notice”). The Notice was the result of an examination and investigation by the Consumer Credit Division.
The Commissioner alleged that Respondent: (1) charged Connecticut consumer debtors convenience fees not authorized by the debtor’s contract, in violation of Section 36a-805(a)(12) of the Connecticut General Statutes (“CGS”) and Section 36a-809-12(1) of the Regulations of Connecticut State Agencies (“Regulations”); (2) engaged in conduct that created a false impression to Connecticut consumers debtors that it was a law firm and intended to take legal action, in violation of Section 36a-806(a) of the CGS and subdivisions (3), (5), (10) and (13) of Section 36a-809-11 of the Regulations; (3) used a name that was neither Respondent’s legal name nor authorized by its license, in violation Section 36a-801(i) of the CGS and Section 36a-809-11(14) of the Regulations; (4) engaged in conduct which the natural consequence was to harass Connecticut consumer debtors, in violation of Section 36a-809-10 of the Regulations; (5) commingled monies in its trust account for the benefit of creditors, in violation of Section 36a-811(b) of the CGS; (6) acted as a consumer collection agency from an unlicensed location, in violation of subsections (a) and (i) of Section 36a-801 of the CGS; (7) communicated with a third party regarding a consumer’s debt without such debtor’s authorization, in violation of Section 36a-809-9(d)(2) of the Regulations; (8) failed to establish, enforce and maintain policies and procedures for supervising employees and office operations reasonably designed to achieve compliance with consumer collection laws, in violation of Section 36a-805(16) of the CGS; and (9) failed to disclose clearly in communications with consumer debtors that it was attempting to collect a debt and that any information obtained would be used for that purpose, in violation of Section 36a-809-11(11) of the Regulations. In addition, the Commissioner alleged that Respondent’s conduct, in its entirety, renders him unable to find that the financial responsibility, character, reputation, integrity and general fitness are such to warrant belief that the business will be operated soundly and efficiently, in the public interest and consistent with the purposes of the consumer collection agency statutes, and constitutes grounds to revoke Respondent’s consumer collection agency license in Connecticut.
The Commissioner found that the public safety and welfare imperatively required emergency action to prevent further irreparable and immediate harm to consumer debtors as a result of the pervasive and systemic harassing, abusive and false, unfair, deceptive or misleading collection practices employed by collectors and fostered by management and summarily suspended Respondent’s consumer collection agency license in Connecticut and issued a temporary order to cease and desist. As part of the Order to Make Restitution, Respondent was ordered to refund all charges and fees paid by Connecticut consumer debtors that could not be legally added and to waive any charges and fees added to Connecticut consumer debtor accounts that could not be legally added. Respondent was afforded an opportunity to request a hearing with regard to the allegations set forth in the Notice.
Dated: Tuesday, July 3, 2018
Jorge L. Perez
Banking Commissioner