The Department of Banking News Bulletin 

Bulletin # 2982 - Week Ending April 16, 2021

 

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.

 

CONSUMER CREDIT DIVISION ACTIVITY
Findings of Fact, Conclusions of Law and an Order Issued

On April 16, 2021, following a hearing that spanned several months, the Banking Commissioner issued Findings of Fact, Conclusions of Law and an Order in the matter of 1st Alliance Lending, LLC, a mortgage lender located at 111 Founders Plaza, Suite 1300, East Hartford, Connecticut.

The hearing addressed issues raised in a July 15, 2019 Amended and Restated Notice of Intent to Revoke Mortgage Lender License, Amended and Restated Notice of Intent to Issue Order to Cease and Desist and Amended and Restated Notice of Intent to Impose Civil Penalty (the “Amended Notice”) issued against the firm. The Amended Notice had superseded a December 5, 2018 Notice of Intent to Revoke Mortgage Lender License, Notice of Intent to Issue Order to Cease and Desist and Notice of Intent to Fine.

In a parallel proceeding, the Banking Commissioner had revoked the firm’s mortgage lender license on October 4, 2019 based on the firm's failure to obtain a statutorily required surety bond. The Commissioner’s decision in that case was upheld on appeal (1st Alliance Lending LLC v. State of Connecticut Department of Banking et al., No. HHB-CV19-6056459-S; 11/9/2020). 1st Alliance Lending, LLC has appealed the lower court's decision and the appeal is currently pending before the Connecticut Supreme Court (1st Alliance Lending LLC v. State of Connecticut Department of Banking et al., Docket No. SC 20560).

The April 16, 2021 decision found that 1st Alliance Lending, LLC 1) violated Sections 36a-486(b)(1) and 36a-498e(a)(8) of the Connecticut General Statutes by engaging the services of unlicensed mortgage loan originators; 2) violated the Fair Credit Reporting Act and therefore Sections 36a-498e(a)(7) and 36a-498e(a)(8) of the Connecticut General Statutes by failing to send adverse action notices to prospective borrowers; 3) violated Sections 36a-678(a) and 36a-498e(a)(7) of the Connecticut General Statutes by not providing consumers with Loan Estimate disclosures absent the verification of information and/or an executed real estate contract; 4) violated Section 36a-498e(a)(6) of the Connecticut by aiding and abetting the unlicensed activities of call center personnel; 5) violated Section 36a-17(e) of the Connecticut General Statutes by failing to produce records to the agency even after the agency subpoenaed the records; 6) violated Section 36a-498e(b) of the Connecticut General Statutes by failing to establish, enforce and maintain policies and procedures reasonably designed to achieve compliance with regulatory requirements; 7) violated Section 36a-53b(2) of the Connecticut General Statutes by omitting to state to prospective borrowers the material fact that call center employees were not licensed mortgage loan originators; and 8) violated Section 36a-53b(3) of the Connecticut General Statutes by doing nothing to dispel the notion that its call center representatives were licensed.   

The April 16, 2021 action fined the firm $750,000 and directed that it cease and desist from regulatory violations. The action also revoked the firm's mortgage lender license in Connecticut in the event the Connecticut Supreme Court ultimately overturned the department's October 4, 2019 revocation.
 
 
      Dated:  Tuesday, April 20, 2021

      Jorge L. Perez
      Banking Commissioner