Bulletin # 3152 - Week Ending July 19, 2024

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.

BANK ACTIVITY

Interstate Loan Production Office

On July 19, 2024, the Commissioner approved an application by 1st Financial Bank, USA, a South Dakota state-chartered bank, to establish a loan production office pursuant to Connecticut General Statutes Section 36a-412(d). The location of the office will be at 464 Heritage Road, Unit A-1, Southbury, CT 06488. The proposed opening of the office is scheduled for July of 2024.

Merger

On July 11, 2024, Ion Bank, a Connecticut bank and wholly-owned subsidiary of Ion Financial, MHC, and NVE Bank, a New Jersey bank and indirect subsidiary of NVE Bancorp, MHC, filed an application pursuant to sections 36a-125 and 36a-412(b) of the Connecticut General Statutes seeking approval for the merger of NVE Bank with and into Ion Bank. The proposed target date for the merger is the fourth quarter of 2024. 

CONSUMER CREDIT DIVISION ACTIVITY 

Consent Order

On July 10, 2024, the Commissioner entered into a Consent Order with Kalbas, Inc. d/b/a Unbank (NMLS # 1931557) (“Kalbas”), Seaville, New Jersey. The Consent Order was based on an investigation by the Consumer Credit Division. As a result of such investigation, the Commissioner alleged that Kalbas engaged in the business of money transmission in this state without the required license since at least 2019, in violation of Section 36a-597(a) of the Connecticut General Statutes. As part of the Consent Order, Kalbas paid $50,000 as a civil penalty and $6,375 as back licensing fees. Also, as part of the Consent Order, Kalbas shall refund monies in the amount of $17,860 to an identified Connecticut consumer.

Consent Order

On July 8, 2024, the Commissioner entered into a Consent Order with Probate Advance, LLC d/b/a InheritFast (“Probate Advance”), White Plains, Connecticut. The Consent Order was based on an investigation by the Consumer Credit Division. As a result of such investigation, the Commissioner alleged that from at least December 20, 2018 to August 24, 2023, Probate Advance: (1) made at least 31 small loans to Connecticut borrowers without the required small loan license, in violation of Section 36a-556(a)(1) of the Connecticut General Statutes in effect at such time; (2) offered a small loan to a prospective Connecticut borrower or solicited a Connecticut resident for a small loan without the required license, in violation of Section 36a-556(a)(2) of the Connecticut General Statutes in effect at such time; (3) received payments in connection with small loans made to Connecticut borrowers without the required license, in violation of Section 36a-556(a)(4) of the Connecticut General Statutes in effect at such time; and (4) advertised small loans in this state without the required license, in violation of Section 36a-556(a)(6) of the Connecticut General Statutes in effect at such time. As part of the Consent Order, Probate Advance paid $10,000 as a civil penalty and $2,400 as back licensing fees. Also, as part of the Consent Order, Probate Advance shall refund fees in the amount of $183,906.49 to identified Connecticut consumers.

Order to Cease and Desist and Order Imposing Civil Penalty

On July 5, 2024, the Commissioner issued an Order to Cease and Desist and Order Imposing Civil Penalty (“Order”) in the Matter of: Aquarion Asset Management, LLC, NMLS # 2558629 (“Respondent”), Sheridan, Wyoming and Charlotte, North Carolina. The basis of the Order was that: (1) Respondent’s acting within this state as a consumer collection agency without a consumer collection agency license constitutes violations of Section 36a-801(a) of the Connecticut General Statutes; (2) Respondent’s using false, deceptive or misleading representations in connection with the collection of a debt, including falsely representing that the debt was valid, and that a lawsuit would be filed against the consumer or that consumer’s property would be attached by Respondent should the debt remain unpaid, constitutes violations of subdivisions (4), (5) and (10) of Section 36a-809-11 of the Regulations of Connecticut State Agencies; (3) Respondent’s using false, deceptive or misleading representation or means in connection with the collection of any debt, including falsely representing that the alleged debt was valid and that a lawsuit would be filed against the consumer or that consumer’s property would be attached by Respondent should the debt remain unpaid, constitutes falsely representing the character, amount or legal status of a debt, in violation of 12 CFR Section 1006.18(b)(2)(i) of Regulation F, representing that nonpayment of any debt will result in the seizure, garnishment, attachment or sale of any property of any person when such action cannot legally be taken or is not intended to be taken, in violation of 12 CFR Section 1006.18(b)(3) of Regulation F, and threatening to take action that cannot legally be taken or that is not intended to be taken, in violation of 12 CFR Section 1006.18(c)(1) of Regulation F, and using any false representation or deceptive means to collect or attempt to collect any debt, in violation of 12 CFR Section 1006.18(d) of Regulation F, all violations of which constitute violations of Section 36a-812 of the Connecticut General Statutes; and (4) Respondent’s failure to provide information requested during the investigation constitutes a violation of Section 36a-17(e) of the Connecticut General Statutes. Respondent failed to request a hearing within the prescribed time period and the allegations were deemed admitted. As a result, the Commissioner ordered Respondent to cease and desist from violating Sections 36a-17(e), 36a-801(a) and 36a-812 of the Connecticut General Statutes, subdivisions (4), (5) and (10) of Section 36a-809-11 of the Regulations of Connecticut State Agencies, and 12 CFR Sections 1006.18(b)(2)(i), 1006.18(b)(3), 1006.18(c)(1) and 1006.18(d) of Regulation F, and imposed a civil penalty in the amount of $300,000 upon Respondent. In addition, the Order to Make Restitution issued against Respondent on May 28, 2024, remains in effect and became permanent on June 18, 2024.

Order to Cease and Desist and Order Imposing Civil Penalty

On July 9, 2024, the Commissioner issued an Order to Cease and Desist and Order Imposing Civil Penalty (“Order”) in the Matter of: MIDLAND GROUP AND ASSOCIATES LLC (“Respondent”), Los Angeles, California. The basis of the Order was that: (1) Respondent’s acting within this state as a consumer collection agency without a consumer collection agency license constitutes violations of Section 36a-801(a) of the Connecticut General Statutes; (2) Respondent’s using false, deceptive or misleading representations in connection with the collection of a debt, including falsely representing that the debt was valid and that a lawsuit would be filed against the consumer by Respondent should the debt remain unpaid, constitutes violations of subdivisions (5) and (10) of Section 36a-809-11 of the Regulations of Connecticut State Agencies; (3) Respondent’s using false, deceptive or misleading representation or means in connection with the collection of any debt, including falsely representing that the alleged debt was valid and that a lawsuit would be filed against the consumer by Respondent should the debt remain unpaid, constitutes falsely representing the character, amount or legal status of a debt, in violation of 12 CFR Section 1006.18(b)(2)(i) of Regulation F, threatening to take action that cannot legally be taken or that is not intended to be taken, in violation of 12 CFR Section 1006.18(c)(1) of Regulation F, and using any false representation or deceptive means to collect or attempt to collect any debt, in violation of 12 CFR Section 1006.18(d) of Regulation F, violations of which constitute violations of Section 36a 812 of the Connecticut General Statutes; and (4) Respondent’s failure to provide information requested during the investigation constitutes a violation of Section 36a-17(e) of the Connecticut General Statutes. Respondent failed to request a hearing within the prescribed time period and the allegations were deemed admitted. As a result, the Commissioner ordered Respondent to cease and desist from violating Sections 36a-17(e), 36a-801(a) and 36a-812 of the Connecticut General Statutes, subdivisions (5) and (10) of Section 36a-809-11 of the Regulations of Connecticut State Agencies, and 12 CFR Sections 1006.18(b)(2)(i), 1006.18(c)(1) and 1006.18(d) of Regulation F, and imposed a civil penalty in the amount of $300,000 upon Respondent. In addition, the Order to Make Restitution issued against Respondent on May 13, 2024, remains in effect and became permanent on June 5, 2024.

      Dated:  Tuesday, July 23, 2024

      Jorge L. Perez
      Banking Commissioner