The Department of Banking News Bulletin
Bulletin # 2442
Week Ending December 10, 2010
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 Howard F. Pitkin, Banking Commissioner, at the Connecticut Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800 or via E-mail. Written comments will be considered only if they are received within ten days from the date of this bulletin.
STATE BANK ACTIVITY
Section 36a-145 of the 2010 Supplement to the General Statutes requires certain applications 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.
Newtown Savings Bank
* 2 Riverside Road
Sandy Hook, CT 06482
*Erroneously filed as 4 Riverside Road, Sandy Hook, CT 06482,
notice of which was published in Bulletin #2433 on October 13, 2010.
Interest Rate to be Paid on Claims for Property, Funds or
Money Delivered to the State Treasurer Pursuant to Section 3-57a(a)(1) or (2),
Mortgage Escrow Accounts, Public Service Company,
Certified Telecommunications Provider
and Electric Supplier Customer Security Deposits
and Tenant Security Deposits
In accordance with Sections 3-70a(e), 16-262j(d), 47a-21(i)(2) and 49-2a(c) of the Connecticut General Statutes, the deposit index for calendar year 2010 is 0.24%. However, Sections 3-70a(e), 16-262j(c), 47a-21(i)(1) and 49-2a(a) provide that in no event shall the rate be less than 1.5%. Therefore, the interest rate to be paid on claims for property, funds or money delivered to the State Treasurer pursuant to Section 3-57a(a)(1) or (2), and mortgage escrow accounts, public service company, certified telecommunications provider and electric supplier customer security deposits and tenant security deposits is 1.5% for the period commencing January 1, 2011 and ending December 31, 2011.
Application for a Business and Industrial Development Corporation License
On December 10, 2010, an application was filed pursuant to Section 36a-628 of the Connecticut General Statutes by Connecticut Business Banc, Inc. for a license to transact business as a business and industrial development corporation to be headquartered in Darien, Connecticut.
New Bank Activity
On December 10, 2010, pursuant to Section 36a-70(i) of the 2010 Supplement to the General Statutes of Connecticut, Start Community Bank (In Organization) received approval for an extension of the period of its Temporary Certificate of Authority from December 19, 2010 to March 21, 2011.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
On December 9, 2010, the Commissioner entered a Consent Order with respect to Digital In-Motion, LLC, a Connecticut limited liability company located at 25 Third Street, Stamford, Connecticut, and Paul H. Couture, its managing member. Digital In-Motion, LLC and Paul H. Couture had been the subject of an October 22, 2010 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing alleging that, from at least June 2007 forward, the respondents offered and sold unregistered digital signage system business opportunities to purchaser-investors in violation of the Connecticut Business Opportunity Investment Act. In resolution of the matter, the December 9, 2010 Consent Order rendered the October 22, 2010 Order to Cease and Desist permanent effective December 9, 2010. Acknowledging that the respondents had submitted evidence demonstrating their inability to pay the fine that otherwise would have been imposed, the Consent Order fined the respondents $250. In addition, the Consent Order barred the respondents from offering or selling business opportunities in Connecticut for five years.
Order to Cease and Desist, Notice of Intent to Fine and Notice of Intent
to Revoke Registration as Broker-dealer Issued
On December 8, 2010, the Commissioner issued an Order to Cease and Desist, Notice of Intent to Revoke Registration as Broker-dealer, Notice of Intent to Fine and Notice of Right to Hearing against Westrock Advisors, Inc. of 230 Park Avenue, New York, New York. The firm is registered as a broker-dealer under the Connecticut Uniform Securities Act. The action alleged that Westrock Advisors, Inc. violated a September 4, 2008 Consent Order to which it was subject by selling unregistered Pink Sheet securities, opening options accounts for Connecticut customers who did not qualify as “accredited investors”; and failing to reimburse the Division for the costs associated with an examination of the firm’s Melville, New York office. The action also alleged that the firm failed to provide Division staff with material records; failed to comply with minimum net capital requirements; and failed to enforce and maintain adequate supervisory procedures with respect to the usage of sales scripts and with respect to compliance with the terms of the 2008 Consent Order. Westrock Advisors, Inc. was afforded an opportunity to request a hearing on the Order to Cease and Desist, Notice of Intent to Fine and Notice of Intent to Revoke Registration as Broker-dealer.
CONSUMER CREDIT DIVISION ACTIVITY
Check Cashing Service License Activity
Brass City Check Cashing LLC
1274 Thomaston Avenue
Waterbury, CT 06704
||State Street Check Cashing, LLC
1328 State Street
New Haven, CT 06511
On December 1, 2010, the Commissioner entered into a Settlement Agreement with APM Financial Solutions, LLC (“APM Financial”). The Settlement Agreement was based on an investigation by the Consumer Credit Division. As a result of such investigation, the Commissioner alleged in a Notice of Automatic Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Consumer Collection Agency License, Notice of Intent to Issue Order to Cease and Desist and Notice of Right to Hearing issued against APM Financial on September 14, 2010, that APM Financial, in violation of Section 36a-802(a) of the 2010 Supplement to the Connecticut General Statutes, failed to maintain a surety bond that ran concurrent with its license to act as a consumer collection agency in Connecticut for 2C South Gold Drive, Hamilton, New Jersey. As part of the Settlement Agreement, APM Financial filed a replacement bond.
On November 30, 2010, the Commissioner entered into a Settlement Agreement with Donna Lynn Petrafassi (“Petrafassi”). The Settlement Agreement was based on an investigation by the Consumer Credit Division. As a result of such investigation, the Commissioner alleged in a Notice of Intent to Refuse to Renew Mortgage Loan Originator License and Notice of Right to Hearing (“Notice”) issued on August 13, 2010, that certain felony convictions, which have not been pardoned, would be sufficient grounds for the Commissioner to deny an application for a mortgage loan originator license under Section 36a 489(b)(1)(B) of the 2010 Supplement to the General Statutes, and constitute sufficient grounds for the Commissioner to refuse to renew Petrafassi’s mortgage loan originator license. The Notice further alleged that such felony convictions also cause Petrafassi to fail to meet the minimum standards for renewal of such license under Section 36a 489(b)(2) of the 2010 Supplement to the General Statutes, which shall cause such license to expire. As part of the Settlement Agreement, Petrafassi requested surrender of her mortgage loan originator license and ceased acting as a mortgage loan originator in Connecticut.
On November 30, 2010, the Commissioner entered into a Settlement Agreement with Nathan M. Russo (“Russo”). The Settlement Agreement was based on an investigation by the Consumer Credit Division. As a result of such investigation, the Commissioner issued an Order of Summary Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke and Refuse to Renew Mortgage Broker License, Notice of Intent to Revoke Mortgage Loan Originator License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing issued on August 3, 2010 (“Notice”). Among other things, the Commission alleged that the filing of (1) a Criminal Complaint in the United States District Court for the District of Connecticut (Case No. 3:10-mj-00097-EBB), charging that Russo, among others, conspired to defraud the United States in connection with mortgages insured by the Federal Housing Administration (“FHA”), in violation of 18 U.S.C. 371, and conspired to commit wire fraud in violation of 18 U.S.C. 1349 (“Criminal Complaint”) and (2) a Superseding Indictment in the United States District Court for the District of Connecticut, in which the Grand Jury charged that beginning in at least February 2007 through May 2010, Russo, among others, conspired to defraud the United States by impairing, impeding, obstructing and defeating, through deceitful and dishonest means, the governmental functions of the Department of Housing and Urban Development and FHA in connection with mortgage loan insurance issued by FHA in violation of 18 U.S.C. 371; committed wire fraud in violation of 18 U.S.C. 1343; and knowingly and willfully made and caused to be made materially false, fictitious and fraudulent statements and representations involving FHA-insured mortgage loans in violation of 18 U.S.C. 1001 (“Indictment”), constitutes a basis for the Commissioner to conclude that Russo fails to demonstrate that the financial responsibility, character and general fitness of Russo are such as to command the confidence of the community and to warrant a determination that Russo will operate honestly, fairly and efficiently within the purposes of Sections 36a-485 to 36a-498f, inclusive, and 36a 534a and 36a-534b of the Connecticut General Statutes. The Commissioner also alleged in the Notice that Russo’s failure to inform the Commissioner of the Criminal Complaint, Indictment and a June 21, 2010, Emergency Order In the Matter of: Nathan M. Russo issued by the State of Rhode Island and Providence Plantations, Department of Business Regulation suspending his mortgage loan originator license in Rhode Island based upon the filing of the Criminal Complaint, constitutes a violation of Section 36a-490(d)(2) of the 2010 Supplement to the General Statutes. Both violations constituted sufficient grounds for the Commissioner to revoke Russo’s mortgage loan originator license in Connecticut. As part of the Settlement Agreement, Russo agreed to the revocation of his mortgage loan originator license.
Dated: Tuesday, December 14, 2010
Howard F. Pitkin