DOB: Bulletin 2460 - April 15, 2011

The Department of Banking News Bulletin 

Bulletin # 2460
Week Ending April 15, 2011

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
Community Reinvestment Plan

Naugatuck Valley Financial Corporation, a newly formed Maryland Corporation, filed a community reinvestment plan that is available for public inspection and comment at the Department of Banking for a period of 30 days.  The filing was made in connection with an acquisition statement filed on March 15, 2011, by Naugatuck Valley Financial Corporation, pursuant to Section 36a-184 of the Connecticut General Statutes, to acquire 100% of the issued and outstanding common stock of Naugatuck Valley Savings and Loan.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Revoke
Registration as a Broker-dealer and Notice of Intent to
Fine Issued Following Allegations of Inadequate Fee Disclosure

On April 15, 2011, the Banking Commissioner issued an Order to Cease and Desist and an Order to Make Restitution against Newbridge Securities Corporation, a Connecticut-registered broker-dealer having its main office at 1451 Cypress Creek Road, Suite 204, Fort Lauderdale, Florida.  On the same day, the Commissioner issued a Notice of Intent to Revoke Registration as a Broker-dealer and Notice of Intent to Fine with respect to the firm.  The action alleged that Newbridge Securities Corporation charged its customers a transactional “Handling Fee” that was unrelated to actual transaction costs, and that the firm failed to inform customers that the fee included a profit to the firm, that certain customers paid lower fees and that the fee was not based on the actual cost of handling a particular transaction.  Such conduct allegedly violated the antifraud provisions in Section 36b-4(a) of the Connecticut Uniform Securities Act and constituted a dishonest and unethical practice.
 
The action directed the firm to cease and desist from regulatory violations and to reimburse affected Connecticut customers the difference between the transactional “Handling Fee” each customer paid and the actual amount of the firm’s ticket, clearing and postage costs.  The firm was afforded an opportunity to request a hearing on the Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Revoke Registration as a Broker-dealer and Notice of Intent to Fine.

CONSUMER CREDIT DIVISION ACTIVITY
Consent Orders
 
On April 1, 2011, the Commissioner entered into a Consent Order with Maverick Funding Corp. (“Maverick Funding”).  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, the Commissioner alleged that:  (1) the qualified individual for the main office did not complete either the education requirement or the national and state tests by April 1, 2010, in violation of Section 36a-488(a)(3) of the Connecticut General Statutes; (2) the branch managers for two branches did not complete the state test by April 1, 2010, in violation of Section 36a-488(a)(3) of the Connecticut General Statutes; (3) Maverick Funding failed to promptly update the Nationwide Mortgage Licensing System and Registry (“NMLS”), or otherwise provide the Commissioner with information required by the MU1 and MU2 Forms pertaining to disclosure of certain civil and criminal matters and regulatory events, in violation of Section 36a-490(b) of the Connecticut General Statutes; (4) in 2007, Maverick Funding filed a statement with the Commissioner that was, at the time and in the light of the circumstances under which it was made, false or misleading in a material respect, in violation of Section 36a-53a of the Connecticut General Statutes; (5) from at least November 2009 through September 2010, Maverick Funding compensated unlicensed third-party lead generation service providers for mortgage brokering or mortgage loan origination, in violation of Section 36a-496 and Section 36a 498e(6) of the Connecticut General Statutes; (6) from at least November 2009 through March 2010, Maverick Funding paid various mortgage brokers a volume-based incentive that was based on the volume of loans produced by the broker each month in violation of 24 CFR 3500.14, which, in turn, constituted a violation of Section 36a-498e(8) of the Connecticut General Statutes; and (7) Maverick Funding paid an individual for unlicensed broker activity on at least two Connecticut loans made by Maverick on or about February 22, 2010 and March 17, 2010 in violation of Section 36a 496 and Section 36a-498e(6) of the Connecticut General Statutes.  As part of the Consent Order, Maverick Funding was ordered to pay a civil penalty in the amount of $48,500.
 
On April 8, 2011, the Commissioner entered into a Consent Order with Luxury Mortgage Corp. (“Luxury Mortgage”).  The Consent Order was based on an examination by the Consumer Credit Division.  As a result of such examination, the Commissioner alleged that Luxury Mortgage employed or retained, during the period of October 28, 2008 through May 21, 2010, six (6) individuals as mortgage loan originators who were not licensed, in violation of Sections 36a-486(b) of the Connecticut General Statutes.  As part of the Consent Order, Luxury Mortgage agreed to pay $6,000 as a civil penalty.

 
Temporary Order to Cease and Desist, Notice of Intent to Issue
Order to Cease and Desist, Notice of Intent to Impose Civil Penalty
 
On April 6, 2011, the Commissioner issued a Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“Notice”) in the Matter of:  The Debt Answer, LLC (“Respondent”).  The Notice alleges that Respondent offered to engage in debt negotiation in Connecticut without obtaining the required license, in violation of Section 36a-671(b) of the Connecticut General Statutes; engaged in debt negotiation in this state on and after October 1, 2009, with 116 debtors and collected fees without the required license, in violation of Section 36a-671(b) of the Connecticut General Statutes; and engaged in debt negotiation services on and after October 1, 2009, with at least 110 Connecticut residents and collected fees under terms which did not comply with Section 36a 671b(b) of the Connecticut General Statutes and the schedule of maximum fees established by the Commissioner pursuant to said section, in violation of Section 36a-671b(b) of the Connecticut General Statutes.  The Commissioner also found that public welfare required the issuance of a Temporary Order to Cease and Desist.  Respondent was afforded an opportunity to request a hearing with regard to the allegations set forth in the Notice.
 
On April 6, 2011, the Commissioner issued a Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“Notice”) in the Matter of:  North American Asset Services, LLC d/b/a Frontier Financial Group a/k/a FFG & Associates (“Respondent”).  The Notice alleges that Respondent acted as a consumer collection agency in Connecticut without the requisite license, in violation of Section 36a-801(a) of the Connecticut General Statutes.  The Commissioner also found that public welfare required the issuance of a Temporary Order to Cease and Desist.  Respondent was afforded an opportunity to request a hearing with regard to the allegation set forth in the Notice.
 
 
       Dated:  Tuesday, April 19, 2011
 
       Howard F. Pitkin
       Banking Commissioner