DOB: Bulletin 2471 - July 1, 2011

The Department of Banking News Bulletin 

Bulletin # 2471
Week Ending July 1,  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
Branch Activity
 
Section 36a-145 of the Connecticut 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.
 
Date Bank Location Activity
6/27/11
Liberty Bank
Middletown
*297 East Center Street
  Manchester, CT  06040
notice of intent
not to disapprove
6/27/11
Union Savings Bank
Danbury
FROM:  158 Main Street
           Danbury, CT  06810
TO:      116 Main Street
           Danbury, CT  06810
approved to
relocate
7/22/11
Naugatuck Savings Bank
Naugatuck
100 Hanover Street
Meriden, CT  06451
closing
date
7/23/11
Naugatuck Savings Bank
Naugatuck
600 West Main Street
Meriden, CT  06451
opening
date
*Limited Branch - LPO
 
Foreign Bank Activity
 
Date Bank Location Activity
5/31/11
Royal Bank of Canada
Montreal, Quebec
Canada
71 Arch Street
Greenwich, CT  06831
closing
date
 
CONSUMER CREDIT DIVISION ACTIVITY
Check Cashing Service License Activity
 
Date Check Casher Location Activity
7/01/11
The Pawn Palace LLC
d/b/a Pawn Paradise, LLC
1194 Dixwell Avenue
Hamden, CT  06514
approved
 
 
Order Revoking Consumer Collection Agency License and
Order to Cease and Desist
 
On June 3, 2011, the Commissioner issued an Order Revoking Consumer Collection Agency License and Order to Cease and Desist ("Order") in the Matter of:  LDG Financial Services, LLC ("Respondent").  The Order was based on Respondent's failure to maintain a surety bond in violation of Section 36a-802(a) of the Connecticut General Statutes and revokes Respondent's license to act as a consumer collection agency in Connecticut from 7001 Peachtree Industrial Boulevard, Building 3, Norcross, Georgia, and order Respondent to cease and desist from violating Section 36a-802(a) of the Connecticut General Statutes.
 
Consent Orders
 
On June 1, 2011, the Commissioner entered into a Consent Order with United Enterprises Group, Inc. d/b/a Daily Mart Convenience Store ("United Enterprises Group"). The Consent Order was based on an investigation by the Consumer Credit Division. As a result of such investigation, the Commissioner alleged that United Enterprises Group engaged in the business of cashing checks, drafts and money orders for consideration without licensure for a general facility or limited facility, in violation of Section 36a-581(a) of the Connecticut General Statutes.  As part of the Consent Order, United Enterprises Group was ordered to pay $3,000 as a civil penalty.
 
On June 3, 2011, the Connissioner entered into a Consent Order with New England Home Mortgage LLC ("New England Home Mortgage"). The Consent Order was based on an examination by the Consumer Credit Division. As a result of such examination, the Commissioner alleged that New England Home Mortgage employed or retained, during the period of January 12, 2009 through February 16, 2010, two (2) individuals as mortgage loan originators who were not licensed, in violation of Section 36a-486(b) of the Connecticut Genearl Statutes.  As part of the Consent Order, New England Home Mortgage agreed to pay $2,000 as a civil penalty.
 
On June 6, 2011, the Commissioner entered into a Consent Order with TriState Lending Inc. ("TriState Lending"). The Consent Order was based on an examination by the Consumer Credit Division. As a result of such examination, the Commissioner alleged that TriState Lending employed or retained, during the period of July 9, 2009 through May 27, 2010, one (1) individual as a mortgage loan originator who was not licensed, in violation of Section 36a-486(b) of the Connecticut General Statutes. As part of the Consent Order, TriState Lending agreed to pay $1,000 as a civil penalty.
 
On June 6, 2011, the Commissioner entered into a Consent Order with Taveras, LLC d/b/a Congress Market ("Taveras"). The Consent Order was based on an investigation by the Consumer Credit Division. As a result of such investigation, the Commissioner alleged that Taveras engaged in the business of cashing checks, drafts and money orders for consideration without licensure for a general facility or limited facility, in violation of Section 36a-581(a) of the Connecticut General Statutes. As part of the Consent Order, Taveras was ordered to pay $3,000 as a civil penalty.
 
On June 13, 2011, the Commissioner entered into a Consent order with Fairfield County Mortgage Group, Inc. d/b/a Fairfield Mortgage, Inc. ("Fairfield Mortgage"). The Consent Order was based on an investigation by the Consumer Credit Division. As a result of the investigation, the Commissioner alleged in an Amended and Restated Notice of Intent to Refuse to Renew Mortgage Lender License and Notice of Right to Hearing issued on November 2, 2010 ("Amended Notice"), the Fairfield Mortgage (1) failed to pay the application fee required by Section 36a-491(a)(1) of the 2010 Supplement to the General Statutes in connection with its mortgage lender license renewal application for the January 1 through December 31, 2010 licensing period; and (2) submitted repeated payments to the Natiowide Mortgage Licensing System ("NMLS") for the 2010 licensing period that were returned for insufficient funds, and also had a historical pattern of submitting other payments to the Department that were returned for insufficient funds, which coupled together with the failure to pay the 2010 renewal application fee, caused Fairfield Mortgage to fail to demonstrate that its character and general fitness will "command the confidence of the community and to warrant a determination that the applicant will operate honestly, fairly and efficiently within the purposes of Sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-532b."  The Commissioner further alleged in the Consent Order that (1) Fairfield Mortgage's designated qualified individual did not complete the required education and testing in violation of Section 36a-488(a)(3) of the 2010 Supplement to the General Statutes; (2) Fairfield Mortgage did not file a bond that complied with Section 36a-492 of the 2010 Supplement to the General Statutes; (3) Fairfield Mortgage did not maintain the required net worth required by Section 36a-488(a) of the 2010 Supplement to the General Statutes nor make prompt disclosure of a decrease in its net worth in violation of Section 36a-490(c)(9) of the 2010 Supplement to the General Statutes; and (4) Fairfield Mortgage made a statement on the MU1 Form on NMLS that was false or misleading in a material respect in violation of Section 36a-53a of the Connecticut General Statutes and constituted a material misstatement in its renewal application.  As part of the consent Order, the Commissioner ordered that the license of Fairfield Mortgage not be renewed and barred Fairfield Mortgage from future licensure as a mortgage lender, mortgage correspondent lender or mortgage broker.  The Commissioner also ordered that John Wilson, the Senior Vice President of Fairfield Mortgage and the only individual solely resoppnsible for the day-to-day operations of Fairfield Mortgage, pay $100 representing the processing fee that was not paid by Fairfield Mortgage for the January 1 to December 31, 2010 licensing period, and ordered Mr. Wilson to remove all advertising for Fairfield Mortgage from the Internet.
 
On June 14, 2011, the Commissioner entered into a Consent Order with Servicios Latino Express, LLC ("Servicios"). The Consent Order was based on an investigation by the Consumer Credit Division. As a result of such investigation, the Commissioner alleged that during the period of August 2009 through November 2010, Servicios engaged in the business of cashing checks, drafts and money orders for consideration without licensure for a general facility or limited facility, in violation of Section 36a-581(a) of the Connecticut General Statutes, after the Commissioner had denied Servicios' application to obtain a license to operate a general facility license on August 17, 2010. As part of the Consent Order, Servicios was ordered to pay $1,000 as a civil penalty.
 
On June 23, 2011, the Commissioner entered into a Consent Order with Access Mortgage Corporation d/b/a Keystone Bankers Mortgage Company ("Access Mortgage"). The Consent Order was based on an examination by the Consumer Credit Division. As a result of such examination, the Commissioner alleged that Access Mortgage emplyoed or retained, during the period of January 13, 2009 through October 18, 2010, three (3) individuals as mortgage loan originators who were not licensed, in violation of Section 36a-486(b) of the Connecticut General Statutes.  As part of the Consent Order, Acess Mortgage agreed to pay $3,000 as a civil penalty.
 
Order to Cease and Desist, Order of Repayment of Fees and
Order Imposing Civil Penalty
 
On June 7, 2011, the Commissioner issued an Order to Cease and Desist, Order of Repayment of Fees and Order Imposing Civil Penalty ("Order") In the Matter of:  The Debt Answer, LLC ("Respondent"). The basis of the Order was that Respondent (1) offered to engage in debt negotiation in this state without obtaining the required license, in violation of Section 36a-671(b) of the Connecticut General Statutes, (2) engaged in debt negotiation in this state on and after October 1, 2009, on behalf of at least 116 debtors and collected fees without obtaining the required license, in violation of Section 36a-671(b) of the Connecticut General States, and (3) 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-671(b) of the Connecticut General Statutes and the schedule of maximum fees established by the Commissioner pursuant to said section, which constitutes 110 violations of Section 36a-671(b) of the Connecticut General Statutes. Respondent was ordered to cease and desist from violating Sections 36a-671(b) and 36a-671b(b) of the Connecticut General Statutes, to pay a civil penalty in the amount of $1,210,000, and to repay fees in the amount of $2,424.90 to a Connecticut resident.
 
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Agent Registration Revoked
 
On June 27, 2011, the Banking Commissioner entered an Order revoking the agent registration of Gregory James Buchholz, a former broker-dealer agent of Raymond James Financial Services, Inc.  Although the Respondent’s agent registration had been withdrawn, Connecticut law permits the Commissioner to initiate revocation proceedings within one year after a withdrawal becomes effective.   The revocation action had been preceded by a May 11, 2011 Notice of Intent to Revoke Registration as an Agent and Notice of Right to Hearing alleging that 1) on November 12, 2010, the Respondent pled guilty to a single-count information for felony wire fraud in violation of 18 U.S.C. §1343 (United States of America v. Gregory Buchholz, D. Conn., Case No. 3:10-CR-229 (JCH)); and 2) on January 31, 2011, the Respondent was sentenced to 48 months in prison, followed by three years of supervised release, and ordered to pay over $1.7 million in restitution to Raymond James Financial Services, Inc.  The felony conviction would support the revocation of the Respondent’s agent registration in Connecticut.
 
In revoking respondent Buchholz’s agent registration, the Commissioner adopted as findings the factual statements and legal basis set forth in the May 11, 2011 Notice of Intent to Revoke Registration as an Agent.  Respondent Buchholz did not appear or contest the revocation of his agent registration.
 
Order to Cease and Desist, Order to Make Restitution and
Notice of Intent to Fine Issued Following Allegations of Fraudulent Note Sales
 
On June 30, 2011, the Banking Commissioner issued an Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing against Julius Blackwelder d/b/a Friend’s Investment Group of 1310 Jeff Davis Drive, Tyler, Texas 75703-5542.
 
The action alleged that from at least 2001 forward, respondent Blackwelder sold several unregistered promissory notes in violation of the Connecticut Uniform Securities Act, and represented to certain investors that he would manage and invest their funds to achieve a guaranteed return of 20 percent and 25 percent.  The action also alleged that respondent Blackwelder engaged in fraudulent, dishonest or unethical practices by failing to disclose to investors that respondent Blackwelder would use investor funds to pay for his personal and household expenses; that investors might lose their entire investment; any risk factors related to the investment; any financial information on respondent Blackwelder; information substantiating how the represented rates of return could be achieved; and information on respondent Blackwelder’s ability to meet his obligations under the notes.
 
The action directed respondent Blackwelder to cease and desist from regulatory violations and to make restitution of those sums obtained in violation of Sections 36b-4(a) and 36b-4(b) of the Act.  Respondent Blackwelder was afforded an opportunity to request a hearing on the Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine.
 
 
       Dated:  Wednesday, July 6, 2011
 
       Howard F. Pitkin
       Banking Commissioner