The Department of Banking News Bulletin
Bulletin # 2774
Week Ending April 21, 2017
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 days from the date of this bulletin.
STATE BANK 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, address how the establishment of the branch will be consistent with safe and sound banking practices and promote the public convenience and advantage. 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.
FROM: 115 State Street
Springfield, MA 01144
TO: One Monarch Place
Springfield, MA 01144
Filed to Relocate -
STATE CREDIT UNION ACTIVITY
Field of Membership
On April 20, 2017, Trumbull Credit Union, Trumbull, Connecticut, a Connecticut credit union, filed a request to amend its bylaws pursuant to 36a-437a(h)(3) of the Connecticut General Statutes, to expand its field of membership to include the volunteers of the towns of Trumbull EMT/Fire, Monroe EMT/Fire, Easton EMT/Fire, and Redding EMT/Fire.
CONSUMER CREDIT DIVISION ACTIVITY
On April 11, 2017, the Commissioner entered into a Consent Order with BillMo, LLC (NMLS # 1273871)
(“BillMo”), Middlebury, 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 August 2015 to April 2017, BillMo engaged in the business of money transmission in this state by having a physical location in this state and administering a mobile money transmission application named BillMo, in violation of Section 36a-597 of the Connecticut General Statutes. To resolve the matter, BillMo agreed to become licensed as a money transmitter in this state and paid back licensing fees of $3,000.
Consent Order and Order Withdrawing Automatic Suspension
On April 11, 2017, the Commissioner entered into a Consent Order and Order Withdrawing Automatic Suspension concerning Praxis Financial Solutions, Incorporated
(NMLS # 934192) (“Praxis Financial”), Lincolnwood, Illinois. On November 18, 2016, the Commissioner issued 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. The Commissioner alleged that Praxis Financial failed to maintain a surety bond that runs concurrently with the period of its consumer collection agency license, in violation of Section 36a-802(a) of the Connecticut General Statutes. The withdrawal was based on the fact that Praxis Financial has shown compliance with Section 36a-802(a) of the Connecticut General Statutes by submitting a new surety bond, and as part of the Consent Order, Praxis Financial is to pay $5,000 as a civil penalty.
Notice of Intent to Issue Order to Cease and Desist
and Notice of Intent to Impose Civil Penalty
Temporary Order to Cease and Desist, Notice of Intent to Issue Order
to Cease and Desist and Notice of Intent to Impose Civil Penalty
On April 20, 2017, 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: Ocwen Loan Servicing, LLC (NMLS # 1852) (“Ocwen”) and Ocwen Business Solutions, Inc.
(NMLS # 1283393)(“OBS”) (collectively, “Respondents”), West Palm Beach, Florida and Pasay City, Philippines, respectively. The Notice was the result of an examination and investigation by the Consumer Credit Division. The Commissioner alleged that Ocwen: (1) acted as a mortgage servicer from locations that were neither licensed nor exempt, in violation of Section 36a-718 of the Connecticut General Statutes; (2) conducted business covered by Sections 36a-715 to 36a-719l without holding a valid license or assisted another person in the conduct of business without holding a valid license required under Title 36a, in violation of Section 36a-719h(17) of the Connecticut General Statutes; (3) knowingly misapplied or recklessly applied residential mortgage loan payments to the outstanding balance of a Connecticut borrower’s residential mortgage loan, in violation of Section 36a-719h(4) of the Connecticut General Statutes; (4) failed to accurately apply residential mortgage loan payments in violation of a prior order of the Commissioner; (5) knowingly misapplied or recklessly applied payments to escrow accounts of a Connecticut borrower, in violation of Section 36a-719h(5) of the Connecticut General Statutes; (6) failed to disclose to Connecticut borrowers the schedule of ranges and categories of costs and fees for its servicing-related activities, in violation of Section 36a-719e(2) of the Connecticut General Statutes; (7) failed to maintain sufficient records in connection with the servicing of residential mortgage loans in Connecticut, in violation of Section 36a-719d(b) of the Connecticut General Statutes; (8) failed to provide a short year escrow statement to a borrower, in violation of Section 36a-498e(7) of the Connecticut General Statutes; (9) failed to pay escrow disbursements to the appropriate taxing authorities and insurance companies, in violation of Section 36a-716(a) of the Connecticut General Statutes; and (10) provided incorrect or incomplete information to a Connecticut borrower concerning the borrower’s pending foreclosure action, in violation of Section 36a-719h(2) of the Connecticut General Statutes. The Commissioner also alleged that OBS acted as a consumer collection agency in this state without a license, in violation of Section 36a-801(a) of the Connecticut General Statutes.
Such allegations form the basis to issue orders to cease and desist against Ocwen and OBS and impose civil penalties not to exceed $100,000 per violation on Ocwen and OBS. The Commissioner found that the public welfare required immediate action in order to prevent irreparable and immediate harm to Connecticut borrowers and the necessity of a temporary order requiring Ocwen to immediately cease and desist from violating the laws cited within the Notice and to take such further action to effectuate the purposes of such section, including, but not limited to, not adding any Connecticut residential mortgage loan to its existing mortgage loan servicing portfolio if such residential mortgage loan requires funds to be held in escrow for payment of taxes and insurance until Ocwen can demonstrate to the satisfaction of the Commissioner that its escrow accounting practices relating to its existing Connecticut residential mortgage loan portfolio are adequate and that such funds are maintained in segregated deposit or trust accounts for the benefit of Connecticut borrowers. Respondents were afforded an opportunity to request a hearing on the allegations set forth in the Notice.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
On April 21, 2017, the Banking Commissioner entered a Consent Order (No. CO-17-8290a-S) with respect to Ashleigh Cooper Swayze, the Chief Compliance Officer and a listed control person of RPM Capital Management, LLC (IARD No. 164200)
, an SEC-registered investment adviser that was formerly registered under the Connecticut Uniform Securities Act. The Consent Order alleged that 1) as Chief Compliance Officer of the firm, Swayze did not adequately pursue measures to ensure that a third party was in compliance with the investment adviser agent registration requirements of the Connecticut Uniform Securities Act; 2) such conduct materially aided the firm's failure to abide by supervisory requirements regarding the registration status of its personnel; and 3) Swayze’s written representations to the agency concerning the third party's activities violated Section 36b-23 of the Act. The Consent Order fined Swayze $10,000 and directed her to cease and desist from regulatory violations.
Dated: Tuesday, April 25, 2017
Jorge L. Perez