The Department of Banking News Bulletin
Bulletin # 2783
Week Ending June 23, 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 361-145 of the Connecticut General Statutes requires certain applications for a branch, of 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.
DATE: June 19, 2017
BANK: Bankwell Bank, New Canaan
LOCATION: 1063 Boston Post Road, Darien, CT 06820
ACTIVITY-BRANCH TYPE: Filed to Open Branch - Full Service Branch
DATE: June 20, 2017
BANK: Bankwell Bank, New Canaan
LOCATION: 855 Main Street, 7th Floor, Bridgeport, CT 06604
ACTIVITY-BRANCH TYPE: Closing Date-Limited Branch
DATE: June 21, 2017
BANK: Salisbury Bank and Trust Company, Lakeville
LOCATION: FROM 52 Route 17K, Suite 201, Newburgh, NY 12550
TO: 801 Auto Park Place, Newburgh, NY 12550
ACTIVITY-BRANCH TYPE: Filed to Relocate - Full Service Branch
DATE: August 1, 2017
BANK: Newtown Savings Bank, Newtown
LOCATION: 126 Monroe Turnpike, Trumbull, CT 06611
ACTIVITY-BRANCH TYPE: Effective Closing Date - Loan Production Office
DATE: September 15, 2017
BANK: Berkshire Bank, Pittsfield, MA (Massachusetts state chartered bank)
LOCATION: 58 State House Square, Hartford, CT 06103
ACTIVITY-BRANCH TYPE: Effective Closing Date - Full Service Branch
CREDIT UNION ACTIVITY
DATE: June 1, 2017
CREDIT UNION: Community Credit Union, Inc., Manchester
LOCATION: 31 Union Street, Vernon, CT 06066
ACTIVITY-BRANCH TYPE: Effective Date of Closing - Full Service Branch
CONSUMER CREDIT DIVISION ACTIVITY
Restated Order and Ruling on Motion to Dismiss
On June 14, 2017, the Commissioner issued a Restated Order and Ruling on Motion to Dismiss (“Restated Order”) in the Matter of: Great Plains Lending, LLC (“Great Plains”), Red Rock, Oklahoma, John R. Shotton (“Shotton”) and Clear Creek Lending
(“Clear Creek”), Stillwater, Oklahoma (collectively, “Respondents”).
As background, on January 6, 2015, the Commissioner issued an initial Order to Cease and Desist and Order Imposing Civil Penalty (“Initial Order”) against Great Plains, Shotton and Clear Creek. The basis of the Initial Order was that Great Plains: engaged in the business of making loans of money or credit in Connecticut without obtaining the required license, in violation of Section 36a-555(1) of the Connecticut General Statutes; made, offered or assisted Connecticut borrowers to obtain unsecured consumer loans, in violation of Section 36a-555(2) of the Connecticut General Statutes; and charged, contracted for and received interest at a rate greater than 12% on at least three unsecured consumer loans to Connecticut residents, in violation of Section 36a-573(a) of the Connecticut General Statutes. The Initial Order was also based on allegations that Shotton participated in Great Plains’ violations of Sections 36a-555(1), 36a 555(2) and 36a-573(a) of the Connecticut General Statutes, subjecting Shotton to the provisions of such sections, and that Clear Creek offered or assisted Connecticut borrowers to obtain small loans in Connecticut without the obtaining the required license, in violation of Section 36a-555(2) of the Connecticut General Statutes. Great Plains was ordered to cease and desist from violating subdivisions (1) and (2) of Section 36a-555 and Section 36a-573(a) of the Connecticut General Statutes, and to pay a civil penalty of $700,000. Shotton was ordered to cease and desist from participating in the violation of subdivisions (1) and (2) of Section 36a-555 and Section 36a 573(a) of the Connecticut General Statutes, and to pay a civil penalty of $700,000. Clear Creek was ordered to cease and desist from violating Section 36a-555(2) of the Connecticut General Statutes and to pay a civil penalty of $100,000.
On January 23, 2015, Respondents filed an appeal of the Initial Order in Superior Court for the Judicial District of New Britain (“Court”). On August 31, 2016, the Court issued a decision remanding the matter to the Department to “determine, based on the record that existed at the time, 1) whether Great Plains and Clear Creek are arms of the [Otoe-Missouria] Tribe, 2) whether Shotton has tribal sovereign immunity from financial penalties that the commissioner seeks to impose, and 3) whether Shotton has tribal immunity from the commissioner’s request for prospective injunctive relief against future violations of the state’s usury and banking laws.”
The Restated Order maintained and restated the Initial Order issued by the Commissioner against Respondents and concluded that: (1) Respondents did not raise tribal sovereign immunity as a jurisdictional defense at the proper administrative stage, (2) both Clear Creek and Great Plains failed to meet their burden to prove that each is, in fact, an arm of the Tribe entitled to tribal sovereign immunity and, therefore, are not arms of the Tribe, and (3) Shotton does not have immunity from the financial penalties the Commissioner has imposed or from the Commissioner’s order for prospective injunctive relief against future violations of the state’s usury and banking laws.
On June 14, 2017, the Commissioner entered into a Consent Order with Telmate, LLC (NMLS # 1226337) (“Telmate”), San Francisco, California. The Consent Order was based on an investigation by the Consumer Credit Division. As a result of such investigation, the Commissioner alleged that from September 2014 to September 2016, Telmate engaged in the business of money transmission in this state without the required license, in violation of Section 36a-597(a) of the Connecticut General Statutes. To resolve the matter, Telmate paid $4,000 as payment for back licensing fees and paid $3,500 as a civil penalty.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Consent Order Entered
On June 19, 2017, the Banking Commissioner entered a Consent Order (No. CO-17-8290-S) with respect to RPM Capital Management, LLC
, an investment adviser registered with the Securities and Exchange Commission. The firm was formerly located at 2 Greenwich Office Park, Suite 300, Greenwich, Connecticut 06831 and was previously registered as an investment adviser in Connecticut. Also named in the Consent Order was Michele Mary Newland, Chief Investment Officer and Co-CEO of the firm.
The Consent Order alleged that from June 2012 through March 8, 2016, when she applied for investment adviser agent registration under the Connecticut Uniform Securities Act, Newland transacted business as an unregistered investment adviser agent in violation of Section 36b-6(c)(2) of the Act and that the firm violated Section 36b-6(c)(3) of the Act by engaging an unregistered investment adviser agent. The Consent Order also alleged that RPM Capital Management, LLC 1) failed to establish and maintain written supervisory procedures as required by Section 36b-31-6(f) of the Regulations under the Act; and 2) violated Section 36b-31-14(b) of the Regulations by failing to maintain adequate books and records.
The Consent Order directed RPM Capital Management, LLC and Michele Mary Newland to cease and desist from regulatory violations. In addition, the Consent Order directed the firm to pay $10,400 to the department. Of that amount, $10,000 constituted an administrative fine and $400 constituted reimbursement for past due registration fees for Michele Mary Newland.
Dated: Tuesday, June 27, 2017
Jorge L. Perez