DOB: Great Westerm Financial Services, Inc. -Amended and Restated NOI CD-CP

* * * * * * * * * * * * * * * * * * * * * * * * * *

IN THE MATTER OF:

GREAT WESTERN FINANCIAL
SERVICES, INC.
NMLS # 82156

       ("Respondent")


* * * * * * * * * * * * * * * * * * * * * * * * * *


*
*
*
*
*
*
*
*
*
*
*
*

AMENDED AND RESTATED
NOTICE OF INTENT TO ISSUE
ORDER TO CEASE AND DESIST

AMENDED AND RESTATED
NOTICE OF INTENT TO IMPOSE
CIVIL PENALTY

AND

NOTICE OF RIGHT TO HEARING


I. LEGAL AUTHORITY AND JURISDICTION

The Banking Commissioner (“Commissioner”) is charged with the administration of Part I of Chapter 668, Sections 36a-485 to 36a-534c, inclusive, of the Connecticut General Statutes, “Mortgage Lenders, Correspondent Lenders, Brokers and Loan Originators”.

Pursuant to the authority granted by Sections 36a-17(a) and 36a-498f of the Connecticut General Statutes, the Commissioner, through the Consumer Credit Division of the Department of Banking, has investigated the activities of Respondent to determine if it has violated, is violating or is about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner.
 
Section 36a-17(a) of the Connecticut General Statutes provides, in pertinent part, that:

The commissioner, in the commissioner’s discretion, may, subject to the provisions of section 36a-21 and the Freedom of Information Act, as defined in section 1-200; (1) make such public or private investigations or examinations within or outside this state, concerning any person subject to the jurisdiction of the commissioner, as the commissioner deems necessary to carry out the duties of the commissioner . . . .

Section 36a-498f(a) of the Connecticut General Statutes provides, in pertinent part, that:

In addition to any authority provided under this title, the Banking Commissioner shall have the authority to conduct investigations and examinations as follows:

(1)  For purposes of initial licensing, license renewal, license suspension, license conditioning, license revocation or termination, or general or specific inquiry or investigation to determine compliance with sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b, the commissioner may access, receive and use any books, accounts, records, files, documents, information or evidence including, but not limited to:  (A) Criminal, civil and administrative history information; (B) personal history and experience information including independent credit reports obtained from a consumer reporting agency described in Section 603(p) of the federal Fair Credit Reporting Act, 15 USC 1681a; and (C) any other documents, information or evidence the commissioner deems relevant to the inquiry or investigation regardless of the location, possession, control or custody of such documents, information or evidence.

Section 36a-52(a) of the Connecticut General Statutes provides, in pertinent part, that:

Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any provision of the general statutes within the jurisdiction of the commissioner, or any . . . order . . . issued thereunder, the commissioner may send a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt.  The notice shall be deemed received by the person on the earlier of the date of actual receipt, or seven days after mailing or sending.  Any such notice shall include:  (1) A statement of the time, place, and nature of the hearing; (2) a statement of the legal authority and jurisdiction under which the hearing is to be held; (3) a reference to the particular sections of the general statutes . . . or orders alleged to have been violated; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice.  If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice, unless the person fails to appear at the hearing.  After the hearing, the commissioner shall determine whether an order to cease and desist should be issued against the person named in the notice.  If the person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall issue an order to cease and desist against the person.  No such order shall be issued except in accordance with the provisions of chapter 54.

Section 36a-50(a) of the Connecticut General Statutes provides, in pertinent part, that:

(1)  Whenever the commissioner finds as the result of an investigation that any person has violated any provision of the general statutes within the jurisdiction of the commissioner, or any . . . order . . . issued thereunder . . . the commissioner may send a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt.  The notice shall be deemed received by the person on the earlier of the date of actual receipt or seven days after mailing or sending.  Any such notice shall include:  (A) A statement of the time, place, and nature of the hearing; (B) a statement of the legal authority and jurisdiction under which the hearing is to be held; (C) a reference to the particular sections of the general statutes . . . or orders alleged to have been violated; (D) a short and plain statement of the matters asserted; (E) the maximum penalty that may be imposed for such violation; and (F) a statement indicating that such person may file a written request for a hearing on the matters asserted not later than fourteen days after receipt of the notice.

(2)  If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice unless such person fails to appear at the hearing.  After the hearing, if the commissioner finds that the person has violated any such provision, . . . or order, the commissioner may, in the commissioner’s discretion and in addition to any other remedy authorized by law, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person.  If such person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner may, as the facts require, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person.

(3)  Each action undertaken by the commissioner under this subsection shall be in accordance with the provisions of chapter 54.

As a result of an investigation, on March 14, 2014, the Commissioner issued a Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing. 

Section 36a-1-22 of the Regulations of Connecticut State Agencies provides, in pertinent part, that:

The commissioner may amend the notice of hearing at any stage of the contested case prior to the close of evidence.


II.  MATTERS ASSERTED

1.Respondent is a Texas corporation.
2.Respondent was licensed by the Commissioner through the Nationwide Mortgage Licensing System and Registry (“System”) to engage in the business of a mortgage lender in Connecticut from its main office, located at 5408 West Plano Parkway, Plano, Texas, for the January 1 to December 31, 2013 licensing period and is presently so licensed for the January 1 to December 31, 2014 licensing period (“2014 Licensing Period”).  Respondent also has a branch office located in Tempe, Arizona (NMLS # 831064) that is licensed to engage in the business of a mortgage lender in Connecticut for the 2014 Licensing Period.
3.The System required Respondent to file, among other things, certain Mortgage Call Reports (“MCRs”), one of which was due on February 14, 2014 (“Q4”), and one of which was due on March 31, 2014 (“2013 Financial Condition”).
4.When a licensee fails to file MCRs, the System automatically generates and posts a license item to the licensee’s account, and automatically generates an e-mail that is sent to the licensee indicating that a license item has posted to the account.
5.On February 15, 2014, the System posted a license item to Respondent’s account for failure to file the Q4 MCR described in paragraph 3 above and Respondent was notified of the license item by the System via e-mail as described in paragraph 4 above.
6.On April 1, 2014, the System posted a license item to Respondent’s account for failure to file the 2013 Financial Condition MCR described in paragraph 3 above and Respondent was notified of the license item by the System via e-mail as described in paragraph 4 above.
7.On December 17, 2012, the Commissioner issued a Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“2012 Notice”) alleging that Respondent had failed to timely file its MCR – Standard – Financial Condition report that was due in 2012 (“2012 Annual MCR”).
8.On April 26, 2013, Respondent entered into a Consent Order with the Commissioner resolving the allegation set forth in the 2012 Notice.
9.In the Consent Order, Respondent admitted that the report described in paragraph 7 above was not filed on its due date, and represented to the Commissioner that it “has reviewed and updated its internal policies, procedures and controls for timely and accurately filing required reports with the Commissioner through NMLS as required or as otherwise permitted under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes”.
10.The Consent Order ordered that, “[i]n the future, Great Western shall timely and accurately file all required reports on NMLS or as otherwise permitted under Part I of Chapter 668 of the Connecticut General Statues in connection with its current, and any future license issued to Great Western”.
11.The Consent Order provided, among other things, “[u]pon issuance of this Consent Order by the Commissioner, this matter will be resolved and the Commissioner will not take any future enforcement action against Great Western based upon the allegations set forth in the Notice and contained herein; provided that issuance of this Consent Order is without prejudice to the right of the Commissioner to take enforcement action against Great Western based upon a violation of this Consent Order or the matters underlying its entry, if the Commissioner determines that compliance with the terms herein is not being observed or if any representation made by Great Western and reflected herein is subsequently discovered to be untrue”.
12.Respondent filed its Q4 MCR on March 31, 2013.
13.To date, Respondent has failed to file the 2013 Financial Condition MCR described in paragraph 3 above.


III.  STATUTORY BASIS FOR ORDER TO CEASE
AND DESIST AND IMPOSITION OF CIVIL PENALTY

Section 36a-534b(c)(3) of the Connecticut General Statutes provides, in pertinent part, that:

Each mortgage lender, mortgage correspondent lender, [or] mortgage broker . . . licensee shall timely submit to the system accurate reports of condition that shall be in such form and shall contain such information as the system may require.  Failure by a licensee to submit a timely and accurate report of condition shall constitute a violation of this provision.

Section 36a-494(b) of the Connecticut General Statutes provides, in pertinent part, that:

Whenever it appears to the commissioner that (1) any person has violated, is violating or is about to violate any of the provisions of sections 36a-485 to 36a-498f, inclusive, . . . 36a-534a and 36a-534b, . . . the commissioner may take action against such person . . . in accordance with sections 36a-50 . . . and 36a-52.

Respondent’s failure to timely file the Q4 MCR report on its due date, as more fully described in paragraphs 3 through 5, inclusive, and 12 of the Matters Asserted, and its failure to file the 2013 Financial Condition MCR, as more fully described in paragraphs 3, 4, 6 and 13 of the Matters Asserted, violate Section 36a-534b(c)(3) of the Connecticut General Statutes.  Such violations form the basis to issue an order to cease and desist pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty pursuant to Sections 36a-494(b) and 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.

Respondent’s failure to timely file the Q4 MCR report, as more fully described in paragraphs 3 through 5, inclusive, and 12 of the Matters Asserted, and its failure to file the 2013 Financial Condition MCR, as more fully described in paragraphs 3, 4, 6 and 13 of the Matters Asserted, after it executed the Consent Order described in paragraphs 7 through 11, inclusive, of the Matters Asserted, constitute violations of an order of the commissioner.  Such violations form the basis to issue an order to cease and desist pursuant to Section 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty pursuant to Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.

Respondent’s failure to timely file the Q4 MCR report, as more fully described in paragraphs 3 through 5, inclusive, and 11 of the Matters Asserted, and its failure to file the 2013 Financial Condition MCR, as more fully described in paragraphs 3, 6 and 13 of the Matters Asserted, after it executed the Consent Order described in paragraphs 7 through 11, inclusive, of the Matters Asserted, form a basis to revive the allegation brought by the Commissioner in the 2012 Notice relating to the failure to timely file the 2012 Annual MCR, which such violation was admitted in the Consent Order and forms the basis to issue an order to cease and desist pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty pursuant to Sections 36a-494(b) and 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.


IV.  AMENDED AND RESTATED NOTICE OF INTENT TO ISSUE ORDER TO CEASE
AND DESIST, AMENDED AND RESTATED NOTICE OF INTENT TO IMPOSE
CIVIL PENALTY AND NOTICE OF RIGHT TO HEARING

WHEREAS, the Commissioner has reason to believe that Respondent has engaged in acts or conduct which forms a basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-494(b) and/or 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty upon Respondent pursuant to Sections 36a-494(b) and/or 36a-50(a) of the Connecticut General Statutes.

NOW THEREFORE,
notice is hereby given to Respondent that the Commissioner intends to issue an order requiring Respondent to CEASE AND DESIST from violating Section 36a-534b(c)(3) of the Connecticut General Statutes and to CEASE AND DESIST from violating an order of the Commissioner.  The Commissioner further intends to impose a CIVIL PENALTY upon Respondent as set forth herein, subject to Respondent’s right to a hearing on the allegations set forth above.
 
A hearing will be granted to Respondent if a written request for a hearing is received by the Department of Banking, Consumer Credit Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following Respondent’s receipt of this Amended and Restated Notice of Intent to Issue Order to Cease and Desist, Amended and Restated Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing as set forth in Sections 36a-52(a) and 36a-50(a) of the Connecticut General Statutes.  This Amended and Restated Notice of Intent to Issue Order to Cease and Desist, Amended and Restated Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing shall be deemed received on the earlier of the date of actual receipt, or seven days after mailing or sending.  The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address.  If Respondent will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as “pro se”.  Once a written request for a hearing is received, the Commissioner may issue a notification of hearing and designation of hearing officer that acknowledges receipt of a request for a hearing, designates a presiding officer and sets the date of the hearing in accordance with Section 4-177 of the Connecticut General Statutes and Section 36a-1-21 of the Regulations of Connecticut State Agencies.  If a hearing is requested, the hearing will be held on June 12, 2014 at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.

The hearing will be held in accordance with the provisions of Chapter 54 of the Connecticut General Statutes, unless Respondent fails to appear at the requested hearing.  At such hearing, Respondent will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law to be considered by the Commissioner.
 
If Respondent does not request a hearing within the time prescribed, the Commissioner will issue an order that Respondent cease and desist from violating Section 36a-534b(c)(3) of the Connecticut General Statutes, cease and desist from violating an order of the Commissioner, and may order that the maximum civil penalty be imposed upon Respondent.

Dated at Hartford, Connecticut
this 22nd day of April 2014.                   ________/s/_________
                                                            Howard F. Pitkin
                                                            Banking Commissioner



CERTIFICATION

I hereby certify that on this 23 day of April 2014, the foregoing Amended and Restated Notice of Intent to Issue Order to Cease and Desist, Amended and Restated Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing was sent by certified mail, return receipt requested, to Great Western Financial Services, Inc., Attention:  Fred McDonald IV, Secretary, 5408 West Plano Parkway, Plano, Texas 75093, certified mail no. 70121010000172646578.

                                                            ________/s/_________
                                                            Stacey Valerio
                                                            Prosecuting Attorney 


Administrative Orders and Settlements