DOB: Great Plains Lending Order to Cease and Desist

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IN THE MATTER OF:

GREAT PLAINS LENDING, LLC
(“Great Plains”)

JOHN R. SHOTTON
(“Shotton”)

CLEAR CREEK LENDING
(“Clear Creek”)

    (collectively, “Respondents”)

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ORDER TO CEASE AND DESIST

AND

ORDER IMPOSING CIVIL PENALTY


I.  PRELIMINARY STATEMENT

WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Part III of Chapter 668, Sections 36a-555 to 36a-573, inclusive, of the Connecticut General Statutes, “Small Loan Lenders”, and the regulations adopted thereunder, Sections 36a-570-1 to 36a-570-17, inclusive, of the Regulations of Connecticut State Agencies;

WHEREAS, the Commissioner, through the Consumer Credit Division of the Department of Banking, conducted an investigation of the activities of Respondents, pursuant to the authority granted by Section 36a-17 of the Connecticut General Statutes, as amended by Public Acts 14-7 and 14-89, to determine if they had violated, were violating or were about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner;

WHEREAS, on October 24, 2014, the Commissioner, acting pursuant to Sections 36a-52(b), 36a-50(c), 36a-573(c), 36a-52(a) and 36a-50(a) of the Connecticut General Statutes, issued a Temporary Order to Cease and Desist, Order to Make Restitution (“Order to Make Restitution”), Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (collectively “Notice”) against Respondents, which Notice is incorporated herein by reference;

WHEREAS, on October 24, 2014, the Notice was sent by certified mail, return receipt requested, to Great Plains (Certified Mail Nos. 70120470000147896800, 70121010000172646981 and 70121010000172646998), Shotton (Certified Mail No. 70120470000147896794), Clear Creek (Certified Mail No. 70120470000147896817) and Great Plains’ attorney (Certified Mail No. 70121010000172647001);

WHEREAS, the Notice provided Great Plains with the opportunity for a hearing and stated that if a hearing was not requested within 14 days of its receipt, the Order to Make Restitution shall remain in effect and become permanent and that the Commissioner would issue an order that Great Plains cease and desist from violating subdivisions (1) and (2) of Section 36a-555 and Section 36a-573(a) of the Connecticut General Statutes, including but not limited to, enforcing such loans by any means, and the Commissioner may order a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon Great Plains;

WHEREAS, the Notice provided Shotton with the opportunity for a hearing and stated that if a hearing was not requested within 14 days of its receipt, the Commissioner would issue an order that Shotton 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 the Commissioner may order a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon Shotton;

WHEREAS, the Notice provided Clear Creek with the opportunity for a hearing and stated that if a hearing was not requested within 14 days of its receipt, the Commissioner would issue an order that Clear Creek cease and desist from violating Section 36a-555(2) of the Connecticut General Statutes, and the Commissioner may order a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon Clear Creek;

WHEREAS, on October 27, 2014, the Notice was received by Great Plains’ attorney; on October 27 and 29, 2014, by Great Plains; and on October 28, 2014, by Shotton and Clear Creek.  On November 25, 2014, the Notice received by Clear Creek was returned to the Department marked “Return to Sender, Refused, Unable to Forward”;

WHEREAS, Section 36a-52(a) of the Connecticut General Statutes provides, in pertinent part, that “[t]he notice shall be deemed received by the person on the earlier of the date of actual receipt, or seven days after mailing or sending”;

WHEREAS, Section 36a-50(a)(1) of the Connecticut General Statutes provides, in pertinent part, that “[t]he notice shall be deemed received by the person on the earlier of the date of actual receipt or seven days after mailing or sending”;

WHEREAS, Section 36a-50(c) of the Connecticut General Statutes provides, in pertinent part, that “[a]fter the commissioner issues . . . an order [to make restitution], the person named in the order may, not later than fourteen days after the receipt of such order, file a written request for a hearing”;

WHEREAS, no request for a hearing has been received by the Commissioner;

WHEREAS, on November 12, 2014, the Department received a Motion to Dismiss the Notice filed on behalf of Respondents;

WHEREAS, on November 19, 2014, the Department filed an Objection to Motion to Dismiss and on November 26, 2014, Respondents filed a Reply in Support of Motion to Dismiss Administrative Proceedings;

WHEREAS, on January 6, 2015, the Commissioner denied Respondents’ Motion to Dismiss;

WHEREAS, the Commissioner alleged in the Notice, with respect to the activity described therein, that Great Plains’ (1) engaging in the business of making loans of money or credit without obtaining the required license constitutes at least one violation of Section 36a-555(1) of the Connecticut General Statutes, (2) making, offering or assisting Connecticut borrowers to obtain unsecured consumer loans in Connecticut constitutes at least three violations of Section 36a-555(2) of the Connecticut General Statutes, and (3) charging, contracting for and receiving interest at a rate greater than 12% on at least three unsecured consumer loans to Connecticut residents in amounts less than $15,000 constitutes at least three violations of Section 36a-573(a) of the Connecticut General Statutes.  Such violations form the basis to issue an order to cease and desist against Great Plains pursuant to Sections 36a-573(c) and 36a-52(a) of the Connecticut General Statutes, issue an order to make restitution against Great Plains pursuant to Sections 36a-573(c) and 36a-50(c) of the Connecticut General Statutes and impose a civil penalty against Great Plains pursuant to Sections 36a-573(c) and 36a-50(a) of the Connecticut General Statutes;

WHEREAS, the Commissioner alleged in the Notice, with respect to the activity described therein, that, pursuant to Section 36a-573(a) of the Connecticut General Statutes, Shotton’s participating in Great Plains’ violations of Sections 36a-555(1), 36a-555(2) and 36a-573(a) of the Connecticut General Statutes subjects Shotton to the provisions of such sections and forms the basis to issue an order to cease and desist against Shotton pursuant to Sections 36a-573(c) and 36a-52(a) of the Connecticut General Statutes and impose a civil penalty against Shotton pursuant to Sections 36a-573(c) and 36a-50(a) of the Connecticut General Statutes;

WHEREAS, the Commissioner alleged in the Notice, with respect to the activity described therein, that Clear Creek’s offering or assisting Connecticut borrowers to obtain small loans in Connecticut without obtaining the required license constitutes at least one violation of Section 36a-555(2) of the Connecticut General Statutes, which forms the basis to issue an order to cease and desist against Clear Creek pursuant to Section 36a-52(a) of the Connecticut General Statutes and impose a civil penalty against Clear Creek pursuant to Section 36a-50(a) of the Connecticut General Statutes;

WHEREAS, also in the Notice, the Commissioner ordered pursuant to Sections 36a-573(c) and 36a-50(c) of the Connecticut General Statutes, that, not later than thirty (30) days from the date the Order to Make Restitution becomes permanent, Great Plains shall repay any interest received on or after October 1, 2009, from the Connecticut residents identified in Exhibit A to the Notice or any other Connecticut resident in connection with an unsecured consumer loan, plus interest, and provide evidence of such repayments to the Director of the Consumer Credit Division;

WHEREAS, the Order to Make Restitution remains in effect and became permanent against Great Plains on November 13, 2014;

WHEREAS, no evidence of repayments by Great Plains has been provided to the Director of the Consumer Credit Division;

WHEREAS, Section 36a-52(a) of the Connecticut General Statutes provides, in pertinent part, that “[i]f 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”;

WHEREAS, Section 36a-50(a)(2) of the Connecticut General Statutes provides, in pertinent part, that “[i]f 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 by imposed upon such person”;

WHEREAS, Section 36a-50(a)(3) of the Connecticut General Statutes provides that “[e]ach action undertaken by the commissioner under this subsection shall be in accordance with the provisions of chapter 54”;

AND WHEREAS, Section 36a-1-31(a) of the Regulations of Connecticut State Agencies provides, in pertinent part, that “[w]hen a party fails to request a hearing within the time specified in the notice, the allegations against the party may be deemed admitted.  Without further proceedings or notice to the party, the commissioner shall issue a final decision in accordance with section 4-180 of the Connecticut General Statutes and section 36a-1-52 of the Regulations of Connecticut State Agencies”.

II.  FINDINGS OF FACT AND CONCLUSIONS OF LAW

1.

The Commissioner finds that the matters asserted, as set forth in paragraphs 1 through 14, inclusive, of Section II of the Notice, shall constitute findings of fact within the meaning of Section 4-180(c) of the Connecticut General Statutes, and that the conclusions, as set forth in paragraphs 1 through 7, inclusive, of Section III of the Notice shall constitute conclusions of law within the meaning of Section 4-180(c) of the Connecticut General Statutes and Section 36a-1-52 of the Regulations of Connecticut State Agencies.

2.
The Commissioner finds that Great Plains has engaged in acts or conduct which, pursuant to Sections 36a-573(c) and 36a-52(a) of the Connecticut General Statutes, forms the basis to issue an order to cease and desist against Great Plains, and, pursuant to Sections 36a-573(c) and 36a-50(a) of the Connecticut General Statutes, forms the basis to impose a civil penalty upon Great Plains.
3.
The Commissioner finds that Shotton has engaged in acts or conduct which, pursuant to Sections 36a-573(c) and 36a-52(a) of the Connecticut General Statutes, forms the basis to issue an order to cease and desist against Shotton, and, pursuant to Sections 36a-573(c) and 36a-50(a) of the Connecticut General Statutes, forms the basis to impose a civil penalty upon Shotton.
4.
The Commissioner finds that Clear Creek has engaged in acts or conduct which, pursuant to Section 36a-52(a) of the Connecticut General Statutes, forms the basis to issue an order to cease and desist against Clear Creek, and, pursuant to Section 36a-50(a) of the Connecticut General Statutes, forms the basis to impose a civil penalty upon Clear Creek.
5. The Commissioner finds that the Notice was given in compliance with Sections 36a-52(a), 36a-50(a) and 4-177 of the Connecticut General Statutes.

III.  ORDER

Having read the record, I HEREBY ORDER, pursuant to Sections 36a-573(c), 36a-52(a) and 36a-50(a) of the Connecticut General Statutes, that:

1.
Great Plains Lending, LLC CEASE AND DESIST from violating subdivisions (1) and (2) of Section 36a-555 and Section 36a-573(a) of the Connecticut General Statutes, including, but not limited to, enforcing such loans by any means;
2.
A CIVIL PENALTY of Seven Hundred Thousand Dollars ($700,000) be imposed upon Great Plains Lending, LLC to be remitted to the Department of Banking by cashier’s check, certified check or money order, made payable to “Treasurer, State of Connecticut”, no later than thirty (30) days from the date this Order is mailed;
3.
John R. Shotton 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;
4. A CIVIL PENALTY of Seven Hundred Thousand Dollars ($700,000) be imposed upon John R. Shotton to be remitted to the Department of Banking by cashier’s check, certified check or money order, made payable to “Treasurer, State of Connecticut”, no later than thirty (30) days from the date this Order is mailed;
5. Clear Creek Lending CEASE AND DESIST from violating Section 36a-555(2) of the Connecticut General Statutes;
6. A CIVIL PENALTY of One Hundred Thousand Dollars ($100,000) be imposed upon Clear Creek Lending to be remitted to the Department of Banking by cashier’s check, certified check or money order, made payable to “Treasurer, State of Connecticut”, no later than thirty (30) days from the date this Order is mailed;
7. This Order shall become effective when mailed.

Dated at Hartford, Connecticut
this 6th day of January 2015.             

 ________/s/_________
 Howard F. Pitkin
 Banking Commissioner

This Order was sent by certified mail,
return receipt requested, to
Respondents’ attorneys on
January 7, 2015.



Anthony Jannotta, Esq.                     Certified Mail No. 7012 1010 0001 7264 8336
Dentons US LLP
1301 K Street, NW
Suite 600, East Tower
Washington, DC 20005

Saba Bazzazieh, Esq.                        Certified Mail No. 7012 1010 0001 7264 8343
Rosette, LLP
1100 H. Street, NW, Suite 400
Washington, DC 20005


 


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