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Home Loan Escrow Accounts

Bulletin
Wednesday, January 24, 2018
Banking Bulletin #48
File attachments: 
http://www.dfr.vermont.gov/sites/default/files/Bulletin_48.pdf

State of Vermont

Department of Financial Regulation

Banking Bulletin No. 48

(January 24, 2018)

(This Bulletin Supersedes and Replaces Banking Bulletin No. 40)

Home Loan Escrow Accounts

This Bulletin is issued pursuant to 8 V.S.A. §10404, which governs home loan escrow accounts in Vermont.  For purposes of this Bulletin and 8 V.S.A. §10404, an “’escrow account’ means an account into which a borrower is obligated under the terms of a residential real estate loan agreement to make periodic payments of property taxes, insurance premiums, or other similar charges.” 8 V.S.A. §10404 (a)(2).

Section 10404 (e) requires that lenders maintain escrow account funds in a federally insured depository institution.  Section 10404 (b) generally requires that lenders pay interest on the funds deposited into an escrow account under the same conditions as their regular savings account, if offered, and otherwise at a rate not less than the rate offered in the lender’s local market area.  Lenders who are not federally insured depository institutions are advised to document their local prevailing market rates, and to pay interest accordingly.

Section 10404 (c) was amended to conform to federal law, and now permits up to a two-month cushion on escrow accounts.  8 V.S.A. §10404 (c) (1)

In addition to requiring a new escrow account analysis at least annually, Section 10404 (g) now requires that, upon receipt of a revised property tax bill, the lender shall review the property tax bill and, upon verifying that it has been reduced since the date of the last escrow account analysis, the lender shall, within 30 days of receiving the bill, conduct a new escrow account analysis, recalculate the borrower's monthly escrow payment, and notify the borrower of any change.  The borrower or municipality may provide the revised property tax bill at any time. 8 V.S.A. §10404 (g) (1) & (2).

Lenders are now required to at least annually, and whenever an escrow account analysis is conducted or upon request of the borrower, provide to the borrower financial statements relating to the borrower's escrow account in a manner and on a form consistent with the federal Real Estate Settlement Procedures Act. 8 V.S.A. §10404 (g) (3)

All lenders making loans secured by Vermont residential real estate must comply with the requirements of 8 V.S.A. §10404, and this Bulletin if the lender requires that the borrower maintain an escrow account.  This applies to all lenders regardless of the source of funds.

Lenders are directed to the Vermont Home Loan Escrow Account statute (currently found at 8 V.S.A. §10404) for additional information and restrictions regarding escrow accounts.

Dated this 24th day of January 2018

 

_______________________________

Michael S. Pieciak

Commissioner

PHH Mortgage Corporation

Order
Wednesday, January 3, 2018
Docket No. 18-001-B
File attachments: 
http://www.dfr.vermont.gov/sites/default/files/20180104113249.pdf

SETTLEMENT AGREEMENT AND CONSENT ORDER

PHH MORTGAGE CORPORATION

WHEREAS, PHH Mortgage Corporation (“PHH”) is a privately held New Jersey corporation with its principal place of business located in Mount Laurel, New Jersey and an assigned NMLS identifier number of 2726.

WHEREAS, the States of Alabama, Alaska, Arizona, Arkansas, California, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin, Wyoming, the Commonwealths of Kentucky, Massachusetts, Pennsylvania and Virginia, and the District of Columbia] (individually, a “Participating State,” and collectively, the “Participating States”) have each agreed, through its respective state mortgage regulatory agency, to negotiate and enter into this Settlement Agreement and Consent Order (hereinafter referred to as the “Agreement”).

WHEREAS, the state mortgage regulators of the Participating States (hereinafter referred to individually as a “State Mortgage Regulator,” and collectively as the “State Mortgage Regulators”) are respective members of the Conference of State Bank Supervisors (“CSBS”) and the American Association of Residential Mortgage Regulators (“AARMR”) and have agreed to address enforcement concerns with PHH in a collective and coordinated manner, working through the Multi-State Mortgage Committee (“MMC”).  The State Mortgage Regulators and PHH are collectively referred to herein as the “Parties.”

WHEREAS, PHH is licensed as a mortgage broker, lender, and/or servicer under the respective laws of each Participating State.

WHEREAS, on or about December 20, 2010, the State Mortgage Regulators, as coordinated by the MMC, commenced a multi-state mortgage loan servicing examination (the “Multi-State Examination”) of PHH covering the period of January 1, 2008 to December 31, 2010, in order to determine PHH’s compliance with applicable State and Federal laws and regulations, financial condition, and the adequacy of policies and procedures and the control and supervision of the licensed mortgage loan servicing operations.  The Multi-State Examination was conducted by the State Mortgage Regulators from the states of Arizona, Georgia, Louisiana, Massachusetts, and New York. The Multi-State Examination of PHH was conducted pursuant to their respective statutory authorities, and in accordance with the protocols established by the CSBS/AARMR Nationwide Cooperative Protocol for Mortgage Supervision as well as the Nationwide Cooperative Agreement for Mortgage Supervision.  A concurrent mortgage servicing examination of PHH was conducted by the Florida Office of Financial Regulation.

WHEREAS, Reports of Examination and related inquiries and investigations by the State Mortgage Regulators identified practices that may otherwise violate the laws and regulations of the Participating States and related federal law, including, but not limited to, the allegations and releases that are the basis of this Agreement, which specifically include:

1)      Lack of controls related to document execution, including, unauthorized execution, inconsistent signatures, faulty assignment, improper certification and notarization, and other related practices affecting the integrity of documents relied upon in the foreclosure process;

2)      Deficiencies in servicing, foreclosure, loan modification, and other loss mitigation processes;

3)      Deficiencies related to internal controls, including inadequate staffing levels and lack of independence;

4)      Deficiencies in control and oversight of third-party providers, particularly local foreclosure counsel; and

5)      Deficiencies in document maintenance processes, including but not limited to, failure to retain required documents and failure to produce documents requested in tandem with the examinations.

WHEREAS, the State Mortgage Regulators and PHH enter into this Agreement with the understanding that the State Attorneys Generals, as plaintiffs, have entered a Consent Judgment with PHH in the United States District Court for the District of Columbia (the “Consent Judgment”) in coordination with this Agreement.

WHEREAS, this Agreement incorporates common terms and conditions to that of the Consent Judgment, including certain exhibits herein, which are fully integrated into this Agreement.  It is further understood that the common terms used herein and in the Consent Judgment, along with similar exhibits, set forth the terms and conditions applicable to PHH and the State Mortgage Regulators, apart from and supplemented by the terms and conditions in this Agreement. To the extent that the terms and conditions contained in this Agreement conflict with any provisions of the Consent Judgment or its exhibits, the terms and conditions of this Agreement shall control.

WHEREAS, PHH enters into this Agreement solely for the purpose of resolving disputes with the State Mortgage Regulators concerning the findings as described in the Reports of Examination and does not admit any wrongdoing, allegations or implications of fact and does not admit any violations of applicable laws, regulations or rules governing the conduct and operation of its servicing business.  PHH acknowledges that the State Mortgage Regulators have and maintain jurisdiction over the underlying dispute and therefore have the authority to fully resolve the matter.

WHEREAS, PHH acknowledges that the State Mortgage Regulators are relying, in part, upon PHH’s representations and warranties stated herein in making their determinations in this matter.  PHH further acknowledges that this Agreement may be revoked and the State Mortgage Regulators may pursue any and all remedies available under the law against PHH if the State Mortgage Regulators later find that PHH knowingly or willfully withheld information from the State Mortgage Regulators.

WHEREAS, PHH represents that it has implemented, and will continue to maintain, procedures designed to ensure that PHH has complied with all regulatory requirements imposed by each individual State Mortgage Regulator. 

WHEREAS, the State Mortgage Regulators have legal authority to initiate administrative actions based on the conduct described in the Reports of Examination.

            WHEREAS, the intention of the State Mortgage Regulators in effecting this settlement is to solely resolve the violations and conduct described in the Reports of Examination.  The State Mortgage Regulators reserve all of their rights, duties, and authority to enforce all statutes, rules and regulations under their respective jurisdictions against PHH regarding any mortgage loan activities and/or servicing activities outside the scope of this Agreement. Additionally, a State Mortgage Regulator may consider this Agreement and the facts set forth herein in connection with, and in deciding, any examination, action, or proceeding under the jurisdiction of that State Mortgage Regulator, if the basis of such examination, action, or proceeding is not a direct result of the specific activity identified in the Reports of Examination; and that this Agreement may, if relevant to such examination, action or proceeding, be admitted into evidence in any matter before a State Mortgage Regulator.  Notwithstanding the foregoing and any other term of this Agreement, claims for conduct discovered by PHH during the course of its internal audit in June 2014 and the resulting remediation process regarding a flaw in its automated system to pay default counsel fees and costs are hereby not released and are specifically reserved by the State Mortgage Regulators.

WHEREAS, PHH hereby knowingly, willingly, voluntarily, and irrevocably consents to the execution of this Agreement pursuant to the authority vested in each State Mortgage Regulator and agrees that it understands all of the terms and conditions contained herein.  PHH acknowledges that it has full knowledge of its rights to notice and a hearing pursuant to the laws of the respective Participating States.  By voluntarily entering into this Agreement, PHH waives any right to notice and a hearing, and review of such hearing, and also herein waives all rights to any other judicial appeal concerning the terms, conditions, and related obligations set forth in this Agreement.  PHH further acknowledges that it has had an opportunity to consult with independent legal counsel in connection with its waiver of rights and with the negotiation and execution of this Agreement, and that PHH has either consulted with independent legal counsel or has knowingly elected not to do so.

            WHEREAS, PHH represents that the person signing below is authorized to execute this Agreement and to legally bind PHH.

            WHEREAS, in that the Parties have had the opportunity to draft, review and edit the language of this Agreement, the Parties agree that no presumption for or against any party arising out of drafting all or any part of this Agreement will be applied in any action relating to, connected to, or involving this Agreement.  Accordingly, the Parties agree to waive the benefit of any State statute, providing that in cases of uncertainty, language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist.

            NOW, THEREFORE, this Agreement having been negotiated by the Parties in order to resolve the issues identified herein and in the Reports of Examination, without incurring the costs, inconvenience and delays associated with protracted administrative and judicial proceedings, it is by the State Mortgage Regulators listed below hereby ORDERED:

 

I.  JURISDICTION

1.            That pursuant to the licensing and supervision laws of the Participating States, the Participating States have jurisdiction over PHH as described herein and may enforce the terms of this Agreement thereon unless otherwise stated in this Agreement.

II.   APPLICABILITY

2.            That the provisions of this Agreement and any Exhibits incorporated herein shall apply to PHH’s servicing activities regardless of whether the company is servicing residential mortgage loans as a servicer or subservicer.

 

III.   MORTGAGE SERVICING STANDARDS

3.            That PHH shall comply with all mortgage servicing standards set forth in “Exhibit A”, (“Servicing Standards”) which are attached and incorporated herein, as well as all servicing standards prescribed by Federal law and regulation.  PHH shall implement the Servicing Standards no later than January 1, 2018, or as otherwise stated in Exhibit A, (the “Implementation Date”).

IV. CONSUMER RELIEF

4.            Payments to Foreclosed and Referred Borrowers.  In accordance with written instructions from the Executive Committee, established in Paragraph 8, and for the purposes set forth in “Exhibit B”, which is attached and incorporated herein, and as also provided for in Exhibit B of the Consent Judgment, PHH shall transfer to the Settlement Administrator appointed under Exhibit B thirty-one million, four hundred and fifty-six thousand, two hundred and ten dollars ($31,456,210) (the “Borrower Payment Amount”) to enable the Settlement Administrator to provide cash payments to (a) borrowers whose loans were serviced by PHH at the time the foreclosure was completed and whose homes were sold or taken in a foreclosure between and including January 1, 2009, and December 31, 2012 or (b) all other borrowers whose loans were serviced by PHH and were referred to foreclosure during that same time period and not accounted for in (a) above; who submit claims allegedly arising from the Covered Conduct (as that term is defined in Exhibit C attached to the Consent Judgement); and who otherwise meet criteria set forth by the Executive Committee; and to pay the reasonable costs and expenses of a Settlement Administrator, including taxes and fees for tax counsel, if any.  PHH shall also pay or cause to be paid any additional amounts necessary to pay claims, if any, of borrowers whose data is provided to the Settlement Administrator by PHH after PHH warrants that the data is complete and accurate pursuant to Paragraph 3 of Exhibit B.  The Borrower Payment Amount and any other funds provided to the Settlement Administrator for these purposes shall be administered in accordance with the terms set forth in Exhibit B.  PHH shall pay the Borrower Payment Amount by electronic funds transfer, pursuant to written instructions to be provided by the Executive Committee into an account established in accordance with this Paragraph 6, within seven (7) days of receiving notice that the account has been established or within seven (7) days of the Effective Date of this Agreement, whichever is later.  After PHH have made the required payments, PHH shall no longer have any property right, title, interest or other legal claim in any funds.  The account established by this Paragraph 6 is intended to be a Qualified Settlement Fund within the meaning of Treasury Regulation Section 1.468B-1 of the U.S. Internal Revenue Code of 1986, as amended.

 

V.  SERVICING STANDARDS COMPLIANCE TESTING AND REPORTING


5.                  Internal and/or External Compliance Testing.  PHH shall ensure that the Internal Audit Department of its parent company conducts transactional testing and compliance/controls testing, either internally and/or by retaining the services of a third-party firm, to assess PHH’s compliance with the Servicing Standards set forth in Exhibit A.  The testing shall be conducted in the ordinary course of PHH’s business consistent with industry standards and PHH’s internal testing schedule, which shall be based on an assessment of high risk areas and emerging trends.

6.                  PHH Internal Audit.  PHH shall ensure that the Internal Audit Department of its parent company conducts audits of PHH’s servicing functions, including PHH’s compliance with the Servicing Standards.  PHH shall include the Servicing Standards in its annual risk assessment, which forms the basis for its annual audit plan, and shall conduct audits in accordance with its annual risk assessment and annual audit plan.

7.                  Corrective Action Activity.  In the event any deficiencies are identified through testing or audits, PHH shall perform a root cause analysis and determine whether corrective action activity, including a plan for remediation of any consumer harm, is necessary.

8.                  Executive Committee.  An executive committee comprised of representatives of the government signatories to this Agreement and the Consent Judgment (“Executive Committee”) shall serve as the point of contact between PHH and the government signatories and shall receive reports and communications from PHH.

9.                  Reports.  PHH shall cause to be submitted to the State Mortgage Regulators on the Executive Committee on a quarterly basis (1) any PHH Internal Audit reports conducted on PHH’s compliance with the Servicing Standards during the preceding quarter; (2) any internal or external transactional testing results and compliance/controls testing results conducted; and (3) any root-cause analysis or plan for corrective action activity developed or performed by PHH during the preceding quarter (collectively, “Reports”).  PHH shall submit Reports on the 20th day of the month following the end of each quarter, beginning on the 20th day of the month following the end of the first full quarter of 2018.  The recipients of the Reports shall maintain the confidentiality of the Reports in accordance with each respective states’ laws.

10.        Auditing Period.  The auditing and reporting period shall be for three years, commencing on January 1, 2018.

 

VI.  ADMINISTRATIVE PENALTY

11.        Administrative Penalty.  That PHH shall pay an administrative penalty of eight million, eight hundred and twenty-three thousand, five hundred and fifteen dollars ($8,823,515).  Each Participating State will receive a payment of one hundred and fifty nine thousand, nine hundred and sixty seven dollars ($159,967), with each Participating State that also took part in an examination (Arizona, Georgia, Louisiana, and Massachusetts) receiving an additional one hundred and sixty five thousand, thirty three dollars ($165,033).  PHH shall pay this administrative penalty by the means designated by each Participating State within fifteen (15) calendar days following the Effective Date of this Agreement.

12.        That in the event that PHH fails to submit any administrative penalty set forth in this Agreement, in the amounts specified herein and in accordance with the applicable deadline, or if any transfer of any monetary amount required under this Agreement is voided by a Court Order, including a Bankruptcy Court Order, PHH agrees not to object to a Participating State submitting a claim, nor attempt to defend or defeat such authorized claim, for any unpaid amounts against any surety bond that PHH may maintain in such Participating State as a condition of maintaining a license under the jurisdiction of that State Mortgage Regulator.

VII. ENFORCEMENT

13.        General Enforcement Authority and Enforcement Relative to the Mortgage Servicing Standards, Consumer Relief, and Administrative Penalty: That the terms of this Agreement including all Exhibits attached and incorporated herein shall be enforced in accordance with the provisions, terms and authorities provided herein and under the respective laws and regulations of each Participating State.

14.        No Restriction on Existing Examination and Investigative Authority. That this Agreement shall in no way preclude any State Mortgage Regulator from exercising its examination or investigative authority authorized under the laws of the corresponding Participating State in the instance a determination is made wherein PHH is found not to be adhering to the requirements of the Agreement, other than inadvertent and isolated errors that are promptly corrected by PHH, or involving any unrelated matter not subject to the terms of this Agreement.

15.        That, notwithstanding any other relief to the contrary, if PHH fails to comply with the terms and conditions of this Agreement, the State Mortgage Regulators may pursue any action allowed by law concerning the conduct and compliance violations stated in the Report of Examination, such action including, but not limited to, suspension or revocation of a license issued by the State Mortgage Regulators to PHH, imposition of a civil money penalty against PHH, or any other remedy allowed by law.  The Parties agree that the failure of PHH to comply with any term or condition of this Agreement with respect to a particular State shall be treated as a violation of an Order of the State and may be enforced as such.  Moreover, PHH acknowledges and agrees that this Agreement is only binding on the State Mortgage Regulators and not any other Local, State or Federal Agency, Department or Office.

16.        Sharing of Information and Cooperation.  That the State Mortgage Regulators may collectively or individually request and receive any information or documents in the possession of the Executive Committee or the MMC.  This Agreement shall not limit PHH’s obligations, as a licensee of the State Mortgage Regulators, to cooperate with any examination or investigation, including but not limited to, any obligation to timely provide requested information or documents to any State Mortgage Regulator.

VIII.    RELEASE

17.  That certain claims and remedies are released as provided for in the Release attached hereto as Exhibit C.  That certain claims and remedies are not released, as provided in Part III of Exhibit C.  The releases contained in Exhibit C shall become effective upon payment of the Borrower Payment Amount identified in Section IV and the Administrative Penalty identified in Section VI.

 

IX. GENERAL PROVISIONS

18.        Effectiveness. That this Agreement shall become effective upon execution by all of the named State Mortgage Regulators (the “Effective Date”).

19.        Public Record.  That this Agreement shall become public upon the Effective Date.

20.        Binding Nature.  That the terms of this Agreement  (including the Servicing Standards attached as Exhibit A) are binding on PHH.  This Agreement (including the Servicing Standards attached as Exhibit A) does not bind any successors or assigns, future purchasers of all or substantially all of the assets of PHH Corporation or PHH, or successors-in-interest of PHH Corporation or PHH.  Notwithstanding the foregoing, in the event of the sale of PHH’s servicing or sub-servicing platform, PHH shall work with the State Mortgage Regulators to ensure an orderly transition of serviced loans to any new servicer or sub-servicer of such loans. The provisions of this Agreement shall remain effective and enforceable except to the extent that, and until such time as, any provisions of this Agreement shall have been modified, terminated, suspended, or set aside, in writing by mutual agreement of the State Mortgage Regulators collectively and PHH.

21.        Standing and Choice of Law. That each State Mortgage Regulator has standing to enforce this Agreement in the judicial or administrative process otherwise authorized under the laws and regulations of the corresponding Participating State.  Upon entry, this Agreement shall be deemed a final order of each respective State Mortgage Regulator unless adoption of a subsequent order is necessary under the laws of the corresponding Participating State.  In the event of any disagreement between any State Mortgage Regulator and PHH regarding the enforceability or interpretation of this Agreement and compliance therewith, the courts or administrative agency authorized under the laws of the corresponding Participating State shall have exclusive jurisdiction over the dispute, and the laws of the Participating State shall govern the interpretation, construction, and enforceability of this Agreement.

22.        Adoption of Subsequent Orders to Incorporate Terms. That a State Mortgage Regulator, if deemed necessary under the laws and regulations of the corresponding Participating State, may issue a separate administrative order to adopt and incorporate the terms and conditions of this Agreement.  A State Mortgage Regulator may sua sponte issue such subsequent order without the review and approval of PHH provided the subsequent order does not amend, alter, or otherwise change the terms of the Agreement. In the event a subsequent order amends, alters, or otherwise changes the terms of the Agreement, the terms of the Agreement, as set forth herein, will control.

23.        Privilege.  That this Agreement shall not constitute a waiver of any applicable attorney-client or work product privilege, confidentiality, or any other protection applicable to any negotiations relative to this Agreement.   

24.        Titles.  That the titles used to identify the paragraphs of this Agreement are for the convenience of reference only and do not control the interpretation of this Agreement.

25.        Final Agreement.  That this Agreement is the final written expression and the complete and exclusive statement of all the agreements, conditions, promises, representations, and covenants between the Parties with respect to the subject matter hereof, and supersedes all prior or contemporaneous agreements, negotiations, representations, understandings, and discussions between and among the Parties, their respective representatives, and any other person or entity, with respect to the subject matter covered herein, excepting therefrom any proceeding or action if such proceeding or action is based upon facts not presently known to a State Mortgage Regulator or which were knowingly concealed from a State Mortgage Regulator by PHH.  The Parties further acknowledge and agree that nothing contained in this Agreement shall operate to limit a State Mortgage Regulator’s ability to assist any other Local, State or Federal Agency, Department or Office with any investigation or prosecution, whether administrative, civil or criminal, initiated by any such Agency, Department or Office against PHH or any other person based upon any of the activities alleged in these matters or otherwise.

26.        Waiver.  That the waiver of any provision of this Agreement shall not operate to waive any other provision set forth herein, and any waiver, amendment and/or change to the terms of this Agreement must be in writing signed by the Parties.

27.        No Private Right of Action Created.  That this Agreement does not create any private rights or remedies against PHH (or any of its affiliates or subsidiaries), create any liability for PHH (or any of its affiliates or subsidiaries) or limit defenses of PHH (or any of its affiliates or subsidiaries) for any person or entity not a party to this Agreement.

28.        Costs.  That except as otherwise agreed to in this Agreement, each party to this Agreement will bear its own costs and attorneys’ fees associated with this enforcement action.

29.        Counterparts.  That this Agreement may be executed in separate counterparts, by facsimile or by PDF.  A copy of the signed Agreement will be given the same effect as the originally signed Agreement.

30.        That nothing in this Agreement shall relieve PHH of its obligation to comply with applicable State and Federal law.

It is so ORDERED.

IN WITNESS WHEREOF, in consideration of the foregoing, including the recital paragraphs, and with the Parties intending to be legally bound, do hereby execute this Agreement this 29th of December, 2017.

PHH MORTGAGE CORPORATION

 

By:  ____________________________

Robert Crowl

President and CEO

Docket No. 17-023-B

Order
Monday, December 18, 2017
Yapstone Holdings, Inc. and YapStone, Inc.
File attachments: 
http://www.dfr.vermont.gov/sites/default/files/Yapstone%20Executed%20Order.pdf

STATE OF VERMONT

DEPARTMENT OF FINANCIAL REGULATION

IN RE:                                                                        )

                                                                        )

YAPSTONE HOLDINGS, INC.                             )

NMLS # 1416359                                                       )

                                                                                    )

and                                                                              )

                                                                                    )

YAPSTONE, INC.                                                    )         

NMLS # 1488912                                                       )           DOCKET NO. 17-023-B

                                                                                    )                                

STIPULATION AND CONSENT ORDER

The Banking Division of the Vermont Department of Financial Regulation (the “Department”), Yapstone Holdings, Inc. and YapStone, Inc. (collectively “Respondents”) hereby stipulate and agree as follows:

1.                  Pursuant to 8 V.S.A. Chapters 1 and 79, the Commissioner of the Vermont Department of Financial Regulation is charged with administering and enforcing Vermont law as it pertains to money transmitters in the State of Vermont.

2.                   Yapstone Holdings, Inc. is a Delaware corporation with its principal place of business at 2121 North California Blvd., Suite 400, Walnut Creek, CA 94596.

3.                  YapStone, Inc., is a Delaware corporation with its principal place of business at 2121 North California Blvd., Suite 400, Walnut Creek, CA 94596.

4.                  Respondents acknowledge and admit the jurisdiction of the Commissioner over the subject matter of this Stipulation and Consent Order set forth herein.

5.                  YapStone, Inc. provides electronic payment processing services for the vacation, multi-family apartment rental, self-storage rental, homeowners’ association, faith-based giving, and lodging markets, processing payments received from customers and remitting them to the property owner, property management company, or faith based organization. 

6.                  Respondents have been offering electronic payment processing services in Vermont since 2010.

7.                  Vermont’s Money Services Act, 8 V.S.A. Chapter 79 defines “money transmission” to include “receiving money or monetary value for transmission to a location within or outside the United States.” 8 V.S.A. § 2500(11).

8.                  On December 22, 2016, YapStone, Inc. submitted an application through the Nationwide Multistate Licensing System (“NMLS”) to obtain a Vermont money transmitter license.  Prior to that time, Respondents did not apply for a money transmitter license in Vermont.

9.                  The Department asserts that, prior to receiving a Vermont money transmitter license, Yapstone Holdings, Inc. and YapStone, Inc.  engaged in the business of money transmission in Vermont without the license or authorization required by 8 V.S.A. Chapter 79.

10.              Based on information provided by Respondents, since 2010, the Department finds that prior to obtaining a license in Vermont, in aggregate, Respondents transmitted to, from or among Vermont residents a total of $31,938,603 in 55,508 transactions, receiving $273,108 in fees.  Respondents certify that the above constitutes the total of the business it conducted and fees it earned in Vermont between 2010 and May 31, 2017.

11.              The Department asserts that Respondents violated Vermont’s money transmitter laws by engaging in money transmission without a license.  As part of this Stipulation and Consent Order, Respondents neither admit nor deny the Department’s allegation that they violated Vermont’s money transmitter laws by engaging in money transmission without a license or authorization under Title 8, Chapter 79.

12.              At all times, Respondents have cooperated with the Department.

13.              The Department has not received any complaints stemming from Respondents’ Vermont activity.

14.              The parties wish to resolve this matter without administrative or judicial proceedings.

15.              Respondents and the Department expressly agree to enter into this Stipulation and Consent Order in full and complete resolution of the alleged violations described herein.

16.              Respondent agrees to pay $62,816 to the Department of Financial Regulation; representing licensing fees and assessments for the period of unlicensed activity in the amount of $ 8,194, and disgorgement of an appropriate amount of fees earned from the unlicensed activity in the amount of $54,622. The penalty is allocated as follows: Yapstone Holdings, Inc. shall pay $38,946 and YapStone, Inc. shall pay $23,870.  The penalty shall be paid within ten (10) days of the execution of this Stipulation and Consent Order.

17.              Respondents shall not, either directly or through its affiliates, engage in the business of money transmission in Vermont without a Vermont money transmitter license.

18.              This Stipulation and Consent Order shall not prevent any person from pursuing any claim he or she may have against Respondents, nor shall it be understood as determining whether any such claim may or may not exist in law or equity. Nothing contained herein shall be deemed an admission by Respondents.

19.              Nothing contained in this Stipulation and Consent Order shall restrain or limit the Department in responding to and addressing any actual complaint filed with the Department involving Respondents and the Department reserves the right to pursue restitution in connection with any complaint filed with the Department.

20.              The Department and Respondents are entering into this Stipulation and Consent Order to settle a dispute between them and both agree that this Stipulation and Consent Order does not constitute an adjudication of a violation of statute or regulation.

21.              Respondents hereby waives their statutory right to notice and a hearing before the Commissioner of the Department, or his designated appointee.

22.              Respondents acknowledge and agree that this Stipulation and Consent Order is entered into freely and voluntarily and that except as set forth herein, no promise was made to induce the Respondents to enter into it.  Respondents acknowledge their understanding of and agree to all terms, conditions, and obligations contained in this Stipulation and Consent Order.  Respondents consent to the entry of this Stipulation and Consent Order.

23.              The terms set forth in this Stipulation and Consent Order represent the complete agreement between the parties as to its subject matter.

24.              The undersigned representative of Respondents affirm that he or she has taken all necessary steps to obtain the authority to bind Respondents to the obligations stated herein and has the authority to bind Respondents to the obligations stated herein.

Yapstone Holdings, Inc.

By:      ____________________________________________        Date: __________________

David E. Durant, Secretary and General Counsel

YapStone, Inc.

By:      ____________________________________________        Date: __________________

David E. Durant, Secretaty and General Counsel

ACCEPTED BY:

___________________________________________________      _______________

Molly Dillon, Deputy Commissioner                                                  Date

Banking Division, Vermont Department of Financial Regulation


CONSENT ORDER

1.  The stipulated facts, terms, and provisions of the Stipulation are incorporated by reference herein.

2.  Jurisdiction in this matter is established pursuant to Chapters 1 and 79 of Title 8.

3.  Pursuant to the Stipulation, Respondents consent to the entry of this Consent Order.

4.  Respondent shall comply with all agreements, stipulations, and undertakings as recited above.

 

Dated at Montpelier, Vermont this ____ day of December 2017.

 

DOXO, Inc.

Order
Tuesday, July 18, 2017
Docket No. 17-014-B
File attachments: 
http://www.dfr.vermont.gov/sites/default/files/Docket_17_014_B_DOXO.pdf

STATE OF VERMONT
DEPARTMENT OF FINANCIAL REGULATION
IN RE:)
)
DOXO, INC. )
NMLS # 1513565)DOCKET NO. 17-014-B 

STIPULATION AND CONSENT ORDER
The Banking Division of the Vermont Department of Financial Regulation (the “Department”) and Doxo, Inc. (“Doxo” or “Respondent”) hereby stipulate and agree as follows:
Pursuant to 8 V.S.A. Chapters 1 and 79, the Commissioner of the Vermont Department of Financial Regulation is charged with administering and enforcing Vermont law as it pertains to money transmitters in the State of Vermont.
Doxo, Inc., is a Delaware corporation with its principal place of business at 2025 First Avenue, Suite 270, Seattle, WA 98121.
Doxo acknowledges and admits the jurisdiction of the Commissioner over the subject matter of this Stipulation and Consent Order set forth herein.
Doxo provides a bill paying service for billers to deliver bills electronically to clients, and for clients to pay bills by transferring money from client accounts to billers.  Clients can sign up using Doxo’s mobile app or on the Doxo website and can link all their bills and accounts to organize payments through their Doxo account.
In 2013, Doxo was contractually-appointed as an agent by Noventis, Inc., formerly known as PreCash, Inc., (“Noventis”) a Vermont licensed money transmitter.  A June 16, 2015 amendment to Doxo’s contract, read: “Vermont. Appointment. PreCash (as “licensee) hereby appoints Agent (as “authorized delegate”) with authority to engage in money transmission on behalf of licensee.”
Vermont’s Money Services Act, 8 V.S.A. Chapter 79 limits an “authorized delegate” of a licensee to a person located in Vermont. 8 V.S.A. § 2500(2).
In mid-2016, Noventis notified Doxo that it could not serve as an authorized delegate in Vermont because it did not have a physical location in Vermont.
Following this notification by Noventis, on August 26, 2016, Doxo submitted a filing through the Nationwide Multistate Licensing System (“NMLS”) to obtain a Vermont money transmitter license, and immediately ceased all enterprise sales activity, promotional activity and the addition of new billers in Vermont.  Doxo believed at the time that the best and least disruptive outcome for users of the Doxo service in Vermont was to continue to allow users to pay their bills through the Doxo service, and that the immediate application for a license following notification by Noventis would be considered appropriate remedy.  The Department did not authorize Doxo to continue to operate while the application was pending.
The Department asserts that Doxo violated Vermont’s money transmitter laws by engaging in money transmission without a license, in that Doxo did not qualify as an authorized delegate because it was not “located in Vermont” per 8 V.S.A. § 2500(2) and was operating without a physical location within the state.  Doxo asserts that, at the time, it believed it was acting as an authorized delegate of a Vermont transmitter licensee.    As part of this Stipulation and Consent Order, Doxo neither admits nor denies the Department’s allegation that Doxo violated Vermont’s money transmitter laws by engaging in money transmission without a license or authorization under Title 8, Chapter 79.
Based on information provided by Doxo, since June 1, 2013, the Department finds that prior to obtaining a license in Vermont, in aggregate, Doxo transmitted to, from or among Vermont customers a total of $316,374.29 on 1,808 transactions, which includes $9,502.36 in fees. Doxo certifies that the above constitutes the total of the business it conducted and fees it earned in Vermont since June 2013.
At all times, Respondent has cooperated with the Department.
The parties wish to resolve this matter without administrative or judicial proceedings.
Respondent and the Department expressly agree to enter into this Stipulation and Consent Order in full and complete resolution of the alleged violations described herein.
Respondent agrees to pay $8,686.19 to the Department of Financial Regulation; representing an administrative penalty in the amount of $2,500.00 and disgorgement of fees earned since July 1, 2016 in the amount of $6,186.19. This shall be paid within ten (10) days of the execution of this Stipulation and Consent Order.  
Respondent shall maintain a minimum net worth of no less than $100,000 at all times, as required by 8 V.S.A §2510.  Doxo has provided letters from investors verifying their commitment to support Doxo.  In the event that either of these investors should withdraw their support, Respondent must notify the Department within 10 days. 
Respondent shall not, either directly or through its affiliates, engage in the business of money transmission in Vermont without a Vermont money transmitter license.
This Stipulation and Consent Order shall not prevent any person from pursuing any claim he or she may have against Respondent, nor shall it be understood as determining whether any such claim may or may not exist in law or equity. Nothing contained herein shall be deemed an admission by Respondent.
Nothing contained in this Stipulation and Consent Order shall restrain or limit the Department in responding to and addressing any actual complaint filed with the Department involving Respondent and the Department reserves the right to pursue restitution in connection with any complaint filed with the Department.
The Department and Respondent are entering into this Stipulation and Consent Order to settle a dispute between them and both agree that this Stipulation and Consent Order does not constitute an adjudication of a violation of statute or regulation.
Respondent hereby waives its statutory right to notice and a hearing before the Commissioner of the Department, or his designated appointee.
Respondent acknowledges and agrees that this stipulation is entered into freely and voluntarily and that except as set forth herein, no promise was made to induce the Respondent to enter into it. Respondent acknowledges its understanding of and agrees to all terms, conditions, and obligations contained in this Stipulation and Consent Order.
The terms set forth in this Stipulation and Consent Order represent the complete agreement between the parties as to its subject matter.
The undersigned representative of Respondent affirms that he or she has taken all necessary steps to obtain the authority to bind Respondent to the obligations stated herein and has the authority to bind Respondent to the obligations stated herein.

DOXO, INC.
By: ____________________________________________    Date: __________________

Print name & Title:  
_____________________________________________________________________________

ACCEPTED BY:
___________________________________________________    _______________
Cynthia Stuart, Deputy CommissionerDate
Banking Division, Vermont Department of Financial Regulation



CONSENT ORDER

1.  The stipulated facts, terms, and provisions of the Stipulation are incorporated by reference herein.
2.  Jurisdiction in this matter is established pursuant to Chapters 1 and 79 of Title 8.
3.  Pursuant to the Stipulation, Respondents consent to the entry of this Consent Order.
4.  Respondent shall comply with all agreements, stipulations, and undertakings as recited above.


Dated at Montpelier, Vermont this ____ day of July 2017.





_____________________________________________________
Michael S. Pieciak, Commissioner
Vermont Department of Financial Regulation

Order: Transition Period for Money Transmitters To Implement Receipt Requirements

Order
Thursday, June 29, 2017
Docket No. 17-021-B
File attachments: 
http://www.dfr.vermont.gov/sites/default/files/Docket_17_021_B_MSA_Transition_Order_2017.pdf

 

STATE OF VERMONT 
DEPARTMENT OF FINANCIAL REGULATION

 

In Re:)

)

8 V.S.A. Chapter 79 – Money Transmitters )Docket No. 17-021-B

Receipts Transition Period)

 

 

ORDER

TRANSITION PERIOD FOR MONEY TRANMITTERS

TO IMPLEMENT RECEIPT REQUIREMENTS

 

Background

  1. Section 13, Act 22 of 2017 becomes effective on July 1, 2017.

  2. Act 22 amended 8 V.S.A. Chapter 79 and requires every money transmitter licensee and its authorized delegates to provide a receipt to the customer that clearly states the name, address, and telephone number of the licensee; the amount of money presented for transmission; and the total of any fees charged by the licensee. 8 V.S.A. § 2511(a).

  3. The Department is aware that the money services industry is built upon third party relationships such as its authorized delegates and clients that play varying roles in the completion of a transaction.

  4. The Department is aware that money transmission may be in the form of a pre-packaged product that requires design, production and distribution; or is dependent upon software technology.  In such situations sufficient lead time is required to implement change.

  5. The Department does not want to disrupt money transmission services while licensees and their authorized delegates work towards compliance with the Section 13 of Act 22.

  6. Pursuant to 8 V.S.A. § 15 the Commissioner may issue such orders as shall be necessary to the administration of title 8 V.S.A. and to carry out the purposes of such title.

  1. Pursuant to 8 V.S.A. § 10, the Commissioner is directed to supervise organizations that provide financial services and products in a manner that: ensures their solvency, liquidity, stability, and efficiency; encourages the development, expansion, and availability of financial services and products; and protects consumers.

  2. The Commissioner finds that providing licensees and their authorized delegates some additional limited time to adjust to the changes resulting from Act 22 without creating undue hardship for licensees, their authorized delegates, clients, or customers is necessary and appropriate to the administration of 8 V.S.A. Chapter 79 and to carrying out the purposes of Chapter 79 by providing stability for money transmitters and ensuring the availability of money transmission services to Vermonters

Order

It is hereby ordered that:

  1. Prior to September 30, 2017, a licensee who provides documentation demonstrating that the licensee initiated action to comply with 8 V.S.A. § 2511(a) will not be penalized for failure to comply with the receipt requirements of 8 V.S.A. § 2511(a).

  2. On and after September 30, 2017, all licensees and their authorized delegates must provide a receipt to the customer in full accordance with 8 V.S.A. § 2511(a).

Dated at Montpelier, Vermont this ____day of June 2017.

 

______________________________________

Michael S. Pieciak, Commissioner

Vermont Department of Financial Regulation

 

Money Transmitter Receipts Guidance & Transition Period

Bulletin
Thursday, June 29, 2017
Banking Bulletin #47
File attachments: 
http://www.dfr.vermont.gov/sites/default/files/Banking_Bulletin_%2347_Receipt_Guidance_Transition_Period.pdf

VERMONT DEPARTMENT OF FINANCIAL REGULATION
DIVISION OF BANKING

Banking Bulletin #47

Money Transmitter Receipts Guidance & Transition Period

Effective July 1, 2017, Act 22 amended the Vermont Money Services Act, 8 V.S.A. Chapter 79, to require every money transmitter licensee and its authorized delegates to provide a receipt to the customer.  The receipt must clearly state the name, address, and telephone number of the licensee; the amount of money presented for transmission; and the total of any fees charged by the licensee. 8 V.S.A. § 2511(a).

This bulletin provides guidance regarding what documentation must be provided to consumers to comply with the receipt requirement.

Guidance
 
For general money transmission transactions, the receipt must include the licensee’s name, physical or mailing address, and phone number in addition to the fee and exchange rate disclosure information.  A website address may be used in lieu of a physical or mailing address on the receipt, provided the licensee’s physical or mailing address is readily available on the website.

For stored value transactions, the receipt may include the name, address, and telephone number of the authorized delegate, provided that the licensee’s contact information is provided in or on the stored value device packaging or on the stored value device itself.

For bill payment transactions, the receipt may include the name, address, and telephone number of the authorized delegate, provided the licensee’s name accompanies the authorized delegate's information.

For payroll services performed pursuant to a written contract on behalf of an employer, when the money transmission or currency exchange is an ancillary service in a suite of services that includes one or more of the following: 

facilitates the payment of payroll taxes to state and federal agencies;
makes payments relating to employee benefit plans;
makes distributions of other authorized deductions from an employees' wages or salaries; or
transmits other funds on behalf of an employer in connection with transactions related to employees,
the contract and periodic settlement reports between the employer and the licensee may be substituted for the employer’s receipt.

For payment processing, clearing, or settlement services in connection with wire transfers, credit card transactions, debit card transactions, prepaid access transactions, automated clearinghouse transfers, or similar funds transfers, performed pursuant to a written contract with a merchant or third party, and for which the licensee has no control over receipts issued by merchants or other parties having interactions with the consumer, the written contract and periodic settlement reports between the merchant or third party and the licensee may be substituted for the merchant’s or third party’s receipt. 

For agent payee transactions performed pursuant to a written contract with a payee that  (i) facilitate payment for goods or services (not including money transmission itself) or payment of bills through a clearance and settlement process, and (ii) provide that payment to the licensee or its authorized delegate satisfies the payor's obligation to the payee, the written contract and periodic settlement reports between the payee and the licensee may be substituted for the payee’s receipt provided the payor receives confirmation of payment containing the payee’s contact information.

Transition Period
Based on the circumstances and the nature of the money transmission market, providing some additional time for licensees and authorized delegates to comply with the receipt requirement of Act 22, without creating an undue hardship for licensees, authorized delegates, or their clients, is necessary and appropriate to the administration of 8 V.S.A. Chapter 79.  See 8 V.S.A. § 15.  The attached order provides for a limited transition period for licensees and authorized delegates to comply with the receipt requirement of the Act, provided there is written documentation demonstrating that actions have been taken to initiate compliance on or before July 1, 2017, such as:
Stock inventory, design, cost and lead time required to replace stock, and placement of order for new stock.

Software specifications, pipeline for software implementation, request for software development and implementation.

___________________________________________________________
Michael S. Pieciak, CommissionerDate
Vermont Department of Financial Regulation

Motor Vehicle Retail Installment Sales Finance Act Guidance

Bulletin
Monday, June 19, 2017
Banking Bulletin #46
File attachments: 
http://www.dfr.vermont.gov/sites/default/files/Banking_Bulletin_%2346.pdf

VERMONT DEPARTMENT OF FINANCIAL REGULATION

DIVISION OF BANKING

Banking Bulletin #46

Motor Vehicle Retail Installment Sales Finance Act Guidance

This Bulletin clarifies what constitutes a “motor vehicle” under the Motor Vehicle Retail Installment Sales Finance Act (“MVRISFA”), 9 V.S.A. Chapter 59, and the Retail Installment Sales Act, 9 V.S.A. Chapter 61. Chapters 59 and 61 both regulate retail installment sales contracts. Chapter 59 applies to motor vehicle retail installment contracts while Chapter 61 applies to retail installment contracts for other consumer goods. The broad definition of motor vehicle under MVRISFA has created uncertainty as to which chapter applies to various types of mechanized equipment, specifically ATVs, snowmobiles, garden tractors, and garden trailers.

Each chapter defines the term “motor vehicle,” though the definitions differ. The definitions are as follows:

Chapter 59, MVRISFA:

‘Motor vehicle’ means and is limited to the following:

(A) All vehicles propelled or drawn by power other than muscular power, except when two or more such vehicles are purchased at the same time;

(B) Trailers and semi-trailers, as defined in 23 V.S.A. § 4 (40), except when two or more such trailers or semi-trailers are purchased at the same time.

(C) Mobile home as defined in 10 V.S.A. § 6201.”

Chapter 61, Retail Installment Sales Act:

“Motor vehicle” or “vehicle” means and is limited to any automobile, mobile home, motorcycle, truck, truck-tractor, trailer, semi-trailer, and bus designed and used primarily to transport persons or property on a public highway, excepting however any boat trailer, any vehicle propelled or drawn exclusively by muscular power or which is designed to run only on rails or tracks.” (emphasis added).

When read together, the definitions in Chapters 59 and 61 identify a distinguishing characteristic —whether a vehicle is designed to be used primarily to transport persons or property on a public highway.

When viewed in this context, vehicles that are not designed to be used primarily to transport persons or property on public highways, such as snowmobiles, ATVs, garden tractors, and garden trailers are not considered to be motor vehicles under Chapter 59. Therefore, they are “goods” and are regulated by Chapter 61.

6/19/17

Michael S. Pieciak, Commissioner Date

Vermont Department of Financial Regulation

Glenview Auto Loan Fund LLC—Amendment to May 26, 2017 Cease and Desist Order

Order
Friday, June 16, 2017
Docket No. 17-015-B
File attachments: 
http://www.dfr.vermont.gov/sites/default/files/Docket_17_015_B_Amendment_to_C%26D.pdf

In re Glenview Auto Loan Fund LLC 17-015-B

 

 

 

AMENDMENT TO CEASE AND DESIST ORDER

 

This Amendment follows communications between Glenview Auto Loan Fund LLC (Glenview) and the Department of Financial Regulation (the Department) and the receipt by the Department of certain information requested from Glenview. The Cease and Desist Order dated May 26, 2017 (the Cease and Desist Order) was based on the Banking Division’s Motion pursuant to 8 V.S.A. Sections 2210(a)(4), 2210(b), and 2210(c) for an order requiring Glenview Auto Loan Fund LLC (Glenview) to cease and desist from any further activity as a sales finance company within the meaning of 8 V.S.A. Section 2200(29) pending further order of the Commissioner. Finding good reason therefor, the Commissioner hereby amends the Cease and Desist Order as follows:

 

ORDER

 

A. Glenview may answer telephonic and other inquiries by consumers regarding the status of their loans, the amount due or other questions regarding the retail installment sales contracts.

B. Glenview may continue to passively receive payments on the terms set forth in the retail installment sales contracts, except that Glenview shall not collect late fees which accrued from January 2017 through the date Glenview becomes licensed as a sales finance company in Vermont.

C. Glenview may send one letter to each consumer, in form and substance approved by the Department, advising the consumer that Glenview has purchased the retail installment sales contracts and directing the consumer as to how and where to make payments. Glenview may create one form of letter for consumers with autopay arrangements and another form of letter for those have not set up autopay arrangements.

D. Within 30 days of the date of this Amendment, Glenview shall either become licensed as a sales company in Vermont or sell/transfer all of its not retail installment sales contracts to a licensed sales finance company.

In all other respects, the Cease and Desist Order remains in full force and effect.

 

This Amendment is entered without prejudice to the rights of the state of Vermont to initiate any further proceedings it deems appropriate in light of Glenview’s business activity in Vermont, including for civil or administrative penalties and/or permanent injunctive or other equitable relief.

 

 

Dated at Montpelier, Vermont this __16th____ day of June 2017.

 

 

 

 

_____________________________

Michael S. Pieciak, Commissioner

Vermont Department of Financial Regulation

 

ASSENTED TO:

Glenview Auto Loan Fund LLC

 

By:______________________ Date:___________________________

State Regulatory Registry LLC and Nationwide Multistate Licensing System

Order
Monday, June 5, 2017
Docket No. 17-017-B
File attachments: 
http://www.dfr.vermont.gov/sites/default/files/Docket_17_017_B_NMLS_Order.pdf

STATE OF VERMONT
DEPARTMENT OF FINANCIAL REGULATION

IN THE MATTER OF:)
)DOCKET NO. 17-017-B
STATE REGULATORY REGISTRY )
LLC and NATIONWIDE )
MULTISTATE LICENSING SYSTEM)
)

ORDER EXEMPTING STATE REGULATORY REGISTRY LLC FROM LICENSURE UNDER THE VERMONT MONEY SERVICES ACT
WHEREAS, the Commissioner of the Vermont Department of Financial Regulation, pursuant to 8 V.S.A. chapters 1 and 79 (the Vermont Money Services Act), is charged with administering and enforcing Vermont law as it pertains to money transmitters in the State of Vermont; and
WHEREAS, the Vermont Money Services Act, defines money transmission as receiving money or monetary value for transmission to a location within or outside of the United States; and
WHEREAS, the State Regulatory Registry LLC (SRR), a wholly owned subsidiary of the Conference of State Bank Supervisors (CSBS), owns and operates the Nationwide Multistate Licensing System (NMLS); and 
WHEREAS, CSBS membership is comprised of state banking regulators, including Vermont and all other states, American Samoa, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands; and
WHEREAS, the voting members of the SRR Board of Managers consist solely of state regulators, such as Commissioners, Deputy Commissioners, and similar state officials from various state financial regulatory departments; and 
WHEREAS, NMLS, is a web-based system designed to promote federal and state uniformity and coordination in licensing, supervision and regulation of non-depository and mortgage industries and to enhance consumer protection; and
WHEREAS, SRR through NMLS performs payment processing and money transmission functions to facilitate the payment of fees, and other duly authorized payments, due to regulatory agencies; and 
WHEREAS, SRR has requested confirmation from the Vermont Department of Financial Regulation that the services it provides are not subject to licensure under the Vermont Money Services Act; and
WHEREAS, the Commissioner, pursuant to 8 V.S.A. §2501(b), may issue an order exempting any person from licensure as a money transmitter when such person is performing services for the benefit of the United States or for the benefit of any state; and
WHEREAS, SRR facilitates the transmission of regulatory filings and collects filing fees through NMLS from applicants and licensees on behalf of the member states, including Vermont, pursuant to a contractual agreement with each member state; and
WHEREAS, the Vermont Banking Division requires that regulatory filings and fees be submitted via NMLS; and
WHEREAS, SRR provides a valuable service for Vermont by operating and providing such services through NMLS in a professional and effective manner; and 
WHEREAS, the Commissioner finds, based upon the above, that SRR’s money transmission activities through NMLS are performed for the benefit of CSBS and its member states, including Vermont, and SRR should be exempted from licensure as a money transmitter in Vermont pursuant to 8 V.S.A. §2501(b).

NOW THEREFORE, IT IS HEREBY ORDERED THAT:
SRR is exempt from licensure as a money transmitter because SRR is performing money transmission services for the benefit of the State of Vermont, subject to the conditions that:
SRR shall operate under the terms of a contractual agreement with Vermont regarding NMLS and its money transmission activities; and
SRR shall notify the Commissioner of any material changes to the operation of NMLS or to any other practices, policies or procedures pertaining to money transmission activities.

BY ORDER OF THE COMMISSIONER
Entered at Montpelier, Vermont, this ________ day of June 2017.

______________________________________________________
Michael S. Pieciak, Commissioner
Vermont Department of Financial Regulation

Glenview Auto Loan Fund LLC

Order
Friday, May 26, 2017
Docket No. 17-015-B
File attachments: 
http://www.dfr.vermont.gov/sites/default/files/Genview_C%26D_Order_May_2017.pdf

In re Glenview Auto Loan Fund LLC 17-015-B

 

 

 

EX PARTE ORDER TO CEASE AND DESIST

 

 

Based on the Motion of Banking Division of the Department of Financial Regulation (“the Department”), pursuant to 8 V.S.A. Sections 2210(a)(4), 2210(b), and 2210(c ) for an ex parte order requiring Glenview Auto Loan Fund LLC (Glenview) to cease and desist from any further activity as a sales finance company within the meaning of 8 V.S.A. Section 2200(26), including any further purchase of installment sales contracts, any further collection activity on existing installment sales contracts and any further contact with customers in Vermont, pending further order of the Commissioner, and finding good reason therefor, the Commissioner hereby renders the following Findings of Fact and Conclusions of Law and enters the following Order:

 

I. FINDINGS OF FACT

 

1. Glenview Auto Loan Fund LLC (Glenview) is a limited liability company organized under the

laws of Illinois with a principal place of business at 3750 North Lakeshore Drive, Apt 15E,

Chicago, Illinois, engaged in the business, inter alia, of retail installment sales financing.

2. On or about May 10, 2017, the Department received a consumer complaint from Malinda

Gallagher alleging that a representative of Glenview had contacted her to demand payment on the installment sales contract for an automobile and to make arrangements for Automated Clearinghouse (ACH) installment payments from the customer’s account. The consumer further stated that she had purchased her vehicle from Rod’s Used Cars, had not been made aware of any sale of the retail installment sales contract, and had received no documentation

verifying a transfer of the vehicle title to Glenview. She also expressed concern about her ability to verify the outstanding balance remaining on her contract.

3. After receiving the customer complaint, the Department investigated the customer’s

complaint.

4. The Department discovered that, on or about July 3, 2015, Glenview bought from Rod’s Used

Cars of St. Johnsbury, Vermont at least five retail installment sales contracts, including the contract involving Ms. Gallagher, covering the financing of used vehicle purchases by Vermont consumers

5. On or about May 11, 2017, the Department wrote to Glenview requesting detailed

documentation of all Vermont retail installment sales contracts purchased and requesting that Glenview refrain from any further purchase of retail installment sales contracts in Vermont until it can provide evidence of compliance with or exemption from Vermont statutes

6. On or about May 11, 2017, Glenview representative Kevin Latimer called the Banking

Division of the Department and spoke with Sue Clark, Regulatory & Consumer Affairs Director. Mr. Latimer admitted Glenview had purchased retail installment sales contracts in Vermont and that Glenview was not licensed as a sales finance company in Vermont.

7. Glenview is in the business of purchasing or otherwise acquiring retail installment contracts.

8. Glenview is not licensed in Vermont as a sales finance company.

9. On or about May 17, 2017, Ms. Gallagher reported that after making the complaint to the

Department, she had received a telephone message from Mr. Latimer requesting updates on her “antics” with the Department. She expressed concern that Glenview had acted unprofessionally and could be trying to intimidate her as a result of her complaint to the Department.

10. Glenview may have purchased additional retail installment contracts, either from Rod’s or

otherwise, to which Vermont customers are parties.

11. Glenview may be continuing to act as a sales finance company in Vermont and may be

engaged in further collection activities involving communications with Vermont customers.

 

12. Glenview’s interaction with Ms. Gallagher appears to be designed to deter her from

communicating with or complaining to state authorities about Glenview. It also raises the risk of such inappropriate conduct being directed by Glenview to other Vermont consumers.

13. Given Glenview’s unlawful conduct in operating as a sale finance company in Vermont

without a license, its specific intimidating conduct toward Ms. Gallagher for making a complaint to state authorities about Glenview, and the risk to other Vermont consumers, the protection of public welfare (financial health and welfare) warrants issuance of an emergency cease and desist order to Glenview pending notice to the company of its opportunity to contest the order.

 

II. CONCLUSIONS OF LAW

 

14. Pursuant to 8 V.S.A. Section 2200(26), a sales finance company is a person engaged in the

business of purchasing or otherwise acquiring retail installment sales contracts.

15. The contracts Glenview acquired from Rod’s Used Cars are retail installment sales contracts

within the meaning of 9 V.S.A. Sections 2351(5) and 2401(7). Glenview is in the business of purchasing or otherwise acquiring retail installment contracts.

16. Glenview has been acting as a sales finance company within the meaning 8 V.S.A. Section

2200(26).

17. Glenview has violated 8 V.S.A. Section 2201(4) by continuing to act as a sales finance

company in Vermont without first obtaining a license from the Commissioner.

18. Glenview has not obtained a license and is thus acting in violation of 8 V.S.A. Section

2201(4) when it purchases installment sales contracts or engages in collection activity related to those contracts in Vermont.

 

III. ORDER

 

Pursuant to 8 V.S.A. Sections 2210(a)(2), 2210(b) and 2210(c), IT IS HEREBY ORDERED:

 

A. Glenview Auto Loan Fund LLC shall cease and desist from acting as a sales finance company in Vermont and shall refrain from any further purchase of Vermont retail installment sales contracts and from any collection activity or communications with customers in connection with retail installment sales contracts which have already been purchased in Vermont until properly licensed as a sales finance company in Vermont or until further order of the Commissioner.

B. Glenview Auto Loan Fund LLC, through its members, officers, employees and agents, shall not withhold, destroy, mutilate or by any means falsify any documentary material relevant to its activities as a sales finance company in Vermont.

 

Dated at Montpelier, Vermont this __26____ day of May 2017.

 

 

 

s/ Cynthia Stuart

___________________________________

Cynthia L. Stuart, Acting Commissioner

Vermont Department of Financial Regulation

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