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IH Financial Licenses, Inc. and ITC Financial Licenses, Inc.

Order
Monday, July 9, 2012
Docket No. 12-027-B
File attachments: 
http://www.dfr.vermont.gov/sites/default/files/12-027-B_20150312091827.pdf
Docket No. 12-027-B

In Re: IH Financial Licenses, Inc. and ITC Financial Licenses, Inc., Respondents


STIPULATION AND CONSENT ORDER

Allegations

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. IH Financial Licenses, Inc. ("IHFL") is a South Dakota corporation with a principal place of business at 250 Williams Street, Atlanta, GA.

3. ITC Financial Licenses, Inc. ("ITC") is a South Dakota corporation with a principal place of business at 5617 Princeton Avenue, Columbus, GA.

4. IHFL and ITC are affiliated corporations and both are indirect wholly owned subsidiaries of InComm Holdings, Inc. ("InComm").

5. IHFL and ITC have represented that collectively they are licensed as money transmitters in 45 states and that they offer open loop prepaid cards in those states where they are licensed or are otherwise authorized to offer open loop prepaid cards.

6. At all relevant times neither IHFL nor ITC was licensed as a money transmitter in Vermont.

7. Open loop cards were sold or offered for sale in Vermont under one or more programs managed by IHFL or ITC.

8. On February 22, 2011, the Department had a telephone conversation with representatives of IHFL, ITC, and InComm regarding the sale of prepaid open loop cards in Vermont without a license. IHFL and ITC represented that the open loop cards were inadvertently distributed in Vermont by retailers that serve as authorized agents for IHFL and ITC in multiple jurisdictions. IHFL and ITC represented to the Department that all open loop prepaid cards would be removed from Vermont locations, that policies and procedures would be put in place to prevent the sale of open loop cards in Vermont, and that the companies would not sell open loop prepaid cards in Vermont until they were in compliance with Vermont law.

9. The policies and procedures that IHLF and ITC put in place were not completely effective to prevent the sale of open loop prepaid cards in Vermont.

10. During a series of on-site visits to Vermont retail stores in October 2011, the Department found several locations where IHFL or ITC open loop prepaid cards were offered for sale.

11. IHFL and ITC have since discovered and reported to the Department that despite their policies and procedures, certain authorized agents that operate their own distribution centers continued to distribute IHFL and ITC open loop cards in Vermont.

12. IHFL and ITC have represented to the Department that they have reviewed and revised their policies and procedures to prevent their prepaid open loop cards from being sold in Vermont.

13. At all times IHFL and ITC have cooperated with the Department.

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

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

Stipulation and Agreement

IHFL, ITC, and the Department hereby stipulate and agree as follows:

16. IHFL and ITC do not dispute that there is a factual basis for the Department's allegations in this Stipulation and Consent Order.

17. IHFL and ITC shall pay an administrative penalty to the Department in the total amount of $25,000.00, which payment shall be made on or before July 23, 2012. IHFL and ITC shall be jointly and severally liable for payment of the $25,000.00 administrative penalty.

18. Going forward, neither IHFL nor ITC shall sell open loop prepaid cards in Vermont without a Vermont money transmitter license.

19. IHFL and ITC shall adopt policies and procedures to insure that open loop prepaid cards are either not sold in Vermont or are sold in Vermont in full compliance with 8 V.S.A. Chapter 79.

20. The Department shall retain continuing jurisdiction in this matter until IHFL and ITC have complied with the terms and conditions of this Stipulation and Order.

21. This Stipulation and Order shall not prevent any person from pursuing any claim he or she may have against IHFL or ITC, nor shall it be understood as determining whether any such claim may or may not exist in law or equity.

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

23. IHFL and ITC knowingly and voluntarily waive any right they may have to judicial review by any court of these matters by way of suit, appeal, or extraordinary relief resulting from entry or enforcement of this Stipulation and Order.

ORDER

NOW THEREFORE, IT IS HEREBY ORDERED THAT:

24. IHFL and ITC shall comply with all agreements, stipulations, and undertakings as recited above.

25. IHFL and ITC, jointly and severally, shall pay an administrative penalty to the Department in the total amount of $25,000.00, which payment shall be made on or before July 23, 2012. IHFL and ITC shall be jointly and severally liable for payment of the $25,000.00 administrative penalty.

26. This Order shall not prevent any person from pursuing any claim he or she may have against IHFL or ITC.

27. Nothing contained in this Order shall restrain the Department from responding to and addressing any complaint involving IHFL or ITC filed with the Department or shall preclude the Department from pursuing any other violation of law.

28. This Order shall not be construed as an adjudication of any violation of any Vermont law or federal law, except as specifically set forth herein.

Amended Order Removing The Directors, Officers and Committee Members of Border Lodge Credit Union

Order
Friday, December 21, 2012
Docket No. 12-050-B (Amended)
File attachments: 
http://www.dfr.vermont.gov/sites/default/files/12-050-B-Amended_20150312092047.pdf
 

DOCKET NO. 12-050-B

IN RE: BORDER LODGE CREDIT UNION

AMENDED ORDER REMOVING THE DIRECTORS, OFFICERS AND COMMITTEE MEMBERS OF BORDER LODGE CREDIT UNION

Pursuant to 8 V.S.A. § 3070l(a)(5). this order removes all directors, officers, and committee members of Border Lodge Credit Union ("Border Lodge"). This Order is amended to correct the service list, and specifically the service address of Mr. Laurie McMullen.

Background

On November 30, 2012, the Commissioner seized Border Lodge with an Ex Parte Order for Conservatorship and Order for Related Matters, ("Conservatorship Order''), pursuant to 8 V.S.A. § 36103(a)(l) and (5). The Commissioner found that there was an immediate threat to the assets and depositors of Border Lodge, and took possession and control of the business and all assets of Border Lodge. Pursuant to 8 V.S.A. § 36103(f), the Commissioner, as conservator. assumed all the powers of the members, directors, officers, and committees of Border Lodge. In addition, the National Credit Union Administration Board, ("NCUA'') was appointed liquidating agent of Border Lodge.

Pursuant to 8 V.S.A. § 30701(a)(5), the Commissioner may remove any person who knowingly: violates this title or a lawful regulation or order issued under it; engaged in or participated in any materially unsafe or unsound practice in connection with a credit union; or engaged in any act, omission, or practice which is a breach of fiduciary duty to the credit union.

The Commissioner's Letter and Notice of Proposed Order dated September 25, 2012 ("Commissioner's Letter") received by Ms. Debra Kinney and the directors of Border Lodge stated that there were concerns about unsafe or unsound practices in connection with Border Lodge. The Commissioner's Letter also notified Ms. Kinney and the directors of Border Lodge that the credit union had failed to provide monthly account reconciliation reports as required under Vermont law. Despite these warnings, no corrective action was taken on behalf of Border Lodge.

Notice of Hearing Rights

Pursuant to 8 V.S.A. § 3070l(c) and (d), any party served in this matter has 30 days to request that the Commissioner hold a hearing. A sen·ice list is attached to this order. If no hearing is requested, this order becomes final at the end of the 30 day period. The hearing on this order shall be private unless the Commissioner determines that a public hearing is necessary to protect the public interest.

ORDER

It is therefore ORDERED that:

1. The following persons are removed as directors and/or officers of Border Lodge: Terrence Decker, Elizabeth Graves, Debra Kinney, James Kinney, Kenneth LaPlume, Laurie McMullen and Linda Montague.

2. All committee members and committees of Border Lodge are removed and terminated.

3. If no hearing is requested, this removal order shall become final and effective within 30 days of service of this order.

4. All other terms and conditions of the Conservatorship Order remain unchanged and in full force and effect, including the authority of the NCUA as liquidating agent.

Border Lodge Credit Union

Order
Thursday, November 29, 2012
Docket No. 12-050-B
File attachments: 
http://www.dfr.vermont.gov/sites/default/files/12-050-B_20150312091924.pdf
DOCKET NO. 12-050-B

IN RE: BORDER LODGE CREDIT UNION

 

EX PARTE ORDER FOR CONSERVATORSHIP AND ORDER FOR RELATED MATTERS

The Commissioner of the Department of Financial Regulation (the "Commissioner") pursuant to 8 V.S.A. § 36103(a), issues this ex parte order to appoint himself conservator of Border Lodge Credit Union located at 138 Beauchesne Street, Derby Line, Vermont 05830 ("Border Lodge") and to take possession and control of the business and assets of Border Lodge.

Pursuant to 8 V.S.A. § 36103(a)(l) and (5), the Commissioner has determined that such action is necessary to conserve the assets and protect the interests of the members of Border Lodge and that there is concealment of the books, papers, records, or assets of Border Lodge.1 The Commissioner further finds that there is an immediate threat to the assets of Border Lodge.

ORDER

It is therefore ORDERED that:

1. This order is effective as of 12:01 a.m., November 30, 2012.

2. The Commissioner is conservator of Border Lodge, and immediately takes possession and control of the business and all assets of Border Lodge, pursuant to 8 V.S.A. § 36103(a).

3. All directors, officers and committees of Border Lodge are relieved of all duties and authority in regards to Border Lodge. Pursuant to 8 V.S.A. § 36103(f), the Commissioner, as conservator, has all the powers of the members, the directors, the officers, and the committees of Border Lodge and may conserve the assets in the manner and to the extent he authorizes.

4. In accordance with 8 V .S.A. § 36103(f), Ms. Debra Kinney is relieved of all her duties and authority in regards to Border Lodge. Ms. Kinney no longer has any authority, including signature authority, over any accounts, papers or other documents which may be executed on behalf of Border Lodge.

5. Border Lodge is closed pursuant to 8 V .S.A. §§ 30303 and 36103(f)-(g).

6. The Commissioner as conservator, as provided for in 8 V.S.A. § 36103(c) , shall maintain possession and control of the business and assets of Border Lodge until such time as Border Lodge is liquidated in accordance with 8 V.S.A. § 36101.

7. The Commissioner, as conservator, and having all the powers of the members, the directors, the officers, and the committees of Border Lodge, and in accordance with the liquidation provisions of8 V.S.A. § 3610l(b), waives any and all notice and meeting requirements and approves and directs the dissolution and liquidation of Border Lodge. Border Lodge shall immediately cease to do business except for the purposes of liquidation.

8. Pursuant to 8 V .S.A. § 36103(d), the Commissioner may, at his discretion, appoint such agents as he considers necessary to assist in carrying out his duties as conservator.

9. Pursuant to 8 V.S.A. §§ 36103(c)(2) and 36103(d), the Commissioner appoints the National Credit Union Administration Board ("NCUA") as liquidating agent of Border Lodge .

10. All expenses incurred by the Commissioner in exercising his authority as conservator with respect to Border Lodge shall be paid out of the assets of Border Lodge.

1 Not later than ten days after the date on which the Commissioner takes possession and control of Border Lodge's business and assets, it may apply to the Superior Court, Washington County, for an order requiring the Commissioner to show cause why the Commissioner should not be enjoined from continuing such possession and control. 8 V.S.A. § 36103(b).

Shelter Mortgage Company, LLC.

Order
Monday, May 13, 2013
Docket No. 13-010-B
File attachments: 
http://www.dfr.vermont.gov/sites/default/files/13-010-B_20150312092257.pdf

Docket No. 13 -010-B

In The Matter Of: SHELTER MORTGAGE COMPANY, LLC, Respondent


STIPULATION AND CONSENT AGREEMENT

Background

1. Pursuant to 8 V.S.A. Chapters 1 and 73, the Commissioner of the Department of Financial Regulation is charged with administering and enforcing Vermont law as it pertains to licensed lenders in the State of Vermont.

2. Shelter Mortgage Company, LLC is an Illinois limited liability company. Shelter Mortgage also uses the trade name SugarTree Mortgage.

3. At all relevant times, January 1, 2011 through April30, 2012, Shelter Mortgage held lender licenses for locations at 4000 West Brown Deer Road, Brown Deer, Wisconsin and 550 Hinesburg Road, Suite #103, South Burlington, Vermont.

4. At all relevant times, January 1, 2011 through April30, 2012, Shelter Mortgage had an office at 19 Roosevelt Highway, Suite #110, Colchester, Vermont. The Colchester office was not a licensed location.1

5. The Department has reason to believe that:

a. Shelter Mortgage engaged in licensed lender business from its unlicensed Colchester location, in violation of8 V.S.A. §§2201 (a), 2206 (a), 2208 (a), and 2228; and/or

b. Shelter Mortgage failed to keep and use accurate business records and failed to submit accurate records to the Department that would enable the Commissioner to determine whether Shelter Mortgage was complying with the provisions of 8 V.S.A. Chapter 73 and other relevant laws and regulations, in violation of 8 V.S.A. §2223.

6. Shelter Mortgage has denied any intentional wrongdoing on its part.

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

8. Shelter Mortgage and the Department expressly agree to enter into this Stipulation and Consent Agreement in full and complete resolution of the alleged violations described in paragraph 5.

Stipulation and Agreement

Shelter Mortgage and the Department hereby stipulate and agree as follows:

9. Although Shelter Mortgage neither admits nor denies the Department's allegations, Shelter Mortgage does not dispute that there is a factual basis for the Department's allegations in this Stipulation and Consent Agreement.

10. Shelter Mortgage agrees to pay: (a) an administrative penalty to the "Department of Financial Regulation" in the amount of$25,000.00; and (b) a $5,000.00 payment to the "VT DFR- Financial Services Education & Training Special Fund", which payments shall be made on or before May 15, 2013.

11. Shelter Mortgage: (a) shall not engage in licensed lender business from an unlicensed location; and (b) shall maintain and submit to the Department accurate business records that will enable the Commissioner to determine whether Shelter Mortgage is complying with the provisions of 8 V.S.A. Chapter 73 and other relevant laws and regulations.

12. In the event Shelter Mortgage fails to make the payments described in paragraph 10 on or before May 15, 2013, the Commissioner may, upon request from the Banking Division of the Department, issue an Order suspending, revoking, or terminating any or all of Shelter Mortgage's licenses arid imposing additional administrative penalties. The Department's failure to exercise this option shall not constitute a waiver of the right to exercise such option at any other time.

13. The Department shall retain continuing jurisdiction in this matter until Shelter Mortgage has complied with the terms and conditions of this Stipulation and Consent Agreement.

14. This Stipulation and Consent Agreement shall not prevent any person from pursuing any claim he or she may have against Shelter Mortgage, nor shall it be understood as determining whether any such claim may or may not exist in law or equity.

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

16. Shelter Mortgage knowingly and voluntarily waives any right it may have to judicial review by any court of these matters by way of suit, appeal, or extraordinary relief resulting from entry or enforcement of this Stipulation and Consent Agreement.

ORDER

NOW THEREFORE, IT IS HEREBY ORDERED THAT:

17. Shelter Mortgage shall comply with all agreements, stipulations, and undertakings as recited above.

18. Shelter Mortgage shall make the payments described in paragraph 10, which payments shall be made on or before May 15, 2013.

19. In the event Shelter Mortgage fails to make the payments described above on or before May 15, 2013, the Commissioner may, upon request from the Banking Division of the Department, issue an Order suspending, revoking, or terminating any or all of Shelter Mortgage's licenses and may impose additional administrative penalties. The Department's failure to exercise this option shall not constitute a waiver of the right to exercise such option at any other time.

20. This Order shall not prevent any person from pursuing any claim he or she may have against Shelter Mortgage.

21. Nothing contained in this Order shall restrain the Department from responding to and addressing any complaint involving Shelter Mortgage filed with the Department or shall preclude the Department from pursuing any other violation of law:

22. This Order shall not be construed as an adjudication of any violation of any Vermont law or federal law, except as specifically set forth herein.

1 Shelter Mortgage subsequently received a lender license for its Colchester office on December 13, 2012.


David Leonard Rome

Order
Monday, September 16, 2013
Docket No. 13-017-B
File attachments: 
http://www.dfr.vermont.gov/sites/default/files/13-017-B_20150312092832.pdf

Docket No. 13 -017-B

In The Matter Of: David Leonard Rome, Respondent


ORDER SUSPENDING MORTGAGE LOAN ORIGINATOR LICENSE

The Commissioner of the Department of Financial Regulation issues this Order suspending David Leonard Rome's mortgage loan originator license.

Findings Of Fact

1. David Leonard Rome ("Rome") (NMLS #774735) is an individual that currently holds a Vermont Mortgage Loan Originator license issued by the Department of Financial Regulation.

2. The Georgia Department of Banking and Finance revoked Rome's mortgage loan originator license on April24, 2013.

3. In order to be a mortgage loan originator, a licensee may not have had a mortgage loan originator license, or any similar license, revoked in any governmental jurisdiction. (A subsequent formal vacation of such revocation shall not be deemed a revocation.) 8 V.S.A. §2204 (a)(4).

5. Rome has not provided the Department with a vacation of the Georgia revocation.

6. The Commissioner may, among other remedies, suspend, revoke, condition, refuse to renew a license, issue a cease and desist order, or terminate a license, or take any other action or remedy the Commissioner deems necessary, if a mortgage loan originator licensed in Vermont has a mortgage loan originator license, or similar license, revoked in another jurisdiction. 8 V.S.A. §§15, 2204 (a)(4), 2210.

7. On July 29, 2013 the Department sent Administrative Charges and Notice of Hearing Rights (the "Administrative Charges") by certified mail, return receipt requested, to Rome's current address as stated on his license. Rome received the Administrative Charges on or before August 6, 2013 as indicated on the certified mail return receipt. The Administrative Charges constitute notice to Rome of his right to have a hearing and defend against the charges.

8. Rome has not requested a hearing or otherwise defended against the charges within the time permitted by law.

Conclusions Of Law

9. Rome's mortgage loan originator license was revoked by the Georgia Department of Banking and Finance and Rome has not provided the Department with a vacation of the Georgia revocation. This constitutes grounds for the Commissioner to issue an order suspending, revoking, conditioning, terminating, or refusing to renew Rome's license or to take any other action or remedy the Commissioner deems necessary. 8 V.S.A. §§15, 2204 (a)(4), 2210.

10. The Department provided Rome with adequate written notice and an opportunity for a hearing as required by 8 V.S.A. § 2210 and Regulation B-82-1; Rome did not request a hearing or otherwise defend against the charges.

ORDER

Pursuant to the authority contained in 8 V.S.A. Chapters 1, 3, and 73, the Vermont Administrative Procedures Act (3 V.S.A. §§ 809 et seq.), and Department Regulation B-82-1, it is hereby ordered:

11. Rome's Vermont mortgage loan originator license is suspended until such time as he provides evidence satisfactory to the Commissioner that the Georgia revocation has been vacated.

12. In the event Rome does not provide satisfactory evidence to the Commissioner that the Georgia revocation has been vacated on or before December 1, 2013, Rome shall not be permitted to renew his Vermont mortgage loan originator license and such license shall automatically expire on December 31, 2013.

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