STIPULATION AND AGREEMENT

WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Sections 36a-671 to 36a-671e, inclusive, of the Connecticut General Statutes contained in Part II of Chapter 669 of the Connecticut General Statutes, “Debt Adjusters and Debt Negotiation”;

WHEREAS, Consumer Law Associates, LLC (“CLA”) is a law firm organized as a limited liability company, with a principal place of business at 29 Susquehanna Avenue, Suite 400, Towson, Maryland;

WHEREAS, on April 1, 2013, the Commissioner issued a Temporary Order to Cease and Desist, 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 against CLA, among others (collectively, “Notice”), alleging that CLA engaged in debt negotiation in this state without obtaining the required license, in violation of Section 36a-671(b) of the Connecticut General Statutes;

WHEREAS, on April 6, 2013, CLA requested a hearing on the Notice;

WHEREAS, on November 15, 2013, a hearing was held at the Department of Banking (“Department”) concerning the allegation made in the Notice;

WHEREAS, on May 12, 2014, relying on the trial court decision in Persels and Associates, LLC v. Connecticut Department of Banking, HHB CV12-6017849-S issued on March 28, 2014, the Commissioner issued a Findings of Fact, Conclusions of Law and Order concerning the allegation made in the Notice (“Final Decision”), concluding that CLA was not entitled to the attorney exemption to the debt negotiation statutes set forth in Section 36a-671c(1) of the Connecticut General Statutes and, therefore, violated Section 36a-671(b) of the Connecticut General Statutes;

WHEREAS, on June 27, 2014, pursuant to Section 4-183 of the Connecticut General Statutes, CLA filed an administrative appeal of the Final Decision in Superior Court for the Judicial District of New Britain, which appeal currently remains pending;

WHEREAS, the Connecticut Supreme Court reviewed the trial court’s decision in Persels, and on September 15, 2015, issued its final decision reversing the judgment of the trial court and holding that the attorney exemption set forth in Section 36a-671c(1) of the Connecticut General Statutes violated the constitutional separation of powers provisions.  Persels and Associates, LLC v. Banking Commissioner, 318 Conn. 652 (2015);

WHEREAS, the Connecticut Supreme Court also held that “the separation of powers provision of the state constitution requires that the commissioner presume, for the purposes of § 36a-671c, that a Connecticut attorney who purports to provide debt negotiation services within the context of an attorney-client relationship is actually engaged in the practice of law,” but the “presumption may be overcome where, for example, the commissioner determines that the Connecticut attorney has failed to (1) exercise meaningful oversight over debt negotiation staff, (2) provide any genuine legal advice or other legal services, and/or (3) maintain a bona fide attorney-client relationship with the client.  In such cases, the person or persons providing debt negotiation services would not qualify for the attorney exemption”.  Persels, 318 Conn. 652, 679-80;

WHEREAS, Section 4-181a(b) of the Connecticut General Statutes permits the Commissioner to reverse or modify a final decision on the Commissioner’s own motion upon a showing of changed conditions and provides that the procedure for contested cases shall be applicable to any such proceeding concerning reversal or modification of a final decision;

WHEREAS, the holding by the Connecticut Supreme Court in Persels, 318 Conn. 652 (2015), construing Section 36a-671c(1) of the Connecticut General Statutes represents a showing of changed conditions;

WHEREAS, Section 4-177(c) of the Connecticut General Statutes and Section 36a-1-55(a) of the Regulations of the Connecticut State Agencies provides that a contested case may be resolved by stipulation or agreed settlement, unless precluded by law;

WHEREAS, CLA represents that it is no longer active in the State of Connecticut, has ceased to represent any Connecticut clients and has wound up its affairs nationally such that it will no longer be engaged in representing consumer clients seeking relief from debt;

WHEREAS, the Commissioner and CLA desire to settle the matters described herein and voluntarily enter into this Stipulation and Agreement without any admission by either party, acknowledging that this Stipulation and Agreement is in lieu of any court action or further administrative proceedings adjudicating any issue of fact or law alleged in the Notice;

AND WHEREAS, CLA, through its execution of this Stipulation and Agreement, voluntarily waives any rights it may have to seek judicial review or otherwise challenge or contest the terms and conditions of this Stipulation and Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals, the parties hereby mutually agree as follows:

IN WITNESS WHEREOF, the undersigned have executed this Stipulation and Agreement on the dates indicated.

STATE OF CONNECTICUT
DEPARTMENT OF BANKING

________/s/_________                                    2/16/2016
Jorge L. Perez                                                 Date
Banking Commissioner

CONSUMER LAW ASSOCIATES, LLC

________/s/_________                                    2/11/16
Neil Ruther, Esq.                                             Date
Managing Member

Administrative Orders and Settlements