State of Connecticut Department of Banking

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IN THE MATTER OF:

GMA INVESTMENTS, LLC
d/b/a SUMMIT RECEIVABLES
NMLS # 1217898

     ("Respondent")


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ORDER TO PROVIDE DISGORGEMENT

NOTICE OF INTENT TO ISSUE
ORDER TO CEASE AND DESIST

NOTICE OF INTENT TO IMPOSE
CIVIL PENALTY

AND

NOTICE OF RIGHT TO HEARING


I. LEGAL AUTHORITY AND JURISDICTION

The Banking Commissioner (“Commissioner”) is charged with the administration of Part XII of Chapter 669, Sections 36a-800 to 36a-814, inclusive, of the Connecticut General Statutes, “Consumer Collection Agencies”, Sections 36a-809-6 to 36a-809-17, inclusive, of the Regulations of Connecticut State Agencies (“Regulations”), Part III of Chapter 668, Sections 36a-555 to 36a-573, inclusive, of the Connecticut General Statutes, “Small Loan Lending and Related Activities”, and Sections 36a-570-1 to 36a-570-17, inclusive, of the Regulations.

Pursuant to the authority granted by Section 36a-17 of the Connecticut General Statutes and Section 36a-801 of the 2018 Supplement to the General Statutes, the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, has investigated and examined the activities of Respondent to determine if it has violated, is violating or is about to violate the provisions of the Connecticut General Statutes or Regulations within the jurisdiction of the Commissioner.

Section 36a-17(a) of the Connecticut General Statutes provides, in pertinent part, that:

The commissioner, in the commissioner’s discretion, may, subject to the provisions of section 36a-21 and the Freedom of Information Act, as defined in section 1-200, (1) make such public or private investigations or examinations within or outside this state, concerning any person subject to the jurisdiction of the commissioner, as the commissioner deems necessary to carry out the duties of the commissioner, (2) require or permit any person to testify, produce a record or file a statement in writing, under oath, or otherwise as the commissioner determines, as to all the facts and circumstances concerning the matter to be investigated or about which an action or proceeding is pending . . . .

Section 36a-801(b) of the 2018 Supplement to the General Statutes provides, in pertinent part, that:

Any person desiring to act within this state as a consumer collection agency shall make a written application to the commissioner for such license in such form as the commissioner prescribes. . . .  The commissioner shall cause to be made such inquiry and examination as to the qualifications of each such applicant or any partner, member, officer, director or principal employee of the applicant as the commissioner deems necessary. . . .  Each applicant shall furnish satisfactory evidence to the commissioner that the applicant is a person of good moral character and is financially responsible.

Section 36a-52(a) of the 2018 Supplement to the General Statutes provides, in pertinent part, that:

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

Section 36a-50 of the 2018 Supplement to the General Statutes provides, in pertinent part, that:

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

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

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

(c)  Whenever the commissioner finds as the result of an investigation that any person has violated any provision of the general statutes within the jurisdiction of the commissioner, or any regulation, . . . the commissioner may, in addition to any other remedy authorized by law, order such person to . . . (2) provide disgorgement of any sums shown to have been obtained in violation of any such provision . . . .  After the commissioner issues such an order, the person named in the order may, not later than fourteen days after the receipt of such order, file a written request for a hearing.  The order shall be deemed received by the person on the earlier of the date of actual receipt or seven days after mailing or sending.  Any such hearing shall be held in accordance with the provisions of chapter 54.


II.  MATTERS ASSERTED

1. Respondent is a Nevada limited liability company with an office at 1291 Galleria Drive, Suite 170, Henderson, Nevada.
2. Respondent was licensed as a consumer collection agency in Connecticut from September 15, 2014 through September 30, 2015, but has not been licensed as a consumer collection agency since September 2015.
3. On March 9, 2017, Respondent submitted an application for licensure as a consumer collection agency in Connecticut on the Nationwide Multistate Licensing System and Registry (“NMLS”) (“Application”).
4.
In connection with the Application, the Division requested a list of all accounts of Connecticut residents that had been collected on by Respondent in the last 24 months.
5.
On July 19, 2017, Respondent uploaded a spreadsheet via NMLS indicating that from October 2015 through July 2017, Respondent collected and received payments on at least 35 debtor accounts of Connecticut residents which had been charged-off by creditors (“First Spreadsheet”).
6. Among the debtor accounts included in the First Spreadsheet were five “small loans” made by persons who had not obtained a small loan license in Connecticut.  A “small loan” is a loan of an amount of $15,000 or less with an APR of greater than 12%.
7.
On January 14, 2015, the Division had issued a memorandum to licensed consumer collection agencies, including Respondent, advising, in pertinent part, that:
Section 36a-573 of the Connecticut General Statutes prohibits persons who are not licensed as small loan lenders from, directly or indirectly, charging, contracting for or receiving any interest, charge or consideration greater than 12% per annum upon a loan, use or forbearance of money or credit in the amount of $15,000 or less, and further provides that “[n]o loan for which a greater rate of interest or charge than is allowed by the provisions of sections 36a-555 to 36a-573, inclusive, has been contracted for or received, wherever made, shall be enforced in this state, and any person in any way participating therein in this state shall be subject to the provisions of said sections . . . ”.
If you have purchased illegal small loans or are assisting in their collection, you should immediately cease and desist from activity that may violate the mandates of the small loan regulatory scheme.
8. The First Spreadsheet indicates that in October 2015, December 2015 and July 2017, Respondent received payments from Connecticut residents on small loans made by unlicensed persons that charged interest at a rate greater than 36%.
9. On July 25, 2017, Respondent deleted the First Spreadsheet on NMLS labeling it as “inaccurate” and uploaded a new spreadsheet of accounts of Connecticut residents that had been collected upon in the last 24 months (“Second Spreadsheet”).  The Second Spreadsheet listed only 5 debtor accounts of Connecticut residents and reflected only payments received between July and September 2015.
10. Subsequently, the Division conducted an investigation which indicated that from October 2015 to July 2017, Respondent collected and received payments on at least one Connecticut debtor account that was not included in the Second Spreadsheet.
11.
At no time relevant hereto, has Respondent been licensed as a small loan company in Connecticut.

III.  STATUTORY BASIS FOR ORDER TO PROVIDE DISGORGEMENT,
ORDER TO CEASE AND DESIST AND IMPOSITION CIVIL PENALTY
Section 36a-53a of the Connecticut General Statutes provides, in pertinent part, that:
No person shall make or cause to be made orally or in any document filed with the commissioner or in any proceeding, investigation or examination under this title, any statement which is, at the time and in the light of the circumstances under which it is made, false or misleading in any material respect.
Effective June 19, 2015, Section 36a-573 of the Connecticut General Statutes provided in pertinent part, that:
(a)  No person, except as authorized by the provisions of sections 36a-555 to 36a-573, inclusive, shall, directly or indirectly, charge, contract for or receive any interest, charge or consideration greater than twelve per cent per annum upon the loan, use or forbearance of money or credit of the amount or value of . . . (2) fifteen thousand dollars or less for any such transaction entered into on and after October 1, 1997. . . .  No loan for which a greater rate of interest or charge than is allowed by the provisions of sections 36a-555 to 36a-573, inclusive, has been contracted for or received, wherever made, shall be enforced in this state . . . .
(c)  For transactions subject to the provisions of subsection (a) of this section, if any interest, consideration or charges in excess of those permitted are charged, contracted for or received, the contract of loan, use or forbearance of money or credit shall be void and no person shall have the right to collect or receive any principal, interest, charge or other consideration. . . .
(e)  Whenever it appears to the commissioner that any person has violated the provisions of this section . . . the commissioner may investigate, take administrative action or assess civil penalties . . . in accordance with the provisions of sections 36a-50 and 36a-52.
On and after July 1, 2016, Section 36a-556(a) of the Connecticut General Statutes provides, in pertinent part, that:
Without having first obtained a small loan license from the commissioner pursuant to section 36a-565, no person shall, by any method, including, but not limited to, mail, telephone, Internet or other electronic means, unless exempt pursuant to section 36a-557: . . .
(4)  Receive payments of principal and interest in connection with a small loan made to a Connecticut borrower[.]
On and after July 1, 2016, Section 36a-570(b) of the Connecticut General Statutes provides, in pertinent part, that:
Whenever it appears to the commissioner that (1) any person has violated, is violating or about to violate any of the provisions of sections 36a-555 to 36a-573, inclusive . . . the commissioner may take action against such person . . . in accordance with sections 36a-50 and 36a-52.
Section 36a-800(2) of the Connecticut General Statutes in effect prior to October 1, 2017, provided, in pertinent part, that:
“Consumer collection agency” means any person (A) engaged as a third party in the business of collecting or receiving payment for others on any account, bill or other indebtedness from a consumer debtor, (B) engaged directly or indirectly in the business of collecting on any account, bill or other indebtedness from a consumer debtor for such person’s own account if the indebtedness was acquired from another person and if the indebtedness was either delinquent or in default at the time it was acquired . . . .
Section 36a-801(a) of the Connecticut General Statutes in effect prior to October 1, 2017, provided, in part, that:
No person shall act within this state as a consumer collection agency unless such person has first obtained a consumer collection agency license for such person’s main office and each branch office where such person’s business is conducted.  A consumer collection agency is acting within this state if it (1) has its place of business located within this state; (2) has its place of business located outside this state and (A) collects from consumer debtors, [or] property tax debtors . . . who reside within this state for creditors who are located within this state, or (B) collects from consumer debtors, [or] property tax debtors . . . who reside within this state for such consumer collection agency’s own account; (3) has its place of business located outside this state and regularly collects from consumer debtors, [or] property tax debtors . . . who reside within this state for creditors who are located outside this state . . . .
Section 36a-804(b) of the Connecticut General Statutes provides, in pertinent part, that:
Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any of the provisions of sections 36a-800 to 36a-812, inclusive, . . . the commissioner may take action against such person . . . in accordance with sections 36a-50 and 36a-52.
1. Respondent acted as a consumer collection agency in Connecticut without the required license, as more fully described in paragraphs 2 through 6, inclusive, 8 and 10 of the Matters Asserted, constitutes a violation of Section 36a-801(a) of the Connecticut General Statutes in effect prior to October 1, 2017.  Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-804(b) of the Connecticut General Statutes and Section 36a-52(a) of the 2018 Supplement to the General Statutes, issue an order to provide disgorgement pursuant to Section 36a-804(b) of the Connecticut General Statutes and Section 36a-50(c) of the 2018 Supplement to the General Statutes, and to impose a civil penalty pursuant to Section 36a-804(b) of the Connecticut General Statutes and Section 36a-50(a) of the 2018 Supplement to the General Statutes.  Section 36a-50(a) of the 2018 Supplement to the General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.
2. Respondent received payments on at least one small loan made by a person who had not obtained a small loan license, including interest in excess of 36%, as more fully described in paragraphs 2 through 8, inclusive, and 11 of the Matters Asserted, in violation of Section 36a-556(a) of the Connecticut General Statutes in effect on and after July 1, 2016.  Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-570(b) of the Connecticut General Statutes and Section 36a-52(a) of the 2018 Supplement to the General Statutes, and to impose a civil penalty pursuant to Section 36a-570(b) of the Connecticut General Statutes and Section 36a-50(a) of the 2018 Supplement to the General Statutes.  Section 36a-50(a) of the 2018 Supplement to the General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.
3. Respondent collected and received payments on at least one small loan made by a person who had not obtained a small loan license, as more fully described in paragraphs 2 through 8, inclusive, and 11 of the Matters Asserted, in violation of Section 36a-573(c) of the Connecticut General Statutes effective June 19, 2015.  Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-573(e) of the Connecticut General Statutes effective June 19, 2015, and Section 36a-52(a) of the 2018 Supplement to the General Statutes, and to impose a civil penalty pursuant to Section 36a-573(e) of the Connecticut General Statutes effective June 19, 2015, and Section 36a-50(a) of the 2018 Supplement to the General Statutes.  Section 36a-50(a) of the 2018 Supplement to the General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.
4.
Respondent filed a spreadsheet with the Commissioner that failed to identify all Connecticut accounts which Respondent had collected on in the past 24 months, as more fully described in paragraphs 4, 5, 9 and 10 of the Matters Asserted, in violation of Section 36a-53a of the Connecticut General Statutes.  Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-52(a) of the 2018 Supplement to the General Statutes and to impose a civil penalty pursuant to Section 36a-50(a) of the 2018 Supplement to the General Statutes.  Section 36a-50(a) of the 2018 Supplement to the General Statutes authorizes the Commissioner to impose a civil penalty upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.

ORDER TO PROVIDE DISGORGEMENT, NOTICE OF INTENT TO ISSUE
ORDER TO CEASE AND DESIST, NOTICE OF INTENT TO IMPOSE
CIVIL PENALTY AND NOTICE OF RIGHT TO HEARING
WHEREAS, the Commissioner has reason to believe that Respondent has engaged in acts or conduct which constitutes sufficient grounds for the Commissioner to issue an order to provide disgorgement pursuant to Section 36a-804(b) of the Connecticut General Statutes and Section 36a-50(c) of the 2018 Supplement to the General Statutes, and forms a basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-570(b) and 36a-804(b) of the Connecticut General Statutes, Section 36a-573(e) of the Connecticut General Statutes effective June 19, 2015, and Section 36a-52(a) of the 2018 Supplement to the General Statutes and impose a civil penalty upon Respondent pursuant to Sections 36a-570(b) and 36a-804(b) of the Connecticut General Statutes, Section 36a-573(e) of the Connecticut General Statutes effective June 19, 2015, and Section 36a-50(a) of the 2018 Supplement to the General Statutes.

THE COMMISSIONER THEREFORE ORDERS, pursuant to Section 36a-50(c) of the 2018 Supplement to the General Statutes, that GMA Investments, LLC d/b/a Summit Receivables PROVIDE DISGORGEMENT of any fees collected as a result of GMA Investments, LLC d/b/a Summit Receivables violating Section 36a-801(a) of the Connecticut General Statutes in effect prior to October 1, 2017.  Specifically, the Commissioner ORDERS that:  Not later than thirty (30) days from the date this Order to Provide Disgorgement becomes permanent, GMA Investments, LLC d/b/a Summit Receivables shall: 
1. Disgorge to Connecticut consumers all fees received as a result of collecting or receiving monies as payment for others since October 1, 2015, on any account, bill or other indebtedness from a Connecticut consumer debtor; and
2. Provide to Carmine Costa, Director, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or carmine.costa@ct.gov, evidence of such disgorgement to Connecticut consumers.
NOW THEREFORE, notice is hereby given to Respondent that the Commissioner intends to issue an order requiring Respondent to CEASE AND DESIST from violating Section 36a-53a of the Connecticut General Statutes, Section 36a-556(a) of the Connecticut General Statutes in effect on and after July 1, 2016, Section 36a-801(a) of the Connecticut General Statutes in effect prior to October 1, 2017, and Section 36a-573(c) of the Connecticut General Statutes effective June 19, 2015, including, but not limited to, enforcing such small loans by any means, and impose a CIVIL PENALTY upon Respondent as set forth herein, subject to Respondent’s right to a hearing on the allegations set forth above.

A hearing will be granted to Respondent if a written request for a hearing is received by the Department of Banking, Consumer Credit Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following Respondent’s receipt of this Order to Provide Disgorgement, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing as set forth in Section 36a-52(a) and subsections (a) and (c) of Section 36a-50 of the 2018 Supplement to the General Statutes.  This Order to Provide Disgorgement, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing shall be deemed received on the earlier of the date of actual receipt, or seven days after mailing or sending.  To request a hearing, complete and return the enclosed Appearance and Request for Hearing Form to the above address.  If Respondent will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as “pro se”.  Once a written request for a hearing is received, the Commissioner may issue a notification of hearing and designation of hearing officer that acknowledges receipt of a request for a hearing, designates a hearing officer and sets the date of the hearing in accordance with Section 4-177 of the Connecticut General Statutes and Section 36a-1-21 of the Regulations of Connecticut State Agencies.  If a hearing is requested, the hearing will be held on August 16, 2018, at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.

The hearing will be held in accordance with the provisions of Chapter 54 of the Connecticut General Statutes, unless Respondent fails to appear at the requested hearing.  At such hearing, Respondent will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law to be considered by the Commissioner.

If Respondent does not request a hearing within the time period prescribed or fails to appear at any such hearing, the allegations herein will be deemed admitted.  Accordingly, the Order to Provide Disgorgement shall remain in effect and become permanent, and the Commissioner will issue an order that Respondent cease and desist from violating Section 36a-53a of the Connecticut General Statutes, Section 36a-556(a) of the Connecticut General Statutes in effect on and after July 1, 2016, Section 36a-801(a) of the Connecticut General Statutes in effect prior to October 1, 2017, and Section 36a-573(c) of the Connecticut General Statutes effective June 19, 2015, including, but not limited to, enforcing such small loans by any means, and may order a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon Respondent.

So ordered at Hartford, Connecticut
this 25th day of June 2018                  ________/s/_________
                                                      Jorge L. Perez
                                                      Banking Commissioner


CERTIFICATION

I hereby certify that on this 26th day of June 2018, I caused to be mailed by certified mail, return receipt requested, the foregoing Order to Provide Disgorgement, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing to GMA Investments, LLC d/b/a Summit Receivables, Attention:  Anthony Guadagna, Managing Member, 1291 Galleria Drive, Suite 170, Henderson, Nevada 89014, Certified Mail No. 7012 3050 0000 6999 5538; and to GMA Investments, LLC d/b/a Summit Receivables, Attention:  Kristy Macswan, Compliance Officer/Consumer Complaint, 1291 Galleria Drive, Suite 170, Henderson, Nevada 89014, certified mail no. 7012 3050 0000 6999 5545.


 ________/s/_________
 Tina M. Daigle
 Paralegal

Administrative Orders and Settlements