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IN THE MATTER OF: CREDIT COUNSELING ("Respondent")
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NOTICE OF AUTOMATIC SUSPENSION TEMPORARY ORDER TO NOTICE OF INTENT TO ISSUE AND NOTICE OF RIGHT TO HEARING |
I. LEGAL AUTHORITY AND JURISDICTION
The Banking Commissioner (“Commissioner”) is charged with the administration of Sections 36a-655 to 36a-665, inclusive, of the Connecticut General Statutes contained in Part II of Chapter 669 of the Connecticut General Statutes, “Debt Adjusters and Debt Negotiation”.
Pursuant to the authority granted by Section 36a-17(a) of the 2012 Supplement to the General Statutes, the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, has investigated the activities of Respondent to determine if it has violated, is violating or is about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner.
Section 36a-17(a) of the Connecticut General Statutes provides:
The commissioner, in the commissioner’s discretion, may 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.
Section 36a-52 of the Connecticut General Statutes provides, in pertinent part, that:
(a) 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, . . . 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 . . . 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.
(b) If the commissioner finds that the public welfare requires immediate action, the commissioner may incorporate a finding to that effect in the notice sent in accordance with subsection (a) of this section and issue a temporary order requiring the person to cease and desist from the activity which constitutes such alleged violation and to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section. Such temporary order shall become effective on receipt and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in the notice.
Section 36a-51 of the 2012 Supplement to the General Statutes provides, in pertinent part, that:
(a) The commissioner may . . . revoke . . . any license issued by the commissioner under any provision of the general statutes by sending a notice to the licensee 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 licensee 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, . . . involved; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that the licensee may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice. . . .
(b) 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 licensee fails to appear at the hearing. After the hearing, the commissioner shall . . . revoke . . . the license for any reason set forth in the applicable licensing provisions of the general statutes if the commissioner finds sufficient grounds exist for such . . . revocation . . . . If the licensee does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall . . . revoke . . . the license. No such license shall be . . . revoked except in accordance with the provisions of chapter 54.
Section 36a-664 of the 2012 Supplement to the General Statutes provides, in pertinent part, that:
(a)(1) Except as provided in subdivision (2) of this subsection, no such license, and no renewal thereof, shall be granted unless the applicant has filed a surety bond with the commissioner written by a surety authorized to write such bonds in this state, provided any applicant that files applications for licenses for more than one location shall file a single bond. Except as provided in this subdivision, for every applicant, the principal amount of the bond shall be the greater of (A) forty thousand dollars, or (B) (i) twice the amount of the average daily balance of the payments received by the applicant from Connecticut debtors in connection with the applicant’s debt adjustment activity during the preceding twelve months ending July thirty-first of each year . . . .
(2) If a licensee or applicant for renewal of a license establishes that such licensee or applicant is unable to comply with the bond required by subdivision (1) of this subsection, it shall file a bond for the highest principal amount it can obtain, provided such amount shall be a minimum of forty thousand dollars, and the licensee or applicant for renewal shall, in lieu of the balance of the required amount of the bond, deposit a sum equal to the amount of the bond required by subdivision (1) of this subsection, less the amount of the bond filed with the commissioner, in cash or cash equivalents, with such bank, out-of-state bank that has a branch in this state, Connecticut credit union or federal credit union as such applicant or licensee may designate and the commissioner may approve, and subject to such conditions as the commissioner deems necessary for the protection of consumers and in the public interest. . . .
(3) The form of any surety bond submitted pursuant to this section shall be approved by the Attorney General. . . . Any bond required by this section shall be maintained during the entire period of the license granted to the applicant, and the aggregate liability under any such bond shall not exceed the principal amount of the bond or the limit of liability.
(b) The surety shall have the right to cancel any bond filed under subsection (a) of this section at any time by a written notice to the licensee, stating the date cancellation shall take effect. Such notice shall be sent by certified mail to the licensee at least thirty days prior to the date of cancellation. No such bond shall be cancelled unless the surety notifies the commissioner in writing not less than thirty days prior to the effective date of cancellation. After receipt of such notification from the surety, the commissioner shall give written notice to the licensee of the date such bond cancellation shall take effect. The commissioner shall automatically suspend the license on such date, unless prior to such date the licensee submits a letter of reinstatement of the bond from the surety or a new bond or the licensee has surrendered the license. After a license has been automatically suspended, the commissioner shall give the licensee notice of the automatic suspension pending proceedings for revocation . . . and an opportunity for a hearing on such actions in accordance with section 36a-51 and require the licensee to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section.
Section 4-182(c) of the Connecticut General Statutes provides, in pertinent part, that:
No revocation, suspension, annulment or withdrawal of any license is lawful unless, prior to the institution of agency proceedings, the agency gave notice by mail to the licensee of facts or conduct which warrant the intended action, and the licensee was given an opportunity to show compliance with all lawful requirements for the retention of the license.
II. MATTERS ASSERTED
| 1. |
Respondent is a Connecticut corporation with an office at 52 Harrison Avenue, Branford, Connecticut (“Branford Office”). |
| 2. |
Since October 1, 2011, Respondent has been licensed as a debt adjuster for the Branford Office. Such license shall expire on September 30, 2013. |
| 3. |
On May 21, 2012, the Commissioner received notice from Hartford Fire Insurance Company that bond number 04BSBFZ1467 issued on behalf of Respondent with respect to its debt adjuster license for the Branford Office would be cancelled, effective on June 24, 2012. |
| 4. |
On May 25, 2012, pursuant to Section 4-182(c) of the Connecticut General Statutes, the Division sent a letter to Respondent giving Respondent an opportunity to show compliance with all lawful requirements for retention of its debt adjuster license in Connecticut.
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| 5. |
To date, Respondent has failed to file with the Commissioner a letter of reinstatement of the bond or a new bond policy and Respondent has not surrendered its license. |
| 6. |
The Commissioner automatically suspended Respondent’s debt adjuster license in Connecticut for the Branford Office effective on June 24, 2012.
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III. STATUTORY BASIS FOR REVOCATION OF DEBT ADJUSTER
LICENSE AND ORDER TO CEASE AND DESIST
Section 36a-657 of the Connecticut General Statutes provides, in pertinent part, that:
(a) The commissioner may . . . revoke . . . any license or take any other action, in accordance with the provisions of section 36a-51, for any reason which would be sufficient grounds for the commissioner to deny an application for a license under sections 36a-655 to 36a-665, inclusive, or if the commissioner finds that the licensee or any proprietor, director, officer, member, partner, shareholder, trustee, employee or agent of such licensee has done any of the following: . . . (3) violated any of the provisions of sections 36a-655 to 36a-665, inclusive, or any other law . . . applicable to the conduct of its business . . . .
(b) Whenever it appears to the commissioner that any person has violated, is violating or is about to violate the provisions of sections 36a-655 to 36a-665, inclusive, . . . the commissioner may take action against such person or licensee in accordance with . . . [section] 36a-52.
Respondent’s failure to maintain a surety bond during the entire period of its debt adjuster license, as more fully described in paragraphs 1 through 5, inclusive, of the Matters Asserted, constitutes sufficient grounds for the Commissioner to deny an application for such license and constitutes a violation of Section 36a-664 of the 2012 Supplement to the General Statutes, both of which constitute grounds for the Commissioner to revoke Respondent’s license to engage in the business of debt adjustment in Connecticut from the Branford Office pursuant to Sections 36a-657(a) and 36a-657(a)(3) of the Connecticut General Statutes, and subsections (a) and (b) of Section 36a-51 of the 2012 Supplement to the General Statutes, and forms a basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-657(b) and 36a-52(a) of the Connecticut General Statutes.
IV. FINDING AND STATUTORY BASIS FOR
TEMPORARY ORDER TO CEASE AND DESIST
The Commissioner finds that public welfare requires immediate action to issue a temporary order requiring Respondent to cease and desist from violating Section 36a-664(a)(3) of the 2012 Supplement to the General Statutes, pursuant to Section 36a-52(b) of the Connecticut General Statutes, in that due to Respondent’s failure to maintain its surety bond, any debtor who may be damaged by Respondent’s failure to perform any written agreements, or by the wrongful conversion of funds paid to Respondent, will not be able to proceed on such surety bond to recover damages.
V. NOTICE OF AUTOMATIC SUSPENSION, TEMPORARY ORDER TO CEASE
AND DESIST, NOTICE OF INTENT TO REVOKE DEBT ADJUSTER LICENSE,
NOTICE OF INTENT TO ISSUE ORDER TO CEASE AND DESIST
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 revoke its license to engage in debt adjustment in Connecticut from the Branford Office pursuant to Sections 36a-657(a) and 36a-657(a)(3) of the Connecticut General Statutes and subsections (a) and (b) of Section 36a-51 of the 2012 Supplement to the General Statutes, and forms a basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-657(b) and 36a-52(a) of the Connecticut General Statutes;
AND WHEREAS, the Commissioner has made the finding required under Section 36a-52(b) of the Connecticut General Statutes.
NOW THEREFORE, pursuant to the authority granted in Section 36a-664(b) of the 2012 Supplement to the General Statutes, the Commissioner gives NOTICE that on June 24, 2012, the license of Credit Counseling Solutions, Inc., to engage in the business of debt adjustment in Connecticut from 52 Harrison Avenue, Branford, Connecticut, was AUTOMATICALLY SUSPENDED pending proceedings for revocation.
THE COMMISSIONER ORDERS, pursuant to Section 36a-52(b) of the Connecticut General Statutes, that Credit Counseling Solutions, Inc., immediately CEASE AND DESIST from violating Section 36a-664 of the 2012 Supplement to the General Statutes. This Temporary Order shall become effective upon receipt by Credit Counseling Solutions, Inc., and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in this Temporary Order.
FURTHER, notice is hereby given to Respondent that the Commissioner intends to REVOKE Respondent’s license to engage in the business of debt adjustment in Connecticut from the Branford Office, and issue an order requiring Respondent to CEASE AND DESIST from violating Section 36a-664 of the 2012 Supplement to the General Statutes, subject to its right to a hearing on the allegation 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 its receipt of this Notice of Automatic Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Debt Adjuster License, Notice of Intent to Issue Order to Cease and Desist and Notice of Right to Hearing as set forth in subsections (a) and (b) of Section 36a-51 of the 2012 Supplement to the General Statutes, and Section 36a-52(a) of the Connecticut General Statutes. This Notice of Automatic Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Debt Adjuster License, Notice of Intent to Issue Order to Cease and Desist 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. The enclosed Appearance and Request for Hearing Form must be completed and mailed 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 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 November 15, 2012, 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 prescribed, the Commissioner will issue an order revoking Respondent’s license to engage in the business of debt adjustment in Connecticut from 52 Harrison Avenue, Branford, Connecticut, and issue an order that Respondent cease and desist from violating Section 36a-664 of the 2012 Supplement to the General Statutes.
So ordered at Hartford, Connecticut
this 3rd day of October 2012. ________/s/_________
Howard F. Pitkin
Banking Commissioner
CERTIFICATION
I hereby certify that on this 4th day of October 2012, the foregoing Notice of Automatic Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Debt Adjuster License, Notice of Intent to Issue Order to Cease and Desist and Notice of Right to Hearing was sent by certified mail, return receipt requested, to Credit Counseling Solutions, Inc., 52 Harrison Avenue, Branford, Connecticut 06405, certified mail no. 70112000000247319902.
________/s/_________
Doniel Kitt
Prosecuting Attorney