The company conducted business as a consumer collection agency without a license in Connecticut, resulting in a consent order, fine, and cease-and-desist order.
04/27/2022 3:30 P.M.
3 minute read
On April 1, 2022, the Connecticut Department of Banking Commissioner entered into a Consent Order with US Asset Management Inc. d/b/a USAM in Norwell, Massachusetts for operating without a license.
The consent order was based on an investigation by the Consumer Credit Division. As a result of the investigation, the commissioner alleged that between Jan. 14, 2020, and Dec. 27, 2021, USAM acted as a consumer collection agency in Connecticut without a consumer collection agency license, in violation of Section 36a-801(a) of the Connecticut General Statutes.
As part of the consent order, USAM paid $10,000 as a civil penalty and $800 for back licensing fees. The commissioner also issued a cease-and-desist order against USAM.
“The [c]ommissioner and USAM acknowledge the possible consequences of formal administrative proceedings, and USAM, without admitting or denying the allegation contained therein, voluntarily agrees to consent to the entry of the sanctions imposed below solely for the purpose of obviating the need for formal administrative proceedings concerning the allegation,” the consent order states.
On Nov. 16, 2021, USAM filed an application with the commissioner of the Nationwide Multistate Licensing System and Registry (NMLS) to obtain a license to act as a consumer collection agency in Connecticut. The application is currently pending.
The consent order serves as a good reminder for licensees to ensure their applications are up to date and submitted on a timely basis.
NMLS Updates
NMLS users will see a modernized system this year, ACA International previously reported.
Establishing a standardized licensing approach based on uniform requirements across all state nonbank financial regulatory agencies is an essential step toward building a modernized NMLS and was one of the Conference of State Bank Supervisor’s (CSBS) Networked Supervision priorities for 2021, ACA previously reported.
The new NMLS will be more automated, data-driven and user-friendly for applicants, licensees and regulators, according to CSBS.
Key components of the proposal include:
- A three-part licensing framework that distinguishes requirements as core, business-specific and license-specific, with the goal of creating uniform license requirements and reducing variations among state agencies as much as possible.
- A listing and description of each core requirement as it applies to companies and individual licensees.
- An overview of the identity verification process users will complete when creating an account in the new NMLS.
ACA’s Take:
The Connecticut consent order serves as a general reminder that responses to state and federal regulators’ requests require prompt attention. Failure to respond will typically result in harsh penalties, including revocation of licensure and monetary damages. In many cases, these may far exceed penalties that could have been negotiated via legal counsel. If you receive a civil investigative demand, subpoena, or complaint from a regulator, ACA International strongly recommends that you engage appropriate legal counsel as quickly as possible.
Additionally, the consent order highlights the importance of confirming a license application or license status before conducting business.
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