COMMONWEALTH OF MASSACHUSETTS
COMMISSIONER OF BANKS
MOTOR VEHICLE SALES FINANCE COMPANY LICENSING
Docket No. 2010-228
In the Matter of
Motor Vehicle Sales Finance Company License No. MV0147
WHEREAS, INOFIN INC., Rockland, Massachusetts ("Inofin" or the "Corporation"), a licensed motor vehicle sales finance company under Massachusetts General Laws chapter 255B, section 2, has entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER ("Consent Agreement") with representatives of the Division of Banks ("Division") dated June 18, 2010, whereby, solely for the purpose of settling this matter, and without admitting any allegations or implications of fact or the existence of any violation of state or federal laws and regulations governing the conduct and operation of a motor vehicle sales finance company, Inofin agrees to the issuance of this CONSENT ORDER ("Order") by the Commissioner of Banks ("Commissioner");
WHEREAS, an examination of Inofin commenced pursuant to General Laws chapter 255B, section 3, on November 9, 2009, to assess the Corporation's level of compliance with applicable Massachusetts statutes and the Division's regulations governing the conduct of those engaged in the business of a motor vehicle sales finance company in the Commonwealth;
WHEREAS, during the examination and review of the Corporation's books and records the Division became concerned with Inofin's ability to maintain the minimum financial requirements for holding a motor vehicle sales finance company license in Massachusetts; and
WHEREAS, as of June 8, 2010 and June 9, 2010, as a result of continuing concerns relative to the financial condition of the Corporation, the Division's supervisory management participated with Division examiners and continued an onsite review of Inofin's books and records.
WHEREAS, the Division remains concerned about the Corporation's ability to maintain the minimum financial requirements for holding a motor vehicle finance company license in Massachusetts.
NOW COME the parties in the above-captioned matter, the Division and Inofin, and stipulate and agree as follows:
- Within forty-eight (48) hours of the effective date of this Consent Order, Inofin shall identify an independent consultant ("Consultant") as an interim manager to oversee, direct and coordinate, the operations of the Corporation. It being understood that Inofin shall obtain the prior written approval from the Commissioner of the Consultant proposed by the Corporation. Inofin shall provide written notification of a proposed Consultant and thereafter submit to the Commissioner a proposed engagement letter that identifies the scope of services to be provided by the Consultant, which at a minimum conforms with the requirements set forth in Section 2 of this Consent Order.
- The Consultant appointed by Inofin at a minimum shall render the following services:
- Manage and oversee the Operations of the Corporation including but not limited to the servicing operations;
- Oversee the financial reporting and reconciliation of all accounts maintained by Inofin; and
- Ensure the Corporation's compliance in responding to any requests made by the Division.
- Within five (5) business days of the appointment of the Consultant, Inofin through the designated Consultant shall submit to the Commissioner a detailed record, prepared as of the date of submission, of all of the motor vehicle loans currently held and/or serviced by the Corporation for consumers in Massachusetts. The records to be produced shall include but not necessarily be limited to, the following:
- Inofin shall submit to the Commissioner all information on file as of the date of submission regarding the Corporation's Massachusetts servicing portfolio including but not limited to: the borrower's addresses and telephone numbers; the loan number; the account balance; and the location of the funds currently held for each account. The record should include telephone numbers of contact persons who are familiar with the Corporation's motor vehicle contracts; and
- Inofin shall immediately place all payments collected from Massachusetts consumers relative to any motor vehicle loans serviced by the Corporation in a separate escrow account maintained at a federally insured bank.
- The Consultant shall ensure that Inofin continues to pay all obligations due to Investors pursuant to the terms of any Agreements.
- On the last business day of each subsequent week after the effective date of this Consent Order, the Consultant appointed by Inofin shall provide the Commissioner with:
- An updated, written status report of the operations and the current financial condition of the Corporation;
- A description of the form, content, and manner of any actions taken to address each Section of this Order and the results thereof; and
- Written findings prepared by the Corporation detailing a review of management's and staff persons' adherence to the policies, programs, and procedures adopted pursuant to this Order and to applicable statutes, regulations, and rules, as well as a description of any operational changes implemented and the results thereof.
- Within forty-eight (48) hours of the effective date of this Consent Order, Inofin shall engage an Accounting Firm ("Firm") to prepare and submit to the Division an audit of the financial statements for the year 2009 and issue an Opinion Audit ("Audit") in conformity with accounting principles generally accepted in the United States of America. In addition, the Accounting Firm shall prepare and submit to the Division, an audited 2008 year-end balance sheet and a 2008 income statement review. The accounting firm previously retained by Inofin shall not be eligible to be retained as the Firm for purposes of this Consent Order. It being understood that Inofin shall obtain the prior written approval from the Commissioner of the Firm to be utilized by the Corporation. The Firm's review shall commence immediately upon approval of the Commissioner.
- Inofin shall immediately cease soliciting and/or accepting funds from any source in order to finance Inofin's business as a motor vehicle sales finance company without written approval of the Commissioner.
- Inofin shall not authorize or execute any financial transaction, including the purchase of retail installment contracts in excess of two hundred thousand dollars ($200,000.00), except for wages and salaries paid to employees, contractors, officers, or other members of Inofin's management in the ordinary course of their business, without the prior written approval of the Commissioner. Upon the effective date of this Consent Order, Inofin shall implement or revise its practices and procedures, as necessary, to ensure that their financial books and records are accurately maintained, in a manner illustrating compliance with the provisions of this Section, and available for review by the Division's examiners upon request.
- The reporting requirements to the Division referenced in this Consent Order shall remain in effect and shall not be amended or rescinded without the prior written modification, termination, or suspension of the applicable provision of this Consent Order from the Commissioner.
- Nothing in this Consent Order shall be construed as permitting Inofin to violate any law, rule, regulation, or regulatory bulletin to which Inofin is subject.
- In consideration of the foregoing Order, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke Inofin's motor vehicle sales finance company license under General Laws chapter 255B, sections 7 and 8, while this Consent Order is in effect unless the Division is made aware of material information that is not addressed in this Consent Order.
- Failure to comply with the terms of this Consent Order shall constitute grounds for license suspension and/or revocation pursuant to applicable provisions of the General Laws of the Commonwealth of Massachusetts.
- This Order shall become effective immediately upon the date of its issuance.
- The provisions of this Consent Order shall be binding upon Inofin and its officers and/or directors, and their successors or assigns.
- The provisions of this Consent Order shall remain effective and enforceable except to the extent that, and until such time as the Consent Order or any provisions thereof shall have been modified, terminated, suspended, or set aside by the Commissioner or upon an order of a court of competent jurisdiction.
- This Order and the Consent Agreement are the complete documents representing the resolution of this matter. There are no other agreements between the Division and Inofin.
BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.
Dated at Boston, Massachusetts, this 18th day of June, 2010
By: Steven L. Antonakes
Commissioner of Banks
Commonwealth of Massachusetts