By the Division of Banks


COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MOTOR VEHICLE SALES
FINANCE COMPANY
LICENSING

CEASE DIRECTIVE

In the Matter of
GRANITE FINANCIAL SERVICES
Malden, Massachusetts


The Division of Banks ("Division") has jurisdiction over the licensing and regulation of persons and entities engaged in the business of a motor vehicle sales finance company in Massachusetts pursuant to Massachusetts General Laws 255B, and its implementing regulation 209 CMR 20.00 et seq.

Pursuant to the authority granted by Massachusetts General Laws chapter 255B, section 6, the Division has investigated the activities of GRANITE FINANCIAL SERVICES ("Granite Financial") located at 189 Eastern Avenue, Malden, Massachusetts to determine if Granite Financial has engaged in the business of, or is about to engage in, acts or practices constituting violations of Massachusetts General Laws chapter 255B. Based upon such investigation, the Commissioner of Banks ("The Commissioner") hereby issues the following CEASE DIRECTIVE ("Cease Directive") as a result of the findings alleged herein.

A. FINDINGS OF FACT

  1. Massachusetts General Laws chapter 255B, section 2 governing the licensing requirements for entities engaged in the business of motor vehicle sales financing states, in part:

    No person, other than a bank as defined in section one of chapter one hundred and sixty-seven, a national banking association, federal savings bank, federal savings and loan association, federal credit union, or any bank, trust company, savings bank, savings and loan association or credit union organized under the laws of any other state of the United States, shall engage in the business of a sales finance company without first obtaining from the commissioner a license to carry on said business in the city or town where the business is to be transacted as provided herein.

  2. Massachusetts General Laws chapter 255B, section 1 defines a "sales finance company," in part, as follows:

    "Sales finance company" ...(2) any person engaged, in whole or in part, in the business of purchasing retail installment contracts from one or more retail sellers...

  3. Granite Financial is, and at all relevant times, has been a business entity conducting business in the Commonwealth of Massachusetts with a principal office located at 189 Eastern Avenue, Malden, Massachusetts.
  4. According to the Division’s records, Granite Financial has not applied for a motor vehicle sales finance company license with the Division.
  5. Pursuant to an examination/inspection of a licensed debt collector, the Division was provided with numerous retail motor vehicle installment sales contracts that were assigned to Granite Financial from retail sellers during the calendar year 2011.
  6. On December 15, 2011 and December 21, 2011, as a result of the events referenced in Paragraph 5 of this Directive, the Division’s examiners conducted visitations at Granite Financial’s Malden office location ("Visitations").
  7. During the Visitations, the Division’s examiners reviewed retail installment contracts that contained further evidence that Granite Financial is engaging in motor vehicle sales financing activity.
  8. During the Visitations, the examiners were provided with a letter dated December 21, 2011 and signed by Mr. Ronaldo Maia, Owner of Granite Financial, in which Mr. Maia admits that Granite Financial has been "writing loans without knowing that [it] needed to have a license to do so".
  9. Massachusetts General Laws chapter 255B, section 21 states:

    Whoever violates any provision of this chapter or any rule or regulation made thereunder by the commissioner shall be punished by a fine of not more than five hundred dollars or by imprisonment for not more than six months, or both.

    B. CEASE DIRECTIVE

  10. Granite Financial is hereby directed to cease engaging in the motor vehicle sales finance business until such time that Granite Financial has demonstrated either that it is exempt from the licensing provisions of Massachusetts General Law chapter 255B; or has obtained a license issued by the Commissioner of Banks for the operation of a motor vehicle sales finance company in Massachusetts.
  11. Granite Financial must submit a response within ten days of receipt of this Directive. The response must include either of the following:
    1. Satisfactory evidence that Granite Financial is exempt from the provisions of Massachusetts General Laws chapter 255B or an indication as to whether Granite Financial will seek to be licensed as a motor vehicle sales finance company and, if so, approximately when a completed application will be submitted to the Division.
    2. A signed copy of the enclosed affidavit, completed by an authorized officer, attesting that Granite Financial will immediately cease from engaging in the motor vehicle financing business until such time as a license may be issued by the Commissioner. In addition, a complete listing of open loans and retail installment contracts made by Granite Financial should be included with the affidavit. Such list should include the name and address of the consumer, the original balance, the current balance, the origination date, and the terms of the loan.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 26th day of January, 2012

By:
David J. Cotney
Commissioner of Banks