By the Division of Banks
COMMONWEALTH OF MASSACHUSETTS
COMMISSIONER OF BANKS
Docket No. 2012-031
In the Matter of
NEW AGE FINANCIAL SERVICES, INC.
d/b/a SOUTH EXCHANGE MONEY TRANSFERS
Foreign Transmittal Agency License No: FT1776
WHEREAS, NEW AGE FINANCIAL SERVICES, INC. d/b/a SOUTH EXCHANGE MONEY TRANSFERS, Miami, Florida (South Exchange or the Corporation), a licensed foreign transmittal agency under Massachusetts General Laws chapter 169 has been advised of its right to Notice and Hearing pursuant to General Laws chapter 169, section 13, and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER (Consent Agreement) with representatives of the Division of Banks (Division) dated December 20, 2012, 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 foreign transmittal agency, South Exchange agrees to the issuance of this CONSENT ORDER (Order) by the Commissioner of Banks (Commissioner);
WHEREAS, an examination of South Exchange was conducted pursuant to General Laws chapter 169, section 10, as of October 11, 2011 (the examination) to assess the Corporation’s level of compliance with applicable state and federal laws, rules, regulations and regulatory bulletins governing the conduct of those engaged in the business of a foreign transmittal agency in the Commonwealth; and
WHEREAS, the Report of Examination (the Report) issued pursuant to the Division’s examination of South Exchange alleged substantial non-compliance with applicable state and federal statutes, rules, and regulations governing the conduct of those engaged in the business of foreign transmittal agency in the Commonwealth.
NOW COME the parties in the above-captioned matter, the Division and South Exchange, and stipulate and agree as follows:
- South Exchange shall cease commigling operating funds with transamittal funds and establish, implement and maintain policies and procedures to ensure that any client funds collected from Massachusetts consumers by the Corporation’s licensed locations are monitored and maintained in an appropriate account in accordance with the Division’s regulation 209 CMR 44.07. Procedures shall also include monthly reconciliation of escrow accounts.
- South Exchange shall amend its anti-money laundering program to include risk-based policies, procedures, and controls designed to identify and minimize money laundering and terrorist financing risks associated with foreign agents and counterparties that facilitate the flow of funds into and out of the United States in accordance with 31 CFR 1022.210 and the Financial Crimes Enforcement Network’s Interpretive Release 2004-1.
- South Exchange shall establish, implement and maintain policies and procedures to ensure that any client funds collected from Massachusetts consumers by the Corporation’s licensed locations for transmittal abroad are forwarded to the beneficiary within the required seven days in accordance with Massachusetts General Laws chapter 169, section 8.
- South Exchange shall establish, implement and maintain policies and procedures to ensure that adequate documentation is maintained to evidence that all client funds accepted for transmittal abroad are forwarded to the beneficiary within the required seven days in accordance with Massachusetts General Laws chapter 169, section 10.
- South Exchange shall establish, implement and maintain policies and procedures to ensure that the Corporation obtains the Commissioner’s prior written approval of any change in or closing of an agent location in accordance with the Division’s regulation 209 CMR 44.09(2).
- South Exchange shall enhance training procedures to ensure applicable staff persons are trained according to the Corporation’s policies. Training should be conducted by qualified and trained personnel, which includes, but is not limited to, proper instruction, adequate supervision and ongoing training to ensure proper implementation and execution of the revised policies and procedures implemented pursuant to this Consent Order.
- South Exchange shall revise its procedures to ensure that the Corporation identifies the correct Taxpayer Identification Number on all forms filed with the Financial Crimes Enforcement Network in accordance with 31 CFR 1010.320 and 31 CFR 1010.306(d).
- South Exchange shall enhance its agent supervision program to ensure proper oversight of agent locations. The updated program must include detailed policies and procedures at the agent level, improved controls, increased monitoring, and an enhanced training program. The agent visitations must be developed to include formalized steps for conducting documented compliance visitations to agents, along with a schedule as to how often these visitations will be performed. Reviews and training conducted as part of the agent supervision program should address all applicable state and federal compliance requirements and all violations and areas of concern mentioned in the Report.
- Immediately upon execution of this Consent Order, South Exchange shall withdraw all pending foreign transmittal agency license applications for branch or agent office locations that have been filed with the Division. South Exchange agrees to refrain from submitting any foreign transmittal agency license applications for any branch or agent office locations for a period of twelve (12) months from the effective date of this Consent Order unless the Commissioner, in his sole discretion, agrees to review such an application earlier.
- South Exchange acknowledges and agrees that the Division shall conduct an examination of the Corporation in six (6) months. Such examination may be conducted without prior notification to South Exchange and will assess the Corporation's level of compliance with state and federal laws, rules, regulations and regulatory bulletins governing the conduct of those engaged in the business of a foreign transmittal agency in the Commonwealth as well as the Corporation's compliance with the provisions of this Consent Order. The provisions of this Section shall not prohibit the Division from conducting an inspection of South Exchange pursuant to the authority granted to the Division under General Laws chapter 169, section 10 to investigate: (a) any complaint which is received by the Division against the Corporation or (b) any information received by the Division which has a tendency to suggest that the Corporation has engaged, or is engaged, or is about to engage in acts or practices in violation of the provisions of General Laws chapter 169, or any rule or regulation issued thereunder, or any other law, rule, or regulation applicable to the conduct of the licensed business. It being understood that if the Commissioner determines that South Exchange, or its partners, or their successors or assigns, has violated or is about to violate any provision of this Consent Order, the Commissioner make take any affirmative steps as may be necessary to carry out the provisions of General Laws chapter 169, section 13.
- Within thirty (30) days of receipt of the relevant invoice from the Division, South Exchange shall submit payment in full of the amount owed for the costs of the Division’s examination. The payment shall be made payable to the "Commonwealth of Massachusetts" and mailed to the Office of the Commissioner of Banks, Attn: Non-Depository Institution Supervision, 1000 Washington Street, 10th Floor, Boston, Massachusetts 02118-6400.
- South Exchange shall comply with all laws and regulations applicable to its conducting the business of a Foreign Transmittal Agency, including, but not limited to, Massachusetts General Laws chapter 169, the Division’s regulation 209 CMR 44.00 et seq., and the Bank Secrecy Act (31 U.S.C. § 5311 et seq.) and its implementing regulation 31 CFR Chapter X. Such obligations shall necessarily include the duty to address and correct, within twenty (20) days of receipt of the Report, all violations and areas of concern addressed in the Report.
- Within twenty (20) days of South Exchange’s receipt of the Report, the Corporation shall submit to the Commissioner, a written response that addresses each of the violations and areas of concern specified in the Report. The written response shall describe the revised policies and procedures adopted by South Exchange to implement all corrective actions set forth in: (i) the "Examiner’s Comments and Conclusions" section of the Report and (ii) the provisions of this Consent Order; and
- By the thirtieth (30th) day after the end of each calendar quarter following the date of this Consent Order, South Exchange shall furnish written progress reports to the Division, which shall address and include the following:
- A description of the form, content, and manner of any actions taken to address each Section of this Consent Order and the results thereof; and
- Written findings prepared by South Exchange detailing a review of management’s and staff persons’ adherence to the policies, programs, and procedures adopted pursuant to this Consent Order and to applicable statutes, regulations, and rules, as well as a description of any operational changes implemented during such quarter which are intended to improve South Exchange’s compliance condition in Massachusetts and the results thereof.
- The reporting requirement to the Division referenced in Section 14 of 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.
- The provisions of this Consent Order shall not limit, estop, or otherwise prevent the Division, or any other state agency or department, from taking any other action affecting South Exchange, its successors or assigns, if South Exchange fails to fully and promptly comply with the above provisions.
- This Consent Order shall become effective immediately upon the date of its issuance.
- The provisions of this Consent Order shall be binding upon South Exchange, its officers and directors, their successors and assigns, and those persons in active participation with it, directly or indirectly, acting individually or through any corporate or other entity.
- In accordance with the terms of the Consent Agreement entered by South Exchange and the Commissioner, South Exchange has waived all rights of appeal that it may have relative to this Consent Order or any of its provisions.
- The provisions of this Consent Order shall remain effective and enforceable except to the extent that, and until such time as, any provisions of this Consent Order shall have been modified, terminated, suspended, or set aside by the Commissioner or upon an order of a court of competent jurisdiction.
- This Consent Order and the Consent Agreement are the complete documents representing the resolution of this matter. There are no other agreements, promises, representations, or warranties other than those set forth in this Consent Order.
BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS:
Dated at Boston, Massachusetts, this 20th day of December, 2012
David J. Cotney
Commissioner of Banks
Commonwealth of Massachusetts
(Order terminated on September 16, 2015)