By the Division of Banks
COMMONWEALTH OF MASSACHUSETTS
COMMISSIONER OF BANKS
Docket No. 2016-007
In the Matter of
HG INTERNATIONAL CO. INC.
D/B/A CHANG EXPRESS
Foreign Transmittal Agency License # FT-909031
WHEREAS, HG INTERNATIONAL CO. INC. D/B/A CHANG EXPRESS, Somerville, Massachusetts (Chang Express 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 October 12, 2016, 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, Chang Express agrees to the issuance of this CONSENT ORDER (Order) by the Commissioner of Banks (Commissioner);
WHEREAS, the Division has jurisdiction over the licensing and regulation of persons and entities engaged in the business of a foreign transmittal agency in Massachusetts pursuant to Massachusetts General Laws chapter 169, and its implementing regulation 209 CMR 45.00 et seq;
WHEREAS, an examination of Chang Express was conducted pursuant to General Laws chapter 169, section 10, as of April 27, 2015 to assess the Corporation’s level of compliance with applicable Massachusetts and federal statutes, rules and regulations governing the conduct of those engaged in the business of a foreign transmittal agency in the Commonwealth;
WHEREAS, the Report of Examination (the Report) issued pursuant to the Division’s examination of Chang Express 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;
WHEREAS, the parties now seek to resolve by mutual agreement, the matters identified in the Report; and
NOW COME the parties in the above-captioned matter, the Division and Chang Express, and stipulate and agree as follows:
- Chang Express must develop, implement and maintain procedures to ensure that all money remitted to Brazil is processed through entities registered with and authorized by the Central Bank of Brazil.
- Chang Express must implement risk-based policies, procedures, and controls designed to identify and minimize risks associated with foreign agents and counterparties that facilitate the flow of funds out of the United States in accordance with 31 CFR 1022.210 and the Financial Crimes Enforcement Network’s (FinCEN) Interpretive Release 2004-1.
- Chang Express must develop, implement and maintain an effective overall compliance management system and anti-money laundering program with sufficient oversight by ownership and senior management, including but not limited to, adequate policies and procedures, internal monitoring, training and periodic independent testing as required by FinCEN’s regulation 31 CFR 1022.210.
- Chang Express must ensure the designated compliance officer has the necessary training, resources and authority to assure compliance with its anti-money laundering program and FinCEN’s regulation 31 CFR 1022.210.
- Chang Express must cease commingling operating funds with transmittal funds immediately in accordance with the Division’s regulation 209 CMR 45.13. The Corporation must establish, implement and maintain procedures to ensure that all funds received for transmittal abroad are deposited into a trust account containing only those funds collected for transmittal, and none of the Corporation’s own funds or funds collected for any other purpose are commingled with money collected for transmission abroad. Procedures shall include monthly reconciliation of escrow accounts.
- Chang Express must address all matters requiring attention set forth in the Report within the time frames contained therein. Chang Express must also adopt and implement any corrective actions discussed in the Report that are not specifically addressed by the provisions of this Order.
- Chang Express agrees to refrain from submitting any foreign transmittal agency license applications for any branch or agent office locations for a period of at least twelve (12) months from the effective date of this Order and until the Commissioner, in his sole discretion, determines that Chang Express is in compliance with all provisions of this Order.
- By the thirtieth (30th) day after the end of each calendar quarter following the date of this Order, Chang Express must furnish written progress reports to the Division, which must address and include the following:
- 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 Chang Express detailing a review of management’s and staff members’ 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 during such quarter which are intended to improve Chang Express’ compliance condition in Massachusetts and the results thereof.
- The reporting requirement to the Division referenced in Section 7 of this 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 Order from the Commissioner.
- The provisions of this Order shall not limit, stop, or otherwise prevent the Division, or any other state agency or department, from taking any other action affecting Chang Express, its successors or assigns, if Chang Express fails to fully and promptly comply with the above provisions.
- Nothing in this Order shall be construed as permitting Chang Express to violate any law, rule, regulation, or regulatory bulletin to which the Corporation is subject.
- In consideration of the foregoing provisions of this Order, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke Chang Express’ foreign transmittal agency license under Massachusetts General Laws chapter 169, section 12, while this Order is in effect.
- Failure to comply with the terms of this Order shall constitute grounds for license suspension and/or revocation, or other formal regulatory action 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 Order shall be binding upon Chang Express, its officers and directors, their successors and assigns.
- The provisions of this Order shall remain effective and enforceable except to the extent that, and until such time as, any provisions of this Order 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 Chang Express.
BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.
Dated at Boston, Massachusetts, this 12th day of October, 2016
By: Terence A. McGinnis
Commissioner of Banks
Commonwealth of Massachusetts