Consent Order  Freedom Financial Asset Management, LLC

Date:	08/05/2019
Organization:	Division of Banks
Docket Number:	2019-0003
Location:	Tempe, Arizona

WHEREAS, FREEDOM FINANCIAL ASSET MANAGEMENT, LLC, (“Freedom Financial” or “Company”) has been advised of its rights to Notice and Hearing pursuant to Massachusetts General Laws chapter 30A, section 10, and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER (the "Consent Agreement") with the Division of Banks (the "Division") dated August 5, 2019 whereby, solely for the purpose of settling this matter and without admitting any allegations of fact or the existence of any violations of law, Freedom Financial agrees to the issuance of this CONSENT ORDER (this “Consent Order”) by the Commissioner of Banks (the “Commissioner”);

WHEREAS, a person or entity must register with the Commissioner prior to acting as a third party loan servicer in Massachusetts pursuant to Massachusetts General Laws chapter 93, section 24A;

WHEREAS, a person or entity acting as a third party loan servicer in Massachusetts must comply with the requirements of 209 CMR 18.00 et seq.;

WHEREAS, Freedom Financial has its main office located at 2114 E Rio Salado Parkway, Tempe, Arizona 85281;

WHEREAS, Freedom Financial engaged in the business of a third party loan servicer from at least July 2014 through November 28, 2018 without a third party loan servicer registration;

WHEREAS, on or about September 17, 2013 Freedom Financial applied for a third party loan servicer registration with the Division;

WHEREAS, on or about June 5, 2014 Freedom Financial's third party loan servicer registration application was deemed Withdrawn - Application Abandoned;

WHEREAS, on or about July 30, 2018 Freedom Financial submitted an application for a third party loan servicer registration with the Division (the "2018 Application");

WHEREAS, as a part of Freedom Financial's 2018 Application, the Division became aware that Freedom Financial had engaged in the business of a third party loan servicer without a third party loan servicer registration;

WHEREAS, on November 19, 2018 the Division and Freedom entered into a consent order (the 2018 Consent Order) resolving the issue of Freedom Financial's unregistered loan servicing;

WHEREAS, the Division issued Freedom Financial a third party loan servicer registration on November 29, 2018;

WHEREAS, a person or entity must be licensed by the Commissioner prior to directly or indirectly engaged in the business of making closed end small loans to consumers in Massachusetts ("small loans") as such business is described in Massachusetts General Laws chapter 140, section 96 ("small loan company);

WHEREAS, a person or entity acting as a small loan company in Massachusetts must comply with the requirements of 209 CMR 20.00 et seq. and 209 CMR 26.00 et seq.;

WHEREAS, Freedom Financial has never applied for or received a license from the Division to engage in the business of a small loan company in Massachusetts.

WHEREAS, in January 2019 Freedom Financial informed the Division it had failed to disclose as a part of its 2018 Application that it had entered into a Consent Order with Federal Deposit Insurance Corporation (FDIC) dated March 28, 2018.

WHEREAS, in discussions relating to Freedom Financial's Consent Order with the FDIC, the Division became aware that the company had engaged in the business arranging small loans for a fee without a license from the Division.

WHEREAS, the parties now seek to resolve by mutual agreement the matters identified above.

Order

NOW COME the parties in the above-captioned matter, the Division and the Company, and stipulate and agree as follows:

1. The Company shall pay an administrative penalty to the Division in the amount of six hundred fourty-two thousand five hundred ($ 642,500.00). The penalty shall be due upon execution and the portion of such penalty amount that has not been paid already shall be payable by check to the “Commonwealth of Massachusetts,” mailed to the Division of Banks, Attn: Consumer Finance Licensing Unit, 1000 Washington Street, 10th Floor, Boston, Massachusetts 02118.
2. Freedom Financial shall immediately cease and desist from engaging in any business activity that requires licensing or registration from the Division, prior to obtaining the appropriate license or approval from the Division including, but not limited to, acting as a third party loan servicer in Massachusetts as such business is described in Massachusetts General Laws chapter 93, section 24A, and including acting as a small loan company in Massachusetts as such business is described in Massachusetts General Laws chapter 140, section 96.
3. Freedom Financial shall establish, implement and maintain adequate internal policies and procedures to ensure that the Company refrains from engaging in any business activity that requires licensing or registration from the Division, prior to obtaining the appropriate license or approval from the Division.
4. By its execution of this Consent Order, Freedom Financial hereby certifies that all of the loans serviced by Freedom Financial were originated by a lender that is state-chartered and supervised and regulated by the Federal Deposit Insurance Corporation.  Accordingly, Freedom Financial represents that the loans are exempt from the Massachusetts Criminal Usury Law, including its notification requirements. See Mass. Gen. Laws ch. 271, § 49(e). 
5. Nothing in this Consent Order shall be construed as permitting Freedom Financial to violate any law, rule, regulation, or regulatory bulletin to which the Company is subject.
6. It is understood that Freedom Financial submitted an application to obtain the third party loan servicer registration from the Division and that such registration has been granted.  The Division had all of the discretion set forth within Massachusetts General Laws chapter 93, sections 24 to 28 and the Division’s regulation 209 CMR 18.00 et seq., in determining whether to issue the relevant registration to Freedom Financial, provided, however, that the Division would not have denied such application solely as a result of any of the issues resolved by this Consent Order or because the Company entered into the Consent Order or agreed to the issuance of this Consent Order.
7. It is understood that, now that it is registered, Freedom Financial shall comply with the requirements set forth in applicable state and federal laws, rules, regulations, and published regulatory bulletins governing the conduct of those engaged directly or indirectly in the business of a third party loan servicer in Massachusetts including but not limited to: Massachusetts General Laws General Laws chapter 93, sections 24 to 28 and the Division’s regulation 209 CMR. 18.00 et seq., and establish, implement, and maintain policies and procedures to ensure compliance.
8. Failure to comply with the terms of this Consent Order shall constitute grounds for formal regulatory action, including but not limited to, revocation of any and all licenses and registrations issued to Company by the Division, pursuant to and in accord with the General Laws of the Commonwealth of Massachusetts., including laws that provide for notice, hearings, review and appeal. 
9. This Consent Order shall become effective immediately upon the date of its issuance.
10. The provisions of this Consent Order shall be binding upon Freedom Financial and its respective subsidiaries, officers and directors, successors and assigns, and those persons in active participation with them, directly or indirectly, acting individually or through any corporate or other entity.
11. In consideration of this Consent Order, the Division agrees not to pursue any other remedial measures, sanctions or penalties relative to this matter unless the Division is made aware of material information that is not addressed in this Consent Order, or if Freedom Financial fails to comply with the terms of this Consent Order.
12. The provisions of this Consent Order shall not limit, estop, or otherwise prevent any other state agency or department, from taking any other action under separate authority affecting the Company or any of its officers and directors, or their successors or assigns.
13. The provisions of this Consent Order shall remain effective and enforceable except to the extent that, and until such time as the Commissioner or a court of competent jurisdiction modifies, terminates, suspends, or sets aside any provision of this Consent Order.
14. In accordance with the terms of the Consent Agreement entered into by Freedom Financial and the Commissioner, Freedom Financial has waived all rights of appeal that it may have relative to this Consent Order or any of its provisions.
15. This Consent Order and the Consent Agreement are the complete documents representing the resolution of this matter. There are no other agreements between the Division and Freedom Financial.
16. This Consent Order amends, restates and replaces that certain 2018 Consent Order.  Amounts paid by Freedom Financial pursuant to the 2018 Consent Order are deemed applied to amounts payable by Freedom Financial under this Consent Order.

By order and direction of the Commissioner of Banks:

Dated at Boston, Massachusetts, this 5th day of August 2019
By: Mary L. Gallagher
Commissioner of Banks