offered by
Consent Order

Consent Order Ideal Financial Services, Inc.

Date: 11/13/2012
Organization: Division of Banks
Docket Number: 2012-031
Location: Springfield, MA

Table of Contents


Suffolk, SS.

Docket No. 2012-031


In the Matter of
Springfield, Massachusetts

Motor Vehicle Sales Finance Company License No. MV0170
Small Loan Company License No. SL0125

WHEREAS, IDEAL FINANCIAL SERVICES, INC., Springfield, Massachusetts ("Ideal" or the "Corporation"), a licensed motor vehicle sales finance company under Massachusetts General Laws chapter 255B, section 2, and 209 CMR 20.00 et seq. and a licensed small loan company under Massachusetts General Laws chapter 140, sections 96 to 114A, and 209 CMR 20.00 et seq. 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 November 13, 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 motor vehicle sales finance company, and small loan company, Ideal agrees to the issuance of this CONSENT ORDER ("Order") by the Commissioner of Banks ("Commissioner");

WHEREAS, as of May 16, 2012, the Division’s examiners conducted an examination of Ideal’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, and small loan company license in Massachusetts.


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

  1. Within seven days of the effective date of this Consent Order, Ideal shall engage an Accounting Firm ("Firm") to prepare and submit to the Division an audit of the financial statements as of September 30, 2012 and issue an Opinion Audit ("Audit") in conformity with accounting principles generally accepted in the United States of America. The accounting firm previously retained by Ideal shall not be eligible to be retained as the Firm for purposes of this Consent Order. It being understood that Ideal 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 and the results should be submitted to the Division within 120 days.
  2. Ideal shall immediately cease soliciting and/or accepting outside funds from any source in order to finance Ideal’s business as a motor vehicle sales finance company or small loan company without written approval of the Commissioner.
  3. Ideal shall not authorize or execute any financial transaction, including the purchase of retail installment contracts in excess of fifty thousand dollars ($50,000.00), except for wages and salaries paid to employees, contractors, officers, or other members of Ideal’s management in the ordinary course of their business, without the prior written approval of the Commissioner.
  4. Ideal shall immediately cease distributing the payment of dividends to preferred shareholders. Any future dividend payments shall be approved by the Commissioner prior to distribution.
  5. Ideal shall submit for approval, within thirty days, a Capital Plan that describes how the Corporation will establish and maintain at a minimum an adjusted positive net worth of seventy-five thousand dollars ($75,000.00) and demonstrate and provide evidence to the Commissioner of its financial responsibility, in compliance with 209 CMR 20.03(2)(a). The Capital Plan shall address both internal and external sources of capital augmentation, including capital infusion, conversion of debt to equity, retention of earnings, asset sales or any other means that are acceptable to the Division.
    1. The amount of capital infusion shall be at a level satisfactory to the Commissioner and commensurate with the Corporation’s delinquency levels and liabilities.
    2. The capital plan shall include a provision on maintaining adequate reserves to address the Corporation’s delinquency levels.
  6. Ideal shall submit, within thirty days, a written profit plan reflecting the next two years, consisting of goals and strategies for providing the foundation for improved profitability.
    1. The written profit plan shall include, at a minimum:
      1. identification of the major areas in, and means by which, management shall seek to improve Ideal’s operating performance and enhance capital formation;
      2. realistic and comprehensive budgets;
      3. a budget review process to monitor the income and expenses of Ideal to compare actual figures with budgetary projections;
      4. a description of the operating assumptions that form the basis for, and adequately support, major projected income and expense components; and
      5. a statement of the Board of Director’s commitment to the continued maintenance of acceptable levels of liquidity and capital.
  7. Within 30 days of month end, Ideal shall submit monthly financial statements to the Division for review. These statements shall include balance sheet, income statement and statement of cash flows.
  8. 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.
  9. Nothing in this Consent Order shall be construed as permitting Ideal to violate any law, rule, regulation, or regulatory bulletin to which Ideal is subject.
  10. In consideration of the foregoing Order, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke Ideal’s motor vehicle sales finance company license or small loan company license under General Laws chapter 255B, sections 7 and 8, and General Laws Chapter 140, section 103, while this Consent Order is in effect unless the Division is made aware of material information that is not addressed in this Consent Order.
  11. 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.
  12. This Order shall become effective immediately upon the date of its issuance.
  13. The provisions of this Consent Order shall be binding upon Ideal and its officers and/or directors, and their successors or assigns.
  14. 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.
  15. 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 Ideal.


Dated at Boston, Massachusetts, this 13th day of November, 2012

David J. Cotney
Commissioner of Banks
Commonwealth of Massachusetts