Consent Order  NCA Finance Partners I, LLC and New Credit America, LLC

Date:	12/11/2018
Organization:	Division of Banks
Docket Number:	2018-008

WHEREAS, NCA FINANCE PARTNERS I LLC, Calabasas, California (NCAFPI or the Company), and NEW CREDIT AMERICA LLC (New Credit) have 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 11, 2018, 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 relevant state or federal laws and regulations, NCAFPI and New Credit agree to the issuance of this CONSENT ORDER (Consent Order) by the Commissioner of Banks (Commissioner);

WHEREAS, NCAFPI is a licensed small loan company under Massachusetts General Laws chapter 140, section 96 and 209 CMR 20.00 et seq., and is a wholly owned subsidiary of New Credit;

WHEREAS, New Credit is a licensed debt collector under Massachusetts General Laws chapter 93, section 24A and 209 CMR 18.00 et seq., and is the parent company of NCAFPI;

WHEREAS, an examination of NCAFPI was conducted pursuant to General Laws chapter 140, section 97 as of May 29, 2018 to assess the Company’s level of compliance with applicable Massachusetts and federal statutes, rules and regulations governing the conduct of those engaged in the business of a small loan company in the Commonwealth;

WHEREAS, pursuant to General Laws chapter 140, section 96, small loans are defined as consumer loans for six thousand dollars or less with interest rates exceeding 12% annually (small loans);

WHEREAS, 209 CMR 26.01 (the small loan rate order) sets forth a maximum interest rate of 23% on small loans;

WHEREAS, the Report of Examination (the Report) issued pursuant to the Division’s examination of NCAFPI alleged substantial non-compliance with applicable state statutes, rules, and regulations governing the conduct of those engaged in the business of a small loan company in the Commonwealth, including but not limited to, collecting interest that exceeds the maximum amount permitted under 209 CMR 26.01, and engaging in the small loan business prior to obtaining the small loan license;

WHEREAS, NCAFPI has indicated its intention to surrender its Massachusetts Small Loan Company license;

WHEREAS, New Credit has indicated its intention to surrender its Massachusetts Debt Collector License;

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

Consent Order

NOW COME the parties in the above-captioned matter, the Division, NCAFPI, and New Credit who stipulate and agree as follows:

1. The Company shall pay an administrative penalty to the Division in the amount of ten thousand dollars ($10,000).  The penalty shall be due upon execution and shall be payable by check to the “Commonwealth of Massachusetts,” mailed to the Division of Banks, Attn: Consumer Finance Supervision Unit, 1000 Washington Street, 10th Floor, Boston, Massachusetts 02118.
2. NCAFPI affirms that it has ceased purchasing small loans in Massachusetts as of, or prior to February 26, 2018.
3. NCAFPI shall immediately surrender its Massachusetts Small Loan Company License by submitting a “Request to Surrender” to the Division through the Nationwide Multi-State Licensing System & Registry (NMLS).
4. New Credit will not accept for servicing or debt collection any new or additional Massachusetts debt collection accounts beyond the Massachusetts accounts it is servicing as of the date of this Consent Order.  Promptly after those accounts have been paid off or servicing of those accounts has been transferred to a replacement duly licensed servicer, New Credit shall surrender its Massachusetts Debt Collector License by submitting a “Request to Surrender” to the Division through the NMLS.
5. Within thirty (30) days from the execution of this Consent Order, NCAFPI shall conduct portfolio review of all Massachusetts small loans purchased by the Company, to identify small loans with rates in excess of 23%, and shall reimburse all affected consumers for the full amount of interest and fees collected.  NCAFPI shall further waive all future interest and fees on the identified accounts. It is understood that the aforementioned portfolio review shall also include all small loans that were purchased prior to the Company becoming licensed in Massachusetts as a small loan company.
6. Within thirty (30) days from the execution of this Consent Order, NCAFPI shall conduct portfolio review of all Massachusetts small loans purchased by the Company, to identify small loans purchased prior to obtaining a license on August 1, 2016, and shall reimburse all affected consumers for the full amount of interest and fees collected.  NCAFPI shall further waive all future interest and fees on the identified accounts.
7. NCAFPI shall immediately cease purchasing any Massachusetts loans that are not regulated under the small loan rate order and that exceed the Massachusetts usury threshold of twenty percent per annum (usurious loans), unless proper notification has been made to the Massachusetts Office of the Attorney General (Attorney General), as required under M.G.L. c. 271, section 49(e).
8. Within thirty (30) days from the execution of this Consent Order, NCAFPI shall notify the Attorney General that the Company has purchased from a bank loans with rates that exceed twenty percent per annum, and shall provide the Attorney General with a list of all such loans. 
9. NCAFPI will submit to the Division documentation of the review performed on its Massachusetts collection accounts, including a list of all the accounts reviewed, which shall include, at a minimum: the name of the consumer; the account number; the origination date; the contract interest rate; the total fees charged at prior to origination; the annual percentage rate; the date of each payment received; the amount of each payment received from the consumer; and the check number of each refund along with copies of checks or evidence of appropriate adjustments made to the consumer’s account.
   
   a. NCAFPI shall certify that it has made a reasonable good faith effort to identify the current address of all consumers who are entitled to refund checks.  In all cases where consumers cannot be located, the Company shall comply with Massachusetts General Laws chapter 200A regarding the disposition of unclaimed property.
10. 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 NCAFPI and/or New Credit, their successors or assigns.
11. Nothing in this Consent Order will be construed as permitting NCAFPI or New Credit to violate any law, rule, regulation, or regulatory bulletin to which the Company is subject.
12. This Consent Order will become effective immediately upon the date of its issuance. 
13. The provisions of this Consent Order are binding upon NCAFPI and New Credit, their owners, officers and directors, and their successors and assigns.
14. The provisions of this Consent Order will remain effective and enforceable except to the extent that, and until such time as, any provisions of this Consent Order will have been modified, terminated, suspended, or set aside by the Commissioner or upon an order of a court of competent jurisdiction.
15. In accordance with the terms of the Consent Agreement entered by NCAFPI and New Credit and the Commissioner, NCAFPI and New Credit have waived all rights of appeal that they may have relative to this Consent Order or any of its provisions.
16. 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, NCAFPI and New Credit.

By order and direction of the Commissioner of Banks
Dated at Boston, Massachusetts, this 11th day of December, 2018.
 

By: Merrily S. Gerrish
Acting Commissioner of Banks
Commonwealth of Massachusetts