| Date: | 05/11/2022 |
|---|---|
| Organization: | Division of Banks |
| Docket Number: | 2022-001 |
| Location: | Boston, Massachusetts |
WHEREAS, PENN CREDIT CORPORATION (“Penn Credit” or “Corporation”), a licensed debt collector under Massachusetts General Laws (M.G.L.) chapter 93, section 24A and 209 Code of Massachusetts Regulations (C.M.R.) 18.00 et seq., has been advised of its rights to Notice and Hearing pursuant to M.G.L. chapter 30A, sections 10 and 11, and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER (Consent Agreement) with the Division of Banks (Division) dated May 11th, 2022 whereby, solely for the purpose of settling this matter and without admitting any allegations of fact or the existence of any violations of law, Penn Credit agrees to the issuance of this CONSENT ORDER (Consent Order) by the Commissioner of Banks (Commissioner);
WHEREAS, the Division, through the Commissioner, has jurisdiction over the licensing and regulation of persons and entities engaged in the business of a debt collector and/or loan servicer in Massachusetts pursuant to M.G.L. chapter 93, sections 24 through 28 and 209 C.M.R. 18.00 et seq.;
WHEREAS, Penn Credit is, and at all relevant times, has been a foreign corporation conducting business in the Commonwealth of Massachusetts. The main office of Penn Credit is located at 2800 Commerce Drive, Harrisburg, Pennsylvania, 17110;
WHEREAS, Penn Credit is licensed by the Commissioner as a debt collector under M.G.L. chapter 93, section 24A. According to records maintained on file with the Division and the Nationwide Multi-State Licensing System (NMLS), the Commissioner issued debt collector license number DC0717 to Penn Credit to engage in the business of a debt collector on or about June 8, 2001;
WHEREAS, M.G.L. chapter 93, section 24(a) states, “Upon the filing of an application for a license, if the commissioner finds that the financial responsibility, character, reputation, integrity and general fitness of the applicant…are such as to warrant belief that the business will be operated honestly, fairly, soundly and efficiently in the public interest consistent with the purposes of this chapter, he shall thereupon issue the applicant a license to engage in the business of a debt collector. If the commissioner shall not so find, he shall not issue a license and shall notify the applicant of the denial…”;
WHEREAS, 209 C.M.R. 18.10(1), in pertinent part, states:
A debt collector, licensed student loan servicer or registered third party loan servicer if applicable, shall notify the Commissioner immediately, and in writing within one business day, of the occurrence of any of the following significant developments...
(b) The filing of a criminal indictment any way related to the activities of the debt collector, licensed student loan servicer, or registered third party loan servicer, any partner, member, officer, director, or equivalent, or principal employee, including, but not limited to, the handling and/or reporting of moneys received and/or instruments sold.
(c) Notification of the institution of license denial, cease and desist, suspension, or revocation procedures, or other formal or informal regulatory action, in any state against the debt collector, licensed student loan servicer, or registered third party loan servicer, and the reasons thereof.
(d) Receiving notification of the initiation of any action by the Attorney General of the Commonwealth or of any other state, pursuant to M.G.L. c. 93A, or any other comparable consumer protection statute, and the reasons thereof…
(e) Any partner, member, officer, director, or equivalent, or principal employee being convicted of a misdemeanor that is in any way related to debt collector, student loan servicing, or loan servicing activities; or of any felony whatsoever.
WHEREAS, on or about October 12, 2021, Penn Credit notified the Division through the NMLS system that, on or about October 12, 2021, Penn Credit’s former principal owner and chief executive officer, Donald Donagher, Jr. pleaded guilty to the felony of corruptly giving something of value to reward a public official in the United States District Court for the Northern District of Illinois, Eastern Division, namely a payment of $869 to a trophy company which was made for the benefit of a public official in connection with the referral of traffic debt placements to Penn Credit;
WHEREAS, on or about October 12, 2021, Penn Credit notified the Division through the NMLS system that, on or about October 12, 2021, Penn Credit entered into a deferred prosecution agreement with the United States Attorney’s Office for the Northern District of Illinois whereby Penn Credit acknowledged its role in the aforementioned corruption scheme, which was at the direction of its former principal owner and chief executive officer;
WHEREAS, the aforementioned deferred prosecution agreement is for a term of two years with conditions including implementation of ethics and compliance remediation and the remittance of a penalty in the amount of two hundred and twenty-five thousand dollars ($225,000.00) to the federal government; and
WHEREAS, the parties now seek to resolve by mutual agreement the matters identified above.