Bulletin 3171 - November 29, 2024

State of Connecticut
Department of Banking

The Department of Banking News Bulletin

Bulletin # 3171 - Week Ending November 29, 2024

This Bulletin constitutes the only official notification you will receive from this office concerning any of the following applications. Any observations you may have are solicited. Any comments should be directed to Jorge L. Perez, Banking Commissioner. Written comments will be considered only if they are received within ten business days from the date of this bulletin.

CREDIT UNION ACTIVITY

Merger

On November 21, 2024,
America’s First Network Credit Union
, a Connecticut credit union, and
Connecticut State Prison Employees Federal Credit Union , a federal credit union, filed an application pursuant to Section 36a-468a of the Connecticut General Statutes seeking approval for the merger of Connecticut State Prison Employees Federal Credit Union with and into America’s First Network Credit Union. In connection with the application, America’s First Network Credit Union is proposing to expand its field of membership to include the select employee group field of membership of Connecticut State Prison Employee Federal Credit Union. The proposed target date for this merger is April 1, 2025.

CONSUMER CREDIT DIVISON ACTIVITY

Consent Orders

On November 27, 2024, the Commissioner entered into a Consent Order with Nationwide Credit and Collection Inc.
(NMLS # 1057803) (“Nationwide”), Oak Brook, Illinois and P. J. Collections Inc. d/b/a PJ Collections (NMLS # 2487407) (“PJ Collections”), Naperville, Illinois (collectively, “Respondents”). The Consent Order was based on an investigation by the Consumer Credit Division. As a result of such investigation, the Commissioner alleged that: (1) between April 2018 and the present, Nationwide acted as a consumer collection agency in Connecticut without a license, in violation of Section 36a-801(a) of the Connecticut General Statutes in effect at such time; and (2) between June 2023 and the present, PJ Collections transferred funds collected or received from Connecticut consumer debtors through Nationwide’s trust account, in violation of Section 36a-811(b) of the Connecticut General Statutes. As part of the Consent Order, Respondents paid $10,000 as a civil penalty and $2,000 as back licensing fees.

On November 21, 2024, the Commissioner entered into a Consent Order with Plutus Financial, Inc.
, Wilmington, Delaware,
Abra Trading, LLC, NMLS # 2387330
, Atlanta, Georgia,
Plutus Financial Holdings, Inc. Plutus Lending, LLC , and William John Barhydt (collectively, “Respondents”). The Consent Order was based on a multistate investigation performed by several states including Connecticut. The Consent Order resolved allegations made by the Commissioner in the Temporary Order to Cease and Desist, Order to Provide Disgorgement, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing against Plutus Financial, Inc. d/b/a Abra Trade d/b/a Abra. Pursuant to the Consent Order, the Commissioner found that: (1) Plutus Financial, Inc. engaged in the business of money transmission, and advertised or solicited such services in Connecticut without a license, in violation of Section 36a 597(a) of the Connecticut General Statutes; (2) William John Barhydt aided or otherwise facilitated Plutus Financial, Inc.’s engagement in the business of money transmission without a license by failing to establish, enforce and maintain policies and procedures reasonably designed to achieve compliance with applicable money transmission laws and regulations, in violation of Section 36a 607(c)(10) of the Connecticut General Statutes; and (3) By offering and providing Abra Trade Accounts, and related products and services to residents of Connecticut, Plutus Financial, Inc. engaged in the business of money transmission in Connecticut without a license issued by Commissioner, in violation of Section 36a 597(a) of the Connecticut General Statutes. As part of the Consent Order, among other items, Respondents agreed to return the virtual assets of Connecticut customers and that William John Barhydt will not participate in any capacity in the conduct of the affairs of any entity licensed to engage in the business of money transmission by Connecticut, except as a “passive investor”, for a period of five years from June 25, 2024.

Order to Cease and Desist and Order Imposing Civil Penalty

On November 18, 2024, the Commissioner issued an Order to Cease and Desist and Order Imposing Civil Penalty (“Order”) in the matter of Alliance (“Respondent”), Kenmore, New York. The basis of the Order was that: (1) Respondent’s acting within this state as a consumer collection agency without a consumer collection agency license constitutes at least one violation of Section 36a-801(a) of the Connecticut General Statutes; (2) Respondent’s using false, deceptive or misleading representations in connection with the collection of a debt, including falsely representing that the debt was owing and being collected on behalf of Zoca Loans, and that a lawsuit would be filed against the Connecticut consumer should the debt remain unpaid, constitutes violations of subdivisions (2)(A), (5) and (10) of Section 36a-809-11 of the Regulations of Connecticut State Agencies; and (3) Respondent’s using false, deceptive or misleading representations or means in connection with the collection of any debt, including falsely representing that the debt was owing and being collected on behalf of Zoca Loans, and that a lawsuit would be filed against the Connecticut consumer should the debt remain unpaid, constitutes falsely representing the character, amount or legal status of a debt, in violation of 12 CFR Section 1006.18(b)(2)(i) of Regulation F, threatening to take action that cannot legally be taken or that is not intended to be taken, in violation of 12 CFR Section 1006.18(c)(1) of Regulation F, and using any false representation or deceptive means to collect or attempt to collect any debt, in violation of 12 CFR Section 1006.18(d) of Regulation F, which constitute at least three violations of Section 36a-812 of the Connecticut General Statutes. Respondent failed to request a hearing within the prescribed time period and the allegations were deemed admitted. As a result, the Commissioner ordered Respondent to cease and desist from violating Sections 36a-801(a) and 36a-812 of the Connecticut General Statutes, subdivisions (4), (5) and (10) of Section 36a-809-11 of the Regulations of Connecticut State Agencies, and imposed a civil penalty in the amount of $100,000 upon Respondent. In addition, the Order to Make Restitution issued against Respondent on September 23, 2024, remains in effect and became permanent on October 15, 2024.

Dated: Tuesday, December 3, 2024

Jorge L. Perez
Banking Commissioner