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Casco Bay Mortgage, Inc. - Decision and Order
April 13, 2011
This matter was heard on April 7, 2011, as the result of a Petition for Administrative Hearing filed by the staff of the Bureau of Consumer Credit Protection (the Bureau).
Testimony, exhibits and official notice presented and introduced permit the following findings of fact:
1. Casco Bay Mortgage, Inc. is a loan broker holding, at relevant times, license CSO 8123 issued by the Bureau. Its office is located at 371 Fore Street, Portland, Maine. As a licensed loan broker it has posted a surety bond with the Bureau of Consumer Credit Protection.
Rhonda J. Kenney is a Principal Examiner with the Bureau. On October 28, 2010, Ms. Kenney conducted a routine compliance examination at the office of Casco Bay Mortgage. Bryan C. Moore, the president of Casco Bay Mortgage was present and provided documents to Ms. Kenney.
Although another apparent employee or loan originator was present on the date of the examination, Mr. Moore was solely responsible for acting on behalf of, and representing, Casco Bay Mortgage in all the company?s dealings with the Bureau.
By the time Mr. Moore had to leave his office on October 28, 2010, Ms. Kenney had not been able to complete all the work she thought was necessary for the examination. She therefore took certain documents with her, which she later used to complete her examination of Casco Bay Mortgage.
Upon completing her examination, Ms. Kenney determined there were apparent violations of the federal Real Estate Settlement Practices Act, the Maine Fair Credit Reporting Act, the Maine Consumer Credit Code, and Regulation Z of the Federal Reserve Board. The substance of these alleged violations is not before me in this matter.
Ms. Kenney mailed her report, along with an invoice for $572.30 for the costs necessarily incurred of her compliance examination, to Mr. Moore on November 10, 2010. The report provided Casco Bay Mortgage with notice that Mr. Moore was to act on the examination report?s finding or challenge or contest them, and in either event he was to notify the Bureau within 60 days.
The invoice provided Casco Bay Mortgage with notice that it was to be paid within 30 days of receipt, or else a $5.00 per day late fee would be assessed. This fee is authorized by 9-A MRS sec. 6-204(1) of the Maine Consumer Credit Code.
The Bureau did not receive a timely response to Ms. Kenney?s examination report from, or timely payment of the invoice by, Mr. Moore or Casco Bay Mortgage.
Ms. Kenney sent a follow-up letter to Mr. Moore, in his role as principal of Casco Bay Mortgage, on February 16, 2011, to remind him of his obligations to respond to the findings in the examination report and to pay the invoice. The amount due by that time was $887.30, including late fees of $315. Ms. Kenney sent this letter by certified mail, and Mr. Moore signed for it on February 18, 2011.
At no time thereafter did Mr. Moore, on behalf of Casco Bay Mortgage, in any fashion respond to the Bureau. Casco Bay Mortgage?s obligations to respond to the findings in the examination report and to pay the invoice remained entirely unsatisfied as of the day of the hearing.
- Staff filed the Petition for Administrative Hearing in this matter on March 9, 2011.
On March 10, 2011, a Notice of Administrative Hearing was mailed to Mr. Moore, providing him with notice of the hearing date of April 7, 2011, and the place of the hearing.
Staff Attorney Eric E. Wright spoke with Mr. Moore by telephone on March 12 or 13, 2011, and Mr. Wright again notified Mr. Moore of the hearing date.
On March 17, 2011, Mr. Wright mailed a letter to Mr. Moore, which again reminded him of the April 7, 2011 date for the hearing.
Neither Mr. Moore nor any person representing Casco Bay Mortgage appeared at the hearing on April 7, 2011.
I reach the following conclusions of law:
- 9-A M.R.S. ? 6-103 authorizes the Superintendent of the Bureau to be the administrator of the Maine Consumer Credit Code, including the examination and investigation of any person subject to the jurisdiction of the Code and the determination of violations of the Code, pursuant to id. ? 6-106.
Casco Bay Mortgage is subject to the authority and jurisdiction of the Bureau pursuant to 9-A M.R.S. ? 10-201.
Casco Bay Mortgage was provided proper and adequate notice of the date and place of the hearing.
By not appearing, Casco Bay Mortgage has voluntarily relinquished all the rights that it could have exercised if present; namely, to confront and cross-examine witnesses against his company, to object to the introduction of documentary evidence, to testify and offer documentary evidence in its own behalf for the company, to offer testimony and documentary evidence from other witnesses, and to be heard in argument, both on the merits of the allegations and, if violations were found, in mitigation of any sanctions that may be imposed.
9-A M.R.S. ? 6-106 authorizes the examination of licensees such as Casco Bay Mortgage, as well as the imposition of costs of examination and investigation of them.
Bureau regulation 02-030, ch. 190, ? 4(E)(2), requires an examinee to respond to the examination report within 60 days of the examinee?s receipt of the report.
Casco Bay Mortgage violated Bureau regulation 02-030, ch. 190, ? 4(E)(2), by not timely responding to the examination report sent to it on November 10, 2010.
- 9-A M.R.S. ?? 6-106(6) and 6-204(2), and Bureau regulation 02-320, ch. 350, ? 5, require a licensee such as Casco Bay Mortgage to pay the Bureau for the necessarily incurred costs of examination and investigation by it within 30 days of receipt of the assessment of costs.
Casco Bay Mortgage violated 9-A M.R.S. ?? 6-106(6) and 6-204(2), and Bureau regulation 02-320, ch. 350, ? 5, by failing to pay the invoice sent to it on November 10, 2010.
Late fees for failing to pay a Bureau invoice are authorized by 9-A M.R.S. ? 6-204(1). They are continuing in nature. Casco Bay Mortgage accordingly can be charged with a fee of $5 for each day from February 19, 2011 (the day after Mr. Moore received Ms. Kenney?s follow-up letter), until the date of the filing of the petition for hearing, March 9, 2011.
10 M.R.S. ? 8003(A-1) allows for the imposition of various sanctions in an adjudicated matter involving a Bureau, in the discretion of the hearing officer.
Based on the above findings of fact and conclusions of law, I impose the following sanctions:
Casco Bay Mortgage shall, within 45 days of the receipt of this Decision and Order, respond to the findings in the examination report either by filing an affidavit, under oath, that the violations found by Ms. Kenney have been rectified or by challenging or contesting them.
Casco Bay Mortgage shall, within 45 days of the receipt of this Decision and Order, pay to the Bureau $982.30 for the necessarily incurred costs of the examination and late fees until March 9, 2011, consisting of the $887.30 previously billed, plus $95 for 19 days from Feb. 19 to March 9.
Casco Bay Mortgage shall, within 45 days of the receipt of this Decision and Order, pay a civil penalty of $500 for the two violations that I find have occurred: failure to respond to the examination report and failure to pay the Bureau?s costs of investigation.
Casco Bay Mortgage shall, within 45 days of the receipt of this Decision and Order, pay to the Bureau $500 for its costs in prosecuting this Petition for Administrative Hearing.
The loan broker?s license of Casco Bay Mortgage is hereby suspended for 30 days, beginning on the 46th day after receipt of this Decision and Order. However, this suspension will not take effect if Casco Bay Mortgage complies with the other remedies set forth in paragraphs one through five this Order, immediately above, to the satisfaction of the Bureau.
If the above penalties, fees and costs are not paid by Casco Bay Mortgage within the times set forth, the Bureau is authorized to apply against the surety bond for payment of such amounts. Appropriate proof shall consist of a certified copy of this order, together with attested statements from Mr. Wright and Ms. Kenney or other authorized employees of the Bureau that such amounts, or portions of amounts, remain unpaid.
IT IS SO ORDERED.
| Date: April 13, 2011 | /s/William N. Lund |
| William N. Lund | |
| Superintendent | |
| Bureau of Consumer Credit Protection |
APPEAL RIGHTS
Any party may appeal this Decision by filing a petition for review in the Superior Court within 30 days of receipt of this Decision pursuant to 5 M.R.S. ?? 11001-11008. If the Order is not appealed, it shall become binding on the parties at the end of the 30-day period.
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