DATE:  June 20, 2017
BANK:  Bankwell Bank, New Canaan
LOCATION:  855 Main Street, 7th Floor, Bridgeport, CT  06604
ACTIVITY-BRANCH TYPE:  Closing Date-Limited Branch

On June 14, 2017, the Commissioner issued a Restated Order and Ruling on Motion to Dismiss (“Restated Order”) in the Matter of:  Great Plains Lending, LLC (“Great Plains”), Red Rock, Oklahoma, John R. Shotton (“Shotton”) and Clear Creek Lending (“Clear Creek”), Stillwater, Oklahoma (collectively, “Respondents”).

As background, on January 6, 2015, the Commissioner issued an initial Order to Cease and Desist and Order Imposing Civil Penalty (“Initial Order”) against Great Plains, Shotton and Clear Creek.  The basis of the Initial Order was that Great Plains:  engaged in the business of making loans of money or credit in Connecticut without obtaining the required license, in violation of Section 36a-555(1) of the Connecticut General Statutes; made, offered or assisted Connecticut borrowers to obtain unsecured consumer loans, in violation of Section 36a-555(2) of the Connecticut General Statutes; and charged, contracted for and received interest at a rate greater than 12% on at least three unsecured consumer loans to Connecticut residents, in violation of Section 36a-573(a) of the Connecticut General Statutes.  The Initial Order was also based on allegations that Shotton participated in Great Plains’ violations of Sections 36a-555(1), 36a 555(2) and 36a-573(a) of the Connecticut General Statutes, subjecting Shotton to the provisions of such sections, and that Clear Creek offered or assisted Connecticut borrowers to obtain small loans in Connecticut without the obtaining the required license, in violation of Section 36a-555(2) of the Connecticut General Statutes.  Great Plains was ordered to cease and desist from violating subdivisions (1) and (2) of Section 36a-555 and Section 36a-573(a) of the Connecticut General Statutes, and to pay a civil penalty of $700,000.  Shotton was ordered to cease and desist from participating in the violation of subdivisions (1) and (2) of Section 36a-555 and Section 36a 573(a) of the Connecticut General Statutes, and to pay a civil penalty of $700,000.  Clear Creek was ordered to cease and desist from violating Section 36a-555(2) of the Connecticut General Statutes and to pay a civil penalty of $100,000.

On January 23, 2015, Respondents filed an appeal of the Initial Order in Superior Court for the Judicial District of New Britain (“Court”).  On August 31, 2016, the Court issued a decision remanding the matter to the Department to “determine, based on the record that existed at the time, 1) whether Great Plains and Clear Creek are arms of the [Otoe-Missouria] Tribe, 2) whether Shotton has tribal sovereign immunity from financial penalties that the commissioner seeks to impose, and 3) whether Shotton has tribal immunity from the commissioner’s request for prospective injunctive relief against future violations of the state’s usury and banking laws.”

The Restated Order maintained and restated the Initial Order issued by the Commissioner against Respondents and concluded that:  (1) Respondents did not raise tribal sovereign immunity as a jurisdictional defense at the proper administrative stage, (2) both Clear Creek and Great Plains failed to meet their burden to prove that each is, in fact, an arm of the Tribe entitled to tribal sovereign immunity and, therefore, are not arms of the Tribe, and (3) Shotton does not have immunity from the financial penalties the Commissioner has imposed or from the Commissioner’s order for prospective injunctive relief against future violations of the state’s usury and banking laws.

On June 14, 2017, the Commissioner entered into a Consent Order with Telmate, LLC (NMLS # 1226337) (“Telmate”), San Francisco, California.  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, the Commissioner alleged that from September 2014 to September 2016, Telmate engaged in the business of money transmission in this state without the required license, in violation of Section 36a-597(a) of the Connecticut General Statutes.  To resolve the matter, Telmate paid $4,000 as payment for back licensing fees and paid $3,500 as a civil penalty.