Banking and Finance Law Daily Wrap Up, CONSUMER CREDIT—Massachusetts, Source One settle allegations of sales finance violations, (Dec 6, 2013)

By Charles A. Menke, J.D.

The Massachusetts Division of Banks (DOB) has reached an agreement with Source One Financial Corporation, a licensed motor vehicle sales finance company under Massachusetts law, relating to alleged violations of the commonwealth’s motor vehicle sales finance company laws and regulations. The Consent Order entered into between the DOB and Source One stems from a DOB examination and report that found substantial noncompliance by Source One with Massachusetts statutes, rules, and regulations governing the conduct of those engaged in the business of a motor vehicle sales finance company in Massachusetts. Source One entered into the Consent Order without admitting it violated any state or federal laws and regulations.

Terms. Pursuant to the Consent Order, Source One will pay an administrative penalty to the DOB in the amount of $32,860. In addition, Source One has agreed, among other things, to:

• ensure that overcharges made by dealers for items identified as payable “to Public Officials” on contracts purchased by Source One are refunded to vehicle customers;

• maintain policies and procedures to ensure that it timely remits premium amounts obtained from consumers for vendor’s single-interest insurance as disclosed in retail installment contracts;

• maintain policies and procedures to ensure that it properly calculates and issues refunds for loans paid in full prior to maturity; and

• maintain an effective compliance management system, including its continuing engagement of an independent compliance consultant to augment its compliance management system.

The DOB in turn has agreed not to pursue proceedings to suspend or revoke Source One’s motor vehicle sales finance company or retail installment sales and service company license.

Companies: Source One Financial Corporation

LitigationEnforcement: ConsumerCredit MassachusettsNews