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Below is a cache of http://www.corp.ca.gov/ENF/pdf/m/mrcash-accusation.pdf. It's a snapshot of the page taken as our search engine crawled the Web.
The web site itself may have changed. You can check the current page or check for previous versions at the Internet Archive. Yahoo! is not affiliated with the authors of this page or responsible for its content. California Department of Corporations-Accusation to Revoke -1- ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations PRESTON DuFAUCHARD
California Corporations Commissioner
WAYNE STRUMPFER
Deputy Commissioner
ALAN S. WEINGER (CA BAR NO. 86717)
Lead Corporations Counsel
JOANNE J. ROSS (CA BAR NO. 202338)
Corporations Counsel
Department of Corporations
1515 K Street, Ste. 200
Sacramento, California 95814
Telephone: (916) 324-9687
Facsimile: (916) 445-6985
Attorneys for Complainant
BEFORE THE DEPARTMENT OF CORPORATIONS OF THE STATE OF CALIFORNIA In the Matter of the Accusation of
THE CALIFORNIA CORPORATIONS
COMMISSIONER,
Complainant,
vs.
JRMM, L.L.C. dba Mister Cash,
Respondent )
)
)
)
)
)
)
)
)
)
)
)
File No.: 100-3134
1) ACCUSATION TO REVOKE LICENSE; 2) CITATIONS AND DESIST AND REFRAIN ORDER; 3) ORDER VOIDING LOANS
Complainant, the California Corporations Commissioner, (Commissioner) is informed and believes, and based upon such information and belief, alleges and charges Respondent as follows: INTRODUCTION On May 5, 2006, the Commissioner of the Department of Corporations (Department) issued to Respondent, JRMM, L.L.C., doing business as Mister Cash, a deferred deposit transaction originator license (File No. 100-3134) pursuant to the California Deferred Deposit Transaction Law (CDDTL) set forth in California Financial Code section 23000 et seq. (All future references to sections are to the California Financial Code unless indicated otherwise.) Respondent violated numerous provisions of the CDDTL. If the Commissioner had known -2- ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations Respondent would engage in a scheme that violated multiple provisions of the California Financial Code, the Commissioner would have denied a license to Respondent. In view of the extent, nature and duration of violations, the Commissioner believes it is in the best interests of the public to revoke Respondents CDDTL license pursuant to section 23052. The Commissioner has issued a Desist and Refrain order, twenty-two (22) citations in the amount of $2,500 per citation, and an order voiding 22 loans totaling $5,094.10 made by Respondent, pursuant to sections 23050, 23058 and 23060, respectively. I FACTUAL BACKGROUND 1. The Department is responsible for enforcing provisions of the CDDTL and authorized to pursue administrative actions and remedies against licensees who engage in violations of the CDDTL. 2. Since at least July 15, 2006, Respondent has engaged in the business of deferred deposit transactions by offering, originating and making deferred deposit transactions. 3. A deferred deposit transaction is a written transaction whereby one person gives funds to another person upon receipt of a personal check along with an agreement that the personal check shall not be deposited until a later date. These transactions are also referred to as payday advances or payday loans. 4. Respondent engaged in CDDTL violations. On August 28, 2007, the Commissioners examiner visited Respondents business location after giving the licensee oral advance notice of the Departments examination. 5. The Department examiners subsequent review of Respondents business revealed the CDDTL violations described below warranting a revocation, penalties and restitution to consumers. II DEFERRED DEPOSIT TRANSACTION LAW 6. Respondents are required to comply with legal requirements imposed on all CDDTL licensees that include agreeing not to prosecute or threaten with criminal prosecution any customer for failure to comply with the terms of the agreement. -3- ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations 7. Section 23035, subdivisions (b), (c), (d) and (e) specify the requirements for deferred deposit transactions, stating, in relevant part: (b) A customer who enters into a deferred deposit transaction and offers
a personal check to a licensee pursuant to an agreement shall not be
subject to any criminal penalty for the failure to comply with the terms
of that agreement.
(c) Before entering into a deferred deposit transaction, licensees shall
distribute to customers a notice that shall include, but not be limited
to, the following: . . .
(3) That the customer cannot be prosecuted in a criminal
action in conjunction with a deferred deposit transaction for a
returned check or be threatened with prosecution. . . .
(d) The following notices shall be clearly and conspicuously posted in
the unobstructed view of the public by all licensees in each location of
a business providing deferred deposit transactions in letters not less
than one-half inch in height:
(1) The licensee cannot use the criminal process against a consumer to collect any deferred deposit transaction. . . . (e) An agreement to enter into a deferred deposit transaction shall be in
writing and shall be provided by the licensee to the customer. The
written agreement shall authorize the licensee to defer deposit of the
personal check, shall be signed by the customer, and shall include all
of the following: . . .
(8) Disclosure of any returned check charges.
(9) That the customer cannot be prosecuted or threatened with
prosecution to collect. . . .
8. Subdivisions (a), (e) and (f) of section 23036, limit the type and amount of fees and charges that customers can be required to pay. These subdivisions, in relevant part, state: (a) A fee for a deferred deposit transaction shall not exceed 15 percent of the face amount of the check. . . . / / / -4- ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations (e) A fee not to exceed fifteen dollars ($15) may be charged for the return
of a dishonored check by a depositary institution in a deferred deposit
transaction. A single fee charged pursuant to this subdivision is the
exclusive charge for a dishonored check. No fee may be added for late
payment.
(f) No amount in excess of the amounts authorized by this section shall be
directly or indirectly charged by a licensee pursuant to a deferred deposit
transaction.
9. Section 23037 limits a licensees transactions and activities and states in relevant part: In no case shall a licensee do any of the following: . . .
(f) Engage in any unfair, unlawful, or deceptive conduct, or
make any statement that is likely to mislead in connection with
the business of deferred deposit transactions. III RESPONDENTS DEFERRED DEPOSIT TRANSACTION LAW VIOLATIONS 10. When questioned by the Commissioners representative about the non-sufficient funds (NSF) checks, Respondent stated that it filed complaints about its customers NSF checks with the Office of the District Attorney (DA) in Shasta County in accordance with the DAs Bad Check Program. The complaints filed with the DAs Office about NSF checks require declaring under penalty of perjury that a complainant knows he or she is filing a criminal complaint. 11. Respondent filed criminal complaints about NSF checks under penalty of perjury with the DAs Office. As a direct result of Respondents criminal complaints about NSF checks, Respondents customers received letters from the Shasta County DAs Office threatening them with criminal prosecution if they failed to make restitution in accordance with the DAs Bad Check Program. 12. Each customer whose NSF checks are processed by the Bad Check Program are also assessed an administration fee of $35.00 and a diversion fee of $50.00 by the District Attorney. -5- ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations 13. During the examination, the Commissioners examiner requested that Respondent provide records that documented details about the NSF checks that they referred to the DAs office. In response, Respondent provided a log containing loan information about the bad debt/unpaid loans that revealed Respondent had sent 22 checks to the DAs Office in 2007. 14. In accordance with the Bad Check Program, consumers were charged additional fees as described in paragraph 12, above. Consequently, Respondent violated section 23036 (a), (e), and (f) by having excessive and unauthorized fees charged. 15. Although the licensee posted and distributed the required notices pursuant to section 23035 (c) and (d), it was not operating in accordance with its representations to the public. Similarly, the licensees written agreement contained all the disclosures required by section 23035 (e), but it did not operate in accordance with the written agreement, thereby rendering the notices and agreements with consumers false and misleading. Thus, Respondents actions violated section 23037(f), which prohibits deceptive and misleading conduct. 16. Respondents specific violations include the following CDDTL sections: 23036 (a), (e), (f), and 23037 (f). For 22 of Respondents violations discovered during the Departments regulatory examination and review of records, the Commissioner is issuing Citations 1 through 22, inclusive. The Citations are being issued for false and misleading transactions with the 22 consumers shown in Exhibit A. IV COMMISSIONERS AUTHORITY TO ISSUE CITATIONS AND DESIST AND REFRAIN ORDER 17. Section 23058 gives the Commissioners authority to issues citations, and states: (a) If, upon inspection, examination or investigation, based upon a
complaint or otherwise, the department has cause to believe that a person
is engaged in the business of deferred deposit transactions without a
license, or a licensee or person is violating any provision of this division
or any rule or order thereunder, the department may issue a citation to that
person in writing, describing with particularity the basis of the citation.
Each citation may contain an order to desist and refrain and an assessment
of an administrative penalty not to exceed two thousand five hundred
dollars ($ 2,500). All penalties collected under this section shall be ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS -6- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations deposited in the State Corporations Fund.
(b) The sanctions authorized under this section shall be separate from, and
in addition to, all other administrative, civil, or criminal remedies.
(c) If within 30 days from the receipt of the citation of the person cited
fails to notify the department that the person intends to request a hearing
as described in subdivision (d), the citation shall be deemed final.
(d) Any hearing under this section shall be conducted in accordance with
Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of
Title 2 of the Government Code, and in all states the commissioner has all
the powers granted therein.
(e) After the exhaustion of the review procedures provided for in this
section, the department may apply to the appropriate superior court for a
judgment in the amount of the administrative penalty and order
compelling the cited person to comply with the order of the department.
The application, which shall include a certified copy of the final order of
the department, shall constitute a sufficient showing to warrant the
issuance of the judgment and order.
CITATIONS 18. Pursuant to Financial Code section 23058, Respondent is hereby ordered to pay to the Commissioner within 30 days from the date of these Citations an administrative penalty of two thousand five hundred dollars ($2,500) for 22 citations for the total amount of fifty five thousand dollars ($55,000). DESIST AND REFRAIN ORDER 19. By reason of the foregoing, the licensee has engaged in charging excessive fees and in deceptive and misleading deferred deposit transactions in violation of the California Financial Code sections 23036 and 23037. California Financial Code section 23050 provides in pertinent part: Whenever, in the opinion of the commissioner, any person is engaged
in the business of deferred deposit transactions, as defined in this
division, without a license from the commissioner, or any licensee is
violating any provision of this division, the commissioner may order
that person or licensee to desist and to refrain from engaging in the
business or further violating this division. If, within 30 days, after the
order is served, a written request for a hearing is filed and no hearing is
held within 30 days thereafter, the order is rescinded. -7- ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations Pursuant to Financial Code sections 23050 and 23058, JRMM, L.L.C., doing business as Mister Cash is hereby ordered to desist and refrain from violating Financial Code sections 23036 and 23037. This Order is necessary for the protection of consumers and consistent with the purposes, policies and provisions of the CDDTL. This Order shall remain in full force and effect until further order of the Commissioner. V COMMISSIONERS AUTHORITY TO VOID TRANSACTIONS 20. Respondent willfully violated sections 23036 and 23037 of the CDDTL by charging excessive or unauthorized fees and by entering into fraudulent deferred deposit transactions with at least twenty-two (22) consumers. Fraudulent transactions totaled at least $5,094.10 in 2007. Therefore, the Commissioner seeks to void Respondents transactions with at least 22 consumers and order the return of the consumers funds in an amount that aggregates at least $5,094.10. 21. California Financial Code section 23060 states: (a) If any amount other than, or in excess of, the charges or fees
permitted by this division is willfully charged, contracted for, or
received, a deferred deposit transaction contract shall be void, and no
person shall have any right to collect or receive the principal amount
provided in the deferred deposit transaction, any charges, or fees in
connection with the transaction.
(b) If any provision of this division is willfully violated in the
making or collection of a deferred deposit transaction, the deferred
deposit transaction contract shall be void, and no person shall have
any right to collect or receive any amount provided in the deferred
deposit transaction, any charges, or fees in connection with the
transaction.
ORDER VOIDING DEFERRED DEPOSIT TRANSACTIONS 22. Pursuant to California Financial Code section 23060 the above described deferred deposit transactions for at least twenty-two (22) consumers totaling at least $5,094.10 are declared void. 23. Further, Respondent had no right to collect or receive any amount provided in the -8- ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations deferred deposit transactions or any charges or fees in connection with these consumer transactions and are hereby ordered to immediately return any amount and all charges and fees, of at least five hundred and fifty-two dollars and fifty-three cents ($552.53), that Respondent directly or indirectly received for these transactions. VI COMMISSISONERS AUTHORITY TO REVOKE RESPONDENTS CDDTL LICENSE 24. Section 23052 states the grounds for revocation of a CDDTL license: The commissioner may suspend or revoke any license, upon notice and
reasonable opportunity to be heard, if the commissioner finds any of the
following:
(a) The licensee has failed to comply with any
demand, ruling, or requirement of the commissioner
made pursuant to and within the authority of this
division.
(b) The licensee has violated any provision of this
division or any rule or regulation made by the
commissioner under and within the authority of this
division.
(c) A fact or condition exists that, if it had existed at the time of
the original application for the license, reasonably would have
warranted the commissioner in refusing to issue the license
originally. CONCLUSION Complainant finds, due to the foregoing, that Respondent violated sections 23036 and 23037. Therefore, the Commissioner is justified in revoking Respondents California deferred deposit transaction license pursuant to section 23052. The Commissioner was also justified, based upon the foregoing, in issuing 22 citations to Respondent, issuing a Desist and Refrain order, and voiding at least 22 transactions pursuant to sections 23058, 23050 and 23060, respectively. / / / -9- ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations WHEREFORE, Complainant, the California Corporations Commissioner prays that the deferred deposit transaction license of JRMM, L.L.C., doing business as Mister Cash, be revoked pursuant to Financial Code section 23052. Dated: February 6, 2008 Sacramento, California PRESTON DuFAUCHARD California Corporations Commissioner By_____________________________ ALAN S. WEINGER Lead Corporations Counsel
The web site itself may have changed. You can check the current page or check for previous versions at the Internet Archive. Yahoo! is not affiliated with the authors of this page or responsible for its content. California Department of Corporations-Accusation to Revoke -1- ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations PRESTON DuFAUCHARD
California Corporations Commissioner
WAYNE STRUMPFER
Deputy Commissioner
ALAN S. WEINGER (CA BAR NO. 86717)
Lead Corporations Counsel
JOANNE J. ROSS (CA BAR NO. 202338)
Corporations Counsel
Department of Corporations
1515 K Street, Ste. 200
Sacramento, California 95814
Telephone: (916) 324-9687
Facsimile: (916) 445-6985
Attorneys for Complainant
BEFORE THE DEPARTMENT OF CORPORATIONS OF THE STATE OF CALIFORNIA In the Matter of the Accusation of
THE CALIFORNIA CORPORATIONS
COMMISSIONER,
Complainant,
vs.
JRMM, L.L.C. dba Mister Cash,
Respondent )
)
)
)
)
)
)
)
)
)
)
)
File No.: 100-3134
1) ACCUSATION TO REVOKE LICENSE; 2) CITATIONS AND DESIST AND REFRAIN ORDER; 3) ORDER VOIDING LOANS
Complainant, the California Corporations Commissioner, (Commissioner) is informed and believes, and based upon such information and belief, alleges and charges Respondent as follows: INTRODUCTION On May 5, 2006, the Commissioner of the Department of Corporations (Department) issued to Respondent, JRMM, L.L.C., doing business as Mister Cash, a deferred deposit transaction originator license (File No. 100-3134) pursuant to the California Deferred Deposit Transaction Law (CDDTL) set forth in California Financial Code section 23000 et seq. (All future references to sections are to the California Financial Code unless indicated otherwise.) Respondent violated numerous provisions of the CDDTL. If the Commissioner had known -2- ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations Respondent would engage in a scheme that violated multiple provisions of the California Financial Code, the Commissioner would have denied a license to Respondent. In view of the extent, nature and duration of violations, the Commissioner believes it is in the best interests of the public to revoke Respondents CDDTL license pursuant to section 23052. The Commissioner has issued a Desist and Refrain order, twenty-two (22) citations in the amount of $2,500 per citation, and an order voiding 22 loans totaling $5,094.10 made by Respondent, pursuant to sections 23050, 23058 and 23060, respectively. I FACTUAL BACKGROUND 1. The Department is responsible for enforcing provisions of the CDDTL and authorized to pursue administrative actions and remedies against licensees who engage in violations of the CDDTL. 2. Since at least July 15, 2006, Respondent has engaged in the business of deferred deposit transactions by offering, originating and making deferred deposit transactions. 3. A deferred deposit transaction is a written transaction whereby one person gives funds to another person upon receipt of a personal check along with an agreement that the personal check shall not be deposited until a later date. These transactions are also referred to as payday advances or payday loans. 4. Respondent engaged in CDDTL violations. On August 28, 2007, the Commissioners examiner visited Respondents business location after giving the licensee oral advance notice of the Departments examination. 5. The Department examiners subsequent review of Respondents business revealed the CDDTL violations described below warranting a revocation, penalties and restitution to consumers. II DEFERRED DEPOSIT TRANSACTION LAW 6. Respondents are required to comply with legal requirements imposed on all CDDTL licensees that include agreeing not to prosecute or threaten with criminal prosecution any customer for failure to comply with the terms of the agreement. -3- ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations 7. Section 23035, subdivisions (b), (c), (d) and (e) specify the requirements for deferred deposit transactions, stating, in relevant part: (b) A customer who enters into a deferred deposit transaction and offers
a personal check to a licensee pursuant to an agreement shall not be
subject to any criminal penalty for the failure to comply with the terms
of that agreement.
(c) Before entering into a deferred deposit transaction, licensees shall
distribute to customers a notice that shall include, but not be limited
to, the following: . . .
(3) That the customer cannot be prosecuted in a criminal
action in conjunction with a deferred deposit transaction for a
returned check or be threatened with prosecution. . . .
(d) The following notices shall be clearly and conspicuously posted in
the unobstructed view of the public by all licensees in each location of
a business providing deferred deposit transactions in letters not less
than one-half inch in height:
(1) The licensee cannot use the criminal process against a consumer to collect any deferred deposit transaction. . . . (e) An agreement to enter into a deferred deposit transaction shall be in
writing and shall be provided by the licensee to the customer. The
written agreement shall authorize the licensee to defer deposit of the
personal check, shall be signed by the customer, and shall include all
of the following: . . .
(8) Disclosure of any returned check charges.
(9) That the customer cannot be prosecuted or threatened with
prosecution to collect. . . .
8. Subdivisions (a), (e) and (f) of section 23036, limit the type and amount of fees and charges that customers can be required to pay. These subdivisions, in relevant part, state: (a) A fee for a deferred deposit transaction shall not exceed 15 percent of the face amount of the check. . . . / / / -4- ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations (e) A fee not to exceed fifteen dollars ($15) may be charged for the return
of a dishonored check by a depositary institution in a deferred deposit
transaction. A single fee charged pursuant to this subdivision is the
exclusive charge for a dishonored check. No fee may be added for late
payment.
(f) No amount in excess of the amounts authorized by this section shall be
directly or indirectly charged by a licensee pursuant to a deferred deposit
transaction.
9. Section 23037 limits a licensees transactions and activities and states in relevant part: In no case shall a licensee do any of the following: . . .
(f) Engage in any unfair, unlawful, or deceptive conduct, or
make any statement that is likely to mislead in connection with
the business of deferred deposit transactions. III RESPONDENTS DEFERRED DEPOSIT TRANSACTION LAW VIOLATIONS 10. When questioned by the Commissioners representative about the non-sufficient funds (NSF) checks, Respondent stated that it filed complaints about its customers NSF checks with the Office of the District Attorney (DA) in Shasta County in accordance with the DAs Bad Check Program. The complaints filed with the DAs Office about NSF checks require declaring under penalty of perjury that a complainant knows he or she is filing a criminal complaint. 11. Respondent filed criminal complaints about NSF checks under penalty of perjury with the DAs Office. As a direct result of Respondents criminal complaints about NSF checks, Respondents customers received letters from the Shasta County DAs Office threatening them with criminal prosecution if they failed to make restitution in accordance with the DAs Bad Check Program. 12. Each customer whose NSF checks are processed by the Bad Check Program are also assessed an administration fee of $35.00 and a diversion fee of $50.00 by the District Attorney. -5- ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations 13. During the examination, the Commissioners examiner requested that Respondent provide records that documented details about the NSF checks that they referred to the DAs office. In response, Respondent provided a log containing loan information about the bad debt/unpaid loans that revealed Respondent had sent 22 checks to the DAs Office in 2007. 14. In accordance with the Bad Check Program, consumers were charged additional fees as described in paragraph 12, above. Consequently, Respondent violated section 23036 (a), (e), and (f) by having excessive and unauthorized fees charged. 15. Although the licensee posted and distributed the required notices pursuant to section 23035 (c) and (d), it was not operating in accordance with its representations to the public. Similarly, the licensees written agreement contained all the disclosures required by section 23035 (e), but it did not operate in accordance with the written agreement, thereby rendering the notices and agreements with consumers false and misleading. Thus, Respondents actions violated section 23037(f), which prohibits deceptive and misleading conduct. 16. Respondents specific violations include the following CDDTL sections: 23036 (a), (e), (f), and 23037 (f). For 22 of Respondents violations discovered during the Departments regulatory examination and review of records, the Commissioner is issuing Citations 1 through 22, inclusive. The Citations are being issued for false and misleading transactions with the 22 consumers shown in Exhibit A. IV COMMISSIONERS AUTHORITY TO ISSUE CITATIONS AND DESIST AND REFRAIN ORDER 17. Section 23058 gives the Commissioners authority to issues citations, and states: (a) If, upon inspection, examination or investigation, based upon a
complaint or otherwise, the department has cause to believe that a person
is engaged in the business of deferred deposit transactions without a
license, or a licensee or person is violating any provision of this division
or any rule or order thereunder, the department may issue a citation to that
person in writing, describing with particularity the basis of the citation.
Each citation may contain an order to desist and refrain and an assessment
of an administrative penalty not to exceed two thousand five hundred
dollars ($ 2,500). All penalties collected under this section shall be ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS -6- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations deposited in the State Corporations Fund.
(b) The sanctions authorized under this section shall be separate from, and
in addition to, all other administrative, civil, or criminal remedies.
(c) If within 30 days from the receipt of the citation of the person cited
fails to notify the department that the person intends to request a hearing
as described in subdivision (d), the citation shall be deemed final.
(d) Any hearing under this section shall be conducted in accordance with
Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of
Title 2 of the Government Code, and in all states the commissioner has all
the powers granted therein.
(e) After the exhaustion of the review procedures provided for in this
section, the department may apply to the appropriate superior court for a
judgment in the amount of the administrative penalty and order
compelling the cited person to comply with the order of the department.
The application, which shall include a certified copy of the final order of
the department, shall constitute a sufficient showing to warrant the
issuance of the judgment and order.
CITATIONS 18. Pursuant to Financial Code section 23058, Respondent is hereby ordered to pay to the Commissioner within 30 days from the date of these Citations an administrative penalty of two thousand five hundred dollars ($2,500) for 22 citations for the total amount of fifty five thousand dollars ($55,000). DESIST AND REFRAIN ORDER 19. By reason of the foregoing, the licensee has engaged in charging excessive fees and in deceptive and misleading deferred deposit transactions in violation of the California Financial Code sections 23036 and 23037. California Financial Code section 23050 provides in pertinent part: Whenever, in the opinion of the commissioner, any person is engaged
in the business of deferred deposit transactions, as defined in this
division, without a license from the commissioner, or any licensee is
violating any provision of this division, the commissioner may order
that person or licensee to desist and to refrain from engaging in the
business or further violating this division. If, within 30 days, after the
order is served, a written request for a hearing is filed and no hearing is
held within 30 days thereafter, the order is rescinded. -7- ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations Pursuant to Financial Code sections 23050 and 23058, JRMM, L.L.C., doing business as Mister Cash is hereby ordered to desist and refrain from violating Financial Code sections 23036 and 23037. This Order is necessary for the protection of consumers and consistent with the purposes, policies and provisions of the CDDTL. This Order shall remain in full force and effect until further order of the Commissioner. V COMMISSIONERS AUTHORITY TO VOID TRANSACTIONS 20. Respondent willfully violated sections 23036 and 23037 of the CDDTL by charging excessive or unauthorized fees and by entering into fraudulent deferred deposit transactions with at least twenty-two (22) consumers. Fraudulent transactions totaled at least $5,094.10 in 2007. Therefore, the Commissioner seeks to void Respondents transactions with at least 22 consumers and order the return of the consumers funds in an amount that aggregates at least $5,094.10. 21. California Financial Code section 23060 states: (a) If any amount other than, or in excess of, the charges or fees
permitted by this division is willfully charged, contracted for, or
received, a deferred deposit transaction contract shall be void, and no
person shall have any right to collect or receive the principal amount
provided in the deferred deposit transaction, any charges, or fees in
connection with the transaction.
(b) If any provision of this division is willfully violated in the
making or collection of a deferred deposit transaction, the deferred
deposit transaction contract shall be void, and no person shall have
any right to collect or receive any amount provided in the deferred
deposit transaction, any charges, or fees in connection with the
transaction.
ORDER VOIDING DEFERRED DEPOSIT TRANSACTIONS 22. Pursuant to California Financial Code section 23060 the above described deferred deposit transactions for at least twenty-two (22) consumers totaling at least $5,094.10 are declared void. 23. Further, Respondent had no right to collect or receive any amount provided in the -8- ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations deferred deposit transactions or any charges or fees in connection with these consumer transactions and are hereby ordered to immediately return any amount and all charges and fees, of at least five hundred and fifty-two dollars and fifty-three cents ($552.53), that Respondent directly or indirectly received for these transactions. VI COMMISSISONERS AUTHORITY TO REVOKE RESPONDENTS CDDTL LICENSE 24. Section 23052 states the grounds for revocation of a CDDTL license: The commissioner may suspend or revoke any license, upon notice and
reasonable opportunity to be heard, if the commissioner finds any of the
following:
(a) The licensee has failed to comply with any
demand, ruling, or requirement of the commissioner
made pursuant to and within the authority of this
division.
(b) The licensee has violated any provision of this
division or any rule or regulation made by the
commissioner under and within the authority of this
division.
(c) A fact or condition exists that, if it had existed at the time of
the original application for the license, reasonably would have
warranted the commissioner in refusing to issue the license
originally. CONCLUSION Complainant finds, due to the foregoing, that Respondent violated sections 23036 and 23037. Therefore, the Commissioner is justified in revoking Respondents California deferred deposit transaction license pursuant to section 23052. The Commissioner was also justified, based upon the foregoing, in issuing 22 citations to Respondent, issuing a Desist and Refrain order, and voiding at least 22 transactions pursuant to sections 23058, 23050 and 23060, respectively. / / / -9- ACCUSATION TO REVOKE LICENSE; CITATIONS AND DESIST AND REFRAIN ORDER; ORDER VOIDING LOANS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 State of California De p
artment of Cor p
orations WHEREFORE, Complainant, the California Corporations Commissioner prays that the deferred deposit transaction license of JRMM, L.L.C., doing business as Mister Cash, be revoked pursuant to Financial Code section 23052. Dated: February 6, 2008 Sacramento, California PRESTON DuFAUCHARD California Corporations Commissioner By_____________________________ ALAN S. WEINGER Lead Corporations Counsel
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