DFI intends to revoke license, impose other sanctions
OLYMPIA – Since December 2005, when Assurity Financial Services, LLC (Assurity) was licensed as a consumer loan company in Washington, the Colorado-based lender has mailed thousands of solicitations to Washington homeowners. The mailers are sent to consumers who have federally-insured loans, and more recently to consumers with adjustable rate mortgages. The mailers offer the possibility of hundreds or thousands of dollars in refunds, and many appear to be from the federal government. In small print in a footnote, Assurity discloses the primary purpose of the mailer—to solicit the recipient for a home loan.
Washington’s Department of Financial Institutions (DFI) has given notice that it intends to revoke Assurity’s license to do business in Washington. On March 5, 2008, DFI issued a Statement of Charges alleging that Assurity’s solicitations mislead Washington consumers and violate the Consumer Loan Act. DFI continues to investigate.
Deb Bortner, Director of DFI’s Division of Consumer Services, noted that the Assurity mailings falsely implied they were associated with various governmental agencies, including the U.S. Department of Veteran’s Affairs (VA) and the U.S. Department of Housing and Urban Development (HUD).
“Both the VA and HUD had advised Assurity to stop claiming a special relationship with their agencies,” Bortner said. “While Assurity made some changes, many solicitations still left the impression they were being sent by or at the direction of those agencies. While a license revocation may seem like a harsh remedy for advertising violations, the lender must understand that false mortgage advertising will not be tolerated.”
Complaints about Assurity’s deceptive advertising practices have increased each year since the firm was licensed. Recent complaints concern solicitations relating to adjustable rate mortgages, or ARMs.
“Assurity falsely claims the recipient has failed to respond, has been identified as being at high risk for overcharges, and may be due refunds ranging from $300 to $38,000,” Bortner said. “In fact, the mailer is just another solicitation from Assurity, which is using various tactics to mislead borrowers into calling them. Both consumers and competitors have filed complaints about this practice, and it must stop.”
The Statement of Charges names Assurity Financial Services, LLC, as well as its owners, Calvin B. Hamler, President, and Troy P. Hamler, Chief Executive Officer. Assurity, headquartered in Englewood, Colo., has licensed branch locations in Bellevue, Wash.; Tempe, Ariz.; Phoenix, Ariz.; and Las Vegas, Nev.
The Statement of Charges gave notice DFI intends to issue an order requiring:
- The consumer loan license held by Assurity Financial Services, LLC, be revoked;
- Calvin B. Hamler and Troy P. Hamler be barred from the affairs of any Washington-licensed consumer loan company or mortgage broker for five years;
- Respondents jointly and severally pay a fine of at least $250,000; and
- Respondents jointly and severally pay an investigation fee of at least $3,000.
All three respondents have the right to request a hearing on the charges.
About DFI
www.dfi.wa.gov ▪ 360.902-8700 ▪ 877.746-4334 ▪ En Español 877.976.4422
The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders, and securities brokers and dealers. The department has won numerous awards for its financial literacy and outreach programs developed to protect consumers from financial fraud. In addition to posting information about licensees and administrative actions, the DFI’s Web site features consumer tips on a variety of financial fraud-related topics.About the Division of Consumer Services
www.dfi.wa.gov/cs/ ▪ 360.902.8703
The mission of the Division of Consumer Services is to protect consumers from illegal and fraudulent lending practices. The division accomplishes its mission through licensing, licensee examinations, investigations, and enforcing selected state and federal statutes and rules. Consumer Services regulates the business activities of consumer loan companies, mortgage brokers, money transmitters and currency exchangers, as well as check cashers and sellers, also known as “payday lenders.” The Division is entirely self-supporting, with funding provided by licensing, auditing, and policing of regulated businesses and individuals. No money is received from the state General Fund or other public revenue source.
