az-cv- "{3.031 16 Filed in Second Judicial District Court 10/25/2016 10:18:39 AM Ramsey County, MN STATE OF MINNESOTA DISTRICT COURT COUNTY OF RAMSEY SECOND JUDICIAL DISTRICT Case Type: Other Civil (Consumer Protection) CourtFileNo. -603/ In the Matter of National BPO, LLC ASSURANCE OF d/b/a National Student Servicing DISCONTINUAN CE WHEREAS, this Assurance of Discontinuance (?Assurance?) is entered into pursuant to Minn. Stat. 8.31, subd. 2b, between the State of Minnesota, through its Attorney General, Lori Swanson, and National BPO, LLC, doing business as National Student Servicing (?National Student Servicing?); WHEREAS, the Attorney General of the State of Minnesota has authority to enforce Minnesota?s laws relating to unfair, discriminatory, and other unlawful practices in business, commerce, or trade, including but not limited to the Minnesota?s Debt Settlement Services Act, Minn. Stat. WHEREAS, National Student Servicing marketed, sold, and provided goods or services to Minnesota consumers related to repayment of student loans; WHEREAS, the Attorney General and National Student Servicing desire to resolve fully the Attorney General?s concerns regarding the lawfulness of National Student Servicing?s actions and inactions, as described further below; and NOW THEREFORE, the Attorney General and National Student Servicing hereby agree to entry of an order with the following terms and conditions: 2? v? - 6 16 6031 Filed in Second Judicial Districtpourt 10/25/2016 10:18:39 AM Ramsey County. MN FACTUAL ALLEGATIONS 1. The Attorney General alleges that National Student Servicing, without? ?rst becoming registered with Minnesota?s Department of Commerce as required by Minn. Stat. offered to provide advice, or offered to act or acted as an intermediary between Minnesota consumers and the US. Department of Education or its federal student loan serviicers, where the primary purpose of the advice or action was to reduce or eliminate student loan debt. 2. The Attorney General alleges that National Student Servicing performed for Minnesota consumers, and imposed charges or received payment from Minnesota consumers for, debt settlement services without first executing written debt settlement services agreements, as required by Minn. Stat. 3328.06, and without ?rst performing all of the services it agreed to perform, as required by Minn. Stat. 332B.09. 3. The Attorney General alleges that National Student Servicing misrepresented its services or created the likelihood of consumer confusion or misunderstanding regarding its services in its dealings with Minnesota consumers in violation of Minn. Stat. 332B.l l. 4. The Attorney General alleges that the above-described alleged conduct violates Minn. Stat. 332B.03-.12. 5. National Student Servicing neither admits nor .denies the Attorney General?s allegations contained herein. INJUNCTIVE RELIEF 6. National Student Servicing shall not hereinafter conduct any business, directly or indirectly, individually or in conjunction with any other person or entity, in the State of Minnesota, including but not limited to marketing, selling, and providing goods or services related to repayment of student loans, including but not limited to completion of application materials for student loan consolidation or repayment plans. 2 62-CV-16-6031 Filed in Second Judicial District Court 10/25/2016 10:18:39 AM Ramsey County, MN 7. National Student Servicing shall fulfill the terms of this Assurance, and all of its parents, subsidiaries, af?liates, and successors shall be bound by this Assurance as if they had signed this Assurance, so as to accomplish the full relief contemplated by this Assurance. National Student Servicing shall not effect any change in its form of doing business, organizational identity, organizational structure, af?liations, ovvnership, or management composition as a method or means of attempting to avoid the requirements of this Assurance. In addition, all persons who now or hereina?er serve as an of?cer or director of, or who own greater than 10. percent of the shares in, National Student Servicing shall comply with Paragraph 6 above. MONETARY PAYMENT 8. National Student Servicing shall pay to the Attorney General the sum of $45,000 (the ?Settlement Sum?) pursuant to Minn. Stat. 8.31. All or any portion of the Settlement Sum may be distributed to consumers by the Attorney General in her discretion pursuant to Minn. Stat. 8.31. Any remaining funds shall be remitted to the Treasury of the State of Minnesota pursuant to Minn. Stat. 8.31. 9. The Settlement Sum shall be made payable to the State of Minnesota and sent by 0 .il 5 wire transfer to the Attorney General contemporaneously With National Student Serv1cmg signing of this Assurance. STAYED CIVL PENALTY 10. National Student Servicing shall pay a stayed civil penalty of $75,000 to the Attorney General upon application to the Court and a showing by the Attorney General that National Student Servicing has violated any of the terms of this Assurance and Order or failed to provide the Attorney General with an accurate financial statement or an accurate and complete list. of Minnesota consumers with whom National Student Servicing contracted for the provision 3 Filed in Second Judicial District Court 10/25/2016 10:18:39 AM Ramsey CountyI MN of goods or services related to repayment of student loans, including but not limited to completion of application materials for student loan consolidation or repayment plans. DEFINITIONS 11. ?National Student Servicing? means National BPO, LLC, doing business as National Student Servicing and all of its merged or acquired predecessors, Successors, divisions, subsidiaries, parents, and any other af?liated entity or component. The term ?National Student Servicing? also includes all present and former directors, of?cers, employees, representatives, and agents of National Student Servicing. 1 12. ?Minnesota consumer? means any person with a Minnesota mailing address} GENERAL TERMS 13. National Student Servicing understands that, after the date of the approval of this Assurance by the Court, a violation of this Assurance may subject National Student Servicing to sanctions for contempt pursuant to Minn. Stat. 8.31, and the Attorney General may thereafter, in her sole discretion, initiate legal proceedings against National Student Servicing for ariy and all violations of this Assurance. 14. In consideration of the stipulated relief, the suf?ciency of which is acknowledged, the Attorney General, upon approval of this Assurance by the Court, hereby fully and completely releases National Student Servicing of any and all claims of the Attorney General under Minn. Stat. arising out of the allegations contained in this Assurance, up to and including the date of this Assurance. The Attorney General through this Assurance does not settle, release, or resolve any claim against National Student Servicing or any other person or entity any private causes of action, claims, and remedies including but not limited to private causes of action, claims, or remedies provided for under Minn. Stat. 8.31. This release does not apply in any way to. claims of any other Minnesota state agency, department, of?cial, or division. 4 2- 6 CV 16 6031 Filed in Second Judicial District Court 10/25/2016 10:18:39 AM Ramsey County, MN 15. National Student Servicing neither admits nor denies the facts alleged in this Assurance, 'which will be taken as true, without the need for any further proof, evidence, or other showing, in any subsequent proceeding by or on behalf of the Attorney General to enforce the State?s rights to any payment or monetary judgment pursuant to this Assurance, such as a nondischargeability complaint in any bankruptcy case. 16. The facts alleged in this Assurance establish all elements necessary to sustain an action by the Attorney General pursuant to section 523(a)(2)(A) of the Bankruptcy Code, 11 U.S.C. and this Assurance will have collateral estoppel effect for such purposes. 17. National Student Servicing agrees that the civil penalty in Paragraph 10 represents a civil penalty owed to the State of Minnesota, is not compensation for actual pecuniary loss, and, therefore, it is not subject to discharge under the Bankruptcy Code pursuant to 11 U.S.C. 523(a)(7). 18. National Student Servicing lshall not state or imply, directly or indirectly, that the State of Minnesota or the Attorney General have approved of, condone, or agree with any conduct or actions by National Student Servicing. 19. Nothing in this Assurance shall relieve National Student Servicing of its obligation to comply with all applicable Minnesota and federal laws and regulations. 20. The person signing this Assurance for National Student Servicing warrants that National Student Servicing has authorized the person to execute this Assurance, that National Student Servicing has been fully advised by its counsel before entering into the Assurance, and that he or she executes this Assurance in an of?cial capacity that binds National Student Servicing and its successors. Filed in Second Judicial District Court 10/25/201610:18:39 AM Ramsey County, MN 21. This Assurance may be executed in counterparts, each of which constitutes an original, and all of which shall constitute one and the same agreement. This Assurance may be executed by facsimile or electronic copy in any image format. 22. This Assurance constitutes the. full and complete terms of the agreement entered into by National Student Servicing and the Attorney General. 23. The Court shall retain jurisdiction of this matter for purposes of enforcing this Assurance and Order. '24. Service of notices required by this Assurance shall be served on the following persons, or any person subsequently designated by the parties to receive such notices: David Cullen, Assistant Attorney General Of?ce of the Minnesota Attorney General 445 Minnesota Street, Suite 1200 St. Paul, Minnesota 55101 National BPO, LLC d/b/a National Student Servicing c/o Robby H. Bi'rnbaum, Esq. 100 West Cypress Creek Road, Suite 700 Fort Lauderdale, FL 33309 25. The failure of a party to exercise any rights under this Assurance shall not be deemed to be a waiver of any right or any future rights. 26. This Assurance, including any issues relating to interpretation or enforcement, shall be governed by the laws of the State of Minnesota. 27. Nothing in this Assurance shall be construed to limit the power or authority of the State of MinneSota or the Attorney General except as expressly set forth herein. 28. Each of the parties is represented by counsel, participated in the drafting of this Assurance, and agrees that the Assurance?s terms may not be construed against or in favor of any of the parties by virtue of draftsmanship. Filed in Second Judicial District Court 1 01251201 6 10:18:39 AM Ramsey County, MN Satin 93:13 513333 Mam wash ?ank-z; acts am gnome- :anai. cialivcr such format dm?umn'ts as may mmnabiy be 12:: carry oat this 39. National 318%: Swaicing si?g?atm tho: the Miomgsy may file- this Warm: this Com on an Mt? bows? am: that? ?15m Com may {565% we 01%: Rims swim: 3313' Mar yrmt?ings SWANSQN 3mm? Geaemi $3131: of Mimaoia 0335: ?54? By: M. massif) mum Asgimm Mammary (imam? NATKENAL 133%), LEA: ?fbfa SEUQENT :3 25?s {331m if} Nazism} 31311}, LLC {$233 Ra?-ma} S?w?cing (39.1323 Raving rwicwzr? that mm of {be foregoing Awamw of Simn??m, wixiizh %s incomommi 21min by {gammy and which 233: Court {Enos {mm?e {mi momma i1 is $13) (BRIDEREQ. Dam: - ?a?m mum? BE