STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BANKING AND FINANCE, )

)

Petitioner, )

)

vs. ) CASE NO. 91-2226

)

FRANK LAMB AND NEXT STEP )

BROKERAGE, INC., )

)

Respondents. )

)

)

RECOMMENDED ORDER

Pursuant to Notice, this cause was heard by Linda M. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on September 26, 1991, in West Palm Beach, Florida.

APPEARANCES

For Petitioner: Jodi R. Marvet, Esquire

Assistant General Counsel Office of Comptroller

201 West Broward Boulevard Suite 302

Fort Lauderdale, Florida 33301

For Respondents: Richard W. Glenn, Esquire

2001 Palm Beach Lakes Boulevard Suite 200

West Palm Beach, Florida 33409 STATEMENT OF THE ISSUE

The issue presented is whether Respondents are guilty of the allegations contained within the Amended Notice of Intent to Revoke Mortgage Brokerage License and Notice of Rights, and, if so, what disciplinary action should be taken, if any.

PRELIMINARY STATEMENT

Petitioner filed its Notice of Intent to Revoke Mortgage Brokerage License and Notice of Rights alleging that Respondents had violated certain statutes and rules regulating the conduct of mortgage brokers, and Respondents timely requested a formal hearing regarding the allegations contained within that Notice. Thereafter, this matter was transmitted to the Division of Administrative Hearings for the conduct of that formal proceeding. By order entered June 24, 1991, Petitioner was granted leave to file its Amended Notice of Intent to Revoke Mortgage Brokerage License and Notice of Rights.

Petitioner presented the testimony of Ronald Mims; Robert Tedcastle, II; Diane Marino, and, by way of deposition, Andrew M. Jacobson. The Respondent Frank Lamb testified on behalf of both Respondents. Additionally, Petitioner's Exhibits numbered 1-4 and Respondents' Exhibit numbered 1 were admitted in evidence.

Petitioner and Respondents have submitted post hearing proposed findings of fact in the form of proposed recommended orders. A specific ruling on each proposed finding of fact can be found in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Respondent Frank Lamb has been a mortgage broker licensed in the State of Florida for approximately nine years.

   
   

2. Respondent Next Step Brokerage, Inc., a Florida corporation, was incorporated on June 20, 1989. As stated in its Articles of Incorporation, the corporation was organized for the purpose of operating a mortgage brokerage business. Respondent Lamb was the only incorporator of the corporation, and he and his wife were the only directors of the corporation. A bank account was opened in the name of Respondent Next Step Brokerage, Inc. Respondent Next Step Brokerage, Inc., has never been registered with the Department as a mortgage brokerage business.

   
   

3. At the time that Respondent Lamb incorporated Respondent Next Step, and until December of 1989, Respondent Lamb was a Senior Vice President in charge of lending at Bay Savings Bank, a savings and loan association.

   
   

4. Earlier in 1989, a Reginald McNaughton entered into a contract with the bank's chairman to purchase the bank. As part of the contractual arrangement, McNaughton would bring loan applications to the bank. If the bank could fund those loans, part of the points received by the bank would be credited to McNaughton toward the purchase price of the bank. If the bank did not fund the loans, but another lender did, then the bank would take a brokerage commission and credit part of it to McNaughton. Although no mortgage broker's license is required for the bank to fund loans, a mortgage broker's license is required for a bank to broker loans to another lender. McNaughton brought in a large number of loans to be funded by the bank and to be brokered to other lenders. He entered into an agreement with Respondent Lamb whereby he would pay Lamb additional compensation for his services in reviewing and processing the volume of loan applications which McNaughton engendered.

   
   

5. One of the loan applications brought in by McNaughton was the Fourth Executive loan. Bay Savings Bank funded that loan. Points, amounting to approximately $40,000, were received by the bank on the transaction. Part of this "points" money was credited to McNaughton's purchase.

   
   

6. Sometime after the Fourth Executive loan, it was discovered that McNaughton was a disreputable character with a criminal history, and his purchase agreement with the chairman was terminated. Prior to that time, however, McNaughton had given Respondent Lamb two payments pursuant to their agreement. The first payment was made on June 19, 1989, in the amount of $5,000 and was payable to Respondent Lamb. The second check, in the amount of $14,000, was dated July 7, 1989, and was paid to Next Step Brokerage's account.

   
   

7. On February 22, 1991, the Department of Banking and Finance, Division of Banking, issued an Administrative Complaint for Prohibition and Notice of

   Rights against Respondent Lamb seeking to prohibit him from serving as an officer, director, committee member, employee, or other person participating in the affairs of a financial institution in the State of Florida. Respondent Lamb, who was no longer employed in the banking industry, entered into a stipulation with the Department expressly stating that he neither admitted nor denied the Department's allegations, but was permitting an order of prohibition to be entered barring him from future services as an officer, director, committee member, or employee of any financial institution. Such an order was entered in April of 1991. Accordingly, no judicial or administrative determination has ever been made that Respondent Lamb was guilty of the allegations contained in the Department's Administrative Complaint for Prohibition and Notice of Rights.

   
   

8. The allegations in the Department's prohibition action arose out of the Fourth Executive loan and involved two matters. The first was not requiring a written "take out" commitment for permanent financing prior to closing since the loan from Bay Savings Bank was only a temporary loan. The second was Respondents' receipt of the $5,000 and $14,000 payments, alleged to be a conflict of interest unless there was written authority from the bank's board of directors. As to the first matter, a $30,000 "take out" commitment fee was sent to Holliday Fenoglio Co. from the closing proceeds, which fee was never returned to the bank. Further, the commitment letter from Bay Savings Bank to Fourth Executive which requires the "take out" commitment for permanent financing does not specify that the commitment be in written form.

   
   

9. In June of 1990, the Department of Banking and Finance, Division of Finance, conducted an examination of Respondent Lamb's activities from July 1, 1989, through May 30, 1990. During the first part of the audit, Respondent Lamb was employed by Bay Savings Bank. During the remainder of the examination period, Respondent Lamb was, for the most part, unemployed. He was primarily trying to work out an arrangement with a Jacksonville bank, Community Savings. He was working out of a room in his home while looking for office space and employees in furtherance of that arrangement whereby he would set up a loan production office for Community Savings in South Florida. He was to produce SBA loans for Community Savings and began receiving funds as a draw against future commissions in order to set up the office and begin operations.

   
   

10. Also in furtherance of that arrangement, Respondent Lamb printed business cards and ran an ad in the newspaper. The business card contained the names of Respondent Lamb and Respondent Next Step Brokerage, Inc., and contained the words "Licensed Mortgage Broker." One ad which ran one time in The Palm Beach Post contained the names of Respondent Lamb and Next Step Brokerage.

    Under Respondent Lamb's name appeared the words "a Licensed Mortgage Broker." The Department employee conducting the examination found a second ad in Respondent's files containing the names of Respondent Next Step Brokerage and Respondent Lamb. No evidence was offered that the second ad ever appeared in any publication.

    
    

11. No loans were closed through Community Savings. Since any loans would have been SBA loans, no commission would have been due from the borrower.

    
    

12. During the time that Respondents were temporarily operating out of Respondent Lamb's home, Respondents did not have a sign or an occupational license posted at the home.

    
    

13. During the examination period, Respondents received $1,000 from a Mr. Deckman to cover Respondents' expenses in attempting to find funding for a loan

    for an adult congregate living facility. No loan was ever made. There was no brokerage agreement signed by Mr. Deckman in Respondents' file.

    
    

14. During the examination period, Respondents received a $200 payment from Ted Graham, a friend of Respondent Lamb. Respondents obtained an $8,000 loan for Mr. Graham without expectation of any commission. After the closing Graham appeared at Respondent Lamb's home and gave him a check for $200 made payable to Next Step Brokerage, in appreciation for his assistance. Respondents did not have a brokerage agreement or closing statement regarding this transaction in their file.

    
    

15. During the examination period, Respondents also received $2,000 from Pinnacle Financial for introducing Pinnacle to NCNB, thereby introducing two lenders. Pinnacle, a finance company, was seeking a source of funding for mobile home financing. Respondents did not negotiate any specific transactions between Pinnacle or Pinnacle's borrowers and NCNB.

    
    

16. Respondent Lamb received a telephone call from a Department employee who had seen the newspaper ad which had the name Next Step Brokerage in it. Although the ad also had Respondent Lamb's name in it with the words "a Licensed Mortgage Broker" under Respondent Lamb's name, Respondent Lamb discontinued the ad in accordance with the instructions of the Department's employee to do so.

    
    

17. Next Step's name and its bank account are no longer used, and the corporation has presumably been dissolved.

    
    

    CONCLUSIONS OF LAW

    
    

18. The Division of Administrative Hearings has jurisdiction over the parties hereto and the subject matter hereof. Section 120.57(1), Florida Statutes.

    
    

19. Respondents are charged with violating several statutory provisions of the Mortgage Brokerage Act and the rules promulgated thereunder. During the preparation of this Recommended Order, it came to the attention of the undersigned that the rules Respondents are alleged to have violated were repealed effective October 1, 1991, five days after the final hearing in this cause. Accordingly, the parties were given an opportunity to file memoranda of law on the issues of whether Respondents can be found guilty of violating rules of the Department of Banking and Finance after those rules have been repealed and whether disciplinary action can be taken against Respondents for violating rules of the Department of Banking and Finance after those rules have been repealed. The parties were further ordered to file copies of the rules the Department alleges Respondents have violated since those rules are no longer in codified form. Those post hearing submissions were completed on January 8, 1992. The Department's Memorandum of Law revealed that not only had the rules with which Respondents had been charged been repealed as of October 1, 1991, but also that the statutes with which Respondents have been charged were repealed effective October 1, 1991.

    
    

20. The parties agree that Respondents cannot be found guilty of, or disciplined for, violating statutes and rules which have been repealed. The Department argues that Respondents can still be found guilty of some of the repealed statutes and rules since the former Mortgage Brokerage Act has been replaced by a new Mortgage Brokerage Act effective October 1, 1991, and the Department is in the process of promulgating emergency rules pursuant to the

    enabling legislation found in that new Act. The Department is only partially correct.

    
    

21. The Supreme Court of Florida has held that

    
    

    ...where a statute has been repealed and substantially re-enacted by a statute which contains additions to or changes in the original statute, the re-enacted provisions are deemed to have been in operation continuously from the original enactment whereas the additions or changes are treated as amendments effective from the time the new statute goes into effect.

    
    

    McKibben v. Mallory, 293 So. 2d 48, 53 (Fla. 1974). Although the McKibben case did not involve a disciplinary action which is penal in nature, such a situation was considered in Solloway v. Department of Professional Regulation, 421 So. 2d

    573 (Fla. 3rd Dist. 1982). That Court held that:

    
    

    A statute that is simultaneously repealed and re-enacted is regarded as continually in force

    . . . . Only provisions omitted from the reenactment are considered repealed. . . .

    An amendment and re-enactment of a statute constitutes a continuation of those provisions which are carried into the new act and permits a prosecution under the original act irrespective of its nominal repeal.

    McKibben v. Mallory, 293 So.2d 48 (Fla.1974); Raines v. State, 42 Fla. 141, 28 So. 57 (1900); Skinner v. State, 383 So.2d 767 (Fla. 3d DCA 1980).

    
    

    Id. at p. 574. Accordingly, Respondents can be disciplined for violating sections of the former Act which were re-enacted in the new Act. Respondents cannot, however, be disciplined for violating statutes contained within the new Act which were not contained in the former Act.

    
    

22. The law is different, however, as to rules which have been repealed. The law is clear that

    
    

    An administrative rule or regulation is operative and binding on those coming within its terms from its effective date until it is modified or superseded by subsequent legislation or by subsequent regulations adopted in compliance with duly ordained standards of administrative procedure, and it expires with the repeal of the statute from which it gains its life.

    
    

    Hulmes v. Division of Retirement, 418 So. 2d 269, 270 (Fla. 1st Dist. 1982). In the case at bar, the rules with which Respondents were charged were specifically repealed as of October 1, 1991. They have not been re-enacted. Although the Department is in the process of rulemaking, those rules are not in effect.

    Further, those rules will not be enacted simultaneously with the repeal of the

    former rules. Their existence will not begin until they become effective, and until that time, there are no rules in effect interpreting the new Mortgage Brokerage Act. On the other hand, the Department is correct in its argument that Respondents can be disciplined for conduct prohibited by Department rules which were repealed on October 1, 1991, if the conduct prohibited by those rules is conduct prohibited by the new Act which became effective on October 1, 1991.

    
    

23. Petitioner's reliance on the case of Drury v. Harding, 461 So. 2d 104 (Fla. 1984), is misplaced. That case did not involve a situation where, as here, rules were repealed, and a new set of rules are enacted at a later date. In the Drury case, the Department of Health and Rehabilitative Services had rules in effect when a replacement statute became effective. The Department never repealed those rules. A number of months later the Department re-adopted those rules. The Court upheld prosecutions based upon those rules during the interim period between the effective date of the new statute and the date on which the rules were re-adopted since the rules had remained in effect throughout that time period.

    
    

24. Paragraph numbered 9 of the Amended Notice of Intent to Revoke Mortgage Brokerage License and Notice of Rights alleges that Respondents have violated Section 494.093(1), Florida Statutes, by not displaying a mortgage broker license in the office where mortgage brokerage business is conducted. Section 494.093(1) made it unlawful for any person to act as a mortgage broker in this State without a mortgage broker license issued by the Department. That statute did not require displaying a mortgage broker license in the office where mortgage brokerage business is conducted. Accordingly, Petitioner has failed to prove that Respondents violated Section 494.093(1), as alleged in paragraph numbered 9.

    
    

25. Paragraph numbered 10 of the Amended Notice alleges that Respondents have violated Rule 3D-40.006(1)(c), Florida Administrative Code, by not having a local occupational license as required by law. That Rule did require the posting of any occupational licenses required by local government agencies. Although the Rule has been repealed, Section 494.0039(1)(a) of the new Act, which became effective on the same date the Rule was repealed, requires the posting of any occupational licenses required by local government agencies. Although Petitioner offered no evidence as to what local occupational licenses would have been required, Respondents admit in their proposed recommended order that they had no occupational license in violation of the former Rule. Accordingly, Respondents are guilty of failing to have a local occupational license, as alleged in paragraph numbered 10.

    
    

26. Paragraph numbered 11 of the Amended Notice alleges that Respondents have violated Rule 3D-40.006(1)(d) and Section 494.039(2), Florida Statutes, by failing to maintain a sign on or about the entrance of the mortgage brokerage office. Section 494.039(2) set forth certain grounds for the denial of registration of mortgage brokerage businesses and contained no language requiring the maintenance of a sign. The repealed rule did require maintaining a sign on or about the entrance to the office. Section 494.0039(1)(b) of the new Act does not require that a sign be maintained at the entrance of the office, but it does require that a sign be publicly displayed. In their proposed recommended order, Respondents admit that they had no sign at the entrance to their office in violation of the rule. There is no evidence that there was a sign located anywhere else, and it is clear that there was no sign publicly displayed. Petitioner has met its burden of proof regarding this violation.

27. Paragraph numbered 12 of the Amended Notice alleges that Respondents have violated Sections 494.055(1)(n) and 494.06(1), Florida Statutes, and Rule 3D-50.006(4), Florida Administrative Code, by failing to maintain adequate books and records for examination. Section 494.055(1)(n) established as a ground for which disciplinary action could be taken the failure to maintain, preserve, and keep available for examination all books, accounts, or other documents required by chapter 494 and the rules of the Division of Finance. Section 494.06(1) required that every principle mortgage broker maintain all books, accounts, records, and documents as the Department deemed necessary. Neither of those statutory sections relied on by the Department specified what books and records were required to be maintained. Rule 3D-50.006(4), Florida Administrative Code, related to motor vehicles, a subject over which the Department of Banking and Finance has no jurisdiction.

    
    

28. The parties have assumed that Respondents were charged with violating Rule 3D-40.006(4), Florida Administrative Code, rather than Rule 3D-50.006(4). That Rule, before its repeal, did require that certain records be maintained. One of the records to be maintained specified within the repealed rule was a closing statement signed by the borrower. Section 494.0037(3) of the new Act does require that the licensee preserve and keep available for at least three years each closing statement signed by a borrower. As to the specific transactions involved in this proceeding, no mortgage loan closings occurred as to Community Savings, Pinnacle Financial, or Mr. Deckman. As to Mr. Graham, however, a loan closing occurred, and Respondents did not maintain a copy of the loan closing statement. Accordingly, Petitioner has met its burden of proof as to a portion of its allegation that Respondents failed to maintain required books and records.

    
    

29. Paragraph numbered 13 of the Amended Notice alleges that Respondents have violated Sections 494.055(1)(b) and (l), 494.093(2), and 494.08(1), Florida Statutes, and Rule 3D-40.010(4), Florida Administrative Code, by using misleading newspaper advertisements indicating that Respondent Next Step Brokerage, Inc., was a licensed entity. Section 494.055(1)(b) established as a ground for which disciplinary action could be taken the commission of fraud, misrepresentation, deceit, negligence, or incompetence in any mortgage financing transaction. The placement of one newspaper advertisement does not constitute a mortgage financing transaction. Sections 494.055(1)(l) prohibited acting as a mortgage broker or mortgage brokerage business without a current, active license or registration. Similarly, Section 494.093(2) made it unlawful for any person to employ a mortgage broker or otherwise act as a mortgage brokerage business without a mortgage brokerage registration issued by the Department. The ad which was placed in The Palm Beach Post tells the reader to "call Frank Lamb", provides a telephone number, and states under Respondent Lamb's name that he is "a licensed mortgage broker." Such is true. The ad also includes the name of Next Step Brokerage, Inc., but makes no representation as to whether that company is registered as a mortgage brokerage business.

    
    

30. Although the Department argues that Respondents violated Sections 494.055(1)(l) and 494.093(2), acting as a mortgage brokerage business without being registered, in that the ad in question "could" be interpreted as misleading because it "could" be understood that not only was Respondent Lamb a licensed mortgage broker as specified in the ad but also that Next Step Brokerage, Inc., was a registered mortgage brokerage business. Evidence that an ad "could" be misleading falls short of the competent, substantial evidence required to find a licensee guilty of violating statutory prohibitions.

31. The Department's former rule pertaining to advertising, Rule 3D- 40.010(4), and its authorizing legislation, Section 494.08(1), were repealed on October 1, 1991, when the new Act became effective. The Department admits in its post hearing memorandum of law that Respondents cannot be found guilty of violating Rule 3D-40.010(4) or Section 494.08(1) since they were repealed and have not been re-enacted. Accordingly, Petitioner has failed to meet its burden of proving Respondents guilty of the allegations contained in paragraph numbered 13.

    
    

32. Paragraph numbered 14 of the Amended Notice alleges that Respondents have violated Section 494.055(1)(l), Florida Statutes, by acting as a mortgage brokerage business without a current, active registration. Section 494.0041(2)(k) of the new Act also prohibits acting as a mortgage broker or mortgage brokerage business without a current, active license. Petitioner has met its burden of proof as to this allegation. Next Step Brokerage, Inc., was incorporated specifically for the purpose of acting as a mortgage brokerage business. A bank account was opened by Respondent Lamb in the name of Respondent Next Step. Fees were paid to Respondent Next Step for mortgage brokerage activities and were deposited in Respondent Next Step's bank account. Although Respondent Next Step was clearly the alter ego of Respondent Lamb, a licensed mortgage broker, the business itself was also required to be registered, and it was not.

    
    

33. Paragraph numbered 15 of the Amended Notice alleges that Respondents have violated Section 494.055(1)(i), Florida Statutes, by having a license, registration, or the equivalent, to practice the occupation of an officer, director, employee or committee member of any state chartered financial institution revoked, suspended, or otherwise acted against. The actual wording of that Section was as follows:

    
    

    Having a license or registration, or the equivalent, to practice any profession or occupation revoked, suspended, or otherwise acted against, including the denial of licensure by a licensing authority of this state or another state, territory, or country for fraud, dishonest dealing, or any other act of moral turpitude.

    
    

    The same language now appears as Section 494.0041(2)(i) of the new Act. This allegation involves the Fourth Executive loan transaction at Bay Savings Bank and the prohibition consent order against Respondent Lamb.

    
    

34. This proceeding has been brought against Respondents by the Department of Banking and Finance, Division of Finance. The prohibition action was brought against Respondent Lamb by the Department of Banking and Finance, Division of Banking. The charging document in that prohibition action alleged that Respondent Lamb had violated banking laws and sought to prohibit Respondent Lamb from being an officer, director, employee, or committee member of a state chartered financial institution. Respondent Lamb who was no longer involved in the banking industry signed a stipulation whereby he neither admitted nor denied the allegations but simply agreed to no longer be involved in the banking industry. Due to Respondent Lamb's agreement to give the Department the relief which it sought, the Department never proved, and it was never judicially or administratively determined that Respondent Lamb committed fraud, dishonest dealing, or any other act of moral turpitude. Having failed to prove those things in that action, the Department attempted to prove those matters in this

    action. Unfortunately for the Department, however, Respondents Lamb and Next Step are not charged with those matters in this proceeding. Accordingly, the Department cannot prove in this proceeding that Respondent Lamb committed fraud, dishonest dealing, or any other act of moral turpitude based upon the matters alleged but never proven in a different proceeding.

    
    

35. Although the Department does have the authority to regulate the banking industry, it has no authority to require licensure, registration, or the equivalent for persons who work in a bank. In other words, although the Department can prohibit an officer, director, employee, or committee member of a financial institution from continuing to work for or participate in the affairs of that institution for violation of the banking laws, no person is required to be licensed or registered (or the equivalent) prior to commencing employment or participation in the affairs of a financial institution. Accordingly, although the Department has proven that Respondent Lamb agreed to the entry of a prohibition order against him, the Department has failed to prove that either Respondent Lamb or Respondent Next Step has had a license or registration or the equivalent to practice any profession or occupation revoked, suspended, or otherwise acted against for fraud, dishonest dealing, or any other act of moral turpitude.

    
    

36. In summary, the Department did prove that between December of 1989 and May 30, 1990, Respondents while temporarily working out of Respondent Lamb's home failed to have a local occupational license, failed to have a sign publicly displayed at Respondent Lamb's home, and failed to keep a copy of the closing statement when they assisted Mr. Graham, a friend of Respondent Lamb, in obtaining a loan without expectation of any fee. The Department also proved that Respondent Lamb, a licensed mortgage broker, engaged in mortgage brokerage activities through his corporation, Respondent Next Step, without obtaining a current, active registration as a mortgage brokerage business.

    
    

37. It is apparent that the persons involved in the few transactions which are the subject of this proceeding knew that they were dealing with Respondent Lamb, a licensed mortgage broker, when they wrote checks payable to his corporation Respondent Next Step. No evidence was offered that the Department received any consumer complaints regarding Respondents' activities, and no evidence was offered that any consumer suffered any injury as a result of Respondents' activities. Respondent Lamb ceased using his corporation's name and its bank account immediately upon being notified by Department employees that he was engaging in prohibited conduct. In its proposed recommended order, Petitioner recommends that Respondent Lamb's mortgage broker's license be revoked and that Respondent Lamb be fined the sum of $5,000. Such a recommendation is unduly harsh and not justified by the facts of this case or the nature of the violations actually proven. In view of the nature of the violations, the fact that Respondent Lamb has had no prior complaints made against him as a result of his mortgage broker activities, and the fact that no injury was suffered by anyone as a result of those violations proven, the imposition of a two-year probationary period together with a fine of $1,000, as recommended by Respondents in their proposed recommended order, is an appropriate penalty.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered placing Respondent Lamb on

probation for a period of two years and requiring Respondent Lamb to pay a fine in the amount of $1,000 by a date certain.

DONE and ENTERED this 17th day of January, 1992, at Tallahassee, Florida.

LINDA M. RIGOT

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 17th day of January, 1992.

APPENDIX TO RECOMMENDED ORDER

1. Petitioner's proposed findings of fact numbered 1, 8, 9, 24, 25, 27, and 30 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, conclusions of law, or recitation of the testimony.

   
   

2. Petitioner's proposed findings of fact numbered 2-4, 6, 12-14, 18, 28, and 29 have been adopted either verbatim or in substance in this Recommended Order.

   
   

3. Petitioner's proposed findings of fact numbered 5, 7, 16, 17, 19-23, and 31 have been rejected as being unnecessary for determination of the issues involved herein.

   
   

4. Petitioner's proposed findings of fact numbered 10, 11, and 15 have been rejected as not being supported by the weight of the credible evidence in this cause.

   
   

5. Petitioner's proposed findings of fact numbered 26, 32, and 33 have been rejected as being irrelevant to the issues involved in this proceeding.

   
   

6. Respondents' proposed finding of fact numbered 1 has been rejected as being irrelevant to the issues involved in this proceeding.

   
   

7. Respondents' proposed findings of fact numbered 2-13 have been adopted either verbatim or in substance in this Recommended Order.

COPIES FURNISHED:

Honorable Gerald Lewis Comptroller, State of Florida Department of Banking and Finance The Capitol, Plaza Level Tallahassee, Florida 32399-0350

William G. Reeves, General Counsel Department of Banking and Finance The Capitol, Room 1302 Tallahassee, Florida 32399-0350

Jodi R. Marvet

Assistant General Counsel Office of Comptroller

201 West Broward Boulevard Suite 302

Fort Lauderdale, Florida 33301

Richard W. Glenn, Esquire

2001 Palm Beach Lakes Boulevard Suite 200

West Palm Beach, Florida 33409

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

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AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE

DIVISION OF FINANCE

DEPARTMENT OF BANKING AND FINANCE,

Petitioner,

Administrative

vs. Proceeding No. 1937-F-8/90

CASE No. 90-3699 FRANK LAMB and NEXT STEP BROKERAGE, DOAH Case No. 91-2226 INC.,

Respondents.

/

FINAL ORDER

This matter has come before the undersigned as Head of the Department of Banking and Finance (hereinafter Depart- ment) , for entry of a Final Order in this proceeding On January 17, 1992, a hearing officer from the Division of Administrative Hearings submitted her Recommended Order in this proceeding, a copy of which is attached hereto as Exhibit A. Neither the Department nor the Respondents filed exceptions to the Recommended Order.

This matter arose when the Department filed an administrative action against Respondents, seeking to impose penal- ties under the provisions of Chapter 494, Florida Statutes. Respondents filed a petition for hearing. The matter was transferred to DOAH for the assignment of a hearing officer to conduct a final hearing. A formal hearing was held on the matter in West Palm Beach on September 26, 1991. The hearing officer's Recommended Order provided that Respondent Lamb be placed on probation for a period of two years and that he be assessed a fine of one thousand dollars ($1,000.00)

Upon a review of the entire record of this proceeding, the Department accepts all the findings of fact, recommended by the hearing officer, as they are supported by competent, substantial evidence as required under Chapter 120, Florida Statutes. Additionally, the Department accepts substantially all of the conclusions of law submitted by the hearing officer. However, the Department rejects the following conclusion of law.

After ruling on the allegations, by the Department, regarding section 494.055(1) (i), Florida Statutes, the hearing officer proceeded to state as follows on page seven- teen of the Recommended Order:

Although the Department does have the authority to regulate the banking industry, it has no

authority to require licensure, registration, or the equivalent for persons who work in a bank. In other words, although the Department can prohibit an officer, director, employee, or committee member

of a financial institution from continuing to work for or participate in the affairs of that institu- tion for violation of the banking laws, no person is required to be licensed or registered (or the equivalent) prior to commencing employment or participation in the affairs of a financial insti- tution. Accordingly, although the Department has proven that Respondent Lamb agreed to the entry of a prohibition order against him, the Department has failed to prove that either Respondent Lamb or Respondent Next Step has had a license or registra- tion or the equivalent to practice any profession or occupation revoked, suspended, or otherwise acted against for fraud, dishonest dealing, or any other act of moral turpitude.

The Department has no obligation to state with particu- larity the reasons the Department is rejecting the above stated conclusions of law. Harloff v. City of Sarasota, 575 So.2d 1324 (Fla. 2nd DCA 1991) . However, to make the record clear, the conclusion of law, referenced above, is improper because it is not supported by any of the findings of fact provided in the Recommended Order by the hearing officer. Wong v. Career Service Commission, 371 So.2d 530 (Fla.

1st DCA 1979) . The findings of fact provide absolutely no basis for this conclusion of law reached by the hearing officer. The findings of fact do not contain any statements regarding the Department's authority or lack of authority to require licensure, registration or the equivalent for individuals seeking employment in the banking industry. The findings of fact contain no reference to any testimony, or other evi- dence, which support this conclusion of law.

A hearing officer's recommended order must have a predicate in record. MacDonald v. Department of Banking and Finance, 346 So.2d 569 (Fla. 1st DCA 1977) , appeal after remand 361 So.2d 199 (Fla. 1st DCA 1978). The record is void of evidence which supports the hearing officer's broad, general statement regarding the Department's authority. Consequently, the Department rejects the above referenced conclusion of law.

IT IS hereby ORDERED:

1. The hearing officer's findings of fact and conclusions of law, except as otherwise noted above, are hereby adopted and incorporated herein.

   
   

2. Respondents are found guilty of the following:

   
   

   Failing to have a local occupational license, failing to have a sign publicly displayed at Respondent Lamb's home, and failing to keep a copy of a closing statement. Respondent Lamb is also found guilty of engaging in mortgage brokerage activities through Respondent Next Step, without obtaining a current, active registration as a mortgage brokerage business.

   
   

3. Respondent Lamb is placed on probation for a period of two years and fined the amount of $1,000.00 payable within thirty (30) days of entry of this Order. The administrative fine shall be paid by cashiers check or money order, made payable to the Department of Banking and Finance. The mail order or cashier's check should be delivered or mailed to Gerald Lewis, Office of the

Comptroller, Department of Banking and Finance, The Capitol, Tallahassee, Florida 32399.

DONE and ORDERED this 17th day of April 1992 in Tallahassee, Leon County, Florida.

GERALD LEWIS, as Comptroller of the State of Florida

NOTICE OF RIGHTS TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE (1) COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DEPARTMENT OF BANKING AND FINANCE AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN THIRTY (30) DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing was sent by

U.S. Regular Mail to Richard Glenn, 2001 Palm Beach Lakes Blvd., Suite 200, West Palm Beach, Florida 33409, this 17th day of April 1992.

H. RICHARD BISBEE Deputy General Counsel

Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, FL 32399-0350

(904) 488-9896

Docket for Case No: 91-002226

Orders for Case No: 91-002226