Freedom Financial Asset Management, Llc

Allegations: IN AUGUST 2016, FREEDOM FINANCIAL ASSET MANAGEMENT, LLC ("FFAM") RECEIVED A LETTER FROM THE FDIC ASKING QUESTIONS REGARDING FFAM'S PARTICIPATION IN THE CONSOLIDATION PLUS LOAN PROGRAM, UNDER WHICH FFAM SOURCES CONSUMER LOANS TO ITS BANK PARTNER, CROSS RIVER BANK, WHICH ORIGINATES THE LOANS. THE CONSOLIDATION PLUS LOAN IS A UNIQUE LOAN PRODUCT MADE EXCLUSIVELY TO CLIENTS OF FDR, A DEBT SETTLEMENT SERVICES PROVIDER. CONSOLIDATION PLUS LOAN FUNDS ARE DISBURSED TO FUND SETTLEMENTS REACHED BY FDR. THE FDIC BELIEVED THAT MATERIALS FOR CONSOLIDATION PLUS LOANS FAILED TO PROPERLY DISCLOSE TO CONSUMERS CERTAIN MATTERS REGARDING THE LOANS, LARGELY RELATED TO FDR'S DEBT SETTLEMENT SERVICE. THE FDIC'S INQUIRY AND ITS ALLEGATIONS ARE UNRELATED TO FFAM'S WORK AS AN INVESTMENT ADVISOR. Status: Final Sanction Detail: NOT APPLICABLE Summary: ON MARCH 22, 2018, FFAM AND CROSS RIVER BANK ENTERED INTO SEPARATE CONSENT AGREEMENTS WITH THE FDIC WITH RESPECT TO LOANS SOURCED BY FFAM AND ORIGINATED BY CROSS RIVER BANK. THE FDIC SUBSEQUENTLY ISSUED CONSENT ORDERS ON MARCH 28, 2018. FFAM'S CONSENT ORDER (THE "ORDER") STATES THAT MATERIALS GIVEN TO CONSUMERS BETWEEN JUNE 2013 AND MARCH 2018 CONTAINED MISREPRESENTATIONS AND OMISSION REGARDING THE CONSOLIDATION PLUS LOAN PRODUCT, INCLUDING (I) MISTATING THE LENGTH OF TIME IT WOULD TAKE FDR TO SETTLE CONSUMER DEBTS; (II) FAILING TO STATE THAT CERTAIN CREDITORS DO NOT NEGOTIATE DIRECTLY WITH FDR; AND (III) FAILING TO ADEQUATELY DISCLOSE CERTAIN LOAN TERMS. THE ORDER REQUIRES FFAM TO CORRECT ALL VIOLATIONS OF LAWS OR REGU-LATIONS ASSERTED IN THE ORDER AND TO IMPLEMENT POLICIES, PROCESSES AND PROCEDURES TO PREVENT THEIR RECURRENCE. IN ADDITION, THE ORDER REQUIRES FFAM TO PROVIDE RESTITUTION TO CERTAIN BORROWERS. TO EFFECT THIS, THE ORDER REQUIRES FFAM TO DEPOSIT $20,000,000 INTO A SEGREGATED ACCOUNT. IF REQUIRED RESTITUTION AMOUNTS EXCEED THE AMOUNT IN THE SEGREGATED ACCOUNT, FFAM MUST BEAR THAT EXCESS. THE ORDER ALSO REQUIRES FFAM TO PAY A CIVIL MONETARY PENALTY OF $493,500. FFAM HAS DEPOSITED THE REQUIRED FUNDS IN THE SEGREGATED ACCOUNT AND PAID THE CIVIL MONETARY PENALTY. THE CIVIL MONETARY PENALTY HAS BEEN PAID AND ALL REQUIRED RESTITUTION PAYMENTS HAVE BEEN MADE. ON JANUARY 19, 2021, THE FDIC ENTERED AN ORDER TERMINATING THE CONSENT ORDER. THE FDIC MATTER AND THE ORDER RELATE SOLELY TO FFAM'S ACTIVITIES SOURCING CONSOLIDATION PLUS LOANS TO CROSS RIVER BANK ARE UNRELATED TO ITS WORK AS AN INVESTMENT ADVISOR.