Press Release

November 19, 2015

Contact: Matt Anderson, 212-709-1691


Anthony J. Albanese, Acting Superintendent of Financial Services, today announced that New Day Financial LLC d/b/a New Day USA (“New Day”) will pay a $1 million penalty to the New York State Department of Financial Services (NYDFS) and surrender its mortgage banker’s license to do business in New York after its employees – such as those in its C-Suite and other senior managers – engaged in a widespread scheme to cheat on state-required continuing education courses and exams, among other violations of New York Law.

Acting Superintendent of Financial Services Anthony J. Albanese said: “New Day employees – including senior managers – participated in a widespread, extensive cheating scheme that casts serious doubt on the integrity of the company.  These exams are important because they help ensure that loan officers know and follow the law, and do not abuse homeowners.  The type of dishonest conduct uncovered in this case is simply unacceptable and will not be tolerated in New York.”

Widespread Cheating Scheme by New Day Employees

At least twenty New Day Mortgage Loan Originators (MLOs) did not personally take the required continuing education courses and exams, but rather had New Day compliance staff take the required courses and exams on their behalf. On multiple occasions, New Day MLOs reported to the former Vice-President of Training information they learned while taking SAFE (Secure and Fair Enforcement for Mortgage Licensing Act)  MLO licensing exams.  Furthermore, on multiple occasions, New Day MLOs took and shared with senior management and other MLOs screen-shots of questions included in the NMLS (Nationwide Multistate Licensing System and Registry) approved continuing education courses.

For example, New Day’s Chief Executive Officer had continuing education requirements completed on his behalf by other employees on at least eighteen occasions. In addition, New Day’s former Chief Operating Officer had continuing education requirements completed on his behalf by other employees on at least eighteen occasions, and, in at least one instance, directly asked a compliance staff member to take the required courses in his place.

The former head of licensing arranged for compliance staff to take the required continuing education exams on behalf of New Day MLOs.  The former Vice President of Training encouraged MLOs to report back to New Day staff with information MLOs acquired while taking SAFE MLO licensing exams in order to update New Day’s internal test preparation materials for new MLOs. The former Senior Vice President of the Reverse Division was aware that New Day MLOs took and shared screen-shots of materials included in the NMLS approved continuing education courses, and had personally received copies of these materials. And at least six other New Day senior managers participated in or had knowledge of some or all of the conduct described above.

Additionally, despite New Day’s decision to terminate or separate from certain senior managers for their participation in or knowledge of some or all of the conduct described above, New Day’s parent corporation – Chrysalis Holdings LLC – subsequently rehired two of the former senior managers – raising doubts regarding New Day’s purported concern for remedying its culture of fraud and dishonesty.

Mortgage Banking Examination Failures

In the course of an examination of New Day, the Department also uncovered numerous additional compliance failures, such as improper issuance of subprime home loans; misrepresenting loan terms; failing to provide discount points notification; failing to maintain minimum line of credit; and submitting false Volume of Operations Report.

Evidence of Additional Misconduct

Further illustrating New Day’s insufficient concern for consumer protection or regulatory compliance, on February 10, 2015, the Consumer Financial Protection Bureau (the “CFPB”) found that New Day had engaged in deceptive acts or practices by failing to disclose payments to a veteran’s organization that endorsed New Day.   The CFPB also found that New Day had made payments to third parties in connection with the marketing of home loans that constituted illegal payments for referrals of mortgage origination business.

To view a copy of today's NYDFS order regarding New Day, please visit, link.