COMMONWEALTH OF VIRGINIA

STATE CORPORAT[ION COMMISSION

COMMONWEALTH OF VIRGINIA, ex rel.

STATE CORPORATION COMMISSION

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CASE NO. BFI-2012-00067

V.

SECURITY TRUST MORTGAGE, L.L.C.,

Defendant
APPLICATION OF
DANIEL MCDONALD

CASE NO. BFI-2013-00069

For a mortgage loan originator license

14EARING EXAMINER'S RULING

July 18,2013
On April 9, 2013, the State Corporation Commission ("Commission") issued a Rule to Show
Cause in which the Bureau of Financial Institutions ("Bureau") is seeking an order from the
Commission revoking the license of Security Trust Mortgage, L.L.C . ("Security Trust"), a mortgage
broker licensed under Chapter 16 of Title 6.2 of the Code of Virginia ("Code"), pursuant to 6.21619 of the Code . That case was docketed as Case No . BFI-2012-00067, and assigned to a hearing
examiner to conduct all further proceedings on behalf of the Commission and to file a final report .
Daniel McDonald, sole owner and officer of Security Trust, filed a Response to Rule to
Show Cause ("Response") on behalf of Security Trust on May 9, 2013 . The Bureau filed a Motion
for Default Judgment on May 24, 2013, contending among other things that the Response was
defective as McDonald cannot represent Security Trust because he is not a licensed attorney, and
that entry of defaultjudgment was appropriate. That Motion is pending.
On June 6, 2013, the Commission issued a Scheduling Order on the Application of Daniel
McDonald ("McDonald") which contests the denial of his application for a mortgage loan originator
license. That case was docketed as Case No. BFI-2013-00069, and also assigned to a hearing
examiner to conduct all further proceedings on behalf of the Commission and to file a final report .

In the June 6, 2013, Scheduling Order the Commission determined there is significant
overlap between the issues involved in both proceedings as McDonald is the sole owner and officer
of Security Trust. In the interests of judicial economy the cases therefore were combined for
purposes of hearing to be scheduled by the examiner .
As directed by the Commission, the Bureau filed a response to McDonald's application on
July 16, 2013 ("Bureau Response"). The Bureau contends that the application should fail because
McDonald is not eligible for a license . The Bureau asserts that McDonald has failed to identify
facts or circumstances that have changed since the Commission affirmed the Bureau's License
Denial Order dated December 27, 201 1, that would warrant his receipt of a license now. The

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Commission's order was issued just a year ago. ' The Bureau also asserts that McDonald is barred
from bringing the current application by the doctrines of collateral estoppel or, alternatively, res
judicata. 2
I find that McDonald should be provided an opportunity to offer evidence of changed
circumstances . Moreover, Security Trust should also be provided an opportunity to present
evidence, through Virginia legal counsel, why its license should not be revoked as requested by the
Bureau. I therefore find that a consolidated hearing should be scheduled for the purpose of
receiving evidence on both cases. Accordingly,
IT IS HEREBY DIRECTED that a hearing shall be convened on September 11, 2013, at
10 a.m . in the Commission's Courtroom, Second Floor, Tyler Building, 1300 East Main Street,
Richmond, Virginia 23219, at which time evidence will be received on the application of McDonald
contesting the denial of his application for a mortgage loan originator license and, the related Rule
to Show Cause issued against Security Trust.

torah V. Elleanbergg
Chief Hearing Examiner
Document Control Center is requested to mail by REGULAR and CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, to : Daniel McDonald, 1407 Hearthstone Drive,
Fredericksburg, Virginia 2240 1 ; and Daniel McDonald, President, Security Trust Mortgage, L.L.C.,
1407 Hearthstone Drive, Fredericksburg, Virginia 22401 .

' Petition of Daniel McDonald, For approval of mortgage loan originator license, Case No. BFI-2012-00003, 2012
S.C .C . Ann. Rep. 22 .
Bureau Response at 1 .
2

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