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Enforcement roundup: a credit union with big problems and unlicensed insurance peddling

Posted on May 15th, 2008 – 11:50 AM
By James Shiffer

This week, the Minnesota Department of Commerce released its list of licensed professionals whom the agency fined, censured or otherwise punished through the middle of this month.

NorthRidge Community Credit Union, a financial institution in the Iron Range town of Hoyt Lakes, agreed to a “cease and desist” order from the agency because of “unsafe or unsound practices” that include inadequate management, insufficient oversight from the board of directors, expenses that exceed income and a decline of $728,302 in “Member Capital” from 2004 to 2007, among other problems.

The Commerce Department also enforces against companies and individuals that violate insurance rules. This month, five individuals received $1,000 fines for accepting “kickbacks from a sham affiliated business arrangement.” All were selling title insurance without a license, according to the consent orders. It’s part of the agency’s continuing crackdown on title insurance companies that paid kickbacks to real estate professionals who steered business their way. The title insurance companies set up phony businesses to try to get around federal and state rules prohibiting this sort of behavior. With this arrangement, consumers lose because they have to pay more for settlement services, to cover the cost of the illegal kickbacks.

This entry was posted on Thursday, May 15th, 2008 at 11:50 am and is filed under Public records. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

3 Responses to “Enforcement roundup: a credit union with big problems and unlicensed insurance peddling”

  1. Peter DelCaro Says:
    May 20th, 2008 at 3:00 pm

    Concerning the “Enforcement roundup” article by James Shiffer, did anyone notice that while the credit union in the second paragraph was mentioned by name but no individuals in the third paragraph were mentioned by name–which left the reader to believe that the five individuals were all employed the credit union mentioned in the second paragraph. The point is that the five inidividuals have absolutely nothing to do with the credit union mentioned in the second paragraph. How about some credibility in reporting, perhaps a few introductory lines leading into a different story may be in order. Shiffer ends the second paragraph with “among other problems” and starts the thrid paragraph with other problems!
    Reads like deception to me.

  2. James Shiffer Says:
    May 20th, 2008 at 3:30 pm

    Indeed, the five individuals have nothing to do with the credit union. I thought the fact that the title of the post was an “enforcement roundup” would make the distinction clear.

  3. Charlie Wiedenhoft Says:
    May 20th, 2008 at 5:08 pm

    This article was very poorly written and laid out. If you don’t include identifying breaks or names of the offending individuals’ agencies of employment we are led to believe that all of the offenses occurred at the same business. If you are going to single out one agency by name, and not the rest, the casual reader is going to associate all the problems to the named agency. By doing this, and not matching offending parties to the respective company, you have indirectly caused a backlash to the named credit union. This report should also include a list of actions taken to correct the offenses. Make your reports credible not sensationalist.

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