Enforcement Actions

BISMARCK, N.D. –  The North Dakota Department of Financial Institutions and 48 state financial regulatory agencies have taken coordinated action against Block Inc. for violations of Bank Secrecy Act (BSA) and anti-money laundering (AML) laws that safeguard the financial system from illicit use.

More than 50 million consumers in the United States use Cash App, Block’s mobile payment service, to spend, send, store and invest money.

In the multistate settlement signed this week, Block agreed to pay an $80 million penalty to the state agencies, hire an independent consultant to review the comprehensiveness and effectiveness of its BSA/AML program, and submit a report to the states within nine months. Block then will have 12 months to correct any deficiencies found in the review after the report is filed.

“It is important for citizens to be able to have confidence in the financial services industry,” Department of Financial Institutions Commissioner Lise Kruse said. “Financial services companies must abide by North Dakota law, and I appreciate the work of my colleagues, the state regulators in Arkansas, California, Massachusetts, Florida, Maine, Texas and Washington state, who led this multistate enforcement effort.” 

Under BSA/AML rules, financial services firms are required to perform due diligence on customers, including verifying customer identities, reporting suspicious activity and applying appropriate controls for high-risk accounts. State regulators found Block was not in compliance with certain requirements, creating the potential that its services could be used to support money laundering, terrorism financing or other illegal activities.

The Department of Financial Institutions licenses and supervises nearly 1,700 nonbank financial services companies, 183 of those being money transmitters.  

North Dakota residents who have questions about the enforcement action should contact the Department of Financial Institutions at dfi@nd.gov or (701) 328-9933. Residents can also visit NMLS Consumer Access to verify that a company is licensed to do business in North Dakota.

Washington, D.C.— The North Dakota Department of Financial Institutions and 52 state financial regulatory agencies have taken coordinated action against mortgage company Bayview Asset Management LLC, and three of its affiliates, Lakeview Loan Servicing, Community Loan Servicing, and Pingora Holdings (collectively the Bayview Companies), for deficient cybersecurity practices and for not fully cooperating with state regulators following a data breach that impacted 5.8 million customers.

The fine and corrective plan underscore the importance of meeting state requirements to protect consumer data and complying with state supervisory demands.

State regulators in California, Maryland, North Carolina, and Washington State led the multistate effort, which found that Bayview Companies’ information technology and cybersecurity practices did not meet federal or state requirements. Furthermore, the Bayview Companies delayed the supervisory process by failing to comply with state requests in a timely and complete manner in the early stages of the examination.

In addition to the monetary penalty, the Bayview Companies have agreed to take specified corrective actions, improve cybersecurity programs, undergo independent assessments, and provide three years of additional reporting to the states.

State financial regulators license and supervise more than 33,000 nonbank financial services companies through the Nationwide Multistate Licensing System (NMLS), including mortgage companies, money services businesses, consumer finance providers, and debt collectors.

North Dakota residents who have questions about the enforcement action should the Department at (701) 328-9933. Residents can also visit NMLS Consumer Access to verify that a company is licensed to do business in North Dakota, and they may also view past enforcement actions. 

BISMARCK, N.D. – The North Dakota Department of Financial Institutions (DFI) has issued a cease and desist order against Bankers Healthcare Group LLC doing business as BHG Financial LLC (BHG) for conducting unlicensed activities in the state, engaging in deceptive practices in interactions with customers, and other activity contrary to North Dakota Century Code chapter 13-04.1. DFI also has imposed civil money penalties against the company and denied its money broker license application.

Through an investigation, DFI determined that BHG had engaged in unlicensed money brokering activity by mailing solicitations to and brokering several hundred loans with North Dakota residents. DFI also determined that some of these loans did not meet the requirements of North Dakota law. Following the investigation, DFI issued an order requiring BHG to cease and desist all unlicensed money brokering activity within the state and denied BHG’s application for a money broker license. DFI also imposed civil money penalties of $7.1 million for violations of state law. BHG may appeal the order.

“It is important for the public to be aware that any non-bank lender must be licensed in North Dakota to solicit and lend to North Dakota residents,” said DFI Commissioner Lise Kruse. “Financial service companies must abide by North Dakota law to prevent consumers from falling victim to these types of unlawful lending practices.”

The North Dakota Department of Financial Institutions is an executive branch agency overseen by Commissioner Lise Kruse. DFI is responsible for chartering and regulating state banks and credit unions, and for licensing and regulating nearly 1,700 non-bank financial services companies, including more than 400 licensed money brokers. North Dakota residents who have questions about the Order should contact DFI at dfi@nd.gov or (701) 328-9933. Residents can also visit NMLS Consumer Access to verify that a company is licensed to do business in North Dakota.

BISMARCK, N.D. – The North Dakota Department of Financial Institutions (DFI) has reached a final agreement with money transmitter Sigue Corp. for failing to fulfill its obligations to customers during its collapse last year. 

The agreement with Sigue comes one year after financial regulatory agencies from 39 states, Puerto Rico and the District of Columbia ordered the company to cease engaging in any further money transmission activities due to its declining financial position. The company failed to complete multiple money orders and transmissions and to maintain adequate net worth and permissible investments to cover outstanding liabilities, both violations of state money transmission law.
 

The agreement requires Sigue Corp. and its owner, Guillermo de la Viña, to resolve Sigue’s failure to meet its outstanding liabilities. The agreement also contains provisions relating to GroupEx Financial Corp., a subsidiary of Sigue and a licensed money transmitter. Under the terms of the agreement, Sigue’s and GroupEx’s money transmitter licenses have been surrendered. Additionally, de la Viña has agreed to refrain from any position of management, control or employment of any money transmitter unless first approved by DFI. 

The North Dakota Department of Financial Institutions is an executive branch agency overseen by Commissioner Lise Kruse. DFI is responsible for chartering and regulating state banks and credit unions, and for licensing and regulating 1,700 non-bank financial services companies, 183 of those being money transmitters. 

North Dakota Department of Financial Institutions joins with other state regulators issuing a Cease and Desist Order on Sigue Corp., prohibiting them from engaging in money transmission. See the press release for more information. 

The Commissioner of the Department of Financial Institutions has issued an Order suspending Allan Eichhorn, a former employee of loanDepot.com, LLC, from employment or otherwise participating in the affairs of any financial corporation, financial institution, credit union, or other entity licensed by the North Dakota Department of Financial Institutions.

The Department of Financial Institutions joined other state financial regulatory agencies in taking collective action against Plutus Financial, Inc., Abra Trading, LLC, Plutus Financial Holdings, Inc., Plutus Lending, LLC (collectively known as “Abra”), and CEO and largest equity owner William “Bill” Barhydt for operating a cryptocurrency company without receiving the required state licensing.

A multistate investigation found that Abra operated a mobile application for buying, selling, trading, and investing in cryptocurrency without obtaining the required licenses. Under the settlement, Abra agreed to cease accepting virtual asset allocations from U.S. Abra Trade Account customers into their products and services and cease making, buying, selling, or trading cryptocurrencies available to U.S. Abra Trade customers as of June 15, 2023. The settlement terms require Abra to refund any remaining virtual assets on its platform for U.S. Abra Trade customers in the settling states.

A copy of the order can be found here.

The Commissioner of the North Dakota Department of Financial Institutions has revoked the money transmitter license of BAM Trading Services, Inc. doing business as Binace.US. Money transmission activity includes receiving money or crypto currency to send to a location within or outside the United States on another person’s behalf. To lawfully engage in the business of money transmission, a license is required under North Dakota Century Code Chapter 13-09.1.

The Commissioner has found that BAM Trading Services, Inc. has failed to comply with North Dakota laws. Additionally, majority beneficial owner and control person, Changpeng Zhao, has plead guilty to felony charges for violating the U.S. anti-money laundering laws.

North Dakota joins Alaska, Florida, Maine, North Carolina, and Oregon who have taken similar actions to revoke or deny the renewal of BAM Trading Services’ Money Transmission License.

Olympic Financial Group, Inc. d/b/a OFG, Inc. entered into a consent order with the Department of Financial Institutions where upon Olympic agrees to involuntarily surrender its North Dakota money transmitter license to fully resolve the ongoing administrative proceeding.

State regulators and state attorneys general levy combined fines of $20 million for data misuse impacting 480,000 consumers nationwide

BISMARCK, N.D. —The North Dakota Department of Financial Institutions and 43 other state agencies have reached settlements with ACI Payments, Inc., for erroneously initiating electronic transactions totaling $2.3 billion from the accounts of 480,000 mortgage-holders serviced by Mr. Cooper (formerly known as Nationstar Mortgage, LLC). State regulators levied $10 million in fines through a multi-state enforcement action led by regulators from Arkansas, Connecticut, Maryland and Texas with support from the Conference of State Bank Supervisors. Additionally, 50 state attorneys general, including North Dakota Attorney General Drew Wrigley, on behalf of North Dakota, participated in a matching settlement, which also levied $10 million in fines to ACI, in coordination with state regulators. 

The Commissioner of the Department of Financial Institutions has issued an Order suspending Kirniece Najimov, a former employee of Wyoming Financial Lenders, doing business as Payday Express, from employment or otherwise participating in the affairs of any financial corporation, financial institution, credit union, or other entity licensed by the North Dakota Department of Financial Institutions. The party listed in this Order has been provided the opportunity to request a hearing pursuant to law.

The Commissioner of the Department of Financial Institutions has issued an Order suspending Heather Hofstrand, a former employee of Wyoming Financial Lenders, doing business as Payday Express, from employment or otherwise participating in the affairs of any financial corporation, financial institution, credit union, or other entity licensed by the North Dakota Department of Financial Institutions. The party listed in this Order has been provided the opportunity to request a hearing pursuant to law.

The Commissioner of the Department of Financial Institutions has issued an Order suspending Tamra Counts, a former employee of Citizens Community Credit Union, Devils Lake, North Dakota, from employment or otherwise participating in the affairs of any financial corporation, financial institution, credit union, or other entity licensed by the North Dakota Department of Financial Institutions. The party listed in this Order has been provided the opportunity to request a hearing pursuant to law.

The North Dakota Department of Financial Institutions has signed a Consent Agreement and Order with West Realm Shires Services Inc. d/b/a FTX US.

The North Dakota Department of Financial Institutions and financial regulatory agencies from 42 other states reached settlements with 441 mortgage loan originators nationwide who deceptively claimed to have completed annual continuing education as required under state and federal law.

North Dakota entered into settlement agreements with Chad Baker, Brian Brown, and Kevin Heckemeyer.  These agreements can be found here.

Through the settlements, the mortgage loan originators agreed to surrender their licenses for a period of three months, pay a fine of $1,000 for each state in which he or she holds a license and take continuing education beyond Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) requirements.

Congress enacted the SAFE Act to enhance consumer protection and reduce fraud through minimum standards for the licensing and registration of state-licensed mortgage loan originators. The law calls on the states to implement and enforce these standards, and every state has enacted its own version of the SAFE Act that requires mortgage loan originators to have at least 20 hours of pre-licensing education and an annual eight hours of continuing education. 

Danny Yen, owner of Carlsbad, Calif.-based course provider Real Estate Educational Services, is facing administrative enforcement actions for both providing false certificates and taking courses on behalf of mortgage loan originators through other education providers in violation of the SAFE Act.

The irregular education activity was discovered through a gesture-driven authentication tool called BioSig-ID, which is used to monitor all online courses approved under the SAFE Act mandate.  

Signed Settlement - Brown    

Signed Settlement - Heckemeyer   

Signed Settlement - Baker

The Commissioner of the Department of Financial Institutions has issued an Order suspending Kaitlin Kastet, a former employee of First Community Credit Union, Jamestown, North Dakota, from employment or otherwise participating in the affairs of any financial corporation, financial institution, credit union, or other entity licensed by the North Dakota Department of Financial Institutions.  The party listed in this Order has been provided the opportunity to request a hearing pursuant to law. 

The Commissioner of the Department of Financial Institutions has issued an Order suspending Amy Bradley, a past employee of the former Citizens Community Credit Union, Devils Lake, North Dakota, from employment or otherwise participating in the affairs of any financial corporation, financial institution, credit union, or other entity licensed by the North Dakota Department of Financial Institutions. The parties listed in this Order have been provided the opportunity to request a hearing pursuant to law.

The Commissioner of the North Dakota Department of Financial Institutions has issued an Order suspending Kelly Huffman, a former employee of The Union Bank, Beulah, North Dakota, from employment or otherwise participating in the affairs of any financial corporation, financial institution, credit union, or other entity licensed by the North Dakota Department of Financial Institutions.

The Commissioner of the North Dakota Department of Financial Institutions has issued an Order suspending Brent Torgerson, a former employee of The Union Bank, Beulah, North Dakota, from employment or otherwise participating in the affairs of any financial corporation, financial institution, credit union, or other entity licensed by the North Dakota Department of Financial Institutions.

The North Dakota State Banking Board has issued an Order suspending Brady Torgerson, a former employee of First Security Bank – West, Beulah, North Dakota, from employment or otherwise participating in the affairs of any financial corporation, financial institution, credit union, or other entity licensed by the North Dakota Department of Financial Institutions. The parties listed in this Order have been provided the opportunity to request a hearing pursuant to law.

On December 7, 2020, the Commissioner of the North Dakota Department of Financial Institutions joined other state and federal agencies in issuing a settlement agreement and consent order against Nationstar Mortgage LLC, d/b/a Mr. Cooper. As part of the consent order, Nationstar will pay consumers nearly $90 million to resolve past actions, and will also pay in excess of $6.5 million in civil money penalties.

On July 29, 2020, the Commissioner of the North Dakota Department of Financial Institutions revoked the money transmitter license of Olympic Financial Group, Inc., which is based in Minneapolis, Minnesota, and operates in North Dakota through delegates Safari Market in Grand Forks and Somali Business Center in Fargo. 

Money transmission activity includes receiving money or monetary value to send to a location within or outside of the United states on another person's behalf. To lawfully engage in the business of money transmission, a license is required under North Dakota Century Code Chapter 13-09.

The Commissioner has found that Olympic Financial Group has failed to comply with North Dakota laws. In order to protect the public, including new Americans, the Commissioner has ordered Olympic Financial Group to cease providing money transmitter services in North Dakota.

On March, 29, 2019, Commissioner Lise Kruse issued an Order suspending Charity Erickson, a former employee of Citizens Community Credit Union, from employment or otherwise participating in the affairs of any financial corporation, financial institution, credit union, or other entity licensed by the North Dakota Department of Financial Institutions. The parties listed in this Order have been provided the opportunity to request a hearing pursuant to law. 

On January 15, 2019, Commissioner Lise Kruse issued an Order suspending Bobbi Miller, a former employee of Kirkwood Bank and Trust, from employment or otherwise participating in the affairs of any financial corporation, financial institution, credit union, or other entity licensed by the North Dakota Department of Financial Institutions.  The parties listed in this Order have been provided the opportunity to request a hearing pursuant to law.

On July 26, 2018, Commissioner Lise Kruse issued an Order imposing a $2,000 civil money penalty against Kirk Wullweber of Minot, North Dakota.  The Commissioner finds that Kirk Wullweber acted in willful violation of North Dakota law and a previously issued Departmental Order by engaging in unlicensed collection activity with a resident of North Dakota. The party listed in this Order has been provided the opportunity to appeal the assessment pursuant to law.  

On June 13, 2018, Commissioner Lise Kruse issued an Order suspending/removing Darla Morstad, a former employee of DC Holdings LLC d/b/a Direct Check, from employment or otherwise participating in the affairs of any deferred presentment service provider, financial institution, credit union, or any other entity licensed by the Department of Financial Institutions. The parties listed in this Order have been provided the opportunity to request a hearing pursuant to law.

On May 8, 2018, Commissioner Lise Kruse issued an Order revoking the collection agency license of Northland Receivables Inc. d/b/a Checkrite of Minot. The company has been ordered to cease and desist any further collection activities in the State of North Dakota. Additionally, the Commissioner has ordered the suspension/removal of Kirk Wullweber from participation in the conduct and affairs of the collection agency, and prohibited him from being employed or otherwise participating in the affairs of any financial corporation, financial institution, credit union, or any other entity licensed by the Department of Financial Institutions.

The parties listed in this Order have been provided the opportunity to request a hearing pursuant to law. Any person having any further questions, or believing they have been harmed by the conduct of Northland Receivables Inc. d/b/a Checkrite of Minot is directed to contact the Department.