Diane Whitaker, the former president/CEO of the liquidated Ensign Federal Credit Union, told Credit Union Times in 2007 that she had early concerns with North Star Business Services LLC, a business lending CUSO now facing a suit from the NCUA.
According to the Nov. 8 complaint filed by the NCUA, the regulator alleged that NSBS continued to collect payments on 18 commercial loans allegedly owned by Ensign after the credit union was shut down in November 2009 due to declining financial conditions. Despite the NCUA issuing NSBS a cease and desist order, the CUSO continued to collect payments and allegedly threatened borrowers with servicing fees if they did not comply. The CUSO's principals, David Osburn and Mark Moody, are named as defendants in the complaint. Neither could be reached for comment.
The NCUA said it believes as of Oct. 1, NSBS has wrongfully retained nearly $46,000. The agency is seeking a jury trial.
NSBS was set up to serve both credit unions and banks. At the time when Ensign signed on with the CUSO, Whitaker said she was initially concerned with working with the firm because she felt it would give the good loans to banks. Her fears were addressed when it was assured Ensign would have the lead spot on NSBS' board and that the other board members were contractors, real estate investors and developers--not bankers. Whitaker could not be reached for comment.
NSBS invited several credit unions to its December 2006 introduction meeting, but only Ensign expressed the strongest interest in moving forward, Osburn told Credit Union Times in June 2007.
The NCUA liquidated Ensign in November 2009 and authorized the purchase and assumption of member share accounts to Plano, Texas-based EDS Credit Union, which is now known as InTouch Credit Union.