Finance firms ordered to halt high charges
Maryland Insurance Commissioner Ralph S. Tyler ordered nine premium finance companies yesterday to stop charging unlawfully high finance charges, a move expected to save consumers less than $100 a year each. The companies lend to drivers who cannot obtain private coverage and turn to the Maryland Automobile Insurance Fund. Most policyholders rely on premium finance companies because state law requires that the entire annual premium be paid to MAIF upfront, at an average of $1,700. The order follows a yearlong investigation by regulators into the activities of the companies, which have been criticized by state lawmakers who have sought to lower costs for consumers. Two of the companies also must refund interest charged on policies that were never issued, either because MAIF refused coverage or the consumer withdrew the policy application. In a separate order, Tyler deferred for 45 days a decision about whether to allow MAIF to lower its premiums. MAIF requested to defer its earlier request, according to Tyler, to study whether it could afford a reduction during a period of economic deterioration.
Laura Smitherman and Gadi Dechter
NeuroMetrix to close its Columbia facility
Massachusetts-based NeuroMetrix Inc. said yesterday that it will close its Columbia office by the end of the year and discontinue the work that is now done there. The office handled sales of DigiScopes, which were developed at the Johns Hopkins University's Wilmer Eye Institute to detect diseases such as diabetic retinopathy. When NeuroMetrix acquired the Columbia operations in December for $10 million, it said that about 20 employees and consultants would continue to work there. The company said yesterday that it is refocusing on "core business."
Jamie Smith Hopkins
Legg Mason buys paper from money funds
Legg Mason Inc. bought asset-backed commercial paper from a non-U.S. money-market fund, allowing it to cancel $460 million in credit-support agreements. The purchases will have no effect on earnings, the Baltimore-based company said yesterday in a filing with the U.S. Securities and Exchange Commission. Legg Mason said it purchased an undisclosed amount of asset-backed commercial paper issued by Axon Financial Funding LLC and Gryphon Funding Ltd. from the Citi Institutional Liquidity Plc, an offshore money fund that is required to maintain a net asset value of $1 a share. Axon and Gryphon are investment funds that issued short-term debt to fund their investments. Legg Mason decided to pull the commercial paper out of the fund "in response to this turbulent market environment," spokeswoman Mary Athridge said in an e-mailed statement.
Coldwell Banker to hold sale event
In a marketing move designed to fight back against the housing slump, Coldwell Banker said yesterday that home sellers across the country will lower their asking prices by as much as 10 percent during a sales event running Oct. 10 through 19. In Baltimore and its five surrounding suburbs, more than 300 sellers have agreed to lower prices "significantly," Coldwell Banker Residential Brokerage Greater Baltimore said. Once the event begins, buyers can see which properties are participating and how the prices have changed at cbmove.com. Coldwell Banker said three-quarters of its U.S. agents surveyed recently believe most sellers have "unrealistic expectations" about price but that a reduction of 10 percent or less would be enough to interest buyers.
Jamie Smith Hopkins
Bank of America reveals 3Q drop in profit
NEW YORK : Bank of America Corp. reported its third-quarter results yesterday - earlier than planned - revealing a 68 percent profit drop and plans to boost capital by selling stock and halving its dividend. Like most other major financial institutions, Bank of America has been hit by significant losses in mortgages, credit cards and other souring debt. Profit fell to $1.18 billion, or 15 cents per share, for the July-to-September period from $3.7 billion, or 82 cents per share, in the same period last year.
Mars, Wrigley close $23 billion deal
HARRISBURG, Pa. : Mars Inc. has closed a deal to purchase chewing-gum giant Wm. Wrigley Jr. Co. to become the world's largest candy maker, Wrigley said yesterday. Mars, the privately held maker of M&Ms;, Snickers and Skittles, paid $23 billion for Wrigley, which was started in Chicago in 1891.