United States: State AGs In The News

HOT NEWS

States, Federal Government Reach Largest Settlement Against Single Entity in U.S. History

  • Federal and state governments will receive $13 billion from JP Morgan Chase in the largest settlement against a single entity in U.S. history. A $4 billion portion of the settlement will go toward consumer relief.
  • The settlement resolves federal and state allegations that JP Morgan, Bear Stearns, and Washington Mutual packaged, marketed, sold, and issued residential mortgage-backed securities (RMBS) that contributed to the financial crisis of 2008.
  • Under the settlement, JP Morgan admitted that it regularly misrepresented to RMBS investors that the mortgage loans in various securities complied with underwriting guidelines.
  • New York AG Eric Schneiderman co-chaired the state/federal working group. California, Delaware, Illinois, Massachusetts, and New York will receive shares of the $13 billion settlement.
  • For more information about this settlement, and what it means for future settlements, please visit our blog.

Utah Attorney General John Swallow Resigns

  • Utah AG John Swallow announced that he is resigning as AG, effective December 3, 2013.
  • AG Swallow became embroiled in controversy when the Alliance for a Better Utah filed a complaint against him alleging that he violated state election laws. The elections office dismissed nine of twelve allegations, but continues to look at the remaining three. The U.S. Department of Justice decided not to file charges against AG Swallow in September.
  • Governor Gary Herbert called upon the Utah Republican Party Central Committee to recommend three candidates to replace AG Swallow in a special election to be held in November 2014.
  • Brian Tarbet, former Adjutant General of the Utah National Guard, will serve as Acting AG until a formal replacement is named.

State Senator Mark Herring Clings to Slim Lead in Virginia Attorney General Election

  • More than two weeks after the Virginia General Elections, the Attorney General election results are still not certified but State Senator Mark Herring (D) maintains a lead of 164 votes (out of 2,212,321 votes) over State Senator Mark Obenshain (R).
  • Both candidates have announced their transition teams and both believe that victory is possible.
  • The election results will be certified on November 25.
  • For more information about the election and Virginia election laws, visit our blog.

CONSUMER FINANCIAL PROTECTION BUREAU (CFPB)

Director Cordray Provides Semi-Annual CFPB Report to Senate

  • CFPB Director Richard Cordray testified before the U.S. Senate Banking Committee providing the fourth semi-annual report on the progress of the CFPB.
  • Director Cordray defended the Bureau's use of credit card data after senators raised privacy concerns, explaining that the bureau only uses anonymized bulk data.
  • Director Cordray testified that the only two circumstances in which the CFPB uses personally identifying information are in direct consumer complaints and when ending a company's unlawful consumer practice in order to assure victims' issues get resolved.
  • Cordray also told the committee that the CFPB is continuing to develop rules to fill regulatory "holes" in current regulations to protect consumers, such as by providing rules for the use of prepaid debit cards.

CFPB Sues Mortgage Insurer Over Lender Kickbacks

  • The CFPB filed a complaint and proposed a consent order against Republic Mortgage Insurance Company (RMIC), alleging that the company paid illegal kickbacks to mortgage lenders in exchange for business.
  • Under the proposed settlement, RMIC would agree to stop paying kickbacks for business referrals, pay a $100,000 penalty, and submit to compliance monitoring and reporting.
  • This is the fifth similar action the CFPB has announced this year.

CFPB and DOJ Team Up to Probe Discriminatory Auto Financing Allegations

  • The CFPB and the U.S. Department of Justice are joining together to investigate possible discrimination against minorities and women in auto financing.
  • Auto dealers have discretion to mark up the interest rates on car loans, but advocates claim that the disparity between the number of white customers and the number of Black, Latino, and female borrowers that receive these marked-up rates indicates discrimination.
  • The CFPB does not have jurisdiction over car dealers, but it does have jurisdiction over the banks and lenders that provide auto financing.

CONSUMER PROTECTION

West Virginia Attorney General Applauds Court Ruling Upholding Subpoena Power

  • West Virginia AG Patrick Morrisey praised the recent state Supreme Court of Appeals ruling that upholds the AG Office's power to issue investigatory subpoenas and power to seek temporary injunctions when investigating consumer protection cases.
  • The ruling stems from a case the Attorney General's Office pursued against three New York-based companies—Cavalry SPV I, Cavalry SPV II, and Cavalry Investments—alleging the companies were collecting debts in West Virginia without a license.
  • AG Morrisey prevailed on all issues raised on appeal but one, in which the court held that an AG's investigatory subpoena cannot be enforced after a lawsuit has been filed against the company alleging the same conduct covered by the subpoena.

Twenty-seven State Attorneys General Call for Ban on Menthol Cigarettes

  • Twenty-seven State AGs asked U.S. health regulators to ban menthol cigarettes, citing a recent Food and Drug Administration report that found that menthol cigarettes appeal to younger smokers and are more difficult to quit using than regular cigarettes.
  • The AGs urged the federal regulators to take action, arguing that the federal government's delay to act on menthol cigarettes hinders the states' abilities to keep younger consumers away from cigarette smoking.
  • The AGs support a complete ban on menthol cigarettes, rather than regulations limiting the amount of menthol allowed in cigarettes, stating that a complete ban would be easier to enforce.

PVC Pipe Manufacturing Company Loses Lawsuit Brought by Three States

  • Nevada Attorney General Catherine Cortez Masto announced that a federal jury agreed that J-M Manufacturing knowingly sold and manufactured substandard PVC pipe used in water and sewer systems.
  • AG Masto alleged that J-M Manufacturers provided substandard pipes that caused at least 16 pipe failures.
  • J-M Manufacturing announced that it will appeal the verdict.
  • If the judgment is upheld on appeal, Nevada, New Mexico, and Virginia will share the judgment with numerous municipalities and water districts.

Washington Attorney General Sues Change-of-Address Service

  • Washington AG Bob Ferguson has sued Form Giant, LLC, which operates change-my-address.com, alleging that the company failed to disclose service charges and to provide full refunds.
  • Hundreds of consumers across the country have allegedly filed complaints about Form Giant.
  • AG Ferguson is seeking civil penalties up to $2,000 per violation and full customer restitution.
  • AG Ferguson alleges that the company programmed its payment screen to jump down to the middle of the payment page to where it displayed a consumer's credit card information, obscuring the pricing information.

Missouri Attorney General Settles Phone "Cramming" Allegations

  • Missouri AG Chris Koster announced a settlement with Odyssey Communication Services resolving allegations that the company placed unauthorized charges on customers' telephone bills, a practice called "cramming."
  • AG Koster alleged that Odyssey charged consumers a monthly fee for commercial-free Internet radio streaming services that consumers did not consent to purchase.
  • Under the settlement, Odyssey will pay $7,729 in customer refunds, $10,000 in penalties, and will pay $5,000 to the Missouri Merchandizing Practices Revolving Fund.

Missouri Attorney General Sues Telemarketer Over Robo-Calls

  • AG Koster has sued M.A. Infinity Marketing, Inc. and its owner, Mark Adams, alleging that the company made harassing telemarketing calls to Missourians in violation of the state's No Call law.
  • AG Koster stated that his office has received hundreds of consumer complaints about M.A. Infinity Marketing.
  • AG Koster seeks an injunction preventing M.A. Infinity Marketing from violating the No Call Law in the future, $5,000 in penalties for each violation of the No Call Law, and $1,000 for each violation of the state's Telemarketing Law.

DATA PRIVACY

Google Settles More Privacy Violation Allegations with 37 States for $17 Million

  • Google has settled allegations of improper online tracking with 37 states and the District of Columbia.
  • The states alleged that Google bypassed Safari browser settings in order to secretly track consumers' Internet activity.
  • In addition to paying $17 million, Google has agreed to refrain in the future from using the code it used to bypass security features and to maintain a webpage for at least five years that gives users information about cookies and tracking.

ENVIRONMENT

Ohio Attorney General Wins Injunction in Asbestos Case

  • Ohio AG Mike DeWine announced that a judge granted the AG's request for a preliminary injunction to order the removal of asbestos-containing material at a former industrial site.
  • Earlier this year the AG sued the owners of the site and a contractor alleging that demolition at the site violated the state's environmental and nuisance laws by failing to properly dispose of asbestos-containing materials.

HEALTHCARE

California Attorney General Shuts Down 10 Fake Health Insurance Websites

  • California AG Kamala Harris shut down 10 private health insurance websites that allegedly misled consumers by imitating Covered California, the state's official insurance marketplace for the Patient Protection and Affordable Care Act (ACA).
  • AG Harris sent cease and desist letters to the operators of websites informing them that they were violating state law and demanding that the operators remove the sites or redirect them to the www.CoveredCA.com website. All operators who were contacted by the AG have complied with the request to remove or redirect the websites.
  • AG Harris also released tips to help protect consumers from insurance scams.

MORTGAGES/FORECLOSURES

California Attorney General's Lawsuit Against S&P to Proceed

  • California AG Kamala Harris' lawsuit against Standard and Poor's (S&P) alleging that the company is responsible for $1 billion in losses by the state pension funds has survived a second motion to dismiss the lawsuit.
  • A judge denied S&P's request to dismiss the lawsuit on grounds that it is a malicious lawsuit intended to intimidate the credit rating agency. AG Harris defeated a previous attempt to dismiss the suit on the grounds that the state lacked standing to sue and that the state had delayed bringing the claims too long.
  • AG Harris alleges that S&P gave mortgage-backed securities a triple A rating, implying that they were a safe investment, when in fact the securities were very risky. AG Harris alleges that the company used the ratings to bolster business rather than using objective analysis to determine ratings.

STATE V. FEDERAL GOVERNMENT

Oklahoma Attorney General to Petition SCOTUS to Review Regional Haze Case

  • Oklahoma AG Scott Pruitt announced his intention to seek the U.S. Supreme Court's (SCOTUS) review of Oklahoma's regional haze case against the U.S. Environmental Protection Agency (EPA).
  • AG Pruitt testified before the U.S. House Subcommittee on Energy and Power on the importance of his suit against the EPA, which will affect a state's ability to implement state-based solutions to haze.
  • In the lawsuit, AG Pruitt claims that the EPA rejected Oklahoma's plan to meet the regional haze requirements and implemented a federal plan, instead, even though the state's plan met the haze requirements.
  • AG Pruitt's petition to SCOTUS, which is due in January, follows the Tenth Circuit's rejection of his request for a rehearing en banc.

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