United States: State AGs In The News - April 23rd, 2015

Consumer Financial Protection Bureau

CFPB Settles With Military Payroll Processor Over Camouflaged Fees

  • The Consumer Financial Protection Bureau (CFPB) settled with Fort Knox National Company and its subsidiary, Military Assistance Company, LLC, for charging hidden fees when processing military allotments in violation of the Consumer Financial Protection Act (CFPA). The military allotment system allows service members to transfer a portion of their pay into a pooled bank account out of which a processor makes payments to service members' creditors.
  • The CFPB alleged that the companies failed to send statements to clients and did not disclose certain fees charged in connection with their processing services, including a $5 fee to send a letter to the service member or to their current or past creditors, as well as a recurring monthly fee of $12 to $20 if an account sat idle with a positive balance for more than six months.
  • The consent order requires the respondents to pay $3.1 million in monetary relief to be administered by the CFPB as redress for injured consumers. It also requires respondents to cease all actions alleged to be in violation of the CFPA, to assist the CFPB in locating injured consumers, and to create and maintain records that demonstrate compliance with the order for five years.

Consumer Protection

Vermont Attorney General Adopts Regulations to Clarify State's "GE" Labeling Requirements

  • Vermont AG Bill Sorrell formally adopted regulations to implement Act 120, Vermont's law requiring that food products made with genetically engineered ingredients provide certain disclosures on the label.
  • The new regulations, Consumer Protection Rule 121 (Rule), set forth the requirements for labeling unpackaged and packaged food produced or partially produced with genetic engineering, provide the format for sworn statements certifying that foods were not produced with genetic engineering (when applicable), and outline a safe harbor period whereby the AG will provide 30 days' notice prior to issuing a civil investigative demand or initiating an enforcement action against any retailer alleged to be in violation of Act 120.
  • The Rule indicates that violators can be liable for civil penalties up to $1,000 per day, per "uniquely named, designated and marketed product" in violation of the Rule. Act 120 and the Rule take effect on July 1, 2016.

FTC and CFPB Bring Lawsuit Against Mortgage Servicer

  • The Federal Trade Commission (FTC) joined with the Consumer Financial Protection Bureau (CFPB) to bring a lawsuit in federal court in Minnesota alleging that Green Tree Servicing, LLC, violated the FTC Act, the Consumer Financial Protection Act, Fair Credit Reporting Act, Fair Debt Collections Practices Act, and the Real Estate Settlement Procedures Act in connection with its residential mortgage loan servicing and debt collection practices.
  • The complaint alleges that Green Tree failed to honor loan modification agreements in connection with mortgages it acquired from prior servicers; delayed recognition of the in-process modification status of other borrowers; demanded payment from struggling borrowers without providing loss mitigation options such as loan modifications, deferrals, extensions or forbearances; and employed aggressive and threatening debt collection practices.
  • The proposed stipulated order, which must be approved by the court, requires Green Tree to pay $48 million in consumer redress and $15 million in civil penalties. The order also requires Green Tree to implement programs that enhance consumer loss mitigation options, ensure the accuracy of consumer loan information before servicing the loans, and substantiate collection amounts when consumers are in the process of loan modifications or when there is reason to believe that Green Tree has flawed loan information.

Data Privacy

Delaware Attorney General Announces Quartet of Online Privacy Bills

  • Delaware AG Matt Denn and state lawmakers announced an array of proposed legislation to increase consumer privacy on the internet and through social media. AG Denn indicated that the proposals are designed to be consistent with laws already on the books in other states such as California and Georgia. The proposals include the following, which will be introduced in the upcoming legislative session:
    • The Delaware Online Privacy and Protection Act, which would restrict marketing of certain products to children and require commercial internet services that collect personally identifiable information to provide users with an explanation as to how the service uses that information.
    • The Employer Use of Social Media Act, which would prohibit employers from requiring employees and applicants to provide the employer with access to personal social media accounts.
    • The Victim Online Privacy Act, which would make it unlawful to post or solicit information online related to a participant in the Department of Justice's Address Confidentiality Program for the purpose of inciting violence or harm to that person.
    • The Student Data Privacy Protection Act, designed to create guidelines for school districts, schools, teachers, and staff regarding permissible methods of collecting and using student data for appropriate educational purposes. It would also create procedures to protect the privacy and data security of students and their parents/guardians.


New York Attorney General Presses Legislation to Ban Microbeads

  • New York AG Eric Schneiderman announced that the Microbead-Free Waters Act—legislation designed to address the increased presence of plastic microbeads from personal care products in waters across the state—passed the State Assembly and now awaits consideration by the Senate.
  • Microbeads are used as abrasives in consumer products like toothpaste and body scrubs in lieu of natural materials like ground almonds or pumice. According to the AG, because microbeads are made of plastic, they absorb a variety of chemicals they come into contact with, and over time they become "toxic-sponges." If released from a controlled system, such as municipal wastewater treatment, they can become a hazard for aquatic ecosystems.
  • The Act seeks to ban the sale of any cosmetic product in which microbeads are intentionally added; it defines microbeads as sub-five-millimeter plastic components of personal cosmetic products. The recent legislative efforts to ban microbeads stem from a study conducted by AG Schneiderman, which identified a large number of wastewater treatment facilities from which microbeads are being discharged.

States v. Federal Government

Supreme Court Holds State Antitrust Laws Not Preempted by U.S. Natural Gas Act

  • The U.S. Supreme Court issued a 7-2 decision in favor of the respondents in ONEOK, Inc. v. Learjet, Inc., holding that the U.S. Natural Gas Act does not preempt state antitrust laws that seek to prevent price-fixing in retail gas markets.
  • The dispute consolidated multiple lawsuits, originally brought in state courts, into one multi-district litigation in the District of Nevada. The original plaintiffs (respondents at the Supreme Court) included an array of retail gas purchasers, from manufacturers to school districts and universities. The original defendants (petitioners at the Supreme Court) were a group of interstate pipelines and gas providers.
  • The decision was in line with arguments made by a group of 21 AGs, led by Kansas AG Derek Schmidt, through an amici brief. The AGs had emphasized the distinction between the federal law's intent to occupy the field when regulating interstate wholesale markets, and the state interest to protect consumers and small businesses purchasing through in-state retail markets. The petitioners, backed by an amicus brief from the federal government, had argued that the state laws were preempted because the challenged industry practices, although applied at the retail level, affected the interstate wholesale market.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions