United States: State AG In The News - October 22nd, 2015

Consumer Financial Protection Bureau

CFPB's Final Rule Looks to Expand and Improve Mortgage Lending Data

  • The Consumer Financial Protection Bureau (CFPB) finalized the Rule to update lenders' reporting requirements under the Home Mortgage Disclosure Act (HMDA). The goal of enhanced data gathering under the Rule is to give policymakers greater transparency into consumers' ability to access the residential mortgage market. The Rule adopts a "dwelling-secured" standard, applying only to loans secured by the house, including home equity loans and reverse mortgages, but excluding home improvement loans and other unsecured lines of credit.
  • The Rule expands the scope of data that mortgage lenders are required to make public, now including disclosure of the property value, term and type of the loan (e.g., adjustable rate, balloon payment, etc.), and the duration of any introductory interest rates. Financial institutions will also be required to give more information as to loan underwriting and pricing, including debt-to-income ratio of the borrower and any discount points charged for the loan.
  • The Rule also seeks to streamline reporting and to expand protections for smaller lenders. Small depository institutions located outside a metropolitan area are excluded from reporting requirements altogether. In addition, the Rule creates a reporting threshold under which depository institutions that have low residential mortgage loan volume will no longer be required to report HMDA data.

Consumer Protection

FTC Settles With Wireless Provider Over Alleged Violation of Risk-Based Pricing Rule

  • The Federal Trade Commission (FTC) reached an agreement with Sprint Corporation over allegations that the mobile communications provider violated the Fair Credit Reporting Act (FCRA) by failing to give proper notice when it charged extra fees to customers with lower credit scores.
  • The Risk-Based Pricing Rule, added to the FCRA in 2003, requires that any company that uses consumer credit reports in connection with providing credit on terms less favorable than those given to a substantial proportion of consumers, must provide notice prior to the consummation of the transaction. The Rule outlines how this notice must be drafted and the information it must provide. The FTC alleged that Sprint placed certain customers in an "Account Spending Limit" program, and charged an additional monthly fee of $7.99 without providing the required notice, or if they did, the notice came too late to allow the customer to cancel and choose a different provider.
  • The proposed settlement requires Sprint to pay a penalty of $2.95 million, and to alter company procedure to give affected customers notice within five days of signing up, or at a point where they can still avoid reoccurring fees and cancel without a penalty. The proposed order was filed in U.S. District Court on the FTC's behalf by the Department of Justice (DOJ) and awaits approval in the District of Kansas.

Data Privacy

California Amends Data Breach Laws to Clarify Standards

  • California Governor Jerry Brown recently signed into law a series of amendments to further enhance the state's data privacy and breach notification requirements. The new laws apply to all businesses conducting business in the state that store personal information in electronic format and will take effect on January 1, 2016.
  • Assembly Bill 964 further clarified requirements to use an existing safe harbor provision for encrypted data. Under the new law, for data to be deemed "encrypted," the company must store it in a manner that renders it "unusable, unreadable or indecipherable to an unauthorized person through a security technology or methodology generally accepted in the field of information security." As this language is not contingent on a specific technology, it may be adapted as technologies continue to improve.
  • Senate Bill 570 creates a standard format for companies to provide data breach notification to consumers. According to the law, the notification must be titled "Notice of Data Breach," and must include explanations under subheadings titled "What Happened?" "What Information Was Involved?" "What We Are Doing," and "What You Can Do." The new law allows for substitute notice through a conspicuous posting on the business's homepage remaining for at least 30 days.

False Claims Act

Medical Laboratory Agrees to $256 Million FCA Settlement

  • Millennium Health reached a settlement with the U.S. Department of Justice (DOJ) to resolve allegations that the medical laboratory violated the U.S. False Claims Act by billing Medicare and Medicaid for unnecessary urine-based drug and genetic tests.
  • The DOJ alleged that Millennium encouraged doctors—essentially creating a standard operating procedure—to order large numbers of urine drug and genetic tests without regard for individualized patient assessments. The DOJ also alleged that Millennium violated the Stark law and anti-kickback law by giving certain drug test materials to doctors free of charge on the condition that they use Millennium as their drug test service provider.
  • Millennium agreed to pay $256 million and to enter into a corporate integrity agreement with the Department of Health and Human Services. Whistleblowers who initially filed eight separate cases will split $31.8 million. In a statement, Millennium's CEO indicated that "it was time to bring closure to an investigation that began nearly four years ago." Millennium reported that it is currently in the process of restructuring its debt, either with lenders directly or through Chapter 11 filing.

New York Court of Appeals Rules Failure to Collect State Sales Taxes Can Be False Claim

  • New York's highest court has denied a motion to dismiss and ruled that AG Eric Schneiderman can move forward with his lawsuit against Sprint for allegedly violating the state False Claims Act by failing to charge state taxes on wireless phone services.
  • AG Schneiderman brought the lawsuit in 2012, alleging that Sprint knowingly failed to collect more than $100 million in New York sales taxes for sales of mobile telephone services. The lawsuit alleged that Sprint knowingly did not collect taxes as part of a strategy to make its overall prices more competitive when compared to other service providers that charged the state taxes. AG Schneiderman is seeking $300 million in damages and penalties.
  • Sprint argued that the New York False Claims Act should not apply to service fees based on interstate calls as these were governed by the federal Mobile Telecommunications Sourcing Act. Sprint also argued that the New York law, which was passed in 2010, could not be applied retroactively to taxes not collected prior. The Court of Appeals rejected both arguments.

State and Local Governments Reach Agreement With Package Delivery Company

  • Fourteen states, Chicago, New York City, and the District of Columbia all reached an agreement with United Parcel Service, Inc. (UPS) resolving allegations that the world's largest package deliverer violated various false claims acts by overcharging the governments for next-day and overnight deliveries.
  • The government intervenors alleged that UPS employees entered false delivery times for packages sent to government customers, indicating that the package had arrived on time to qualify as next-day when in fact it had arrived late; they also alleged UPS employees entered inappropriate exception codes (e.g., claiming adverse weather conditions despite sunny weather) to excuse late packages. UPS's actions prevented the government customers from claiming refunds for the late deliveries.
  • The Settlement Agreement requires UPS to pay $4 million to be distributed among the government intervenors accordingly. UPS must institute programs to improve training, monitoring, and reporting regarding delivery failures and policy violations.

Financial Industry

French Bank Settles With Cadre of Regulators Over Sanctioned Transactions

  • The DOJ has reached a forfeiture and deferred prosecution agreement with Crédit Agricole Corporate and Investment Bank (CACIB) to resolve allegations that the French bank violated U.S. sanctions laws, and New York banking transparency and record-keeping laws, by facilitating and then hiding financial transactions on behalf of entities in Cuba, Iran, and Sudan. CACIB also reached agreements with the U.S. Treasury Office of Foreign Assets Control, the Federal Reserve Board of Governors, the Manhattan District Attorney's Office, and the New York Department of Financial Services (NYDFS).
  • The federal and state regulators had alleged that CACIB, through its foreign subsidiaries and affiliates, omitted and changed information in various wire transactions to mask the fact that the bank was facilitating payments on behalf of sanctioned entities. The NYDFS specifically alleged that CACIB's Geneva branch created special processing methods (e.g., "Sudanese U-turn") to hide the sanctioned transactions as they passed through the New York branch.
  • The bank is required to pay combined penalties of $787 million: the NYDFS came down particularly hard with $385 million in civil penalties and the requirement that the bank fire certain employees involved; the Federal Reserve will take $90 million; the Manhattan District Attorney's Office will receive $156 million, and $156 million will go to the U.S. Attorney's Office for the District of Columbia.

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
Related Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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