State AG Monitor

State AGs in the News

Posted in Consumer Protection, Data Privacy, Mortgages/Foreclosures, State AGs in the News, States v. Federal Government

Click here for a Calendar of Upcoming AG Events in 2011-2012.

Data Privacy and Security

Maryland AG Announces National Association of Attorneys General (NAAG) Presidential Initiative

  • Maryland AG and NAAG President-Elect Douglas Gansler announced that his 2012-2013 Presidential Initiative will relate to privacy and the Internet.
  • This initiative will focus on protecting the privacy of personal information, particularly financial data; the use of personal data for marketing purposes (behavioral advertising); and corporate data from intellectual property infringement.

Mortgage/Foreclosure Abuses

Multi-State Foreclosure Settlement is “Getting Closer”

  • The Obama Administration is prodding the State AGs, led by Iowa AG Tom Miller, to agree to a settlement with the nation’s largest banks over their foreclosure practices as the one-year anniversary of the investigation approaches.
  • The current deal calls for $20 billion in fines, mortgage forgiveness, new compliance systems, and consumer education; revised mortgage foreclosure practices; and limits on the banks’ liability.
  • According to Iowa AG Miller, however, any settlement would not prevent municipalities from suing banks for allegedly cheating them out of millions of dollars in filing fees, or individual States from pursuing claims against banks under state securities laws.
  • Several AGs, including New York AG Eric Schneiderman, Delaware AG Beau Biden, Massachusetts AG Martha Coakley, and Nevada AG Catherine Cortez Masto, have raised concerns about the scope of the proposed liability releases, saying that the banks should not receive releases for matters that have not been fully investigated, including the packaging of mortgage loans into securities and the use of a mortgage database (“MERS”).
  • According to Dickstein Shapiro’s Bernie Nash, “The banks may be resigned to the fact that they’re not going to be released from securitization [claims]. They ought to settle what they can. They won’t get it all done in the near term.”

California AG Considers Focus on White Collar and Cybercrimes

  • According to a draft internal white paper, the office of California AG Kamala Harris is considering shifting its focus to white collar crimes, including mortgage fraud, and cybercrimes in the wake of state budget cuts to units that focus on gang and drug enforcement.
  • The proposal comes as the AG’s office faces a $71 million budget cut over the next few years, which AG Harris has been resisting. The draft white paper, not yet approved by the AG, suggests a shift in focus from gang and drug crimes to more complex crimes like mortgage fraud, white collar crimes such as securities fraud, computer crimes, and international crimes.
  • AG Harris had already begun focusing her office on white collar crimes in the form of the California Mortgage Fraud Strike Force, a group of 17 attorneys and eight special agents created in May 2011 to combat fraudulent lending practices, financial scams, and corporate fraud, including fraud in the sale of securitized subprime mortgages to investors.

Oregon AG Settles with Loan Modification Company

  • Oregon AG John Kroger announced an agreement on Friday with a California loan modification company, American Team Mortgage Inc. d/b/a American Mortgage Relief (“American”), for allegedly taking illegal upfront fees to provide loan modifications and then failing to provide any services or offer any refunds.
  • According to the complaint, although most of the clients were current on their mortgage payments, the defendants allegedly encouraged them to skip at least one payment, claiming it would encourage their lender to renegotiate.
  • Under the terms of the settlement, American will provide $67,000 in restitution to 28 Oregon homeowners, in addition to $65,000 to the State for its consumer protection efforts.

Consumer Protection

Wisconsin AG Settles with Consumer Financing Company

  • Wisconsin AG J.B. Van Hollen announced a settlement of a multi-year suit against the former owner of two recently-defunct companies, BlueHippo Funding, LLC, and BlueHippo Capital, LLC, for alleged violations relating to deceptive advertising and consumer credit.
  • According to the complaint, the companies targeted low-income consumers with poor credit histories, offering to finance computers and other electronic merchandise. However, many consumers did not receive the merchandise within the represented time frame, and some never received the ordered merchandise at all.
  • Under the terms of the agreement, the former owner agreed not to conduct a similar business in Wisconsin for three years; pay the State $160,000 to be used to provide restitution to injured consumers and to defray the State’s costs of bringing its enforcement action; and cancel more than $500,000 in outstanding debt of Wisconsin consumers. The settlement does not cover the corporate defendants, and the State continues to pursue a judgment against them.

States vs. Federal Government: EPA Regulations

25 States and Guam File Amicus Brief in Support of Delay in Implementation of New Emissions Regulations

  • The amicus brief filed in the U.S. District Court for the District of Columbia (American Nurses Association, et al. vs. Lisa P. Jackson, and Administrator of The United States Environmental Protection Agency) requests that the court postpone the implementation of the EPA’s proposed Utility Maximum Achievable Control Technology (MACT) rule, which would create a new federal regulation to address the emissions of hazardous air pollutants from oil-fired and coal power plants. Power plants unable to meet the new limits mandated by the EPA may be forced to shut down.
  • The brief argues that extending implementation by one year to Nov. 16, 2012 would give the EPA additional time to respond to the States’ concerns, fix potential technical flaws, and undergo a further review of the economic ramifications of the regulation.
  • The 25 States filing the amicus brief include Alabama, Alaska, Arizona, Arkansas, Colorado, Georgia, Florida, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Nebraska, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming, as well as the Territory of Guam.

Unclaimed Property

Indiana AG Encourages Residents to Check Unclaimed Property Records

  • Indiana AG Greg Zoeller announced that $1,005,993 in unclaimed property has been returned to residents in southern Indiana this year.
  • In 2010, the AG’s office returned more than 68,000 properties totaling more than $40.1 million, and the State’s unclaimed property database holds more than $350 million in assets.