Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

CFPB

  • The Consumer Financial Protection Bureau (“CFPB”) issued a consent order against fintech company GreenSky, LLC for allowing contractors and other sellers to take out unauthorized loans on consumers’ behalf. The CFPB’s consent order requires the company to pay a $2.5 million civil penalty, provide up to $9 million in loan cancellations and cash refunds, and use verification practices to prevent future abuses.

Consumer Protection

  • Washington D.C. Attorney General Racine announced new legislation that will strengthen protections for consumers in DC against unfair and abusive debt collection activities. Specifically, the legislation is intended to modernize DC debt collection law by covering medical and credit card debt, increasing penalties, adding the ability to seek punitive damages, clarifying that it applies to debt buyers, and prohibiting harassment, among other things.

Energy

  • Connecticut Attorney General Tong applauded a draft decision by the Public Utilities Regulatory Authority rejecting a $20 million rate increase request by Connecticut Water. Attorney General Tong had previously opposed the rate increase, maintain that it was unnecessary and excessive costs could be eliminated so that a rate increase was not needed.

Environmental

  • A coalition of 16 attorneys general is asking the U.S. Environmental Protection Agency not to reinstate the waiver for California under the Clean Air Act, which previously allowed California to set its own vehicle carbon emissions standards.

Tuesday, July 13, 2021

Financial Misconduct

  • New York Attorney General James announced a settlement with TIAA-CREF Individual & Institutional Services, Inc., which is a subsidiary of the Teachers Insurance and Annuity Association of America, under which the company agreed to pay $97 million in restitution to consumers misled into moving their retirement investments into the company’s higher-fee accounts. The company has also agreed to make internal reforms such as holding rollover recommendations to a higher fiduciary standard and disclosing when advisors are not acting as fiduciaries.

Medicaid Fraud

  • Kentucky Attorney General Cameron announced that Kentucky has joined a multistate settlement with Bristol-Myers Squibb Company for allegedly overcharging Medicaid programs for drugs by underpaying drug rebates. Bristol-Myers has agreed to pay $75 million.
  • New Hampshire Attorney General Formella announced that the owner of home care company Alternative Care @ Home, LLC has agreed to pay $1,000,000 in restitution for submitting Medicaid reimbursement claims for services not provided between 2015 and 2018.

Transportation

  • A coalition of 18 attorneys general co-led by New York Attorney General James and Connecticut Attorney General Tong sent a letter to the National Highway Traffic Safety Administration (“NHTSA”) and the U.S. Department of Transportation asking the agencies to enact more stringent measures to protect children in car seats. Specifically, the letter asks NHTSA to create side-impact testing standards for car seats and to require that all car seat labels include guidance that every child should stay in the same seat until it exceeds the child’s weight or height maximum.

Wednesday, July 14, 2021

Consumer Protection

  • New York Attorney General James announced an arrangement with Greentree Country Club that the club will refund $427,000 to 76 consumers who were denied refunds for events that were cancelled because of COVID-19.

Criminal Fraud Scheme

  • Pennsylvania Attorney General Shapiro announced that his office filed a lawsuit against company PA Certificate Service for scamming businesses in the state by sending letters claiming that they needed to apply for a certificate of good standing, which are optional, and then charging them double the cost for a certificate.

Deceptive Claims

  • Massachusetts Attorney General Healey announced that fuel delivery company Diesel Direct, LLC as well as its chief executive officer and senior vice president must pay $850,000 to resolve allegations that the company knowingly sold nonconforming petroleum diesel fuel to state agencies while charging for a more environmentally friendly fuel. The settlement also resolves accusations that the company failed to comply with diversity spending requirements and requires the company not to participate in state contracts for five years.

Energy

  • Connecticut Attorney General Tong applauded a decision by the Public Utilities Regulatory Authority imposing a $29 million civil penalty against Eversource for failing to meet its obligations to consumers after Tropical Storm Isaias.

Thursday, July 15, 2021

California Dept. of Justice

  • California Attorney General Bonta announced the creation of the Office of Community Awareness, Response, and Engagement (“CARE”) within California’s Department of Justice. CARE’s goal is to cultivate relationships with historically marginalized and underrepresented communities and to work to meet their needs.

Environmental

  • California Attorney General Bonta and the California Air Resources Board led a multistate coalition in petitioning the Environmental Protection Agency to use its American Innovation and Manufacturing Act authority to create stricter regulations for hydrofluorocarbon emissions.

Financial Misconduct

  • Arizona Attorney General Brnovich announcedthat his office filed a lawsuit against Deed and Note Traders, LLC, 881 Home, LLC, and their manager for allegedly deceiving consumers in real estate transactions by selling homes under a “wrap mortgage” and failing to make payments on the underlying mortgages despite receiving down payments. The companies also allegedly failed to provide title reports and minimum 15-year loan repayment terms. The lawsuit seeks restitution, civil penalties, fees and costs, and the amount owed on a 2006 Consent Decree with the State.

Price Gouging

  • As part of the 2021 hurricane season, Florida Attorney General Moody highlighted Florida’s No Scam Price Gouging Reporting App and that it is available in both English and Spanish. The press release states that the app has been downloaded by over 21,000 consumers and has assisted with over 2,200 price gouging reports.

Friday, July 16, 2021

Education

  • Massachusetts Attorney General Healey applauded that the U.S. Department of Education withdrew its appeal of a federal court order cancelling former Corinthian Colleges, Inc. students’ loans. The Department has agreed to discharge the federal loans of all Massachusetts students covered by Attorney General Healey’s group borrower defense application, setting a validity precedent for state attorneys’ general group discharge applications.

Price Gouging

  • Kentucky Attorney General Cameron announced a settlement with convenience store and fuel retailer Brothers Market, resolving price gouging allegations for fuel after the Colonial Pipeline shutdown. The Attorney General’s Office has waived civil penalties if the store complies with the settlement, and the store has agreed to profit disgorgement and injunctive relief.
  • California Attorney General Bonta announced that the State’s price gouging law is in effect in Siskiyou, Lassen, and Plumas counties due to wildfires.

Consumer Protection—Debt Collection

  • Massachusetts Attorney General Healey announced guidance stating that federal child tax credits are exempt from seizure or garnishment by debt collectors, and that any attempted seizure or garnishment violates Massachusetts’ Debt Collection Regulations.