The National Attorneys General Training & Research Institute
Consumer Protection News September 2016
The following is a compendium of information that may be of interest to our AG offices who are dealing with consumer protection issues. Neither the National Association of Attorneys General nor the National Attorneys General Training & Research Institute expresses a view as to the accuracy of the matters, nor as to the position expounded by the authors of the hyperlinked materials.
NAAG Fall Consumer Protection Conference
The 2016 Fall Consumer Protection Conference will be held October 3 – 5 in Phoenix, AZ. This two and one-half day conference will include both public and private and seeks to address pressing and relevant issues specific to the role in the Consumer Protection Division of the attorney general's office. Topics for the public session will include Fintech companies, CFPB payday rules and crowd funding. Private session topics will include a multistate roundtable, IRS debt collection calls and scams, auto fraud, bioidentical hormone replacement therapy, rental housing and consumer protection laws, new issues discussion, scam text alters, charity fraud and sale of structured settlements. For more information or to register for the conference, go to http://www.naag.org/meetings-trainings/other/fall-consumer-protection-meeting.php
NAAG / NASCO Conference
This year’s NASCO Conference will be held in Washington D.C. at the Westin Washington Center and will run from October 17 - 19. Monday’s session is open to the public and provides an opportunity for representatives of the nonprofit sector to meet and participate in discussions with state regulators and vice versa. Tuesday and Wednesday are regulator only days and provide significant opportunity for state charity regulators to discuss the latest topics and learn from each other.
The theme for this year’s conference is “The Evolving World of State Charities Regulation.” The agenda for both the public day and the regulator only days will offer a mix of presentations by state regulators and speakers from the non-profit sector addressing this theme, including presentations on the increased development of non-traditional models of philanthropy and the development of new tools for the nonprofit sector.
For more information, go to http://www.naag.org/meetings-trainings/other/naagnasco-conference-2016.php
Multistate Investigations and Settlements
Barclays Bank PLC and Barclays Capital Inc / LIBOR
A $100 million settlement was reached with Barclays Bank PLC and Barclays Capital Inc. for fraudulent and anticompetitive conduct involving the manipulation of the London Interbank Offered Rate (LIBOR). This is a benchmark interest rate that affects financial instruments worth trillions of dollars and has a widespread impact on global markets and consumers.
The investigation, conducted by a multistate working group of 44 State Attorneys General, led by the Attorneys General of New York and Connecticut, revealed that Barclays manipulated LIBOR through two different kinds of fraudulent and anticompetitive conduct. First, in 2007-2008, during the financial crisis period, Barclays’ managers frequently told LIBOR submitters to lower their LIBOR settings in order to avoid the appearance that Barclays was in financial difficulty and needed to pay a higher rate than some of its peers to borrow money. Second, at various times from 2005 to 2007 and continuing at least into 2009, Barclays’ traders asked Barclays’ LIBOR submitters to change their LIBOR settings in order to benefit their trading positions, and the submitters often agreed to the requests. At times, those requests came from traders outside the bank, and Barclays traders agreed to pass them along to Barclays’ submitters, thus colluding with other banks. Barclays also believed that other banks’ LIBOR submissions likewise did not reflect their true borrowing rates, and that therefore, published LIBOR did not reflect the cost of borrowing funds in the market, as it was supposed to do.
Barclays is the first of several USD-LIBOR-setting panel banks under investigation by the State Attorneys General to resolve the claims against it, and Barclays has cooperated fully from the outset. The states joining the Barclays settlement include: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming
The investigation into the conduct of several other USD LIBOR-setting panel banks is ongoing.
Federal Consumer Protection Agencies
Consumer Financial Protection Bureau
CFPB Open Notices:
Notice of Proposed Rulemaking on Payday, Vehicle Title, and Certain High-Cost Installment Loans
The CFPB seeks feedback on practices and products that are related to but may not be addressed in the Bureau's concurrently published Notice of Proposed Rulemaking on Payday, Vehicle Title, and Certain High-Cost Installment Loans (Concurrent Proposal).
Deadline to submit a formal comment OCT 7, 2016
Amendments to Federal Mortgage Disclosure Requirements under the Truth in Lending Act (Regulation Z)
The Bureau of Consumer Financial Protection (Bureau) is proposing various amendments to Federal mortgage disclosure requirements under the Real Estate Settlement Procedures Act and the Truth in Lending Act that are implemented in Regulation Z.
Deadline to submit a formal comment OCT 18, 2016
For more information: https://www.regulations.gov/document?D=CFPB-2016-0038-0001
Request for Information
Request for Information on Payday Loans, Vehicle Title Loans, Installment Loans, and Open-End Lines of Credit
Deadline to submit a formal comment NOV 7, 2016
For more information: https://www.regulations.gov/document?D=CFPB-2016-0026-0001
First National Bank of Omaha Ordered to Pay $32.25 Million for Illegal Credit Card Practices
The Consumer Financial Protection Bureau (CFPB) has ordered First National Bank of Omaha to provide $27.75 million in relief to roughly 257,000 consumers harmed by illegal practices with credit card add-on products. The bank used deceptive marketing to lure consumers into debt cancellation add-on products and it charged consumers for credit monitoring services they did not receive. First National Bank of Omaha will also pay a $4.5 million civil money penalty to the CFPB.
Action Taken Against Wells Fargo for Illegal Student Loan Servicing Practices
The Consumer Financial Protection Bureau (CFPB) took action against Wells Fargo Bank for illegal private student loan servicing practices that increased costs and unfairly penalized certain student loan borrowers. The Bureau identified breakdowns throughout Wells Fargo’s servicing process including failing to provide important payment information to consumers, charging consumers illegal fees, and failing to update inaccurate credit report information. The CFPB’s order requires Wells Fargo to improve its consumer billing and student loan payment processing practices. The company must also provide $410,000 in relief to borrowers and pay a $3.6 million civil penalty to the CFPB.
Proposed Rule Regarding Pre-dispute Arbitration Agreements
A number of states signed on to a letter to Director Cordray in support of the CFPB’s proposed rules regarding pre-dispute arbitration clauses in consumer financial products and services contracts. A copy of the letter may be found at http://www.mass.gov/ago/docs/consumer/cfpb-multistate-letter.pdf.
CFPB Monthly Complaint Report, Vol. 14 (August 2016) Available
Federal Communications Commission
Report and Order and Notice of Proposed Rulemaking
Commission Review of State Opt-Out Requests from the FirstNet Radio Access Network
The item was adopted on August 24, 2016 and released on August 26, 2016.
Deadline to submit Comment: 30 days after publication in Federal Register
Deadline to submit Reply Comment: 60 days after publication in Federal Register
Report and Order and Notice of Proposed Rulemaking: https://ecfsapi.fcc.gov/file/0826187982232/FCC-16-117A1.pdf
Robocall Strike Force Comments Available
Remarks of members of the Commission are available online from the FCC’s First Robocall Strike Force Meeting held August 19, 2016.
For more information: https://www.fcc.gov/news-events/headlines
Federal Trade Commission
Final Rule Amendments Related to E-Warranty Act
The Federal Trade Commission has announced final amendments to its Disclosure Rule and Pre-Sale Availability Rule to give effect to the E-Warranty Act.
Under the Magnuson-Moss Warranty Act (MMWA), in 1975, the FTC promulgated the Disclosure Rule, which provides disclosure requirements for written warranties on products that cost more than $15, specifies language for certain disclosures, and requires simple language in a single document, and the Pre-Sale Availability Rule, which describes how warrantors and sellers must provide warranty terms before a sale.
Florida Mortgage Relief Scammers – Lanier Law, LLC
The principals of a mortgage relief operation and their companies are banned from the mortgage loan modification and debt relief business under court orders obtained by the Federal Trade Commission. The orders resolve charges that the scheme falsely promised financially distressed homeowners they would receive legal representation to prevent foreclosure or lower their mortgage payments and interest rates, and illegally charged thousands of dollars in advance.
The FTC charged the Jacksonville, Florida-based operation in 2014 as part of a federal-state enforcement sweep, Operation Mis-Modification. The court subsequently ordered defendants to stop misleading consumers and froze their assets pending litigation.
Roundtable October 20, 2016 to Examine Consumer Perceptions of “Organic” Claims for Non-Agricultural Products
The Federal Trade Commission and the U.S. Department of Agriculture (USDA) will co-host a roundtable in Washington, D.C. on October 20, 2016, to help the agencies better understand how consumers perceive “organic” claims for non-agricultural products, such as personal care products.
At the roundtable, invited panelists, including consumer advocates, industry representatives, and academics, will discuss the following topics:
· Consumers’ interpretations of “organic” claims for products and services that generally fall outside the scope of the USDA Agricultural Marketing Service’s National Organic Program;
· A recent FTC-USDA study on organic claims, including its methods, limitations and conclusions; and
· Approaches to address potential deception, including consumer education.
The roundtable is open to the public.
Advisory to Financial Institutions on E-Mail Compromise Fraud Schemes
On September 6, 2016, the Financial Crimes Enforcement Network (FinCEN) issued an advisory to help financial institutions guard against a growing number of e-mail fraud schemes in which criminals misappropriate funds by deceiving financial institutions and their customers into conducting wire transfers. This advisory also provides red flags—developed in consultation with the Federal Bureau of Investigation and the U.S. Secret Service—that financial institutions may use to identify and prevent such e-mail fraud schemes. Business E-mail Compromise (BEC) and E-mail Account Compromise (EAC) schemes are among the growing trend of cyber-enabled crime adversely affecting financial institutions. Since 2013, there have been approximately 22,000 reported cases of BEC and EAC fraud involving $3.1 billion.
Consumer Protection News welcomes submissions for inclusion in future editions.
Mark Neil is the Editor of Consumer Protection News and may be reached at 202-326-6019.
Consumer Protection News is a publication of the National Association of Attorneys General (NAAG). Any use and/or copies of this newsletter in whole or in part must include the customary bibliographic citation. For content submissions or to contact the editor directly, please e-mail firstname.lastname@example.org.