The State AG Report 1.21.2021: Impostor Government Invoices | Car Dealer Employees Working Without Pay? | Democratic AGs v. Trump Administration

State AGs in the News

Alaska Governor Nominates Acting Attorney General to Be Attorney General

 Consumer Financial Protection Bureau

CFPB and NCUA Agree on Greater Cooperation in Supervising Credit Unions

  • The Consumer Financial Protection Bureau (“CFPB”) entered into a memorandum of understanding agreement (“MOU”) with the National Credit Union Administration (“NCUA”) to improve the coordination of supervisory responsibilities of credit unions with over $10 billion in assets.
  • According to the CFPB, under the terms of the MOU, CFPB and NCUA will endeavor to more proactively and efficiently share supervisory information through secure two-way electronic means, including sharing draft and final Reports of Examination for credit unions covered by the MUA. The two agencies will also jointly participate in semi-annual strategy planning sessions to further enhance alignment and coordination during examinations of covered credit unions, and will share information on training activities and content.
  • The MOU’s purpose is to reduce redundancy and unnecessary overlap between the supervisory activities of the two agencies.

Mortgage Lender Sued Over Allegations of Unlicensed Employees, Misleading Mortgage-Origination Practices

  • The CFPB sued mortgage lender 1st Alliance Lending, LLC, and related individuals (collectively “1st Alliance”) over allegations that it used unlawful and misleading mortgage-origination practices in violation of the Truth in Lending Act and its implementing regulation, Regulation Z, the Fair Credit Reporting Act, the Equal Credit Opportunity Act, the Mortgage Acts and Practices-Advertising rule (“MAP Rule”), and the Consumer Financial Protection Act.
  • The complaint alleges that, among other things, 1st Alliance used unlicensed employees to engage in mortgage-origination activities that require state licensing, thereby depriving consumers of accurate and timely loan information. 1st Alliance also allegedly required verification documents from consumers prior to providing them with loan estimates, denied credit to consumers based on their reports without giving them the legally mandated adverse action notice, and misled consumers with respect to whether they were preapproved for a mortgage or guaranteed a particular program or term.
  • The complaint seeks injunctive relief, consumer redress, damages, disgorgement, civil money penalties, and costs.

 Consumer Protection

Tennessee Attorney General Sues Alleged Government Impersonators

  • Tennessee AG Herbert H. Slatery III sued Labor Law Poster Services, Council for Corporations, LLC, ANS, Inc., and related individuals (collectively “LLPS”) for allegedly defrauding business owners via mailers that were misleadingly designed to resemble official government correspondence in violation of the Tennessee Consumer Protection Act, the Government Impostor and Deceptive Advertisement Act, and a 2007 assurance of voluntary compliance that resolved an investigation into LLPS’s prior deceptive mailers.
  • The complaint alleges that LLPS sent business owners mailers resembling government invoices with personalized recipient information, misleading citations to Tennessee law, and arbitrary deadline dates. The mailers allegedly demanded high fees for documents that business owners could create on their own or did not need to file at all, or that they could download from the Internet for a nominal fee. The mailers also allegedly included a Nashville return address, but in reality, it was a mailbox that forwarded payments to LLPS.
  • The complaint seeks injunctive and declaratory relief, consumer redress, civil monetary penalties, and attorneys’ fees and costs.

False Claims Act

Car Dealer Pays $1 Million to Settle Allegations It Improperly Took Advantage of Unemployment Insurance

  • Massachusetts AG Maura Healey reached a settlement with car dealer Colonial Automotive Group, Inc. (“Colonial”) to resolve allegations that it improperly took advantage of the state’s unemployment benefits in violation of the Massachusetts False Claims Act.
  • According to the AG’s office, Colonial furloughed the majority of its sales employees in its car dealerships during the COVID-19 shutdown, then encouraged its furloughed employees to apply for unemployment benefits and directed these employees to perform various job duties without pay. Colonial also allegedly continued to sell hundreds of cars through the unpaid work of these employees.
  • Under the terms of the assurance of discontinuance, Colonial agreed to pay $1 million in penalties to the state and amend any inaccuracies in its employment and wage reports already filed with the Department of Unemployment Assistance. Colonial will also enact policies and procedures to ensure that furloughed employees do not perform any functions related to their jobs without pay consistent with state employment regulations.

 State v. Federal

The Last Hoorah: Democratic AGs File Suits Against Federal Government in Final Week of Trump Administration 

  • A group of 15 Democratic AGs petitioned the U.S. Court of Appeals for the Second Circuit to review the Trump Administration’s final rule entitled “Test Procedure Interim Waiver Process,” which requires the U.S. Department of Energy to automatically grant interim waiver applications and removes a one-year deadline for making a permanent waiver determination for manufacturers seeking to set their own test procedures for compliance with energy efficiency standards. The AGs request that the Court vacate the final rule as unlawful pursuant to the Energy Policy and Conservation Act and the Administrative Procedure Act.
  • A group of 13 Democratic AGs, led by California AG Xavier Becerra, petitioned the U.S. Court of Appeals for the District of Columbia for a review of the Environmental Protection Agency’s final rule entitled “Control of Air Pollution from Airplanes and Airplane Engines: GHG Emission Standards and Test Procedures,” which finalized emissions standards that allegedly lag behind existing technology by more than a decade. The petition asks the court to review the final rule, which the AGs argue is unlawful and should be remanded to the Agency.
  • A group of 9 Democratic AGs, led by Illinois AG Kwame Raoul and Pennsylvania AG Josh Shapiro, sued the U.S. Department of Labor (“DOL”), challenging a DOL final rule that removes the cap on the amount of time a tipped worker may be required to spend on non-tipped, related duties while receiving the tipped sub-minimum wage. The complaint alleges that the final rule is contrary to the Fair Labor Standards Act and violates the Administrative Procedures Act. The complaint seeks declaratory and injunctive relief, vacating and setting aside the challenged provisions in the rule, and attorneys’ fees and costs.