Connecticut Attorney General William Tong joined a coalition of 22 attorneys general in urging the Consumer Financial Protection Bureau (CFPB) to prohibit mortgage servicers from charging convenience fees. The coalition argues that these fees are exploitative and unfair, as homeowners have no choice in their servicers and fees often exceed the actual cost of processing payments. They request that the CFPB either ban such fees or limit them to actual costs, and require servicers to document their costs.
In-house legal teams should review all mortgage servicing agreements, loan servicing contracts, and vendor agreements with payment processors for clauses that authorize or define 'convenience fees' or 'payment processing fees.' Specifically examine fee schedules, payment method terms, and cost allocation provisions. Given the coalition's argument that fees often exceed actual processing costs and lack consumer choice, contracts may need amendments to: (1) cap fees at verifiable actual costs, (2) require detailed documentation and disclosure of processing costs to borrowers, and (3) potentially eliminate such fees for non-optional payment channels. Teams should also monitor for any CFPB rulemaking resulting from this petition to ensure future compliance.
Entity
Mortgage Servicers
Industry
Financial ServicesOfficial Press Release
https://portal.ct.gov/ag/press-releases/2022-press-releases/attorney-general-tong-calls-on-cfpb-to-prohibit-mortgage-servicers-from-charging-convenience-fees
state attorneys general multistate comment letter to cfpb co
https://portal.ct.gov/-/media/ag/press_releases/2022/state-attorneys-general-multistate-comment-letter-to-cfpb_convenience-fees_41122_final.pdf?rev=baf6911436064b58814d52d9b75bc789&hash=6DF955F0180BBF28E3F2E9D53692D67A
Connecticut Attorney General Enforcement Page
https://portal.ct.gov/AG/Privacy/Privacy-Resources
$2.0M
Attorney General Tong and a coalition of four other states and the FTC sued Zillow and Redfin after Zillow paid Redfin $100 million to shut down its multifamily rental advertising business and transfer clients to Zillow. The settlement requires the companies to restore competition, with Redfin rebuilding its apartment advertising business, and pay $2 million to the coalition.
Attorney General William Tong sent a letter to the Connecticut Insurance Department urging rejection of double-digit rate increases sought by Anthem, ConnectiCare, and UnitedHealthcare for individual and small group health insurance plans covering about 220,000 people. The letter argues the rates exceed inflationary measures and criticizes the carriers for failing to control costs and for poor claims system management, particularly ConnectiCare's transition to Molina Healthcare.
$275K
Connecticut Attorney General William Tong announced a $275,000 settlement with TaxAct, an online tax preparation company, over allegations that between January 2018 and December 2022, TaxAct improperly disclosed detailed customer financial information to Meta and Google through third-party tracking technologies without notifying taxpayers. The settlement requires TaxAct to pay $275,000 and implement new third-party tracking compliance measures, including a review committee, written policies, a tag monitoring system, and two independent third-party audits.
$4.0M
Connecticut Attorney General William Tong and the Federal Trade Commission announced a $4 million settlement with Manchester City Nissan (Chase Nissan LLC) resolving allegations that the dealership double-charged for 'certified pre-owned' vehicles and collected unauthorized junk fees. The settlement requires payment for consumer redress, prohibits misrepresentations, mandates clear disclosure of the maximum total price, and requires express informed consent for all charges.
Attorney General Tong and a coalition of 21 attorneys general and Pennsylvania filed lawsuits against the U.S. Department of Transportation, FMCSA, and DHS to block demands for the personal information of 17 million CDL drivers. The lawsuits allege violations of federal privacy laws and the Administrative Procedure Act, and seek an emergency order to prevent the data transfer.
Attorney General William Tong and a coalition of 10 attorneys general filed a lawsuit challenging a new OCC rule that preempts state laws requiring national banks to pay interest on homeowners' mortgage escrow accounts. The lawsuit argues the OCC ignored federal court decisions and bypassed safeguards, and seeks to block the rule.