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
$625K
Connecticut reached a $625,000 settlement with Frontier Communications Parent Inc. over an April 2024 breach in which compromised employee and vendor credentials were used to access internal systems and exfiltrate unencrypted personal information of 58,841 Connecticut residents. The settlement requires Frontier to strengthen its security program, implement specific safeguards and training, and obtain an independent third-party assessment.
$2.6M
Connecticut and New York found that Boston Children’s Health Physicians and its security vendor, XTIUM, failed to use reasonable safeguards, resulting in hackers accessing sensitive personal, medical, and employee information. The companies agreed to pay penalties totaling $2.64 million and implement enhanced cybersecurity measures.
Connecticut joined a coalition of state attorneys general filing a notice in Character Technologies, Inc.’s bankruptcy proceedings, raising concerns about the company’s safety and privacy practices and the sensitive information it holds. The states seek protections for children and consumers if the company’s business or assets are sold or transferred; the filing does not impose a fine or other remedy.
Attorney General William Tong and Consumer Counsel Claire Coleman petitioned PURA to review how Connecticut public utilities use artificial intelligence, citing potential data privacy and cybersecurity risks, algorithmic errors, and misleading outputs. The petition asks PURA to examine utility AI systems, safeguards, vendors, and data security practices; it does not report a finding of violation or an imposed penalty.
$2.0M
Connecticut Attorney General William Tong announced a settlement with RZ Smoke, Inc. over allegations that it distributed and sold high-potency cannabis products without a state license. The stipulated judgment is $2 million, with $375,000 payable to the State and $1.6 million suspended to ensure compliance; the company is barred from specified cannabis activities in Connecticut unless licensed.
$13.7M
Connecticut joined a coalition of states and the federal government in settling allegations that Takeda paid healthcare providers speaker honoraria and provided meals to induce prescriptions of Trintellix, leading to allegedly false claims to government healthcare programs. Takeda agreed to pay $13,670,921 plus accrued interest, with portions allocated to federal and state programs.