• Gentner Drummond, an Oklahoma attorney in private practice and former AG candidate, announced his candidacy for the 2022 Republican nomination for the Oklahoma AG’s office.
• As previously reported, Oklahoma AG Mike Hunter, who defeated Drummond in the 2018 Republican primary, resigned from office citing personal matters.

Colorado Seeks Records from Student Loan Servicer Accused of Incompetently Administering Federal Loan Forgiveness Program

• Colorado AG Phil Weiser sued federal student loan servicer Pennsylvania Higher Education Assistance Agency d/b/a FedLoan Servicing (“PHEAA”) over allegations that it failed to provide information to student borrowers about their payment options and failed to maintain required records in violation of the Colorado Student Loan Servicers Act (“SLSA”).
• The complaint alleges, among other things, that PHEAA, which has an exclusive contract to service the federal Public Service Loan Forgiveness (“PSLF”) program, failed to provide sufficient information to student borrowers about their repayment options, potentially preventing them from qualifying for loan forgiveness under the PSLF program, and also failed to maintain and make available adequate records.
• The complaint seeks injunctive relief to compel PHEAA to produce the records it is required to keep and make available under the SLSA.
• As previously reported, in February 2021, Massachusetts AG Maura Healey reached a settlement with PHEAA to resolve allegations that it deprived student borrowers of relief they were entitled to under federal programs offering loan forgiveness and grants for public-service jobholders.

Company Settles Over Allegations it Used Unproven Medical Claims to Market Fish Oil Supplements

• The Federal Trade Commission (“FTC”) approved a final settlement with German multinational chemical company BASF SE and its U.S. subsidiary, as well as BASF-retained marketing company DIEM Labs, LLC (collectively “BASF”), to resolve allegations that BASF made deceptive and scientifically unsupported claims to market its dietary fish oil supplements in violation of the FTC Act.
• The complaint alleged that BASF deceptively advertised two dietary fish oil supplements, rich in omega-3 fatty acids, as clinically proven to reduce liver fat in individuals with non-alcoholic fatty liver disease (“NAFLD”).
• Under the terms of the final consent orders, BASF will pay $416,914 to the FTC for consumer refunds and will be prohibited from claiming that any product containing one or more omega-3 fatty acids reduces liver fat in individuals with NAFLD or can help with any other disease unless the claim is substantiated by scientific evidence in the form of randomized human clinical trials.

Lender Settles Allegations It Financed Loans with Deposits Collected from Consumers Using False Promises of Guaranteed High Returns

• The Consumer Financial Protection Bureau (“CFPB”) reached a settlement with financial company Driver Loan, LLC and its Chief Operating Officer (collectively “Driver Loan”) to resolve allegations that it misled consumers with respect to its financial products in violation of the Dodd-Frank Consumer Financial Protection Act.
• The complaint alleged that, among other things, Driver Loan made short-term, high-interest consumer loans that violated Florida’s usury laws and misrepresented the interest rates that consumers were required to pay on the loans, which in actuality reached as high as 990%. In addition, Driver Loan allegedly funded its loans with deposits collected from other consumers, and marketed its deposit scheme with promises that the funds were “FDIC insured” at member banks and that the deposits were guaranteed to return 15% annual percentage yield, even though the deposits were not placed in FDIC-insured accounts and were not guaranteed to produce any return.
• Under the terms of the proposed stipulated final judgment, Driver Loan will return approximately $1 million in deposits it collected plus all interest due to consumers under the terms it advertised, and also will pay a $100,000 civil money penalty to the CFPB. Driver Loan will also be permanently banned from any deposit-taking activities, among other things.

New York AG Issues Additional Guidance on Recent Investor Protection Bureau Rule Amendments

• New York Attorney General Letitia James provided additional guidance on recent Investor Protection Bureau (“IPB”) rule amendments intended to increase transparency into the investment adviser representatives and securities issuers operating in New York.
• The additional guidance includes detailed information about the practical ramifications of the amendments to Part 10 of Chapter II, Title 13 of the Official Compilation of Codes, Rules and Regulations of the State of New York (“NYCRR”), which covers securities issuers using the North American Securities Administrators Association (“NASAA”) Electronic Filing Depository, and the amendments to Part 11 of Chapter II, Title 13 of the NYCRR, which covers Investment Adviser Representatives.
• As previously reported, the rule amendments are intended to better conform registration and filing processes with the federal securities regulatory regime and to modernize New York’s system by moving it to standardized electronic filings and payments.