AG Suthers Announces Legislative Goals for 2009

Republican attorney general John Suthers today announced that his office will seek legislative approval of four bills that target “foreclosure rescue” firms, lift age-old civil penalty limits and increase the penalties for appraisal fraud and water pollution.

The first of the bills on Suthers' wish list, HB 1109, would expand the protections of the Colorado Foreclosure Protection Act (CFPA) to distressed homeowners who are not yet in foreclosure. The CFPA prevents foreclosure consultants from charging an upfront fee, created standards for written contracts, and prevents consultants from acquiring any interest in a property on which they have been hired to consult.

The bill, which is sponsored by Sen. Jennifer Veiga, D-Denver, and freshman Rep. Kevin Priola, R-Henderson, is headed to the House Business Affairs & Labor Committee.

Nate Strauch, a spokesperson for Suthers, said the attorney general's office has noticed that some companies involved in "foreclosure rescue" operations try to get around CFPA by approaching distressed homeowners before foreclosure proceedings are formally intitiated. Strauch said that HB 1109 is intended to close that loophole by extending CFPA's protection to any homeowner who is behind on mortgage payments or has defaulted on a mortgage contract obligation.

The second measure sought by the attorney general's office, SB 054, would eliminate the maximum civil penalty that can be imposed for violations of the Colorado Consumer Protection Act and raise the maximum penalty for antitrust violations from $100,000 to $250,000.

According to a press release issued by the attorney general's office, the problem of fraudulent advertising is growing larger in Colorado as unscrupulous firms use e-mail, text messages and the Internet to promote their products and services. Under current law those businesses face a ceiling of a $100,000 civil fine "for any related series of violations," regardless of how many consumers are impacted by the firm's illegal behavior. The bill would allow a court to impose a fine of up to $2,000 per individual violation of the law, with no cap on the total civil penalty.

The bill, which would cause Colorado to join a national trend toward more judicial discretion in the imposition of civil penalties under consumer protection laws, is sponsored by freshman Sen. Mark Scheffel, R-Parker, and Rep. Andy Kerr D-Lakewood.

The attorney general will also ask for passage of legislation that would increase the severity of criminal punishments for fraudulent real estate appraisals. The bill, to be carried by Sen. Mary Hodge, D-Brighton, and Rep. Glenn Vaad, R-Mead, would raise the minimum penalty to six months imprisonment, a $500 fine, or both for a first violation of the statute.

The bill would also classify a second violation as a class 5 felony and raise the maximum penalties imposed such second offenders to a maximum $100,000 fine and three years in prison.

The final item on the attorney general's wish list is a bill that would open the door to felony criminal liability for pollution of state waters. The legislation, which will be sponsored by Sen. Ted Harvey, R-Highlands Ranch, and Rep. Beth McCann, D-Denver, would raise the penalties for violations of the state's water pollution control laws to the same level as violations of state laws forbidding unauthorized pollution of land within the state.

Current law allows polluters of waters within Colorado to be assessed fines.

If enacted, the bill would allow prosecutors to seek a felony conviction and, if obtained, a court could sentence violators of the state's water pollution control law to a prison term of up to six years if the violation is intentional and up to three years if the violation is negligent.