Community nonprofits receive financial boost thanks to state consumer protection cases
SEATTLE – Programs to help Washington homeowners avoid foreclosure and improve the lives of mental health patients and those suffering from gastrointestinal diseases were recently awarded grants by the Attorney General’s Office.
The money was paid by defendants in consumer protection cases. Court-ordered agreements permit the funds to be used to benefit the public as a whole where it isn’t practical to allocate restitution to individuals.
Wells Fargo/Wachovia Settlement – to Help Homeowners
The Washington Attorney General’s Office served on the executive committee that negotiated an October 2010 agreement with Wells Fargo. Wells Fargo purchased Wachovia and acquired its subsidiary, Golden West, at the end of 2008. The states claimed that “Pick-A-Pay” loans offered by the banks violated consumer protection laws because they expose borrowers to substantial economic risks that weren’t adequately disclosed. Funds from the settlement will benefit:
- Washington State Bar Association’s Home Foreclosure Legal Aid Project – More than $1 million to expand the program, which provides free legal services to homeowners facing foreclosure. Effective July 22, the state’s Foreclosure Fairness Act of 2011 will provide distressed borrowers with the opportunity to be referred by a housing counselor or attorney to mediation with their lender. WSBS’s project will help Washington get the most from the new law by deploying lawyers in counties with the highest foreclosure rates to represent homeowners and to train and mentor pro bono attorneys. The Attorney General's Office previously granted $320,000 from the Countrywide/Bank of America settlement to the program, which has been spent helping distressed homeowners.
Geodon Settlement – to Promote Mental Health
Attorneys general reached a $33 million multistate settlement with Pfizer, Inc., in September 2009 related to the drug company’s alleged improper marketing of the antipsychotic drug, Geodon. Washington awarded its share of the restitution money, $790,000, to the following programs to promote mental health:
- United Way of King County - $363,000 to support the King County Mental Health Crisis Respite Program.
- Boys & Girls Clubs of Washington State - $140,300 to fund youth mental health initiatives.
- Seattle Community Law Center - $116,000 to expand the Disabled Homeless Advocacy Project. This program provides legal services and support for disabled and homeless people in the Seattle community, including helping clients obtain or maintain Social Security benefits so that they can receive reliable treatment and medication for their impairments.
- Valley Cities Counseling and Consultation - $86,000 to support the Mental Health Recovery in Action project.
- Snohomish County Human Services - $84,700 to support the Chemical Dependency Service Components program.
Activia Settlement – to Promote Nutrition and Diagnosis/Treatment of Gastrointestinal Diseases
Attorneys general reached a $21 million settlement with Dannon in December 2010 that resolved allegations of illegal marketing of it Activia yogurt and DanActive dairy drink. The Washington Attorney General’s Office awarded its restitution money to:
- Crohn’s and Colitis Foundation of America’s Northwest Chapter - $400,000 for the IBD Gastro Health Initiative, a new project comprised of 1) medical research focused on increasing immune system function and 2) a national education program about irritable bowel disease and nutrition, piloted in Washington. The two-pronged approach will allow the foundation to support scientific breakthroughs that lead to more effective therapies while empowering Washington’s 30,000 patients to take control of their treatment plans by creating healthy living guidelines.
- Hopelink - $13,400 to improve nutritional health of disadvantaged youth during summer, when access to school meal programs is limited.
Earlier this year, the Attorney General’s Office granted $1.57 million from a settlement with Seroquel manufacturer AstraZeneca Pharmaceuticals to public mental health programs. The agency also obtained $772,000 in the Intelius settlement, which was paid to the state general fund.
Media Contact: Kristin Alexander, Media Relations Manager, (206) 464-6432