The New York Times explains:
As part of the $25 billion national mortgage servicing settlement two years ago, California and other states won a portion for home loan counseling and other educational services to help troubled homeowners avoid foreclosure. Kamala Harris, the state’s attorney general, secured the funds after long and tense negotiations with the banks.
But like many other states, California faced financial troubles and diverted funds from the settlement to other uses.
So on Friday, the National Asian American Coalition, the COR Community Development Corporation and the National Hispanic Christian Leadership Council, sued Gov. Jerry Brown to demand the return of the money, some $369 million that was used to pay down the states' debt instead of to help borrowers.
Here's the full story.