WASHINGTON -- Even after receiving an emergency loan that gave the government an 80% ownership stake, American International Group Inc. is spending money to lobby states to soften new controls on the mortgage industry.

When the U.S. took control of failing mortgage titans Fannie Mae and Freddie Mac, it prohibited them from lobbying. But it hasn't banned the practice at AIG, a huge insurer that is still 20%-owned by public shareholders.

AIG is currently working to ease some provisions in a new federal law establishing strict oversight of mortgage originators, according to state regulators. The law requires that originators be licensed by the states, and that they supply comprehensive information so state regulators can track their activities.

The goal of the new rules is to hold originators accountable if they engage in the sorts of improper or fraudulent lending that ultimately contributed to AIG's downfall. The law was passed by Congress in July as part of a sweeping housing-industry rescue package.

On Sept. 16, the day of the federal takeover of AIG, company lobbyist Brett J. Ashton was meeting with Indiana banking regulators about the law, said Judith Ripley, director of the Indiana Department of Financial Institutions. Two weeks later, Mr. Ashton spent three days at a Hilton hotel in Beverly Hills, Calif., where he briefed other financial-services industry representatives on "key legislative and regulatory concerns."

Mr. Ashton referred questions about his activities to an AIG spokesman. "We are maintaining government-affairs activities," said Nick Ashooh, an AIG spokesman. "We're not the only financial-services company that has expressed concerns" about the new mortgage-lending oversight rules. "We're rebuilding value in AIG to pay back the Federal Reserve loan and to restore AIG as a vital, ongoing concern."

Separately, New York Attorney General Andrew Cuomo on Wednesday asked AIG to recover millions of dollars worth of "unreasonable" and "outrageous" payments it made to executives as the big insurer neared collapse -- or face legal action for violating state law. Mr. Cuomo is conducting a probe into allegedly "unwarranted and outrageous expenditures" at AIG.

Peter Tulupman, an AIG spokesman, said the attorney general's concerns "are immediately being brought to the attention of the board." He said the company last Friday issued a directive ending all activities "not absolutely essential to the conduct of our business."

AIG owes its continued existence in its present form to more than $120 billion loaned to it by U.S. taxpayers. The government received its 80% equity stake in exchange for loaning AIG as much as $85 billion last month. Last week, the Fed extended another $38 billion in credit, believing the money is needed to prevent an AIG failure, which would reverberate through economies world-wide.

Some regulators are troubled that despite the injection of federal cash into AIG and other financial institutions, the industry is continuing its longstanding efforts to combat stronger control of its activities. "I find it disconcerting that there's still efforts to weaken our regulatory system, and that those efforts would be in any way subsidized by taxpayer dollars," said John W. Ryan, executive vice president of the Conference of State Bank Supervisors, one of the entities charged with implementing the federal law on mortgage-broker oversight, known as the SAFE Act.

Some state banking regulators have long pushed for the consumer protections afforded by the SAFE Act, short for the Secure and Fair Enforcement for Mortgage Licensing Act of 2008.

AIG and its subsidiaries hold membership in several industry lobbying groups, where dues for companies its size total millions of dollars annually. The company spent more than $3 million on federal-government lobbying in the second quarter alone, and more at the state level.

Members of Congress expressed outrage two weeks ago at a different AIG expenditure: more than $440,000 for a California spa outing for top business producers just days after AIG's government-funded rescue.

Before the federal takeover, AIG had contracts with a half-dozen outside lobby firms. One such firm, Ogilvy Government Relations, now represents a group of shareholders of the company. Those include former Chief Executive Maurice R. "Hank" Greenberg, who this week proposed more-favorable terms on the federal loan in a letter filed with the Securities and Exchange Commission.

Some financial institutions contend the SAFE Act's licensing fees and requirements are too expensive, and the extensive background information required about loan originators could violate their privacy. They further worry that the state-based system will prove too costly and cumbersome to be effective, and want more transparency over how licensing fees paid by the industry are spent by the states.

Regulators say they are working with the institutions to address those issues. But some of them say that AIG and other financial-services companies keep raising new objections to slow down the implementation, which, if not completed by the end of 2009, reverts to the federal government.

"They're trying to reintroduce things that really are superfluous and get in the way of implementing the act," said Thomas Gronstal, Iowa's superintendent of banking. "Basically, they're just objecting to having to be regulated. ... I frankly think that takes a lot of gall, given what the industry has done and what we're trying to do."

Mr. Ashton is one of a half-dozen officials from AIG's American General Finance unit who sit on the mortgage-lending advisory board for the American Financial Services Association, which has lobbied heavily on the SAFE Act in Washington. Others on the advisory board include lobbyists for Citigroup Inc., Merrill Lynch & Co. and other companies battered by the mortgage-related crisis. Mr. Ashton has frequently briefed the AFSA and other Washington trade groups on the effort.

During the second quarter of 2008 -- the last full quarter before its takeover -- AIG spent at least double on federal lobbying by outside firms than most other financial-services conglomerates, including Merrill Lynch, Citigroup, Goldman Sachs Group Inc. and Lehman Brothers Holdings, according to congressional filings.

"I would think it would be difficult to justify a sustained lobby budget of that magnitude in bailout mode," said Kenneth Gross, an attorney at Skadden, Arps, Slate, Meagher & Flom in Washington who advises lobbyists and their clients.

The $3 million AIG spent on outside federal lobbyists in the second quarter "is a lot for an entity under any circumstance," Mr. Gross said. "The industry norm is about half that."