The Department of Education (ED) recently delivered a letter to the Consumer Financial Protection Bureau (CFPB) providing notice of its intent to terminate the Memoranda of Understanding (MOUs) between the agencies. The letter is highly critical of the CFPB. The sharp rebuke proclaims ED’s “full oversight responsibility of federal loans” and does not explicitly salvage any part of the agencies’ former cooperation.… Continue Reading
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State AGs seek injunction against Dept. of Education postponement of the Borrower Defense Rule; DeVos continues “regulatory reset” with delay of Gainful Employment Rule and campus financial products disclosure regulations
By Brian Slagle on
Posted in Regulatory and Enforcement, Student Loans
Eighteen states and the District of Columbia have filed suit against Secretary of Education Betsy DeVos seeking an injunction of the Department of Education’s indefinite postponement of the Obama Administration’s Borrower Defense Rule. While generally providing for loan forgiveness for borrowers deceived by postsecondary institutions, the Borrower Defense Rule also created a joint state-federal enforcement scheme by providing that any judgment obtained by a government agency against a postsecondary institution under state law would give rise to a borrower defense to loan repayment.… Continue Reading
Proposed Consumer Contracts Restatement Critiqued at ALI Annual Meeting
By Alan S. Kaplinsky & Brian Slagle on
Posted in CFPB General, Regulatory and Enforcement
At the American Law Institute (ALI) annual meeting in Washington, DC on May 22-24th, members had the opportunity to review a discussion draft of the Restatement of the Law Third, Consumer Contracts. The draft is the result of the ALI’s 2012 initiative to supplement the Restatement Second of Contracts and Uniform Commercial Code (UCC) with a Restatement dedicated to transactions made solely by consumers for personal or household purposes.… Continue Reading
Ninth Circuit affirms tribal lenders subject to CFPB investigative demands
By Brian Slagle on
The Ninth Circuit recently issued its opinion in CFPB v. Great Plains Lending, LLC, et al., in which three tribal-affiliated, for-profit lending companies (“Tribal Lenders”) challenged the authority of the CFPB to issue civil investigative demands (CIDs) against Native American tribes.
In 2012, the CFPB issued CIDs against the Tribal Lenders regarding their advertising, marketing, origination, and collection of small-dollar loan products.… Continue Reading
CFPB Releases Debt Collection Industry Study
By Brian Slagle on
Posted in Debt Collection, Regulatory and Enforcement
On July 28, the CFPB held a field hearing about debt collection in Sacramento, California coinciding with the release of an outline of the proposals it is considering in connection with its debt collection rulemaking. Together with its release of the outline, the CFPB issued a report, “Study of Third-Party Debt Collection Operations.”… Continue Reading
CFPB publishes annual CARD Act, HOEPA and QM adjustments, corrects 2016 error
By Brian Slagle on
The CFPB has published a final rule regarding various annual adjustments it is required to make under provisions of Regulation Z (TILA) that implement the CARD Act, HOEPA, and the ability to repay/qualified mortgage provisions of Dodd-Frank. The adjustments reflect changes in the Consumer Price Index in effect on June 1, 2016 and will take effect January 1, 2017.… Continue Reading
House Financial Services Committee Scrutinizes Basis of Proposed CFPB Arbitration Rule
By Brian Slagle on
On Wednesday May 18, 2016, the House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit held a hearing entitled “Examining the CFPB’s Proposed Rulemaking on Arbitration: Is it in the Public Interest and for the Protection of Consumers?”
The Committee questioned the panel members on whether the CFPB’s proposed rule meets the mandate of Section 1028 of the Dodd-Frank Act.… Continue Reading
CFPB, DOE, Treasury Issue Joint Statement on Student Loan Servicing
By Brian Slagle on
Posted in Regulatory and Enforcement, Student Loans
A new Joint Statement issued by the Consumer Financial Protection Bureau, Department of Education, and Department of the Treasury presents a framework to standardize student loan servicing practices across the various federal and private borrowing programs. The agencies expect the new principles will guide rulemaking for better servicing practices and, ultimately, reduce student loan defaults.… Continue Reading