My colleagues and I have the privilege of advising numerous clients on income share agreements (ISAs), including universities, service providers, and institutional investors. So we were excited by reports that the U.S. Department of Education (ED) plans to publish a Federal Register notice for an Experimental Sites Initiative (ESI) that would facilitate ISA programs at Title IV schools.… Continue Reading
A group of 22 state Attorneys General have sent a letter to the Department of Education seeking information “to determine whether the [ED] is providing relief to thousands of former ITT Tech students as required by federal law.” The use of the seals of the Kentucky, Massachusetts, and Oregon AGs on the first page of the letter suggests that these AGs are taking the lead on the inquiry.… Continue Reading
Two Democratic Senators have sent a letter to CFPB Director Kraninger and Education Secretary DeVos asking the regulators to explain what roadblocks are preventing the CFPB and ED from entering into a new memorandum of understanding to replace the MOU between the agencies that the ED terminated in 2017.
In their letter, the Senators indicated that the agencies have disagreed about the reason for the MOU’s termination and have provided conflicting information to Congress regarding the CFPB’s efforts to reestablish the MOU. … Continue Reading
Democratic Senator Elizabeth Warren, together with Democratic Representatives Ayanna Pressley and Katie Porter, have sent a letter to the Department of Education expressing concern about reports that the Department “is exploring an experiment with Income Share Agreements (ISAs) in federal higher education programs.” The letter states that the lawmakers are “seeking to learn more about the Department’s plans in order to evaluate whether these plans are in the best interest of students and within the Department’s authority under the law.”… Continue Reading
In a letter sent to Senator Elizabeth Warren regarding the CFPB’s supervision of student loan servicers, CFPB Director Kathy Kraninger discussed the Bureau’s relationship with the Department of Education.
In the letter, Director Kraninger responded to a question from Senator Warren regarding the guidance issued by the ED in December 2017 to student loan servicers about the application of the Privacy Act of 1974 to certain student loan records. … Continue Reading
Democratic lawmakers have introduced several new bills to prohibit the use of mandatory arbitration provisions, ranging from bills that broadly target consumer transactions to bills that target schools that receive Title IV assistance under the Higher Education Act (HEA).
A bill introduced by Senator Sherrod Brown, the Senate Banking Committee’s ranking member, would amend the Consumer Financial Protection Act to provide that “no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a consumer dispute between a covered person and a consumer that relates to a consumer financial product or service.” … Continue Reading
The “borrower defense” final rule (Final Rule) issued by the Dept. of Education in November 2016 took effect at noon yesterday after Judge Randolph D. Moss of the D.C. federal district court refused to grant the renewed motion for a preliminary injunction filed by the California Association of Private Postsecondary Schools (CAPPS) seeking to preliminary enjoin the arbitration ban and class action waiver provisions in the Final Rule. … Continue Reading
In addition to the CFPB’s Spring 2018 rulemaking agenda that we have already blogged about, the Spring 2018 rulemaking agendas of several other federal agencies contain some items of interest to consumer financial services providers.
Items of particular interest are:
- OCC. The OCC plans to issue an Advance Notice of Proposed Rulemaking “for modernizing the current regulations to carry out the purposes of the Community Reinvestment Act.”
In response to the wave of new state student loan servicing laws and enforcement activity, the U.S. Department of Education has published an interpretation emphasizing that the Higher Education Act (HEA) preempts state regulation of federal student loan servicers.
Citing Supreme Court and appellate court precedent, ED stresses that the servicing of loans made by the federal government under the Direct Loan Program is an area involving “uniquely federal interests” and that state regulation of servicers of Direct Loans impermissibly conflicts with federal law and is entirely preempted.… Continue Reading