The New York Department of Financial Services (NYDFS) has announced the creation of a Student Debt Advisory Board to advise on consumer protection, student financial products or services, and communities that have been significantly impacted by student debt. The announcement was made on October 9 to coincide with the effective date of Banking Law Article
Student Loans
Democratic Senators send letter to new CFPB student loan ombudsman setting expectations
By John L. Culhane, Jr. on
Posted in CFPB Monitor, Student Loans
Democratic Senators Sherrod Brown and Patty Murray have sent a letter to Robert Cameron, the CFPB’s new Private Education Loan Ombudsman, in which they set forth their expectations for the Ombudsman’s Office. The Bureau announced Mr. Cameron’s appointment as Ombudsman in August 2019. He replaced Seth Frotman, who has been a vocal critic of the…
Washington Proposes Amendments to Student Loan Servicing Rules
By Jeremy C. Sairsingh on
The Washington State Department of Financial Institution (DFI) has published proposed revisions to its student loan servicer regulations. This proposal would amend rules that went into effect earlier this year pursuant to Washington’s student loan servicing law.
While most of the proposed amendments relate to mortgage loan origination, and several of the changes…
FTC announces settlements with student debt relief company and company that financed fees
By Barbara S. Mishkin on
The FTC announced settlements of two lawsuits filed in a California federal district court alleging similar violations of the FTC Act, the Telemarketing Sales Rule (TSR), and the Truth in Lending Act by providers of student debt relief services, their principals, and a Minnesota-based company that provided financing to customers of the providers involved in…
Dept. of Education finalizes regulations allowing use of pre-dispute arbitration agreements by schools receiving Title IV aid for student borrowers
By John L. Culhane, Jr. on
In less than a year, pre-dispute arbitration agreements will be clearly permissible again now that the Department of Education has finalized its proposal to rescind the Obama administration’s “Borrower Defense” rule issued in November 2016 and replace it with “Institutional Accountability Regulations.” The final regulations are effective July 1, 2020 and apply to loans disbursed…
NYDFS Student Lending Initiative
By Taylor R. Gess on
New York Department of Financial Services (NYDFS) Superintendent, Linda A. Lacewell, recently wrote an Opinion Article in the New York Daily News, addressing the student lending industry. According to Lacewell, the Trump administration and Education Secretary Betsy DeVos have “dismantled critical consumer protections available to students” and “gutt[ed]” the Consumer Financial Protection Bureau’s student lending…
House Financial Services Committee to hold Sept. 10 hearing on protecting student borrowers
By Alan S. Kaplinsky on
Posted in Federal CFS Monitor, Student Loans
The Committee on Financial Services will hold a hearing entitled “A $1.5 Trillion Crisis: Protecting Student Borrowers and Holding Student Loan Servicers Accountable.” The hearing, scheduled to take place on Tuesday, September 10, 2019 at 10:00 a.m. in the Rayburn House Office Building, will also be live-streamed.
Building on the Committee’s oversight of consumer financial…
CFPB files amicus brief in Third Circuit supporting PA AG
By John L. Culhane, Jr. on
The CFPB has filed an amicus brief in the U.S. Court of Appeals for the Third Circuit in the Pennsylvania Attorney General’s lawsuit against Navient Corp. The PA AG’s lawsuit includes claims that Navient violated the Consumer Financial Protection Act’s UDAAP prohibition in connection with its servicing of student loans. In its amicus brief, the…
Trump Administration to Discharge the Federal Student Loan Debt of Totally and Permanently Disabled Veterans
By Stacy H. Rubin on
On August 21, 2019, President Trump signed a Presidential Memorandum that streamlines the process by which totally and permanently disabled veterans can discharge their Federal student loans (Federal Family Education Loan Program loans, William D. Ford Federal Direct Loan Program loans, and Federal Perkins Loans). Through the revamped process, veterans will be able to have…
Congressional Chairs Concerned About State of Student Loan Industry Seek Answers from CFPB, Department of Education and Student Loan Servicers
By Andrew Carobus on
Last week, Congressional representatives Maxine Waters, D-CA, Bobby Scott, D-VA, and Elijah Cummings, D-MD, as chairs of committees with oversight responsibility for the student loan servicing market, sent letters to CFPB Director Kathleen Kraninger and Department of Education Secretary Betsy DeVos about their concerns with the current state of the student loan industry. The letters…