In the federal government’s ongoing effort to revive the U.S. economy and help people harmed by the economic damage wrought by the coronavirus pandemic, an important detail has gone under-noticed:  the most recent set of federal stimulus payments to individuals are subject to garnishment by creditors.  And this fact is creating legal and operational challenges

On April 1, 2021, the CFPB issued Compliance Bulletin 2021-02 (the “Bulletin”), warning mortgage servicers to “take all necessary steps now to prevent a wave of avoidable foreclosures this fall.”  The Bulletin and associated press release cite industry data suggesting that around 1.7 million borrowers will exit COVID-related forbearances in September 2021 and the following

The CFPB Private Education Loan Ombudsman has issued an annual report containing an analysis of approximately 5,000 federal student loan complaints, 1,900 private student loan complaints, and 1,700 debt collection complaints related to private or federal student loans submitted by consumers between September 1, 2019 and August 31, 2020. The report notes that total student

On August 8, 2020, President Trump signed four executive orders that are designed to provide additional COVID-19 relief as talks on Capitol Hill collapsed on August 7 between White House negotiators and Democratic leaders over a fifth coronavirus stimulus package. One of those actions, which is directed to the Secretary of Education in the form

Recently, the federal banking regulators issued four new sets of examination procedures. The OCC issued two significant examination booklets on sampling methodologies and UDAP/UDAAP, and the federal banking regulators, together with state financial regulators, issued interagency exam guidance for assessing safety and soundness of financial institutions in light of the ongoing impact of the COVID-19

The CFPB issued ten FAQs for industry that address the CARES Act’s credit reporting requirements and other COVID-19-related credit reporting issues.

Several of the FAQs discuss the Bureau’s Policy Statement issued in April 2020 concerning COVID-19 considerations relevant to how the Bureau will exercise its supervisory and enforcement authority regarding FCRA and Regulation V compliance,

To the dismay of consumers, banks, creditors, and debt collectors alike, there currently is uncertainty as to whether CARES Act stimulus payments to individuals and Paycheck Protection Program loan proceeds can be garnished by private creditors.  Ballard Spahr attorneys John Culhane and Lori Sommerfield have published an article, “Garnishment Must Be Clarified in Pandemic

Massachusetts, New Jersey, ConnecticutIllinois, Colorado, California, Washington, and Vermont have announced that they are participating in a multi-state initiative to provide relief to borrowers whose student loans are not covered by the CARES Act through agreements with certain student loan servicers.  The announcements indicated that Virginia is

A coalition of groups that includes the Consumer Bankers Association, the National Council of Higher Education Resources, and consumer advocates, has sent a letter to House and Senate leadership urging Congress to extend relief to federal student loan borrowers whose loans are not covered by the CARES Act.

The borrowers in question are those with