The New York state legislature is currently considering a pair of companion bills which would impose detailed notice and records requirements upon student loan servicers. New York Senate bill S5136B, which was passed by the New York Senate earlier this year, and New York House bill A6226B, which is currently under consideration with the New York Legislature’s Consumer Affairs and Protection Committee, would require “creditors and debt collectors” to provide certain written disclosures to borrowers or cosigners of private education loans at the time of the first collection communication (or within five days after the first communication). … Continue Reading
Illinois provides guides and templates for Know Before You Owe Private Education Loan Act reporting requirements
Private education lenders doing business in Illinois now have access to official informational guides and templates for meeting the November 1, 2022, reporting requirements under the state’s new Know Before You Owe Private Education Loan Act (“KBYO”).
Promoted as a means to make borrowers aware of federal student loan options before they turn to private loans, KBYO also seeks to collect and publicize data on private educational lending through an annual reporting obligation imposed on lenders. … Continue Reading
Education Department names Richard Cordray Chief Operating Officer of Federal Student Aid
The Department of Education has announced that it has selected former CFPB Director Richard Cordray as the Chief Operating Officer of Federal Student Aid. In addition to having served as CFPB Director, Mr. Cordray formerly served as Ohio Attorney General.
Rohit Chopra, President Biden’s nominee for CFPB Director, previously served as the CFPB’s Private Education Loan Ombudsman under Mr.… Continue Reading
Biden transition announces members of agency review teams
The Biden transition has announced the members of its agency review teams.
The team leaders include the following individuals:
CFPB. The team will be led by Leandra English, who is currently with the New York Department of Financial Services. As our blog readers may recall, Ms. English was appointed CFPB Deputy Director by former CFPB Director Cordray upon his departure from the Bureau. … Continue Reading
Dept. of Education implements Presidential memorandum continuing federal student loan relief during pandemic
At the end of last week, the Department of Education announced that Education Secretary Betsy DeVos has directed Federal Student Aid (FSA) to extend until December 31, 2020 the relief that was provided to federal student loan borrowers by the CARES Act. The CARES Act suspended loan payments on federal student loans and temporarily reduced interest rates to zero until September 30, 2020. … Continue Reading
State AGs sue Dept. of Education to invalidate 2019 “Institutional Accountability Regulations” allowing use of pre-dispute arbitration agreements by schools receiving Title IV aid for student borrowers
A group of 22 state attorneys general joined by the District of Columbia AG filed a lawsuit in a California federal district court against Secretary of Education Betsy DeVos and the U.S. Department of Education (ED) seeking to invalidate the ED’s final “Institutional Accountability Regulations” issued in 2019 (“2019 Rule”) which replaced the Obama administration’s “Borrower Defense” rule issued in 2016 (“2016 Rule”). … Continue Reading
Democratic lawmakers press Kraninger and DeVos for new CFPB/ED MOU
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 lawmakers seek information from Dept. of Education about income share agreements
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
New bills introduced to prohibit use of mandatory arbitration provisions
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
Dept. of Education to issue guidance on arbitration ban
As we reported, the Department of Education announced earlier this month that it would begin implementing its “borrower defense” final rule which was issued in November 2016 by providing discharges of federal student loans made to any borrower
s who, in addition to other conditions, could not complete his or her program of study because the borrower’s school closed. … Continue Reading