John L. Culhane, Jr.

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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 September 16, 2019

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 on or after that date. Loans disbursed before July 1, 2020 are subject to the borrower defense provisions in either the…

Consumer Finance Monitor

CFPB issues fourth biennial report on credit card market

By John L. Culhane, Jr. on September 9, 2019

The CFPB’s fourth biennial report on the credit card market was issued at the end of August. The Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) requires the CFPB to perform periodic market reviews. The CFPB’s first CARD Act report was issued in October 2013, its second report was issued in December 2015, and its third report was issued in December 2017. Like the December 2017 report which was issued under Acting…

Consumer Finance Monitor

CFPB files amicus brief in Third Circuit supporting PA AG

By John L. Culhane, Jr. on September 5, 2019

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 CFPB supports the PA AG’s position that Pennsylvania’s federal UDAAP claims can proceed in parallel to similar UDAAP claims asserted…

Consumer Finance Monitor

HUD publishes proposed revisions to disparate impact rule

By Richard J. Andreano, Jr. & John L. Culhane, Jr. on August 19, 2019

HUD’s proposed revisions to its disparate impact rule were published in today’s Federal Register. Comments on the proposal are due on or before October 18, 2019. Originally adopted in 2013, the rule sets forth the requirements for HUD or a private plaintiff to establish liability under the Fair Housing Act for discriminatory practices based on disparate impact even if there is no discriminatory intent. The proposed revisions include a new burden-shifting framework and other…

Consumer Finance Monitor

CFPB names private education loan ombudsman

By John L. Culhane, Jr. on August 19, 2019

The CFPB has announced the appointment of Robert G. Cameron to serve as the Bureau’s private education loan ombudsman. Mr. Cameron joins the Bureau from the Pennsylvania Higher Education Assistance Agency where he was a high-ranking official responsible for litigation, compliance, and risk mitigation efforts. The ombudsman position was created by the Dodd-Frank Act. The ombudsman is responsible for receiving, reviewing, and attempting to resolve complaints from private student loan borrowers and for compiling and…

Consumer Finance Monitor

DOJ files amicus brief with SCOTUS in FDCPA statute of limitations case

By John L. Culhane, Jr. on August 14, 2019

The DOJ has filed an amicus brief in support of the defendant debt collector in Rotkiske v. Klemm, the case before the U.S. Supreme Court that hopefully will resolve a circuit court split over whether the FDCPA one-year statute of limitations (SOL) runs from the date of the alleged violation or starts upon a consumer’s discovery of the violation. The brief lists CFPB attorneys and DOJ attorneys (including the Solicitor General). The FDCPA provides that…

Consumer Finance Monitor

NY Dept. of Financial Services issues proposed student loan servicer regulations

By John L. Culhane, Jr. on August 12, 2019

The New York Department of Financial Services (NYDFS) has issued proposed regulations to implement the legislation enacted in April 2019 that requires servicers of student loans to be licensed, imposes servicing standards, and prohibits certain practices. On July 31, the NYDFS published a notice of proposed rulemaking in the State Register, triggering a 60-day comment period. The licensing requirement would apply to “every person engaged in the business of servicing student loans owed.” The activities…

Consumer Finance Monitor

CFPB gives boost to use of alternative data and machine learning

By Christopher J. Willis & John L. Culhane, Jr. on August 8, 2019

A new CFPB blog post titled “An update on credit access and the Bureau’s first No-Action Letter” provides a boost to lenders using alternative data and machine learning in their underwriting models. The Bureau issued its first (and so far only) no-action letter in September 2017 to Upstart Network Inc. stating that the CFPB had no present intention to take enforcement or supervisory action against the lender under the ECOA relating to the…

Consumer Finance Monitor

New Jersey enacts licensing and other requirements for student loan servicers

By John L. Culhane, Jr. on August 7, 2019

On July 30, 2019, Acting New Jersey Governor Sheila Oliver signed into law SB 1149, which requires student loan servicers to be licensed, creates an Office of the Student Loan Ombudsman within the NJ Department of Banking and Insurance, imposes various requirements, and prohibits certain conduct. The law takes effect 120 days after enactment. Licensing requirement. The law prohibits any person from acting as a student loan servicer, directly or indirectly, without obtaining a…

Consumer Finance Monitor

Bipartisan bill introduced to create legal framework for income share agreements

By John L. Culhane, Jr. on August 6, 2019

A bipartisan group of U.S. Senators have introduced the “ISA Student Protection Act of 2019” that would create a legal framework for income share agreements (ISA) offered to students. The bill would define an ISA as an agreement between an individual and ISA funder under which the funder “credits towards the tuition or other obligations of, or pays amounts to, or on behalf of, such individual for costs associated with a postsecondary training…

John L. Culhane, Jr.

Dept. of Education finalizes regulations allowing use of pre-dispute arbitration agreements by schools receiving Title IV aid for student borrowers

CFPB issues fourth biennial report on credit card market

CFPB files amicus brief in Third Circuit supporting PA AG

HUD publishes proposed revisions to disparate impact rule

CFPB names private education loan ombudsman

DOJ files amicus brief with SCOTUS in FDCPA statute of limitations case

NY Dept. of Financial Services issues proposed student loan servicer regulations

CFPB gives boost to use of alternative data and machine learning

New Jersey enacts licensing and other requirements for student loan servicers

Bipartisan bill introduced to create legal framework for income share agreements

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