The California Department of Financial Protection and Innovation (DFPI) recently issued a Notice of Modification to Proposed Regulations and published the newly modified proposed regulations to amend its student loan servicing regulations. Among other things, the modified regulations would expand the definition of “income share agreement,” impose additional rules related to responding to a borrower’s

Old Myths Die Hard: District Court Reverses Bankruptcy Court’s Discharge of Student Loan Debt Under BrunnerA district court judge recently reversed and remanded a well-known bankruptcy decision discharging a significant student loan debt. In the Southern District of New York, Judge Philip Halpern, reviewing the bankruptcy court’s summary judgment decision de novo, found that neither the debtor nor the defendant were entitled to summary judgment under the familiar Brunner test.

Second Circuit Follows Other Recent Circuit Opinions Re: Private Student Loan DischargeThe Second Circuit has followed the lead of the Tenth and Fifth Circuits in affirming a bankruptcy court ruling regarding private student loans under 11 U.S.C. § 523(a)(8). In Homaidan v. Navient, et al., the court ultimately held that the exception to discharge language – “an obligation to repay funds received as an educational

Mississippi Joins the Anti-Preemption ParadeThe Mississippi Supreme Court recently rejected federal preemption arguments relating to federally owned student loans. This follows other preemption rulings, as we’ve discussed here and here.

Mississippi’s attorney general filed the action on behalf of the state against Navient Corporation, bringing claims under the Mississippi Consumer Protections Act and for unjust enrichment for Navient’s

Top 10 Changes to Consumer Bankruptcy Proposed in the Consumer Bankruptcy Reform Act of 2020On December 9, 2020, Congressional Democrats, including Elizabeth Warren (D-Mass.) and Jerrold Nadler (D-N.Y.), proposed sweeping legislation that would overhaul consumer bankruptcy law. The proposed changes generally make it easier for consumers to access the bankruptcy system and discharge their debts. Below is a discussion of 10 critical changes proposed in the Consumer Bankruptcy Reform

In the Strangest Year Ever, We’re Very Thankful and Wish You a Happy Thanksgiving

As everyone steps away from their (home) office to celebrate Thanksgiving, we wanted to count our blessings as we review this truly remarkable and unusual year. In addition to frontline healthcare workers, good WI-FI, food delivery services, and finally finding a mask that is comfortable, we are also thankful for the following:

1. The CARES

Tenth Circuit Agrees with the Fifth Circuit – Private Student Loans May be Dischargeable in BankruptcyThe 10th Circuit has joined several circuit courts holding that private student loans are dischargeable in bankruptcy. In McDaniel v. Navient Solutions, a case of first impression in the 10th Circuit, the court concluded that an educational loan does not constitute “an obligation to repay funds received as an educational benefit” under

Federal Law Preempts Connecticut’s Student Loan Servicer Licensing Law, According to Federal CourtSeveral states have recently ramped up their regulation of the student lending industry by passing laws requiring student loan servicers to be licensed in the state in order to operate there. Many of these state licensing laws are creating conflicts for servicers in an industry already dominated by federal law. Now a U.S. District Court

Misrepresentation Claims Not Preempted: Eleventh Circuit Rules Against Preemption in Student Loan CaseAs we’ve been tracking for over a year now, courts across the country have addressed the significant question of whether the federal laws governing federally owned or guaranteed student loans preempt state laws placing burdens on servicers of those loans. Last week, the Eleventh Circuit became the latest court to weigh in, holding in Lawson-Ross

Federal Reserve Acts to Bolster Auto Finance, Credit Card, Student Lending IndustriesIn an action somewhat lost amidst the unprecedented $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Federal Reserve’s Board of Governors announced a series of five “extensive new measures” to provide liquidity for certain sectors of the nation’s economy. One of those liquidity facilities, the reintroduced Term Asset-Backed Securities Loan Facility