Student Loan Servicing

Coronavirus Economic Stabilization Act of 2020: Implications for Consumer Financial ServicesOn Friday, President Trump signed the Coronavirus Economic Stabilization Act of 2020 (CARES Act). The significant legislation directs more than $2 trillion into fighting the COVID-19 pandemic and stimulating America’s economy for the duration of the pandemic. This blog summarizes some of the provisions that are most relevant to financial institutions that make or service

What Will COVID-19 Relief Look Like and How Will It Affect Financial Services Companies?Both parties have recognized the need for significant and immediate relief to assist consumers and small businesses affected by COVID-19. On March 18, 2020, Rep. Maxine Waters (D-CA), the chairwoman of the House Financial Services Committee, released plans for responding to the COVID-19 pandemic. At this point, the plans are merely a high-level list of

How Is the COVID-19 Pandemic Impacting the Student Lending Industry?Like the country and economy at large, the COVID-19 pandemic is significantly impacting secondary education and the student lending industry. In response to the pandemic, colleges across the country closed their campuses, sent students home, and turned to online learning platforms, creating uncertainty for current student borrowers. President Trump, Congress, and the U.S. Department of

Credit Reporting During the COVID-19 Outbreak: Fannie Mae and the VA Offer New GuidanceWe previously blogged about the push among lawmakers and regulators to encourage or force financial institutions to cease providing adverse credit reporting on consumer loans where the delinquency or default may be related to the outbreak of COVID-19. Given the rapidly changing environment, it is not surprising that there have been some material changes in

Eleventh Circuit Endorses Narrow Definition of TCPA Autodialer Creating Circuit SplitOn January 27, 2020, a federal court of appeals issued a significant decision interpreting the Telephone Consumer Protection Act (commonly referred to as the “TCPA”) in a way that limits the expansive potential liability companies face under the statute. In Glasser v. Hilton Grand Vacations Company, the U.S. Court of Appeals for the Eleventh

Bankruptcy Court Rejects Brunner “Myth” and Discharges $220K in Student Loan DebtChief Bankruptcy Judge Cecelia Morris in the Bankruptcy Court for the Southern District recently reinterpreted Brunner’s “undue hardship” test and discharged over $220,000 in student loan debt. This opinion reflects a marked departure from a series of cases interpreting Brunner, a case that has guided the analysis of student loan dischargeability for over 30

First Circuit Holds that Parents’ Tuition Payments for Adult Children Are Fraudulent Transfers Recently, the First Circuit held that a parent’s tuition payments on behalf of an adult child do not benefit the parent’s bankruptcy estate, and a Chapter 7 trustee may therefore claw the payments back as fraudulent transfers.

The concept underlying fraudulent transfer law is that, if a person cannot pay his debts in due course,

Student Loan Servicers' Fight over Federal Preemption of State Regulation of May End Up in the Supreme CourtThe Fifth Circuit’s recent decision in Crocker v. Navient Solutions is a stark reminder to for-profit student lenders and servicers that bankruptcy caselaw continues to evolve relating to discharge. In Crocker, the Fifth Circuit joined the trend of cases holding that private student loans are dischargeable in bankruptcy. More specifically, the court affirmed a

Navigating ADA Compliance Issues in an Online WorldThe landscape remains murky as to whether and how Title III of the Americans with Disabilities Act (ADA) applies to websites. As the financial services industry moves increasingly and inexorably from a “bricks and mortar” presence to a virtual environment, these issues are likely to only become more prominent. With differing authority from

State Law Claims Based on Student Loan Servicer’s Loss Mitigation Representations Not Preempted by the HEA, Seventh Circuit Court of Appeals HoldsThe Seventh Circuit Court of Appeals struck a blow to student loan servicers’ arguments that certain state law claims brought by borrowers are preempted under the Higher Education Act (HEA). In a lengthy opinion issued on June 27, 2019, in Nelson v. Great Lakes Educations Loan Services, Inc., the court held that a borrower’s