We 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 Split
On 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 Debt
Chief 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,
5th Circuit Joins the Growing Crowd Holding that Private Student Loans May be Dischargeable in Bankruptcy
The 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 World
The 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 Holds
The 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
Student Loans in Bankruptcy: What’s on the Horizon?
Federal law has long excepted student loans from discharge in bankruptcy in all but the rarest instances, recognizing the problems (and costs) associated with allowing borrowers to wipe out defaulted debts through a bankruptcy filing. However, as the issues of access to college and affordability become frequent topics in political discourse, new ideas for radical
Fourth Circuit Strikes Down TCPA Exemption for Collection of Government Debt, Putting Loan Servicers and Debt Collectors at Risk
A recent decision by a panel of the United States Court of Appeals for the Fourth Circuit interpreting the Telephone Consumer Protection Act (TCPA) has significant – and possibly costly – implications for loan servicers and debt collectors seeking to collect on loans owed to or guaranteed by the United States. On April 24, the
Student Loan Servicers’ Fight over Federal Preemption of State Regulation May End Up in the Supreme Court
In courts across the country, servicers are facing off against states and borrowers over the extent to which federal laws preempt state regulation of federal student loan servicers. Numerous states have stepped up their enforcement activity against student loan servicers and begun enacting new laws aimed at regulating student loan servicing, partially in response to