Senate
NACBA’s Washington Update, October 27th
Go into the weekend informed about significant and relevant activity on the part of Congress, regulatory agencies and interest groups/think tanks. Check out what’s happening in Washington, DC.
ON THE HILL On October 24th during the late hours, a slim majority of Republicans in the Senate voted to pass Senate Joint Resolution 47, which repeals a rule issued by the Consumer Financial Protection Bureau that made it easier for Americans to sue their banks and credit card companies. Vice President Mike Pence issued the deciding vote to repeal CFPB’s arbitration rule and block consumers from suing financial giants like Equifax and Wells Fargo. Republican Senators John Kennedy (R-LA) and Lindsey Graham (R-SC) voted against the measure.
The Senate passed S. 1107, The Bankruptcy Judgeship Act of 2017, on October 24th introduced by U.S. Senator Chris Coons (D-DE), a member of the Senate Judiciary Committee. The bill is expected to be signed into law by President Trump in the next 10 days. Coons’ bill extends Delaware’s five temporary bankruptcy judgeships for five years. The bill also adds two temporary bankruptcy judgeships for Delaware. The bill also provides extensions for 14 temporary judgeships and creates four new bankruptcy judgeships total across the country.
On October 20th, U.S. Senator Elizabeth Warren (D-MA) joined Senator Bill Nelson (D-FL) and seven other senators to call on the U.S. Department of Education (ED) to use its discretion to help college students and student loan borrowers displaced or otherwise unable to continue their education in the wake of Hurricanes Irma and Maria. Their joint letter called upon the ED to exercise discretion to enroll borrowers impacted by Hurricane Maria “in interest-free administrative forbearance for a minimum period of six months, or until Puerto Rico and the U.S. Virgin Islands are no longer considered to be in a disaster zone”.
House Financial Services Chairman Jeb Hensarling (R-TX) is praising Education Secretary Betsy DeVos for refusing to cooperate with the CFPB and says he hopes it sets an example for other federal agencies. In the letter issued on October 16th, Chairman Hensarling made it clear he would like other agencies to follow Education’s lead. He argues that the Education Department’s action to “curb the CFPB’s overreach are most welcome, and hopefully will serve as an example to other federal agencies to re-evaluate their relationship with the CFPB.”
IN THE AGENCIES On October 17th, 18 states led by Maryland and Pennsylvania sued the Department of Education for illegally delaying and refusing to enforce the gainful employment rule. Their complaint is based on the Department’s numerous violations of the Administrative Procedure Act. The gainful employment rule implements the Higher Education Act requirement that career education programs prepare students for gainful employment in a recognized occupation. Finalized in 2014 and in effect since 2015, the gainful employment regulation requires schools to give prospective students key information about costs and outcomes of career education programs at for-profit, public, and nonprofit colleges, ends federal funding for programs that consistently leave students with debts they cannot repay, and allows colleges to appeal if they believe program graduates earn more than federal data indicate.
Prior to the repeal of CFPB’s arbitration rule being brought to a vote, in a rare move, the Treasury Department sided with Wall Street attacking the rule issued by CFPB. The rule “fails to account for significant costs of class action litigation and benefits of arbitration in a meaningful way,” the Treasury Department said in an 18-page report. And it “would upend a century of federal policy favoring freedom of contract to provide for low-cost dispute resolution.”
FROM THE INTEREST GROUPS The American Legion and National Consumer Law Center published an op-ed in Politico’s Morning Consult on the taxation of death and disability on student loan discharges. In it they argue, when a borrower dies or becomes permanently disabled before paying off student loans, the loans can be discharged, relieving the disabled borrower or surviving family members of the burden of paying off a loan they often cannot afford. However, The Internal Revenue Service may treat the amount of the forgiven loan as taxable income. Although some will be able to exempt this income because they are insolvent, not all will qualify. As a result, a family that was relieved to have a student loan forgiven may then end up struggling to pay a big tax bill — all while dealing with the death of a child.
OTHER On October 14th PBS News Hour has a featured episode titled, “More older Americans than ever are struggling with student debt”. Watch it online now.
Feedback should be directed to Krista.DAmelio@NACBA.com
NACBA’s Latest Washington Update
Read the latest update from Washington, designed to keep NACBA members informed about significant and relevant activity on the part of Congress, regulatory agencies and interest groups/think tanks.
ON THE HILL A vote in Senate on the Consumer Financial Protection Bureau’s arbitration regulation is imminent. Republican leaders are considering whether to bring to the Senate floor a bill that would kill the arbitration regulation finalized by the CFPB this summer using a special legislative tool that allows them to avoid a Democratic filibuster if they act within 60 legislative days of implementation. Senators Johnny Isakson (R-GA) and David Perdue (R-GA) are cosponsors of the legislation in the Senate. The debate comes three weeks after a public outcry compelled the Atlanta-based Equifax to quickly drop so-called forced arbitration language from the terms of service of the free credit monitoring service it was offering its customers after its massive data breach. The House of Representatives already passed a “resolution of disapproval” to revoke the CFPB’s arbitration rule. A total of 23 Senate Republicans filed a resolution at the end of July to rescind the CFPB rule. Senator Sherrod Brown (D-OH), ranking member of the Senate Committee on Banking, Housing, and Urban Affairs, has promised to fight to keep the rule.
IN THE AGENCIES On September 14th, Clifford White, Director of the Executive Office of the U.S. Trustees addressed the National Association of Bankruptcy Trustees at the 35th Annual Convention. He discussed topics that included chapter 7 trustees, guidance on natural disasters, marijuana assets, and stale debt claims—to name a few. Amongst things he noted for natural disaster guidelines were: the US Trustee Program (USTP) will not take enforcement action against debtors who are unable to file or produce documents required by the Code as a result of a natural disaster, if they otherwise are eligible for relief; USTP will not move to dismiss under the “means test” if income loss, increased expenses, or other consequences of a natural disaster constitute “special circumstances” sufficient to rebut the presumption of abuse; and even if conditions do not justify a United States Trustee granted statutory waiver of the credit counseling requirements for a district, USTP will exercise prosecutorial discretion in considering whether to take action to dismiss the case of a debtor who, as a result of a natural disaster, experiences difficulty in obtaining a credit counseling certificate or whose filing was delayed beyond the 180-day period following the debtor’s receipt of credit counseling.
The Federal Trade Commission launched a web page highlighting the work of the agency’s new Military Task Force, which is aimed at identifying the needs of military consumers and developing initiatives to empower servicemembers, veterans, and their families, including through law enforcement actions. The Military Task Force, comprised of a cross-section of agency representatives, is part of the FTC’s ongoing and collaborative effort to provide resources for the military community. Servicemembers, like all consumers, are potential targets for fraudsters. Certain scams are more likely to target the military community because those families may relocate frequently and because many service members are living on their own and earning a paycheck for the first time.
FROM THE INTEREST GROUPS Following the U.S. Trustee Program’s recently issued guidelines for natural disasters mentioned above, NACBA and NCLC wrote a joint letter urging for stronger relief for bankruptcy debtors in Texas, Florida, and Puerto Rico proportionate to the serious problems those hurricane victims are now facing. Specifically, NACBA and NCLC request USTP approve a waiver of credit counseling requirements in the areas of Texas, Florida, and Puerto Rico affected by Hurricanes Harvey, Irma, and Maria.
OTHER A report was recently published that analyzed issues of bankruptcy and race in America. Interested parties can access the report online.
Feedback should be directed to Krista.DAmelio@NACBA.com
Stay Informed With NACBA’s Latest Washington Update
Read the latest update from Washington, designed to keep NACBA members informed about significant and relevant activity on the part of Congress, regulatory agencies and interest groups/think tanks.
On The Hill The Senate unanimously approved legislation on September 8th by Judiciary Committee Chairman Chuck Grassley (R-IA) and Senator Al Franken (D-MN) clarifying Congress’ intent to allow family farmers to more easily reorganize their finances when they fall on hard times. S. 1237 Family Farmer Bankruptcy Clarification Act of 2017 reiterates Congress’ earlier action to enable bankrupt family farmers reorganizing their debts to treat capital gains taxes owed to a governmental unit, arising from the sale of farm assets during a bankruptcy, as general unsecured claims. It also removes the Internal Revenue Service’s veto power over a bankruptcy reorganization plan’s confirmation, giving the family farmer a chance to reorganize successfully.
On September 6th Senator Coons’ (D-DE) bill S. 1107, Bankruptcy Judgeship Act of 2017, passed the Senate. The bill extends temporary bankruptcy judgeships and calls for a five-year extension for 14 temporary bankruptcy judgeships and will create four new bankruptcy judgeships. With this bill, Delaware will retain its one permanent bankruptcy judge, will receive extensions of its five temporary bankruptcy judges and will receive an additional two temporary bankruptcy judgeships for five years to handle the heavy caseload for the district, which is one of the busiest in the country.
Representative Sean Duffy (R-WI) is pushing to have federal flood insurance reformed to avoid bankruptcy and to allow private insurance to run the program as opposed to the federal government. He wants to set flood insurance up so that the private market can come in and offer premiums and coverage at better prices than the federal government. Duffy agrees that helping Texas is the right thing to do, but warned continued subsidies to flood areas is not fiscally sound, and encouraged Congress to think about future disasters on the horizon.
In The Agencies On September 1st the Education Department has notified the Consumer Financial Protection Bureau (CFPB) that it’s severing operating agreements with it, saying the regulatory body has “undermined” the mission to serve students and borrowers — particularly in its handling of student loan servicing issues. A copy of the letter notifying the CFPB of the decision was released Friday by Representative Virginia Foxx (R-NC), chairwoman of the House Education and the Workforce Committee. It’s signed by A. Wayne Johnson, chief operating officer of the Education Department’s Office of Federal Student Aid, and Kathleen Smith, acting assistant secretary in the Office of Postsecondary Education, and dated Thursday. It is claimed that the CFPB is using its jurisdiction in areas that Congress never intended.
OTHER Following the recent Equifax breach, U.S. Senator Sherrod Brown (D-OH), ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, is calling on Equifax to immediately remove forced arbitration from all services offered to customers following a data breach that exposed 143 million Americans to identify theft. Equifax is currently touting free credit monitoring and identify protection services for victims of the breach through its TrustedID product. However, Equifax included forced arbitration clauses in the terms of use agreement customers must agree to when signing up for the services – effectively forcing victims of the breach to sign away their rights to seek access to court.
Feedback should be directed to Krista.DAmelio@NACBA.com
Bankruptcy News Briefs 9/13
Midweek Headlines in the Briefs…
August Bankruptcy Filings Increase for Consumers and Businesses
CFPB Gets $14M In Relief For Deceived Consumers Since Start Of Year
Upcoming Programs On CFPB Arbitration Rule
National Credit Systems Inc., Equifax Inc. accused of misrepresentation in debt collection
CFPB Enters Consent Order with Lead Aggregator For Steering Consumers to Illegal Loans
United States: New TCPA Class Action: Expansion Into Service Calls
Medical debt won’t go on your credit report right away, come Sept. 15, 2017
Roadblocks Ahead for Credit Union Legislation
Don’t miss NACBA’s 2017 Hill Day at Home October 16- October 20, 2017. Hill Day at Home allows NACBA members to meet with federal lawmakers, grow and maintain working relationships with Congressional offices, and have a lasting impact on bankruptcy policymaking, all without leaving the comfort of your state. Meetings will be arranged for you, some taking place in local House and Senate district offices and some being held over the phone with bankruptcy staffers in D.C.
Please sign into your NACBA Member Account to Register now for Hill Day at Home!
DEADLINE TO REGISTER IS FRIDAY, SEPTEMBER 22, 2017
Upcoming Webinar!
DATE: Thursday, September 21, 2017 @ 3:00 PM Eastern to 4:15 PM Eastern
PRESENTED BY: Edward C. Boltz, Law Offices of John T. Orcutt, PC; Durham, N.C. and Jody Bledsoe, Chapter 13 Trustee; New Bern, NC
PRESENTED BY: Edward C. Boltz, Law Offices of John T. Orcutt, PC; Durham, N.C. and Jody Bledsoe, Chapter 13 Trustee; New Bern, NC
COST: $25 Member / $75 Non Member
REGISTER: HERE
REGISTER: HERE
DATE: Thursday, September 14, 2017 @ 4:00 PM Eastern to 4:45 PM Eastern
PRESENTED BY: James Haller, Esq., Sulaiman Law Group Ltd. Chicago, IL
PRESENTED BY: James Haller, Esq., Sulaiman Law Group Ltd. Chicago, IL
COST: $25 Member / $75 Non Member
REGISTER: HERE
REGISTER: HERE
NACBA Events
- Save the Date for the 2018 NACBA Annual Convention on April 19-22 at the Sheraton in Downtown Denver!
- NACBA 2018 Cruise! Get ready to set sail on the Empress of the Sea on November 29th-December 3rd 2018! Visit Havana, Cuba and Nassau, Bahamas while learning with NACBA! Registration is open!
Stay Informed! Read NACBA’s Washington Update
Check out the latest update from Washington, designed to keep NACBA members informed about significant and relevant activity on the part of Congress, regulatory agencies and interest groups/think tanks.
On The Hill Senators Elizabeth Warren (D-MA) and Al Franken (D-MN) sat down to discuss CFPB’s arbitration rule in a Facebook video published on Senator Warren’s page. View the video to hear the advice they provide on what viewers can do to stop Congress from “selling out to the big banks”.
In The Agencies The Consumer Financial Protection Bureau (CFPB) has filed an amicus brief in support of the Department of Education’s (ED) appeal asking the U.S. Court of Appeals for the Federal Circuit to vacate a preliminary injunction entered by the Court of Federal Claims that bars the ED from assigning defaulted student loans to certain small business private collection agency contractors and other contractors. The injunction was issued in a lawsuit filed by companies challenging ED decisions not to award or continue contracts with such companies to collect student loans. The CFPB argues that by preventing the ED from assigning debt collectors to defaulted loans, the preliminary injunction impedes or prevents borrowers from managing their federal student loan debt.
More on CFPB. On August 25, 2017 CFPB issued the 2017 HMDA Final Rule that amends Regulation C to implement amendments to the Home Mortgage Disclosure Act made by section 1094 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). CFPB added several new reporting requirements, clarified existing requirements and modified institutional and transactional coverage of Regulation C. The final rule also provides extensive guidance regarding compliance with both the existing and new requirements.
The Trump administration has selected Julian Schmoke Jr. to serve as the Department of Education’s new chief enforcement officer. Schmoke is a former for-profit college official who previously directed campus operations at West Georgia Technical College and served as a dean at DeVry University. He will lead the Department’s unit that polices fraud in higher education. Specifically, Schmoke will lead the Student Aid Enforcement Unit established by the Obama administration to more aggressively combat fraud and deceptive practices at colleges and universities. Sens. Sherrod Brown (D-OH), Patty Murray (D-WA), Dick Durbin (D-Il) and Elizabeth Warren (D-MA) wrote a letter to Secretary DeVos urging that the person selected must “have relevant experience in consumer protection or litigation, managing attorneys, and conducting investigations with the highest ethical standards.” The unit Schmoke will oversee is also responsible for processing debt relief claims filed by federal student loan borrowers who say they’ve been defrauded by their college.
OTHER It is being reported that in the wake of Hurricane Harvey, about 80% of homeowners in the areas devastated by the hurricane lack flood insurance. This leaves many who escaped the storm with little financial help to rebuild their homes and lives. The Washington Post reports that only 17 percent of homeowners in the eight counties most directly affected by Harvey have flood insurance policies that cover up to $250,000 in rebuilding costs and $100,000 to replace personal belongings such as TVs and furniture. Losing a home without insurance compensation is financially devastating. A total loss could delay retirement or force people into bankruptcy.
Wells Fargo is now revealing it has found a total of up to 3.5 million potentially fake bank and credit card accounts, up from its earlier tally of approximately 2.1 million. The additional fake accounts were discovered by a previously-announced analysis that went back to January 2009 and that reviewed the original May 2011 to mid-2015 period. Moreover, Wells Fargo also revealed that thousands of customers were enrolled in online bill pay without their authorization. The review found 528,000 potentially unauthorized online bill pay enrollments.
Feedback should be directed to Krista.DAmelio@NACBA.com
Bankruptcy News Briefs 9/5
New Month New Headlines…
No Bad Faith for Failure to Voluntarily Devote Social Security Funds to Plan
Federal Judge Dismisses CFPB’s Claims Against Debt Collection Service Providers
College Football Tickets are Property of the Estate which Trustee May Sell for Benefit of Creditors
From the Web: ‘CFPB Director Evasive About Possible Resignation’
Republicans Accelerating Repeal Of Rule To Restore Consumers’ Right To Sue Banks
HHS Secretary Issues Directive on HIPAA Privacy During Public Health Emergency
FTC Court Order Bans Debt Collector from Industry
CFPB Rule Fight Forces Senators to Choose: Military Families or Big Banks
Education Dept. Ends Partnership With CFPB
Wells Fargo’s latest fake account revelation proves why the CFPB must survive
Recent Massachusetts AG consent order places new requirements on debt collection law firm
Liz Weston: Credit Bureaus Ease Medical Debt Pain for a Few
US Credit Card Debt Sets New Record—But Is That a Problem?
“Modest” Overstatements of Amount Due and Interest Rate Actionable Under FDCPA, Ninth Circuit Rules
2017 Hill Day Registration is Open!
Don’t miss NACBA’s 2017 Hill Day at Home October 16- October 20, 2017. Hill Day at Home allows NACBA members to meet with federal lawmakers, grow and maintain working relationships with Congressional offices, and have a lasting impact on bankruptcy policymaking, all without leaving the comfort of your state. Meetings will be arranged for you, some taking place in local House and Senate district offices and some being held over the phone with bankruptcy staffers in D.C.
Please sign into your NACBA Member Account to Register now for Hill Day at Home!
DEADLINE TO REGISTER IS FRIDAY, SEPTEMBER 22, 2017
Upcoming Webinar!
DATE: Thursday, September 21, 2017 @ 3:00 PM Eastern to 4:15 PM Eastern
PRESENTED BY: Edward C. Boltz, Law Offices of John T. Orcutt, PC; Durham, N.C. and Jody Bledsoe, Chapter 13 Trustee; New Bern, NC
PRESENTED BY: Edward C. Boltz, Law Offices of John T. Orcutt, PC; Durham, N.C. and Jody Bledsoe, Chapter 13 Trustee; New Bern, NC
COST: $25 Member / $75 Non Member
REGISTER: HERE
REGISTER: HERE
NACBA Events
- Save the Date for the 2018 NACBA Annual Convention on April 19-22 at the Sheraton in Downtown Denver!
- NACBA 2018 Cruise! Get ready to set sail on the Empress of the Sea on November 29th-December 3rd 2018! Visit Havana, Cuba and Nassau, Bahamas while learning with NACBA! Registration is open!
NACBA’s 2017 Hill Day at Home Announced!
What’s Happening in DC? Find Out In Today’s Washington Update
NACBA Staff member, Krista D’Amelio gives us the latest update from Washington. Stay informed about significant and relevant activity on the part of Congress, regulatory agencies and interest groups/think tanks.
On The Hill On Tuesday, July 25 the House of Representatives passed H.J. Res. 111, a resolution to repeal the new Consumer Financial Protection Bureau (CFPB) rule to restore consumers’ ability to join together and hold banks and lenders accountable in class action lawsuits when they break the law. The CFPB issued the arbitration rule on July 10, 2017, an effort to restrict banks and lenders’ use of forced arbitration — fine-print clauses in contracts for credit cards, bank accounts, and other financial products that prevent people from banding together to challenge fraud by big banks. Representative Walter Jones (R-NC) was the only Republican to vote no on H.J. Res. 111. A full list of recorded votes has been posted on the House Clerk website. The Senate is expected to vote on a similar bill filed as S.J Res. 47.
H.R. 3553 was introduced by Congressman Tom Marino (R-PA) on July 28th to amend title 11 of the United States Code to increase the amount of compensation paid to chapter 7 bankruptcy trustees for services rendered. Congressman Ed Perlmutter (D-CO) co-sponsored the bill and a summary is in progress.
In The Agencies The Federal Trade Commission (FTC), state, and local authorities will convene a conference in Los Angeles on Sept. 7, 2017, to help educate military consumers and train military attorneys, law enforcement personnel, and consumer protection officials to address consumer fraud and other issues that affect servicemembers and their families. This event follows the FTC’s recent successful Military Consumer Financial Workshop, held July 19 in San Antonio. More information can be found by visiting the FTC’s website.
FROM THE INTEREST GROUPS On August 1, 2017, the Economic Policy Institute released a fact sheet debunking industry claims that consumers recover more money in arbitration than class actions. They re-examined data from the CFPB study and found that the average consumer is ordered to pay their bank or lender $7,725 in arbitration. The EPI findings conclude that class actions return hundreds of millions to consumers, while forced arbitration only pays off for banks and lenders.
On July 13, 2017, Director of the U.S. Trustee Program Clifford White addressed the National Association of Chapter 13 Trustees at their 52nd annual conference. During his speech, Director White spoke on issues including: marijuana assets in bankruptcy, stale debt claims, efforts to fight fraud and debt abuse, debtor education and the Department of Justice’s proposal for a uniform national chapter 13 plan. You can read Director White’s entire speech on the Department of Justice website.
Feedback should be directed to Krista.DAmelio@NACBA.com
Bankruptcy News Briefs 2/3
Legislation to Reform Leadership Structure at CFPB Returns in 115th Congress
FCC Chairman Ajit Pai Announces Pilot Program to Improve Transparency
Woman claims debt collector continued to contact her after alleged debt was discharged
Illinois sues major student loan providers, alleges consumer fraud
If your spouse dies, you have to pay their medical debt, little-known state law says
Dodd-Frank’s Bankruptcy Provision Could Be a Trump Target
Most Consumers Still Debt Shy: Filene
Students need bankruptcy protection from crushing loans
Upcoming NACBA Events
Join us in celebrating 25 years of NACBA on May 4th-7th in Orlando, Florida at the Walt Disney World Swan and Dolphin Resort. Visit NACBA25 for all the details on speakers, sessions, hotel reservations, registration and more!
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Save the Date! New NACBA Webinar in March
What to do: Post HAMP for Mortgage Borrower Clients
Date: Thursday, March 16, 2017, 3:00 PM Eastern to 4:00 PM Eastern.
Presented by: Marc Dann Esq., and Bobby Rivera Esq.
Registration opens soon
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