Wells Fargo

Bankruptcy News Briefs 11/27

Check Out Monday’s Headlines…

Wells Fargo Facing Penalties Over Ignoring Student Loan Included in Bankruptcy

The IRS’ Inability to Collect Tax by Levy Tolled the 3-Year Time Period to Determine Dischargeability under §507(a)(8)

Debtor’s Wedding Ring is “Necessary Wearing Apparel” and Fully Exempt Under State Statute

Statement of National Consumer Law Center’s Lauren Saunders Regarding Appointment of Mulvaney

Mulvaney as Interim Director of Consumer Bureau

Creditor Could be Liable for Violating Discharge Injunction, Even if the Debt Does Not Exist

Debt-settlement bill worries consumer groups

Equifax breach is already taking a toll on consumers

CFPB Director Cordray Shaped a Critical Consumer Watchdog

All About the CFPB, Washington’s New Flashpoint: QuickTake Q&A

US Black Friday Sales Hit Record High, So Does Household Debt

CFPB Drama’s Next Act Comes as Dueling Heads Show Up to Lead

FDCPA Overrides State Law Limitations Period And Charging Order Exclusivity In Wilhite

Months after Equifax breach, credit freeze bill on ice

Goldman Sachs forgives $71 million in mortgage debt

Registration is Open for the 2017 Virtual Bankruptcy Workshop!

Examine the New and Amended Bankruptcy Rules, National Uniform Plan and Local Plans

December 7-8, 2017
12:00 PM – 3:00 PM Eastern (Both Days, Part I & 2)
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Registration is Open for the 2018 NACBA Annual Convention! 

Why Attend #NACBADEN?

  • Education: Attendees typically earn 22 of the best CLEs designed for debtor’s attorneys. NACBA’s planning committee is busy putting together a line up that will offer something for everyone, from the beginner to the seasoned practitioner.
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Register by February 23rd for the Early Bird Rate to get great savings!

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

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

Washington Update- August 18th

Krista D’Amelio gives 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.  Take a look at what’s happening in DC in the Washington Update.

On The Hill U.S. Senator Elizabeth Warren (D-MA) sent letters on August 10th to the heads of JP Morgan Chase, Bank of America, Wells Fargo & Company, Citigroup Inc., U.S. Bancorp, PNC Financial Services Group Inc., TD Group US Holdings, Capital One Financial Corporation, HSBC North America Holdings, Charles Schwab Corporation, BB&T Corporation, Suntrust Bank, Barclays US, Ally Financial Inc., American Express Co. and Citizens Financial Group. In these letters, she requests information on the banks’ stances on the arbitration rule, along with data on the firms’ use of arbitration clauses in consumer agreements and the outcomes of arbitration proceedings. Warren has asked for responses by September 1 because Republicans have introduced a CRA resolution to reverse the CFPB rule. Warren is the ranking member of the Senate Banking Committee’s Subcommittee on Financial Institutions.

Full text of H.R. 3553 has been released. As you may recall from the previous Washington Update, the bill 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.

On August 17thPresident Trump signed into law H.R. 3218, the Harry W. Colmery Veterans Educational Assistance Act of 2017, also known as the “Forever GI Bill,” named after the American Legion national commander who wrote the original GI Bill language in 1944. This legislation contains 34 new provisions, the vast majority of which will enhance or expand education benefits for Veterans, Servicemembers, Families and Survivors. Most notably, Veterans who transitioned out of the military after January 1, 2013 will not be limited to the 15-year deadline to use their GI Bill benefits. This law also restores benefits to Veterans, who were impacted by school closures since 2015, and expands benefits for our reservists, surviving dependents, Purple Heart recipients, and provides many other improvements.

In The Agencies The Department of Education submitted a notice in the Federal Register on August 17th regarding the gainful employment rule that would delay appeals and leave the future of failing programs up to Secretary  DeVos. 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. The document establishes new deadlines for submitting notices of intent to file alternate earnings appeals and for submitting alternate earnings appeals. Normally, appeals would be due in February 2018 and warnings are not required by failing programs that intend to say they intend to appeal.

More from the Department of Education. On August 14th, the Department told a federal appeals court that a court order blocking its ability to send any newly defaulted student loan borrowers to its hired debt collectors has cost taxpayers more than $5 million in lost collections since March. In addition, the Education Department now estimates that 463,000 borrowers are stuck in default limbo because they haven’t been assigned a debt collection firm. This lawsuit came about because private debt collection agencies that were not awarded the latest collection contract sued the Department of Education. After the judge overseeing the litigation issued an order preventing the Department from assigning new accounts to debt collectors, the Department announced a re-do of the contract and is now rushing to make a final award by the end of next week.

The Consumer Financial Protection Bureau released new data on August 16th that found nearly half of student loan borrowers leave school owing at least $20,000 – double the share of borrowers a decade ago. Further, the data shows that people are taking on more student debt later in life, and having a tougher time paying it back. 44 million Americans currently owe money and the combined total of outstanding federal and private student loan debt now exceeds $1.4 trillion.

Feedback should be directed to Krista.DAmelio@NACBA.com

NACBA’s Washington Update IX

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This is 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.  Feedback should be directed to mthompson@hastingsgroup.com.

Obviously, the big news out of Washington continues to be the election results.  NACBA members who joined us for the November 18 webinar, “The 2016 Election: What Now?,” heard NACBA leaders and our representatives in Washington answer the questions about what to expect in 2017 from the Administration, Congress and the courts.  We are planning to issue a special report in the next few weeks, after we learn more about the Cabinet and priorities of the Trump Administration and Congress.  Our report will focus not only on what to expect from the White House come January, but also the key agencies of interest to NACBA — Department of Justice, Consumer Financial Protection Bureau, and the Department of Education — as well as the leadership and key committees in Congress.

Continue reading for non-election news out of Washington this week.

ON THE HILL The 114th Congress has unofficially come to a close, but our elected officials are still at work.  Sen. Elizabeth Warren (D-MA) and Rep. Elijah Cummings (D-MD) are broadening their investigation of the Wells Fargo scandal to examine whether Prudential Financial insurance products were also charged to the bank’s customers without their knowledge.  In a December 13, 2016 letter to Prudential’s CEO, the two Democrats asked for documents related to the bank’s sales of Prudential insurance. They requested the information and a briefing by January 13, 2017.

The action came after three former Prudential (PRU) employees alleged that Wells Fargo employees signed up customers for a low-cost Prudential life insurance policy without their knowledge or permission.  The three former PRU employees filed a Dodd-Frank whistleblower complaint with the SEC alleging they were retaliated against after uncovering the misconduct.

IN THE AGENCIES Fannie Mae and Freddie Mac announced a program to aid homeowners who are behind on their mortgage payments.  The Flex Modification loan program will begin in January 2017 and replaces the Home Affordable Modification Program (HAMP), a foreclosure-prevention policy that’s set to expire at the end of this year. Loan servicers have until October 2017 to implement the program.

The new loan modification guidelines are expected to expand the population of homeowners eligible for lower monthly payments, short sales and other alternatives to foreclosure, according to Fannie Mae.

The Government Accountability Office (GAO) has released a report documenting the consequences that the Department of the Treasury’s practice of garnishing Americans’ social security payments has on student loan borrowers in default. The number of older Americans defaulting on education loans has steadily increased in recent decades, as many have returned to college or co-signed loans for family members. Unpaid debt has resulted in the government garnishing the benefits of 114,000 people age 50 and older in the past year, more than half of whom were receiving Social Security disability rather than retirement income.  The report found that for more than two-thirds of borrowers whose monthly benefit was below the poverty line, the money deducted from their Social Security benefits was enough only to pay fees and interest, so the amount of the debt was not even reduced. The report also found that of older student loan borrowers with a Social Security offset, 43% had held their loans for 20 years or more and 80% had held their loans for 10 years or more.  Although there are rules designed to protect a portion of the recipient’s benefits, the dollar amount protected has not changed since 1996, and leaves a borrower with only $750/month ($9,000/year) to live on.

MORE FROM CFPB  The Bureau released a report raising new concerns about costly fees and risky features that can be attached to certain college-sponsored accounts. The report comes after analysis of roughly 500 marketing deals between the schools and large banks found that many deals allow for risky features that can lead students to rack up hundreds of dollars in fees per year. The report also examines trends in the school-sponsored credit card market. The CFPB also issued a bulletin today reminding colleges and universities they are required to publicly disclose marketing agreements with credit card companies.  The campus banking report is available at here.

Both the Director of the CFPB and the head of the FHFA have expressed their intent to finish out their terms at their respective agencies.  Richard Cordray “has no plans” to leave the top job at the CFPB, the agency said. “Director Cordray was confirmed by a bipartisan group of 66 senators to serve a term until July 2018 and has no plans to step down,” CFPB Communications Director Jen Howard said in an email.  Mel Watt, the FHFA head overseeing Fannie Mae and Freddie Mac, will serve out the remaining two years of his term after President-elect Donald Trump takes office.  Watt made his intent clear during a recent meeting with agency staff, according to people familiar with that gathering who confirmed the remarks Friday. His term expires in January 2019.

FROM THE INTEREST GROUPS U.S.PIRG has released a report titled “Big Banks, Big Overdraft Fees” that concludes that “overdraft fees are a major source of consumer pain, since they are borne disproportionately by Americans with few financial resources” but, that the CFPB is working to protect consumers from unfair overdraft fees.” A copy of the report is available here.

The private student loan industry is making a push to expand its role in the Department of Education’s growing $1.3 trillion portfolio of federal student loans.  A main lobbying group for the industry, the National Council of Higher Education Resources, wrote a letter this week to President-elect Donald Trump’s transition team, making a series of proposals that included a bold plan to auction off some of the existing portfolio of federal loans to private investors. You can read a copy of the letter here.

Washington Update VIII

This is the latest issue of our weekly 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.  Feedback should be directed to Maureen Thompson.

Obviously, the big news out of Washington is the election results.  NACBA members who joined us for the November 18 webinar, “The 2016 Election: What Now?,” heard NACBA leaders and our representatives in Washington answer the questions about what to expect in 2017 from the Administration, Congress and the courts.  We are planning to issue a special repot next week after President-Elect Trump announces his full roster of cabinet picks.  We will focus not only on what to expect from the White House come January, but also the key agencies of interest to NACBA: Department of Justice, Consumer Financial Protection Bureau, and the Department of Education, as well as the leadership and key committees in Congress.

Continue reading for non-election news out of Washington this week.

ON THE HILL Congress remains focused on Wells Fargo.  Senator Sherrod Brown (D-OH) – ranking member on the Senate Banking Committee – and Representative Brad Sherman (D-CA)– a member of the House Financial Services Committee – introduced legislation that will give Wells Fargo customers who were victims of a fraudulent account scheme their day in court. Wells Fargo is using the forced arbitration clauses it tucked away in the fine print of contracts customers signed when they opened legitimate accounts to block them from suing over the fraudulent accounts.  Read more about the bill here.

Senator Mike Enzi (R-WY), chairman of the Senate Budget Committee reacted to a General Accountability Office (GAO) report on the cost of Department of Education’s Income Driven Repayment (IDR) plans for student loans (see “In the Agencies) by harshly criticizing the Department, which is responsible for calculating the cost of the program.  “This Administration has been manipulating the terms of the student loan program without the consent of Congress, while shirking its statutory duty to carefully assess the cost impact of those changes,” Enzi said in a statement. “It will be crucial to consider updates to the Federal Credit Reform Act because Congress is not receiving credible, transparent cost data under the existing statute, as this report suggests.”

A group of 21 current and former members of Congress filed an amicus brief in support of the Consumer Financial Protection Bureau’s (CFPB) petition filed with the D.C. Circuit seeking a rehearing of its decision in CFPB v PHH Corporation.  Read the brief here.

IN THE AGENCIES The Government Accountability Office (GAO) released a report critical of the Department of Education’s approach to estimating the cost of income-based student loan repayment plans, which allow borrowers to make student loan payments based on how much they make.  According to the GAO report, these plans will cost more than twice as much as the Education Department expected them to.  The Education Department’s approach to estimating the costs of the repayment plan “do not ensure reliable budget estimates,” the GAO report says.   You can read the report here.

The Education Department responded to the GAO report, saying it “generally concurs” with the findings, but noted that “the decisions made (and critiqued in this report) were based on existing staff and systems resources available, assessed impact, and consideration for conservatism.”  “The lifecycle of a student loan is exceedingly complex, with a multitude of projection paths and outcomes,” the department’s response said. “Estimating the federal cost of student loans is a task we take very seriously, and we are constantly seeking to enhance and refine our cost estimation models.”

On November 18, the CFPB petitioned the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) for an en banc review of PHH v. CFPB. The petition, which was expected, argues that this case represents “what may be the most important separation-of-powers case in a generation.” You can read the petition here.

More from the CFPB… the CFPB has taken action against B&B Pawnbrokers, Inc. for deceiving consumers about the actual annual cost of its loans. In a lawsuit filed in federal court, the CFPB alleged that B&B Pawnbrokers broke the law by misstating the charges associated with pawn loans. The CFPB’s lawsuit seeks to end B&B Pawnbrokers’ illegal practices, get restitution for the consumers it harmed, and impose penalties. You can read the lawsuit here.

In good news for consumers, the Internal Revenue Service (IRS) aims to include as many homeowners as possible in a taxable-income exclusion set to expire at the end of the year.

According to Notice 2016-72, the IRS will accept debt reduction modifications as long as the borrower receives a trial offer by the sunset of the Home Affordable Modification Program, set for Dec. 30, 2016. The program was created to encourage banks to lower monthly mortgage payments to help homeowners stave off foreclosure after the subprime mortgage crisis.  “This is trying to capture as many people as possible in the folks that can benefit from that tax assistance,” Sarah Bolling Mancini, of counsel at the National Consumer Law Center Inc., told Bloomberg BNA Nov. 28.

The IRS guidance focuses on the programs that allow homeowners to reduce the principal balance on their loans, not programs that just reduce interest rates or stretch repayment terms, Mancini said.  Homeowners must receive a trial period plan from their bank before Jan. 1, 2017, but don’t need to complete the plan or enter into a permanent version before the deadline, the IRS said. Typically, a bank will send out a letter saying a homeowner is approved for a trial plan, and the homeowner must then make a trial payment for the next three months before a permanent version will be offered, Mancini said.

FROM THE INTEREST GROUPS A group of 10 consumer advocacy organizations has also filed an amicus brief in support of the Consumer Financial Protection Bureau’s (CFPB) petition filed with the D.C. Circuit seeking a rehearing of its decision in CFPB v PHH Corporation.  Read the brief here.

OTHER For easy access, here is a link to the CFPB Ombudsman’s webpage. There you will find their 2016 Annual Report, which you may find informational as well as a useful as a resource.

Washington Update VI

Get Caught Up on What’s Happening In Washington! Read Today’s Washington Update VI

This is the latest issue of our weekly 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 Wells Fargo settled with regulators for $185 million after its employees were found to have opened some 1.5 million bank accounts and applied for almost 600,000 credit cards that may not have been authorized by customers, but as promised, the Senate investigation continues.  Senators Warren, Sanders, Markey and Hirono sent a letter to accounting firm KPMG asking for an explanation as to why its audits of Wells Fargo failed to uncover the cross-selling misconduct.  The senators asked KPMG a series of questions, including whether the firm has faced disciplinary action from the Public Company Accounting Oversight Board (PCAOB) related to Wells Fargo audits. KPMG has until Nov. 28 to reply.

The special inspector general for the Troubled Asset Relief Program (TARP) is proposing to make it easier to charge bank executives when fraudulent activity occurs at their institution.  Christy Goldsmith Romero, in SIGTARP’s quarterly report to Congress, recommends that Congress require senior bank officials to sign an annual certification that they have done their due diligence to determine that there is no criminal conduct or civil fraud happening at their institution.

The White House called on Congress to rethink its approach to rebuilding the hobbled mortgage market and offered, for the first time, a set of principles for housing reform.

Affordability and access to credit, especially for middle-income Americans and minorities, must provide the foundation of any new system, the White House said. The White House went on to say that revamping the arcane infrastructure of the global mortgage market, which has challenged policymakers since the 2008 housing collapse, should take a backseat.  The request is laid out by Treasury advisers Antonio Weiss and Karen Dynan and can be read here.

IN THE AGENCIES  In a speech given at a major payments and financial technology industry conference (Money 20/20) in Las Vegas, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray called for consumers to have more control over their financial data.  “Consumers should be able to access this information and give their permission for third-party companies to access this information as well.” The CFPB director added that his bureau is “gravely concerned by reports that some financial institutions are looking for ways to limit, or even shut off, access to financial data rather than exploring ways to make sure that such access, once granted, is safe and secure.”  You can read Director Cordray’s speech here.

Director Cordray also delivered remarks at the Consumer Advisory Board meeting in Washington, DC.  His remarks addressed the issues people encounter when they are paying back debt, and more specifically, the debt collection market and the student loan servicing market.  You can read his remarks here.

The U.S. Department of Education announced final regulations to protect student borrowers against misleading and predatory practices by postsecondary institutions and clarify a process for loan forgiveness in cases of institutional misconduct.  Read the full press release from the Department of Education here.  Reaction to the new regulations is unfolding, with at least one publication (Bloomberg analysis) suggesting that the new regulations will make seeking student debt relief more difficult.

FROM THE INTEREST GROUPS  In a letter to the CFPB, the Consumer Bankers Association (CBA) told regulators that its members have changed or are changing contracts for private student-loan customers to ensure that loans in good standing aren’t placed in default because a co-signer has died or filed for bankruptcy.  The changes address the regulators’ criticism of the banks’ practice known as “auto-defaults.” The system causes surprise defaults for borrowers when the status of co-signers changes even when the borrowers’ themselves have met their payment obligations.  You can read the CBA’s press release here.

The Mortgage Bankers Association has stepped up political pressure for housing reform.  The group will launch an inside-the-beltway campaign in January to promote the stability and transparency of the home loan industry.  They also will call on the incoming president to appoint a housing director to coordinate policy across multiple agencies and local state and federal governments. “Someone who works in the White House, someone with the authority of a direct report to the new president,” MBA President David Stevens said in a speech at the group’s annual meeting in Boston. “It’s the only way to untangle the confusion and imbalances. It’s the only way to avoid the housing crisis to come.”

Read all the Washington Updates in NACBA News