Showing 2 posts in Fifth Circuit Court of Appeals.

A Circuit Split Emerges on the Constitutionality of the CFPB's Funding Structure, Months Before the Issue Comes Before the U.S. Supreme Court

On March 23, 2023, the Court of Appeals for the Second Circuit issued a decision in CFPB v. Law Offices of Crystal Moroney (Moroney). The case reviewed constitutional challenges to the Consumer Financial Protection Bureau's (CFPB) funding structure previously decided by the Fifth Circuit Court of Appeals last October in Community Financial Services Association of America, Ltd. v. CFPB (Community Financial). In Community Financial, the Fifth Circuit vacated the CFPB's 2017 "Payday Lending Rule" on the grounds that it was invalid "as the product of the Bureau's unconstitutional funding scheme." The CFPB's petition for writ of certiorari was granted by the U.S. Supreme Court in February. More ›

Fifth Circuit Rules For-Profit Student Loans Are Dischargeable Without Proof of "Undue Borrower Hardship"

Many student loan borrowers, lenders, and servicers operate under the presumption that student loans are generally not dischargeable in bankruptcy, absent an "undue hardship." That notion may no longer be a bright line rule, following a recent ruling by the Fifth Circuit Court of Appeals. The court ruled that certain private, for-profit student loans can in fact be discharged without the borrower providing a showing of undue hardship. This decision is particularly notable as private, for-profit student loans—including loans to cover increasing tuition costs not covered by federal loans, refinance loans, and consolidation loans—continue to see increased use. More ›