SCOTUS Decision in Student Loan Forgiveness Cases May Hinge on Article III Standing

On February 28^th, 2023, the United States Supreme Court heard oral arguments in two related cases, Biden v. Nebraska and Department of Education v. Brown, both of which challenge President Biden's one-time student loan forgiveness program. More ›

Fifth Edition of 50 State Guide on Student Loan Servicing Laws Now Available

An important resource for financial services compliance professionals has been updated. The Fifth Edition of the 50 State Guide on Student Loan Servicing Laws is a quick reference guide and resource for student loan industry participants regarding enacted state laws, and pending or previously introduced legislation. More ›

CFPB Highlights COVID-19-Fueled Regulatory Risks for Examined Industries in Special Edition of Supervisory Highlights

In its recent Special Edition of Supervisory Highlights on COVID-19 Prioritized Assessments, the Consumer Financial Protection Bureau (CFPB) summarized challenges and risks with respect to several industries it had informally examined since the start of the pandemic. Beginning in May 2020, the Bureau rescheduled about half of its planned examinations and instead conducted "prioritized assessments" in response to the pandemic. These assessments included seeking information on how institutions were responding and communicating with consumers, and also examining how institutions were confronting and adapting compliance in response to the pandemic. More ›

Fourth Edition of 50 State Guide on Student Loan Servicing Regulations Now Available

An important resource for financial services compliance professionals has been updated. The Fourth Edition of the 50 State Guide on Student Loan Servicing Regulations is a quick reference guide and resource for student loan servicers regarding the regulations specific to the industry, along with pending legislation, litigation, and court rulings. More ›

Congress is Nearing a $2 Trillion Stimulus Deal, Here's What it Means for Loan Servicers

The COVID-19 outbreak has resulted in unprecedented job loss for millions of Americans, creating economic uncertainty and challenges for loan servicers in 2020. Until the outbreak is controlled, missed payments on mortgages and student loans are likely to increase. Already, the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Finance Agency (FHFA) have issued 60 day moratoriums on foreclosures and evictions, which some states—and most banks and mortgage loan servicers—have adopted. Meanwhile, the Department of Education has announced that all borrowers with federal loans will have their interest rates automatically set at 0% for at least 60 days. Late Wednesday night, the Senate passed H.R. 748, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) after senate leadership reached an agreement with the White House earlier in the week. The legislation now moves to the House of Representatives for what many hope is unanimous consent. While we are still waiting on the House of Representative's approval, we've explored measures within the bill that will immediately impact student and mortgage loan servicers and outlined them below. More ›

NYDFS Issues Order and Instructions to Regulated Entities in Response to COVID-19

In response to challenges facing the financial services industry as a result of coronavirus (COVID-19), New York's Department of Financial Services (DFS) has issued a COVID-19 compliance order, along with a series of industry guidance letters related to the organizational preparedness of regulated institutions to manage risks associated with the outbreak.

Below is a summary of these recent actions and requests for information. Institutions are encouraged to visit the DFS website for additional updates and information. Hinshaw is well-positioned to assist impacted institutions in their review of the DFS instructions and the preparation of responses. More ›

An Emerging Trend in Favor of Student Loan Discharges in Bankruptcy

We recently reported on a Fifth Circuit decision that ruled some private, for-profit student loans are dischargeable in bankruptcy without a showing of undue hardship—something unusual and inconsistent with the widely-held belief that student loans are rarely discharged. It turns out that the Fifth Circuit's decision may have initiated a trend, for both private and federal loans. 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 ›

New Edition of 50 State Guide on Student Loan Servicing Regulations Now Available

An important resource for financial services compliance professionals just received a new update. The Third Edition of the 50 State Guide on Student Loan Servicing Regulations—a quick reference guide and resource for student loan servicers regarding the regulations specific to the industry, along with pending legislation, litigation, and court rulings—now also includes language of the rules implementing state student loan servicer laws. More ›

Congress Waters Down Dodd-Frank for Small and Regional Banks, Updates Consumer Protections

After much anticipation, Senate bill 2155—which rolls back major aspects of the Dodd-Frank law—was approved by Congress and was signed into law by President Trump.

Among the most notable changes, the legislation waters down regulations for small and regional banks. The threshold for banks "too big to fail" will be raised from $50 billion in assets to $250 billion, so that fewer than ten major U.S. banks will now be subject to Dodd-Frank's strictest regulations, including the Federal Reserve's stress test.

While the bill is widely regarded as regulatory roll back, the legislation also updates certain consumer protections, mostly regarding credit reports and student loans. More ›