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 Krista.DAmelio@NACBA.com
ON THE HILL On April 12th, Senator Elizabeth Warren (D-MA) faced off with Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau (CFPB), during a hearing of the Senate Banking Committee. Warren led the creation of the bureau to protect consumers from abuses by everything from big banks to student loan providers to fly-by-night loan sharks, and urged protecting the CFPB. Thursday’s hearing was part of Mulvaney’s mandated semiannual report to Congress on the activities of the CFPB.
In a hearing of the House Financial Services Committee on April 11th, Representative Carolyn Maloney (D-NY) pressed Mick Mulvaney on if his suggested approach regarding the CFPB would involve bringing any actual enforcement actions against financial companies. Mulvaney said he is bringing a less aggressive approach. He is asking lawmakers to put the bureau’s budget under the control of Congress, place the director under the authority of the president and require that lawmakers vote to pass any new rules the bureau creates.
IN THE AGENCIES CFPB has issued a request for information on its financial education program. You can share your views by submitting an official public comment on the federal register.
On April 6th, the US Department of Education Office of Federal Student Aid released new data showing a record high 8.7 million fed student loan borrowers in default
FROM THE INTEREST GROUPS The Institute for College Access & Success recently posted a blog regarding how the tax penalty hits student loan borrowers in income-driven repayment plans for the first time. In the posting it is revealed that some federal student loan borrowers are facing a larger tax bill due to student debt that was forgiven through income-driven repayment (IDR).
Following a federal lawsuit filed by the Legal Aid Foundation of Los Angeles and the National Consumer Law Center against the U.S. Department of Education and Secretary Betsy DeVos (Lizette Menendez, et al. v. Betsy DeVos and U.S. Department of Education, U.S. District Court, Central District of Cal., Case No. 2:18-CV-01061), three former students of the now defunct Marinello Schools of Beauty have finally received a full discharge of their federal student loans. At the time of its closure, Marinello had 39 campuses in California and 17 other campuses in Kansas, Massachusetts, Nevada and Utah.