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 March 15, a bipartisan group of U.S. Senators introduced legislation to make temporary judgeships permanent in an effort to ease overwhelming caseloads that restrict timely access to our bankruptcy courts when bankruptcy judges on courts with temporary judgeships retire. Introduced by Senators Chris Coons (D-DE), Debbie Stabenow (D-MI), Marco Rubio (R-FL) and Bill Nelson (D-FL), S. 632: The Bankruptcy Judgeship Act of 2017 would make 16 temporary judgeships permanent in Delaware, Florida, Maryland, Michigan, Nevada, North Carolina, Puerto Rico, Tennessee and Virginia. It would also create two additional permanent judgeships each in Delaware, Michigan and Florida.
The House Judiciary Committee Subcommittee on Regulatory Reform, Commercial and Antitrust Law met on Thursday, March 23 to examine H.R. 1667, the “Financial Institution Bankruptcy Act of 2017”. The goal of H.R. 1667 is to create a solution that will better equip bankruptcy laws to resolve failing firms, while also encouraging greater private “counter-party diligence” to reduce the possibility of another financial crisis. The resolution responds to parts of the Dodd-Frank Wall Street Reform and Consumer Protection Act that called for an examination of how to improve the Bankruptcy Code in this area.
The House Committee on Financial Services held a hearing on Wednesday, April 5 titled “The 2016 Semi-Annual Reports of the Bureau of Consumer Financial Protection”. Republican members of the Committee made the case that the Consumer Financial Protection Bureau (CFPB) has harmed consumers, violated due process, failed to comply with congressional subpoenas, and was negligent in investigating Wells Fargo’s sales practices. Additionally, suspicion was raised over the trading in the stock of the Navient, one of nation’s largest student loan servicing company. Chairman Jeb Hensarling (R-TX) questioned Director Richard Cordray’s leadership of CFPB stating that under his leadership CFPB has disregarded protecting markets and has made credit more expensive and less available particularly for low and moderate income Americans. Democrats continue to slam the Republicans attacks against CFPB. Ranking Member Maxine Waters (D-CA) expressed strong opposition to Chairman Hensarling’s abuse towards CFPB.
In The Agencies On Tuesday, April 11 Education Secretary Betsy DeVos withdrew the Obama administration’s policy memos that strengthened consumer protections for student loan borrowers. The Education Department is currently issuing new contracts to student loan servicing companies that collect payments on behalf of the agencies responsible for putting borrowers in affordable repayment plans and keeping them from defaulting on loans. In a letter addressed to Federal Student Aid Chief Operating Officer James Runcie, DeVos calls upon the Department in the student loan servicing procurement process to provide high quality customer service to federal loan borrowers in a cost-efficient and effective manner. Critics of DeVos’s decision argue her decisions eliminate basic protections for student debtors such as receiving accurate bills and having payments processed on time. Moreover, critics believe DeVos has now increased the ability of predatory agencies to win even more profitable government contracts.
More on CFPB… The Bureau continues to promote Debt Collection Stories in an effort to bring to light peoples’ experiences and help CFPB create a fairer marketplace. Concerns about debt collection was also addressed in Director Cordray’s testimony to the House Committee on Financial Services during the hearing on April 5th. Cordray calls upon the Bureau to address widespread abuses in debt collection, but reveals it is a big problem that will take time to fix properly.
The Federal Housing Finance Agency (FHFA) issued a Progress Report on March 29 summarizing the 2016 activities of Fannie Mae and Freddie Mac to further FHFA’s strategic objectives. The Progress Report details efforts made to address borrower obstacles to credit access and to transition to policies and programs that help struggling borrowers. The Report describes advances made in the Fannie Mae and Freddie Mac credit risk transfer programs and other activities created to increase the role of private capital in the secondary mortgage market while reducing risk for taxpayers.
From The Interest Groups The U.S. PIRG and 575 higher education advocates representing students, institutions, educators, and consumers sent a letter to Congress on April 5th urging them to protect critical federal student aid programs. Proposals from both the White House and Congress threaten to cut funding from the Pell grant reserve, which will affect millions of students who rely upon it to attend college.