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 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 17th, President 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.