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 Senate Education Committee Chairman Lamar Alexander (R-TN), called for the financial aid system to be reformed to increase effectiveness. The committee held its second hearing in Congress on Thursday on reauthorizing the Higher Education Act, which consists of two grant programs, five loan programs and nine repayment plans.
On Monday, January 29th Congressman Keith Rothfus (R-PA) of the House Financial Services Committee introduced H.R. 1426, Federal Savings Association Charter Flexibility Act of 2017. The bill amend the Home Owners’ Loan Act to allow Federal savings associations to elect to operate as national banks, and for other purposes.
Also on January 29th Congresswoman Nydia Velázquez (D-NY) introduced H.R. 4792, Small Business Access to Capital After a Natural Disaster Act. This bill amends the Securities Exchange Act of 1934 to expand access to capital for small businesses affected by hurricanes or other natural disasters, and for other purposes.
IN THE AGENCIES The Court of Appeals for the District of Columbia ruled on January 31st that the structure of the Consumer Financial Protection Bureau (CFPB) is constitutional, in a landmark victory for the CFPB and a serious blow to President Trump’s efforts to undermine the agency. This affirmed Congress’s decision to create a consumer watchdog insulated from political and Wall Street influence. Consumer advocates called on President Trump to respect the decision by relinquishing political control of the agency and nominating a director who is independent, who will put consumer protection first and can be confirmed by the Senate.
As work continues to improve customer service and overall operations of the Office of Federal Student Aid (FSA), Secretary of Education Betsy DeVos announced the formation of a Strategy and Transformation unit to improve the delivery of financial aid to millions of students and their families. Secretary DeVos asked A. Wayne Johnson to lead the Office of Strategy and Transformation. James Manning will lead FSA as Acting Chief Operating Officer.
FROM THE INTEREST GROUPS The Institute for College Access & Success (TICAS) posted a series of blogs that explore how the House proposal to overhaul the Higher Education Act would impact student debt. This bill, the PROSPER Act, was passed out of the Committee on Education and the Workforce in December 2017. TICAS focuses on the PROSPER Act’s changes to accountability requirements for federal student aid in their recent post.
OTHER During the Super Bowl, expect TV commercials to discuss student debt. Advertisers seem to be more willing to interrupt America’s most popular sporting event to discuss a touchier subject: Student debt. Since 2016, Social Finance or SoFi, the financial services company best known for student loan refinancing, has been advertising during the Super Bowl in a variety of forms. Last year, the company won a big bet when the Super Bowl went into overtime for the first time ever. SoFi was one of a handful of brands that made deals to run ads for a fraction of the typical Super Bowl price in the event of overtime. This year, the company will be advertising its refinancing product in six major markets during the Super Bowl.