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 May 22nd, 51 Democratic House Members and 22 Democratic Senators sent a letter to Secretary Betsy DeVos responding to their request for information on evaluation undue hardship claims in student loan bankruptcy discharge. The letter asks the Department of Education (ED) to revise its 2015 guidance to simplify and improve the standard and process in which ED evaluates if a student loan borrower has established undue hardship that qualifies them for undue hardship.
On May 22nd, the House of Representatives passed S. 2155, also known as the Economic Growth, Regulatory Relief and Consumer Protection Act. The bill rolls back reforms from the 2010 Dodd-Frank Act. President Trump supported this measure and explained Dodd-Frank made it impossible to open up new businesses.
On May 23rd, President Trump signed into law S.J. Res. 57, the joint resolution under the Congressional Review Act (CRA) that disapproves the CFPB’s Bulletin 2013-2 regarding “Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act.” The General Accountability Office had determined that the Bulletin, which set forth the CFPB’s disparate impact theory of assignee liability for so-called auto dealer markup disparities, was a rule subject to override under the CRA.
IN THE AGENCIES On May 24th, the renamed Bureau of Consumer Financial Protection (Bureau) Acting Director Mick Mulvaney issued a statement after President Donald Trump signed the Economic Growth, Regulatory Relief and Consumer Protection Act into law. In it he states: “I applaud my former colleagues in Congress for coming together to pass the most significant financial reform legislation in recent history. This new law will improve consumers’ access to credit, reduce regulatory burdens on credit unions and community banks, and fuel economic growth and job creation across the nation.” Read more
FROM THE INTEREST GROUPS On May 22nd, NACBA, as well as other interest groups, submitted letters to the Department of Education (ED) in response to its request regarding the undue hardship standard. NACBA urges ED to use it rule-making authority to help the neediest borrowers in bankruptcy, including the disabled and families with income that has been substantially lower than the median for their state, by creating safe harbors where ED will not oppose the discharge of student loans. Additionally, NACBA provided information on the weight to be given to such factors, whether the existence of two tests for evaluation of undue hardship claims results in inequities among borrowers seeking undue hardship discharge, and how all of these considerations should weigh into whether an undue hardship claim should be conceded by the loan holder. Read NACBA’s full comments.