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 The first day of the Senate Judiciary Committee’s hearing on Supreme Court nominee, Brett M. Kavanaugh, began on Tuesday, September 4th. Chairman Chuck Grassley (R-IA) is expected to lead the hearing over the period of three to four days. This hearing is an opportunity for senators and the public to hear directly from the nominee as well as other legal experts and those who know Judge Kavanaugh best. The hearing is open to members of the news media and the general public. More information about attending the hearing is available on the Committee’s website. The hearing will also be streamed live.
On Wednesday, September 5th, the House will consider H.R. 1635 “Empowering Students Through Enhanced Financial Counseling Act” under suspension of the rules. H.R. 1635 is sponsored by Representative Brett Guthrie (R-KY) and amends title IV (Student Assistance) of the Higher Education Act of 1965 to modify loan counseling requirements for an institution of higher education (IHE) that participates in federal student aid programs. Currently, an IHE must provide entrance counseling to a student who is a first-time federal student loan borrower. This bill replaces required entrance counseling with required annual counseling. Also, it expands the required recipients of such annual counseling to include, in addition to student borrowers, Federal Pell Grant recipients and parent PLUS Loan borrowers.
Representative Luis Correa (D-CA) introduced H.R. 6588 “Student Loan Bankruptcy Act of 2018” on July 26, 2018. H.R. 6588 will amend title 11 of the United States Code to modify the circumstances under current law to allow an individual debtor to discharge certain educational loans and educational benefits received by the debtor more than 5 years before the commencement of the bankruptcy case under such title.
IN THE AGENCIES On August 31st, the Bureau of Consumer Financial Protection (Bureau) issued an interpretive and procedural rule to implement and clarify the requirements of section 104(a) of the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act), which amended the Home Mortgage Disclosure Act (HMDA). The Bureau also released updates to the Filing Instructions Guide (FIG) for HMDA data collected in 2018 to incorporate the Act as implemented and clarified by the rule issued today. On May 24, 2018, the President signed the Act, which contains provisions that are intended to decrease the burden smaller depository institutions face in complying with HMDA and its implementing regulation, Regulation C. Some such institutions have raised questions about the application of the Act, and the rule issued today seeks to provide clarification. Specifically, the rule clarifies that insured depository institutions and insured credit unions covered by a partial exemption have the option of reporting exempt data fields as long as they report all data fields within any exempt data point for which they report data; clarifies that only loans and lines of credit that are otherwise HMDA reportable count toward the thresholds for the partial exemptions; clarifies which of the data points in Regulation C are covered by the partial exemptions; assigns a non-universal loan identifier for partially exempt transactions for institutions that choose not to report a universal loan identifier; and clarifies the exception to the partial exemptions for negative Community Reinvestment Act examination history.
FROM THE INTEREST GROUPS On August 30th 80 organizations and advocates working on behalf of students, consumers, veterans, servicemembers, faculty and staff, civil rights, and college access submitted joint comments to the Department of Education on the proposed negotiated rulemaking to rewrite the borrower defense rule. The comments express emphatic support of strong borrower defense rules that hold colleges accountable and help make students whole. Borrower defense rules, which protect students and taxpayers from fraud, deception and other misconduct by unscrupulous colleges, both provide relief to students who have been cheated by illegal conduct and deter illegal conduct by colleges. The comments urge the Department to:
- Create a fair process to provide relief to students who have been harmed.
- Do not force harmed borrowers to default in order to apply for relief.
- Protect borrowers’ right to their day in court.
- Retain students’ ability to get a fresh start when their schools close.
- Retain financial incentives designed to hold colleges accountable and protect taxpayers. Click here to read the comments