This is how student loan debt became a $1.7 trillion crisis

For decades now, the country’s outstanding student loan debt balance has only trended in one direction: Up. Today, around 44 million Americans owe a combined $1.7 trillion for their education. But it didn’t have to be this way.

FTC Acts to Shut Down ‘The Credit Game’ for Running a Bogus Credit Repair Scheme that Fleeced Consumers

At the request of the Federal Trade Commission, a federal court has temporarily halted a bogus credit repair scheme known as The Credit Game for promoting a series of lies and deceptions. The FTC alleged the scheme’s operators lied to credit reporting agencies regarding information on consumers’ credit reports and pitched consumers a supposed business opportunity that was essentially starting their own bogus credit repair scheme.

CFPB Supervisory Report Finds Issues in Several Financial Institution Practices

On May 2, the Consumer Financial Protection Bureau (CFPB or Bureau) released its Supervisory Highlights report on legal violations discovered during examinations in the second half of 2021.

Credit reporting companies and furnishers have obligations to assure accuracy in consumer reports

Even a seemingly minor inaccuracy in a credit report can lead to a consumer being denied a loan, housing, or job. However, credit reporting companies’ customers are usually the lenders, landlords, and employers who purchase credit reports, not the consumers whose financial lives are affected by them. This raises a real concern that credit reporting companies won’t pay enough attention to disputes or other issues that consumers raise about their reports.

Student debt collector argues suing borrowers was harmless | Reuters

FTC Takes Action Against Frontier for Lying about Internet Speeds and Ripping Off Customers Who Paid High-Speed Prices for Slow Service

The Federal Trade Commission has moved to stop internet service provider Frontier Communications from lying to consumers and charging them for high-speed internet speeds it fails to deliver. Under a proposed order with the FTC and two California law enforcement agencies, Frontier will be prohibited from tricking consumers about its slow internet service and required to support its speed claims. Frontier must also provide current customers with free and easy cancellations when it fails to deliver the promised speeds.

Exams lead to remediation for private loan servicers’ unfair practices

This week we announced a series of examination findings documenting private student loan servicers’ failure to comply with the terms of their own loans or modifications. When a financial institution commits to something – whether it’s in a loan note, advertisement, or phone call – we expect it to follow through. That’s why we directed these companies to provide significant remediation amounts for failing to make promised payments to consumers.

Statement of CFPB Director Rohit Chopra, FDIC Board Member, on the Notice of Proposed Rulemaking Regarding the Community Reinvestment Act

Today, the Board of Directors of the Federal Deposit Insurance Corporation is voting to seek public comment on a Notice of Proposed Rulemaking to update the Community Reinvestment Act framework for certain state-chartered banks.

Seventh Circuit Provides Rare Guidance On “Statutory Liens”

On April 21, 2022, the U.S. Circuit Court of Appeals for the Seventh Circuit issued a decision interpreting the Bankruptcy Code’s definitions of “statutory lien” and “judicial lien,” holding that a lien imposed by the Chicago Municipal Code was “judicial” rather than “statutory” because it arose partly as the result of a “quasi-judicial” process rather than “solely by force of a statute.” In the Matter of Mance, No. 21-1355, 2022 WL 1182416 (7th Cir. April 21, 2022).

Attorney General James Calls for Full Cancelation of Federal Student Loan Debt

NEW YORK – New York Attorney General Letitia James led a multistate coalition of eight attorneys general in urging U.S. President Joe Biden to fully cancel federal student debt owed by every federal student loan borrower in the country. In a letter to President Biden, Attorney General James and the coalition stress that immediate relief is needed for borrowers struggling with the unmanageable burden of student loan debt.

CFPB Orders Bank of America to Pay $10 Million Penalty for Illegal Garnishments

Washington, D.C. – The Consumer Financial Protection Bureau (CFPB) finalized an enforcement action against Bank of America for processing illegal, out-of-state garnishment orders against its customers’ bank accounts. Bank of America unlawfully froze customer accounts, charged garnishment fees, garnished funds, and sent payments to creditors based on out-of-state garnishment court orders that should have been processed under the laws and protections of the states where the consumers lived. Bank of America also violated the law by inserting unfair and unenforceable language into customer contracts that purported to limit customers’ rights to challenge garnishments.

CFPB and Fintech Companies: Charting a New Course on Regulatory Supervision

As a fintech company, platform offering payment services, or a cryptocurrency business, you may be used to operating in uncharted waters; the Consumer Financial Protection Bureau (CFPB), however, is ready to start drawing some maps. It has announced that it will begin to exercise its supervisory authority over non-bank consumer financial entities that the CFPB has reason to believe pose risks to consumers.

U.S. Court of Appeals for the Third Circuit Agrees to Hear Interlocutory Appeal in CFPB Enforcement Action against Student Loan Trusts

On April 29, 2022, the U.S. Court of Appeals for the Third Circuit granted a petition for permission to appeal in Consumer Financial Protection Bureau v. The National Collegiate Master Student Loan Trusts filed by defendants The National Collegiate Student Loan Trusts (the “Trusts”) and certain interveners in the action.

Student debt ticks higher as the future of loan forgiveness remains uncertain

Average tuition and fees for the 2021-2022 academic year increased by 1.6%, to $10,740, for in-state students at four-year public colleges, according to the College Board, which tracks trends in college pricing and student aid. The data also showed tuition and fees at four-year private institutions rose by 2.1% to $38,070.

How to prevent and report scams targeting older adults

Scammers use lots of different tactics — stories about grandchildren in distress, million-dollar prizes, a romantic future, or a business deal — to try to steal peoples’ money. Scammers may demand payment by wire transfers, gift cards, and cryptocurrency — methods that transfer funds quickly and anonymously.

Overcharging for add-on products on auto loans

The Consumer Financial Protection Bureau is committed to ensuring a fair, transparent, and competitive auto lending market, and we are taking action against sloppy servicing practices that cause harm. Some of these practices involve optional, add-on products that consumers can purchase when they purchase a car. For example, guaranteed asset protection (GAP) products offer to help pay off an auto loan if the car is totaled or stolen and the consumer owes more than the car's depreciated value.

LendingClub, PayPal Results Show Consumers Embracing Credit Alternatives Amid Rising Rates

The consumer is resilient. But pressured. And examining options to battle back against rising interest rates and inflation. Earnings results from any number of banks and payments networks have pointed to a continued willingness on the part of U.S. consumers to use credit cards to spend in pursuit of what they need.

California Strikes Back: Filing Cross-Complaint Alleging FinTech is “True Lender,” Seeks $100M Penalty

On April 8, the California Department of Financial Protection and Innovation (DFPI) filed a cross-complaint against a Chicago-based FinTech company alleging that as the “true lender” of consumer installment loans, it is subject to and also violated the Californian Financing Laws (CFL) by making loans in excess of the CFL 36% rate cap and that the FinTech violated the California Consumer Financial Protection Law (CCFPL) by offering and collecting on loans with rates exceeding the rate cap.

Consumer advisory: Don’t give money or information to scammers promising student loan forgiveness

Numerous student loan borrowers recently submitted complaints to the Consumer Financial Protection Bureau (CFPB) about companies that promised them student loan forgiveness or loan forbearance in exchange for fees amounting to hundreds or thousands of dollars. Borrowers believed they were talking to their servicer or a company authorized by the Department of Education because they often knew private information such as the borrower’s loan balance or recent consolidation activity. This is fraud.

CFPB Supervisory Report Finds Unlawful Auto Repossessions, Breakdowns in Credit Report Disputes

Washington, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) released its Supervisory Highlights report on legal violations identified during the CFPB’s supervisory examinations in the second half of 2021. The report details key findings across consumer financial products and services.

Idaho Updates Requirements for Collection Agency Licensees

Idaho recently enacted a bill, House Bill 610 (HB 610), that updates certain licensing requirements for collection agencies. The changes made by HB 610 will go into effect on July 1, 2022.

FTC, DOJ Seek to Enjoin Internet Provider From Facilitating Illegal Robocalls

On April 26, the DOJ filed a federal complaint on behalf of the FTC against a Voice over Internet Protocol (VoIP) service, a related company, and its owner for allegedly facilitating the transmission of illegal telemarketing robocalls.

Department of Education for Student Loan Relief on Behalf of Californians Defrauded by Education Corp. of America

OAKLAND – California Attorney General Rob Bonta today, as part of a multistate coalition, submitted a “borrower defense” application to the U.S. Department of Education (ED) on behalf of California students defrauded by Education Corp. of America (ECA). ECA operated a number of predatory for-profit schools in California before it abruptly shut its doors in December 2018.

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