Douglas F. Gansler was quoted in Law360 article, “State efforts to rein in financial firms face roadblock”
Law360Douglas F. Gansler
Douglas F. Gansler was quoted on January 24, 2018 in a Law360 article, “State efforts to rein in financial firms face roadblock,” which discussed the efforts by state attorneys general and bank regulators to increase their customer protection efforts if the Trump administrations decreases enforcement. The article stated, “The Trump administration has promised to roll back financial regulations, which many have taken to mean enforcement efforts will also take a hit, especially given Republican hostility to the federal government's most aggressive financial regulator, the Consumer Financial Protection Bureau. Democratic attorneys general and other officials from New York, California, Massachusetts and other states have vowed to step in and fill any void left by a federal government retreat on consumer financial protection issues.”
Gansler noted, “By diluting the CFPB, the common thinking is that some states are going to fill that vacuum.”
The article also discussed the federal government interference with the Massachusetts case against the Pennsylvania Higher Education Assistance Agency, a servicer of federal student loans. The August lawsuit in which Healey, a Pennsylvania-based student loan servicer, alleged PHEAA of blocking borrowers from making payments towards loan forgiveness. The accounts were allegedly transferred into forbearance status and were not fixed. The article noted that earlier in January, the federal government argued that the Higher Education Act bars Massachusetts from bringing a case against PHEAA because it is a contractor with the U.S. Department of Education.
Gansler added, “But the federal government trying to stop a state lawsuit over student loan servicing is nothing new. The Obama administration intervened in cases where state attorneys general and other plaintiffs got ‘way over their skis’ in bringing cases against student loan servicers. While the Trump administration has some basis to preempt student loan litigation, it may have to stretch legal theories further to stop other actions. In the Higher Education Act, it delineates specifically that there is preemption here. In all the other areas that I can envision, it's much more ambiguous.”
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