Student Lending
Practice Overview
In recent years, scrutiny of consumer financial services offered to students has increased dramatically. This uptick in attention is the result of myriad factors, including mounting student debt and the challenges that many borrowers have experienced in repaying loans.
Government regulators, private litigants, consumer advocates, and others are focusing attention on traditional student loans as well as other financial products and services offered to students. Major industry participants such as lenders and servicers have been focal points for monitoring and increased regulation, but attention also is being placed on less prominent players such as vendors and other service providers. From marketing, disclosures, and origination terms to routine servicing, repayment restructuring, and loss mitigation, matters relating to the entire product lifecycle are being examined more closely.
Buckley is well-positioned to provide lenders, servicers, and other student lending industry participants with comprehensive, forward-looking, and practical advice to navigate this increasingly complex regulatory landscape.
We regularly advise clients regarding cutting edge student lending and servicing matters involving the Consumer Financial Protection Bureau (CFPB), prudential banking regulators, the Department of Justice (DOJ), and state attorneys general and consumer regulators. Over the past few years we have handled scores of regulatory examination preparations, supervisory matters, investigations, and enforcement actions for a variety of lenders, servicers, and service providers offering financial products and services to students.
We also assist clients with drafting and negotiating student lending-related agreements, including program, servicing, and loan purchase and sale agreements.
Our involvement in the full spectrum of matters relating to student lending and servicing gives us substantial visibility relating to the varied concerns of government agencies, as well as would-be private litigants, and we bring this experience to bear in our work. From proactive compliance management and risk-assessment to litigation and enforcement defense, Buckley is well-positioned to provide advice to industry participants.
Our recent experience includes:
- Representing student lenders, servicers, and service providers in connection with investigations by the CFPB, prudential banking regulators, the DOJ, and state regulators
- Representing student lenders and servicers in connection with examinations by federal regulators, responses to supervisory findings, and implementation of corrective action
- Conducting fair lending and unfair, deceptive, or abusive acts or practices (UDAAP)/unfair or deceptive acts or practices (UDAP) risk assessments for student loan industry participants in order to identify and address compliance gaps
- Representing a large student loan servicer in parallel federal government investigations, focusing on issues related to UDAP and Servicemembers Civil Relief Act (SCRA) compliance consensually resolved in 2014
- Assisted a national nonbank student lender launching a new loan program obtain state lending licenses and create a state law compliance program consistent with those licenses
- Advising student lending industry participants on compliance with the full spectrum of consumer financial protection laws as applied to the full product life cycle. These laws includes by are not limited to UDAAP/UDAP, SCRA, Fair Debt Collection Practices Act (FDCPA), Fair Credit Reporting Act (FCRA), Truth in Lending Act (TILA), Equal Credit Opportunity Act (ECOA), and laws governing electronic signatures
- Advising innovative players in the industry, including fintech companies, new product development
Articles
"School of hard knocks: Federal student loan servicing and the looming federal student loan crisis" by Jeffrey P. Naimon, Sasha Leonhardt, and Sarah B. Meehan (American University Administrative Law Review)
Nearly forty-three million Americans collectively owe $1.5 trillion in outstanding student loan debt. Of that, approximately ten percent of student loan debt is over ninety days delinquent or in default, while the actual delinquency rate is estimated to likely be double this amount due to the fact...
ArticlesSpecial Alert: CARES Act places significant burdens on servicers of consumer debt but provides some relief to depositories
President Trump late last week signed the Coronavirus Aid, Relief, and Economic Security Act that attempts to soften the negative economic effects of the Covid-19 pandemic on consumers, including by suspending payments for certain student loan borrowers and enabling mortgage loan borrowers to...
Special Alerts"The role of State AGs in solving student loan crisis" by Sasha Leonhardt and Dana Walsh Kumar (Law360)
State attorneys general are the chief legal officers of their state; state attorneys general are the chief law enforcement officers of their state; and state attorneys general must protect their citizens and vigorously enforce their state’s consumer protection statutes. As broad as these powers and...
ArticlesAll Student Loan Players Great and Small
From presidential town halls to the local college dining hall, issues related to student lending have become the talk of the nation. According to recent estimates, over 41 million Americans owe more than $1.2 trillion in student loan debt, second only to mortgage loan debt. A quarter of these...
ArticlesA New Balancing Act: The DOJ Provides New Direction Regarding the SCRA's Interest Rate Benefit
When Congress reenacted the Servicemembers’ Civil Relief Act (“SCRA”) in 2003, Congress designed the SCRA to balance the interests of active duty servicemembers and their creditors, as it had done under the SCRA’s predecessor legislation. One of the benefits provided by the SCRA is a six-percent...
ArticlesSpotlight on Student Lending, Part 2: Lessons Learned from CFPB Reports
In 2012 and 2013, the Consumer Financial Protection Bureau released several major reports and held field hearings focused on private student lending and servicing. In addition to recent CFPB activity, on June 25, 2013, the Senate Banking Committee held a hearing regarding private student loans at...
ArticlesSpotlight on Student Lending, Part 1: Facing Increased Regulatory Scrutiny, Student Loan Lenders Prepare for CFPB Examinations
Currently, total outstanding student debt (both federal loans and private loans) has risen to roughly $1.1 trillion dollars. That figure represents an over 50% increase since 2008 and makes student loans the largest source of unsecured consumer debt – surpassing credit cards. At the same time...
Articles
News & Blogs
Court enters nearly $90 million default judgment against student debt-relief defendants
On December 15, the U.S. District Court for the Central District of California entered a default judgment and order against two companies (collectively, “default defendants”) for their role in a student loan debt-relief operation. As previously covered by InfoBytes , the CFPB, along with the...
InfoBytesCourt enters judgments against multiple defendants in CFPB debt-relief action
On December 15, the U.S. District Court for the Central District of California entered final judgment against two defendants (defendants) and a default judgment against another defendant (defaulting defendant) in an action brought by the CFPB alleging the defendants (and others not subject to these...
InfoBytesCourt enters $41 million default judgment against student debt-relief operators
On December 3, the U.S. District Court of the Central District of California entered a default judgment against a student debt-relief company and one of its owners (collectively, “defaulting defendants”) in an action brought by the CFPB alleging the defaulting defendants (and others not subject to...
InfoBytesFTC reaches $62 million settlement with student loan debt relief operation
On November 19, the FTC entered into a settlement with defendants accused of engaging in deceptive practices when marketing and selling student loan debt relief services. As part of its enforcement initiative, Operation Game of Loans (covered by InfoBytes here ), the FTC alleged that the defendants...
InfoBytesMaryland AG obtains $2.6 million in student debt relief
On November 16, the Maryland attorney general announced that it obtained over $2.6 million in debt relief from a third-party debt buyer for approximately 1,200 former students of a defunct Maryland-based for-profit college. In its press release, the AG alleged that the for-profit college offered “...
InfoBytesCFPB releases education ombudsman’s annual report
On October 28, the CFPB Private Education Loan Ombudsman published its annual report on consumer complaints submitted between September 1, 2019 and August 31, 2020. The report is based on approximately 7,000 complaints received by the Bureau relating to federal and private student loans. Of these...
InfoBytesIllinois adopts regulations for student loan servicers
On October 9, the Illinois Department of Financial and Professional Regulation adopted regulations implementing provisions of the Student Loan Servicing Right Act related to licensing fees, operations, and supervision. Among other things, the provisions (i) establish license, examination, and...
InfoBytesNew Jersey now accepting student loan servicer licenses through NMLS
On September 15, the New Jersey Department of Banking and Insurance (Department) began accepting applications for the NJ Student Loan Servicer license through the NMLS. The license is governed by the Student Loan Servicing Act, which was enacted in July 2019, and establishes the Office of the...
InfoBytesCalifornia enacts student loan servicing requirements
On September 25, the California governor signed AB 376 , which provides new requirements for student loan servicers. Among other things, these requirements require servicers to (i) timely post, process, and credit payments within certain timeframes; (ii) apply overpayments “consistent with the best...
InfoBytesJoint settlement requires forgiveness on $330 million of student loans
On September 15, the CFPB filed a complaint and proposed stipulated judgment against a trust, along with three banks acting in their capacity as trustees to the trust, for allegedly providing substantial assistance to a now defunct for-profit educational institution in engaging in unfair acts and...
InfoBytes
Our Student Lending Team
Partners
FYI
"School of hard knocks: Federal student loan servicing and the looming federal student loan crisis" by Jeffrey P. Naimon, Sasha Leonhardt, and Sarah B. Meehan (American University Administrative Law Review)
Recent Blog Posts
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December 18, 2020
Court enters nearly $90 million default judgment against student debt-relief defendants
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December 18, 2020
Court enters judgments against multiple defendants in CFPB debt-relief action
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December 9, 2020
Court enters $41 million default judgment against student debt-relief operators
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December 1, 2020
FTC reaches $62 million settlement with student loan debt relief operation
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November 19, 2020
Maryland AG obtains $2.6 million in student debt relief