On December 3, the CFPB filed a proposed settlement to resolve a long running lawsuit against a student loan relief company and its owner (collectively, the “Defendants”). The settlement bars the company from offering or providing debt settlement products. In addition, the Defendants must pay $2,000 in civil monetary penalties, an amount determined based on their inability to pay more.Continue Reading CFPB’s Settlement Imposes Permanent Ban on Defunct Student Loan Relief Company and Its Owner
Starting in February 2025, providers of (1) debt settlement services, (2) student debt relief services, (3) private postsecondary education financing, and (4) income-based advances (a/k/a earned wage access (EWA) products) must begin registering and conform to annual reporting requirements in order to operate in California. We previously discussed this rule here.Continue Reading California DFPI Poised to Fill Potential Regulatory Gap Amid Anticipated CFPB Leadership Shift
On October 22, the California DFPI announced the state’s approval of registration regulations enacted under the CCFPL, which will require providers of (1) debt settlement services, (2) education financing, (3) income-based advances (including earned wage access products), and (4) student debt relief services to register with the state and comply with data submission requirements. Financial service providers covered by the new regulations must file an application to register by February 15, 2025, to continue operating legally in the state.Continue Reading California DFPI Rolls Out Registration Requirements for Debt Settlement, EWA, and Student Loan Relief Providers
On September 17, the California Department of Financial Protection and Innovation (DFPI) announced enforcement actions against three student loan debt relief companies. The companies were ordered to cease unlawful practices, including charging upfront fees prior to providing services. They were also required to cancel all outstanding contracts with California consumers, issue refunds, and collectively pay $260,000 in penalties.Continue Reading DFPI Cracks Down on Illegal Student Loan Debt Relief Practices
On September 24, the CFPB announced the release of its annual report on the most pressing financial concerns facing servicemembers. This edition highlights that servicemembers are encountering student debt-related difficulties such as struggling to get help from student loan servicers, and transcript withholding by colleges or universities as a means to collect on student debt.Continue Reading CFPB Report Highlights Student Loan Struggles Facing Servicemembers
On September 12, 2024, the Consumer Financial Protection Bureau (CFPB) filed a proposed order which, if entered by the court, will ban a student loan servicer from servicing federal student loans and require it to pay $120 million—$20 million in civil money penalties and $100 million in redress for harmed borrowers—for what is described as “wide-ranging student lending failures” resulting in violations of the Consumer Financial Protection Act, the Fair Credit Reporting Act, and the Fair Debt Collection Practices Act.Continue Reading CFPB Settles Action Against Student Loan Servicer with Industry Ban
On July 11, the Federal District Court for the Middle District of Florida granted the FTC’s request for a temporary restraining order against operators of a debt relief enterprise that unlawfully charged consumers illegal advance fees.
In the FTC’s July 9 complaint, the Commission alleges that the company and its owners falsely promised to enroll consumers in programs that guaranteed low monthly loan repayments followed by a lump-sum loan forgiveness. In exchange for enrollment in their program, the operators charged consumers advance fees of several hundred dollars followed by monthly fees of as much as $29. The FTC alleges that while the company stated it would apply consumers’ monthly payments to their loan balances, in reality it kept the consumers’ money and moved it offshore. As part of their scheme, the defendants falsely claimed that they were affiliated with the Department of Education.Continue Reading FTC’s Shuts Down Operators of Debt Relief Enterprise
On June 28, the FTC announced it had filed an action in federal court against a California-based student debt relief enterprise for deceptive practices, including unlawfully obtaining advance fees for debt relief, and pretending to be affiliated with the Department of Education for engaging new customers. The U.S. District Court for the Central District of California entered a temporary restraining order on June 24 against the defendants.Continue Reading FTC Files Action Against Student Debt Relief Enterprise
On May 31, the CFPB filed suit in federal court in the Middle District of Pennsylvania against a Pennsylvania-based student loan servicer accusing it of illegally pursuing student loan debts discharged in bankruptcy and providing false information to credit reporting agencies. The CFPB’s lawsuit asks the court to order the servicer to stop its illegal conduct, provide redress to borrowers, and pay a civil penalty.Continue Reading CFPB Takes Legal Action Against Student Loan Servicer for Chasing Debt on Discharged Student Loans
On May 20, the CFPB settled an enforcement action against a California-based telemarketing firm for practices related to student loan debt relief services. The Bureau has ordered the firm to permanently halt operations and pay a $400,000 civil money penalty, in addition to ordering the recission of all the firm’s existing contracts with consumers.Continue Reading CFPB Shuts Down Debt Relief Provider Over Fraudulent Student Loan Practices
On May 6, 2024, the CFPB resolved an enforcement action against a group of Delaware student loan trusts and a loan servicer (found here and here) for their failures to adequately respond to borrowers’ requests for relief, including during the COVID-19 pandemic. When entered by the court, the stipulated final judgments will require defendants to pay almost $3 million in redress to borrowers, and pay a fine of $2.15 million.Continue Reading CFPB Settles Action Against Student Loan Servicer and Securitization Trusts