TOPICS COVERED IN THIS ISSUE:
- FEDERAL ISSUES
- CONSUMER FINANCE
- CREDIT CARDS
- PRIVACY/DATA SECURITY
- Excerpt From : FEDERAL ISSUES
CFPB REPORT LIKENS STUDENT LOAN COMPLAINTS TO MORTGAGE SERVICING PROBLEMS. On October 16, CFPB Student Loan Ombudsman Rohit Chopra published the first annual report on student loans, as required by the Dodd-Frank Act. According to the report, the CFPB has received nearly 3,000 complaints regarding private student loans since it began accepting such complaints in March 2012. Based on the complaints and other data obtained by the CFPB, the report describes issues in the student loan market as similar to those seen in the mortgage servicing market including (i) improper application of payments, (ii) untimeliness in error resolution, and (iii) inability to contact appropriate personnel when facing economic hardship. Further, the report notes problems reported in the application of the Servicemembers Civil Relief Act, including obstacles to obtaining the available interest rate cap. The CFPB Student Loan Ombudsman recommends that the Treasury Secretary, the CFPB Director, and the Education Secretary assess whether efforts to remedy problems in mortgage servicing can be applied to improve student loan servicing. The Ombudsman also invites lenders to develop creative programs to help borrowers restructure debt, and recommends that the relevant Senate and House committees identify opportunities to spur the availability of loan modification and refinance opportunities. Additionally, on October 18, the CFPB released a report that expands on the servicemember-related issues presented in the Ombudsman's annual report.
CFPB PROPOSES CHANGE TO CREDIT CARD ABILITY TO PAY RULES. On October 17, the CFPB proposed a rule to amend the current Regulation Z requirement that credit card issuers consider an applicant's independent ability to pay regardless of age. The current regulation, as amended by the Federal Reserve Board, and which took effect October 1, 2011, has received criticism from members of Congress and other stakeholders that the rule limits access to credit for stay-at-home spouses and partners. The CFPB's proposed revision would remove the ability to pay requirement for consumers who are twenty-one and older and permit issuers to consider income to which such consumers have a "reasonable expectation of access." The proposed rule would not change the independent ability to pay requirement for individuals under the age of twenty-one. Comments on the proposed rule will be accepted for sixty days following publication in the Federal Register.
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