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Facing an existential threat at the U.S. Supreme Court, which will hear oral arguments on March 3 in a constitutional challenge to the unusual structure of the Consumer Financial Protection Bureau, the CFPB has found an unlikely champion. The Trump administration believes that the bureau's lone director is unconstitutionally shielded from accountability to the president, yet the Justice Department’s final brief before oral argument urged the Supreme Court not to issue a ruling that will halt the CFPB’s “critical work," Reuters reported. “The bureau,” DOJ argued in a reply brief filed on Friday, “is the federal government’s only agency solely dedicated to consumer financial protection.” Invalidating the entire statute that created the CFPB, DOJ said, will wreak havoc not just for consumers but for the banks, mortgage lenders, credit card companies, and other financial institutions regulated by the CFPB. The government even cited the billions of dollars CFPB has recovered in enforcement actions as proof of its crucial mission. The California debt relief firm that brought the CFPB case to the Supreme Court, meanwhile, continued to argue in its final brief that if the Supreme Court deems the CFPB’s structure to be a violation of separation of powers doctrine, the justices must either strike down the entire Consumer Financial Protection Act or else leave it to Congress to fix the problem. The case is Seila Law v. CFPB, 19-7.

According to research by Villanova law professor Jason Iuliano, a million student loan debtors have filed for bankruptcy in the past five years. However, 99.9 percent of them did not include their student loan debt in their bankruptcy filing. This research was the seed of what would become Reset Button, a new startup founded by Iuliano and Rob Hunter looking to help student loan debtors who have gone through bankruptcy find a new way to include those debts in their filing, TechCrunch.com reported. Reset Button is targeted directly at folks who have already filed for bankruptcy but were told they couldn’t include their student loan debt in those filings, and so they didn’t. Reset Button has built a network of litigation lawyers who have experience in seeking student loan discharges. When a new user fires up Reset Button, the startup sends them through an evaluation process that collects financial information, etc. to assess whether or not one of those lawyers could litigate the discharge of that user’s student loan debt. Reset Button, as the connective tissue between debtor and lawyer, is able to automate a lot of that process for the lawyers, delivering a package of information on the case and connecting the user with the right lawyer for them.

A report released yesterday from the Federal Reserve Bank of New York yesterday found that Americans increased their borrowing for the 22nd straight quarter as more households took out loans to buy homes or refinance existing mortgages, Bloomberg News reported. Total U.S. household debt rose by $601 billion in the fourth quarter from a year earlier, or 4.4 percent, surpassing $14 trillion for the first time, the New York Fed’s quarterly household credit and debt report showed. That’s $1.5 trillion above the previous peak in the third quarter of 2008. Overall household debt is now 26.8 percent above the second-quarter 2013 trough. Mortgage borrowing rose by $120 billion to $9.56 trillion. The rate for a 30-year mortgage has fallen by about 100 basis points over the past year, adding to home purchasers’ buying power. Total debt for people ages 18 to 29 rose to a record $1.04 trillion. Student debt increased to $1.51 trillion from $1.46 trillion at the end of 2018. More than $100 billion in student debt is held by those age 60 and over. Auto loans rose to $1.33 trillion, while credit card debt rose to a record $930 billion.

Federal Reserve data released on Friday showed that consumer borrowing surged in December, as consumers used credit cards to make holiday purchases, MarketWatch.com reported. Total consumer credit increased $22.1 billion, according to the Federal Reserve data. That’s an annual growth rate of 6.3 percent, up from a 3.4 percent rate in the prior month. Revolving credit, like credit cards, jumped 14percent in December. This is the fastest pace of growth since April 1998. Nonrevolving credit, typically auto and student loans, rose 3.7 percent. For all of 2019, credit card debt was up at a 4.2 percent pace while nonrevolving credit was up at a 4.8 percent pace. The data doesn't include mortgage loans.

The Consumer Financial Protection Bureau (CFPB) yesterday announced a proposed settlement with Think Finance, LLC, formerly known as Think Finance, Inc., and six subsidiaries (collectively, the “Think Finance Entities”), to resolve the CFPB’s lawsuit, which the Bureau filed on November 15, 2017, according to a press release. The CFPB alleged that the Think Finance Entities engaged in unfair, deceptive, and abusive acts and practices in violation of the Consumer Financial Protection Act in connection with the illegal collection of loans that were void in whole or in part under state laws governing interest rate caps, the licensing of lenders, or both. The CFPB’s first amended complaint, filed in the U.S. District Court for the District of Montana in 2018, alleged that the Think Finance Entities operated as a common enterprise that affiliated with tribal lenders in the offering and collection of online installment loans and online lines of credit to consumers nationwide. The Think Finance Entities, the Bureau alleged, made deceptive demands and illegally took money from consumers’ bank accounts for debts that consumers did not actually owe because the loans were either partially or completely void under the law of 17 states. The CFPB also alleged that the Think Finance Entities provided substantial assistance to two debt collection companies that were also engaged in the illegal collection of loans. If entered by the court, the proposed stipulated final consent order, among other things, would prohibit the Think Finance Entities from offering or collecting on loans to consumers in any of the 17 states if the loan violates state lending laws and assisting others in engaging in that conduct. The proposed order would also impose a $1 civil money penalty for each of the seven Think Finance Entities.

The Consumer Financial Protection Bureau (Bureau) and the U.S. Department of Education (ED) announced a new coordination agreement in order to better serve student loan borrowers, according to a CFPB press release. Under the newly signed Memorandum of Understanding (MOU) the agencies will share complaint information from borrowers and meet quarterly to discuss observations about the nature of complaints received, characteristics of borrowers, and available information about resolution of complaints. The MOU also provides for the sharing of complaint data analysis, recommendations, and analytical tools. The MOU also more clearly defines roles and responsibilities for each agency. The MOU also allows for subject matter experts from both agencies to work together more efficiently to resolve complaints and fulfill their respective duties under the law.