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The program that public servants can use to have their federal student loans forgiven is such a quagmire for borrowers that Congress had to set up a relief program for the relief program. So far, it’s not performing much better, according to a New York Times analysis. It has been nearly five months since the Department of Education released instructions for a $350 million pot of money that some public servants can use if they received bad information about the loan forgiveness program and ended up in the wrong type of repayment plan. Tens of thousands of people have applied for the relief program. But so far, most have been rejected, and as of late last month, none among the few thousand who remain in the running have seen their debt balances go to zero. In response to an inquiry led by Senator Tim Kaine (D-Va.), the department disclosed last week that 28,207 people had submitted requests as of Sept. 28 and that it had found 21,672 ineligible almost immediately. It then culled “approximately” half of the remaining 6,535 for other reasons. That leaves just over 3,000 applications still under consideration.

A long-delayed federal rule intended to protect student loan borrowers who were defrauded by their schools went into effect yesterday, after a judge rejected an industry challenge and the Education Department ended efforts to stall it any longer, the New York Times reported. The new rule, finalized in the last few months of President Barack Obama’s administration, is intended to strengthen a system called borrower defense that allows forgiveness of federal student loans for borrowers who were cheated by schools that lied about their job placement rates or otherwise broke state consumer protection laws. The new rule could expedite the claims of more than 100,000 borrowers, many of whom attended for-profit schools, including ITT and Corinthian, that went out of business in recent years. The new rule requires the Education Department to create a “clear, fair, and transparent” process for handling borrowers’ loan discharge requests, many of which have sat for years in the department’s backlog. It also orders the department to automatically forgive the loans of some students at schools that closed, without requiring borrowers to apply for that relief.

A federal regulator plans to explain what it considers to be “abusive” practices by companies selling financial services, a move aimed at giving a clearer idea of what behavior would get companies into trouble under relatively new government enforcement powers, the Wall Street Journal reported. Mick Mulvaney, the Consumer Financial Protection Bureau’s acting director, said on Monday that the bureau is working on a regulation defining how it views unfair, deceptive or abusive acts or practices, known as "UDAAP." Most of the CFPB’s enforcement actions involve such claims and the 2010 Dodd-Frank financial law, which created the CFPB and gave it broad enforcement powers. Companies have long complained that the CFPB’s UDAAP approach was overly broad and nuanced, making what would trigger an enforcement action less predictable.

Bank card delinquencies fell in the second quarter while a majority of other loan delinquencies remained steady, according to the American Bankers Association’s latest Consumer Credit Delinquency Bulletin, ACAInternational.org reported. Overall, consumer delinquencies held steady in eight of the 11 individual consumer loan categories tracked by the ABA. “The composite ratio, which tracks delinquencies in eight closed-end installment loan categories, rose 3 basis points to 1.76 percent of all accounts, driven primarily by a 12-basis point rise in home equity loan delinquencies,” according to the ABA. “Nonetheless, all other closed-end loans held steady or declined, and the overall composite ratio remains well below the 15-year average of 2.13 percent.”

In the final months of President Obama’s administration, the government’s top consumer regulator was negotiating a large settlement with the student loan collector Navient, which it said had misled borrowers and made mistakes that added billions of dollars to their bills. But after President Trump’s victory, the talks between the company and the Consumer Financial Protection Bureau broke down, the New York Times reported. Two days before Trump’s inauguration, the bureau sued Navient, accusing it of “systematically and illegally failing borrowers at every stage of repayment.” Two states, Illinois and Washington, simultaneously filed their own suits in state courts. As the bureau has taken a softer approach toward industries, including payday lending, and had its own acting director say it too often exceeds its authority, the possibility that the Trump administration will ease up on Navient has prompted more states to join the legal fray. Five have now sued Navient, two of them within the past four months. “There is growing concern among myself and state attorneys general that the federal government is not only losing interest in holding student loan servicers like Navient accountable, but that the federal government is actively looking for ways to shut down state enforcement actions against Navient and other student loan servicers,” said Jim Hood, the Mississippi attorney general, who sued Navient in July. “The timing of filing our lawsuit reflects that concern.”

The Consumer Financial Protection Bureau and Bluestem Brands, Inc., Bluestem Enterprises, Inc. and Bluestem Sales, Inc. (the Bluestem companies) have filed an administrative consent order resolving the Bureau’s allegations that after consumers made payments to the Bluestem companies on debts that the companies had already sold, the Bluestem companies substantially delayed sending those payments to the third-party debt buyers, according to a CFPB press release. In the consent order, the Bureau found that the Bluestem companies violated the Consumer Financial Protection Act of 2010 by unfairly delaying the transfer of payments that customers had made to the Bluestem companies on charged-off accounts to the third-party debt buyers who had purchased those accounts. The Bureau found that between 2013 and 2016, Bluestem delayed forwarding payments for more than 31 days in 18,000 instances; in 3,500 of those instances, Bluestem delayed forwarding payments for more than a year. The consent order filed today requires the Bluestem companies to improve their processes to timely identify and forward customer payments on accounts that they have sold to third-party debt buyers. The Bluestem companies will also pay a civil money penalty of $200,000.