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Fed Study Finds Continued Growth in Credit Card Payments
Americans increasingly relied on credit cards to make payments in 2016, and made more of those payments remotely, according to new data the Federal Reserve released yesterday, Dow Jones Newswires reported. The number of credit-card payments grew 10.2 percent last year, to 37.3 billion, compared with an annual growth rate of 8.1 percent over the previous three years. The Fed attributed the increase in part to “continued strong growth” in the number of remote payments, such as online shopping and bill paying, which represented 22.2 percent of all general-purpose credit- and debit-card payments. Remote payments increased 1.5 percent from 2015, the Fed said. By value, remote payments represented 44 percent of all general-purpose card payments.
H.R. 4715, the "Truth in Tuition Act of 2017."
To amend the Higher Education Act of 1965 to require certain institutions of higher education to provide notice of tuition levels for students.
U.S. States Sue Trump Administration for Not Granting Student Loan Relief
President Donald Trump’s administration is breaking the law in not granting loan relief to students defrauded by Corinthian Colleges and other defunct for-profit schools, according to four U.S. state attorneys general who sued the Education Department and Secretary Betsy DeVos, Reuters reported. In a complaint filed in the U.S. District Court of the District of Columbia, the top law enforcement officers of New York, Illinois and Massachusetts also said the administration has unlawfully declared that some of the loans are still valid, which has led to involuntary collections from students’ paychecks. Separately, California Attorney General Xavier Becerra filed a parallel complaint in the U.S. District Court in Northern California. According to Becerra, 13,000 former Corinthian students in his state are waiting for the federal government to forgive their loans. The lawsuits come after months of pressure from states, borrower advocates and Democratic lawmakers, who say students cannot repay the often-large debts because the schools did not give them adequate work training or diplomas. By law, anyone the government determines was a victim of education fraud is not required to pay student loan debt. In the final days of his administration, President Barack Obama approved rules speeding up the debt cancellations. DeVos has delayed implementing those rules, saying they would create significant costs for taxpayers. Tens of thousands of defaulted borrowers with pending applications for relief are seeing interest charged for the loans mount and their credit scores drop, and are often unable to get additional financial aid to return to school. Since Trump’s inauguration, the department has received 25,991 claims for discharging loans. It has denied two requests and approved none, the inspector general found.
Nearly 5 Million Americans in Default on Student Loans
The number of Americans severely behind on payments on federal student loans reached roughly 4.6 million in the third quarter, doubling from four years ago, despite a historically long stretch of U.S. job creation and steady economic growth, the Wall Street Journal reported. In the third quarter alone, the count of such defaulted borrowers—defined by the government as those who haven’t made a payment in at least a year—grew by nearly 274,000, according to Education Department data released on Tuesday. The total number of defaulted borrowers represents about 22 percent of the Americans who were required to be paying down their federal student loans as of Sept. 30. That figure has increased from 17 percent four years earlier. The money they owe is becoming a bigger share of total outstanding student debt in repayment. Defaulted student loans totaled $84 billion at the end of the quarter, or 13 percent of the roughly $631 billion that borrowers were required to be paying down. Read more.(Subscription required.)
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U.S. Department of Education Stopped Granting Loan Relief to Defrauded Students at Corinthian Colleges, According to Inspector General
The U.S. Education Department under President Donald Trump and Secretary Betsy DeVos has stopped cancelling the student-loan debt of people defrauded by failed for-profit schools and those borrowers face mounting interest and other burdens, its inspector general said yesterday, Reuters reported. DeVos is seeking to redo the process for cancelling the debts of people who attended Corinthian Colleges, which collapsed in 2015 amid government investigations into its post-graduation rates, and other failed schools. In the final days of his administration, President Barack Obama approved rules speeding up the debt cancellations. DeVos has delayed implementing those rules, saying that they would create significant costs for taxpayers. According to a report by the inspector general, DeVos also brought the existing cancellation process to a crawl. Since Trump’s inauguration on Jan. 20, the department has received 25,991 claims for discharging loans. It has denied two requests and approved none, the inspector general, an independent auditor within the agency, found. That is in contrast to Obama’s final months in office. From July 1, 2016, through inauguration, the department received 46,274 claims and approved 27,986. It denied none. Caught in limbo, borrowers are seeing interest and fees accrue and their credit damaged, the inspector general’s report showed. Borrowers could ultimately owe more on a denied discharge than if they had not asked for cancellation and simply continued making payments, the inspector said.
Deputy CFPB Chief Challenges Court Ruling for Control of Agency
The deputy director of the Consumer Financial Protection Bureau (CFPB) asked a federal court Wednesday night to halt a previous ruling that cleared President Trump to appoint a temporary chief in her place, The Hill reported. The move by CFPB Deputy Director Leandra English is the latest maneuver in the fight for control of the agency. English filed an injunction in the District Court for the District of Columbia to block Office of Budget and Management Director Mick Mulvaney from leading the agency. English’s complaint asks the court to impose her restraining order against Mulvaney after it dismissed her effort two weeks ago. English had sued Mulvaney, who Trump appointed to lead the CFPB until the Senate confirms a permanent replacement, and the president, claiming the Dodd-Frank Act made her the rightful acting director. The deputy director argues in the new filing that Mulvaney is ineligible to run the CFPB because of the line of succession established in Dodd-Frank. English also claims Mulvaney’s appointment violates the Federal Reserve’s independence since the CFPB was created within the Fed system and Mulvaney is a senior White House aide.
Wells Fargo Sanctions Are on Ice under New CFPB Official
The new acting head of the U.S. Consumer Financial Protection Bureau is reviewing whether Wells Fargo & Co. should pay tens of millions of dollars over alleged mortgage lending abuse, Reuters. The San Francisco-based bank said in October that it would refund homebuyers who were wrongly charged fees to secure low mortgage rates — a black mark against a lender which has already been roiled by scandal over its treatment of customers. The Consumer Financial Protection Bureau (CFPB) had been investigating the mortgage issue since early this year, said one current and two former officials. The agency accepted an internal review from Wells Fargo and set settlement terms in early November, said the sources, who were not authorized to speak about internal discussions. But that matter and roughly a dozen others are in question now that Mick Mulvaney, the agency chief tapped by President Donald Trump, has said he is reviewing the CFPB’s prior work.
