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U.S. President Donald Trump will order the Treasury on Friday to find and reduce tax burdens and review post-financial crisis reforms that banks and insurance companies have said hinder their ability to do business, Reuters reported today. A White House official said yesterday that Trump will issue an executive order directing the Treasury on the tax issues. He will also issue two memoranda asking for reviews of two parts of the 2010 Dodd-Frank Wall Street reform law — the Orderly Liquidation Authority that sets out how big banks can wind down during a crisis, and the Financial Stability Oversight Council (FSOC), which is comprised of the country's top regulators. The orders, which Trump will sign at the Treasury Department, comes as the president works toward making good on a major campaign promise to lower taxes.

Ocwen Financial and its subsidiaries faced a slew of accusations from federal and state regulators yesterday, as the Consumer Financial Protection Bureau and Florida accused it of widespread servicing errors, while 20 states filed separate cease-and-desist orders against the firm for improper handling of consumer escrow accounts, NationalMortgageNews.com reported. The actions cap years of state and federal investigations into Ocwen. The once high-flying West Palm Beach, Fla., mortgage servicer grew quickly after the financial crisis, only to get caught by regulators for allegedly violating mortgage servicing standards. The CFPB said that it had uncovered "substantial evidence" that Ocwen has engaged in significant and systemic misconduct. “Ocwen has repeatedly made mistakes and taken shortcuts at every stage of the mortgage servicing process, costing some consumers money and others their homes,” CFPB Director Richard Cordray said yesterday.

How will courts apply a statute to a business that did not exist when the law was written, if the statutory language does not clearly supply the answer one way or the other? The Supreme Court faced that question at oral argument on April 18 in Henson v. Santander Consumer USA Inc., the second case this term involving the federal Fair Debt Collection Practices Act, or FDCPA, according to a special analysis today by Bill Rochelle. Although predicting the outcome is difficult based on questions from the bench, comments by the justices suggest that consumers may be headed for a second loss of protections from debt collectors in some circumstances. In Midland Funding LLC v. Johnson, argued in January, a majority of justices seemed inclined to find no violation of the FDCPA when a debt collector files a proof of claim in a bankruptcy case based on a debt where collection is barred by the statute of limitations. That decision is still pending. In Henson, the case argued on April 18, the Supreme Court will decide whether the FDCPA applies to someone who buys consumer receivables originated by someone else.

In recent months, student loan giant Navient, which was spun off from Sallie Mae in 2014 and retained nearly all of the company’s loan portfolio, has come under fire for aggressive and sloppy loan collection practices, which led to a set of government lawsuits filed in January, the New York Times reported yesterday. But those accusations have overshadowed broader claims, detailed in two state lawsuits filed by the attorneys general in Illinois and Washington, that Sallie Mae engaged in predatory lending, extending billions of dollars in private loans to students that never should have been made in the first place. “These loans were designed to fail,” said Shannon Smith, chief of the consumer protection division at the Washington State attorney general’s office. Read more.

Now available in the ABI Bookstore: Pick up your copy of the updated and revised Graduating with Debt: Student Loans under the Bankruptcy Code, Second Edition! 

Federal Reserve Bank of New York President William Dudley said that the rising burden of student debt is weighing on interest rates in the U.S., and it would be a “reasonable conversation” for policy makers to explore making college tuition free, Bloomberg News reported. The growing pile of student debt is “obviously one headwind to economic activity” that “probably pushes in that direction of lower equilibrium real rates” because it limits households’ spending power, Dudley said yesterday. Dudley and his staff presented data showing significant disparities in homeownership between those who graduated from college with debt and those who graduated without it. In 2016, almost half of all 30-year-olds who left college with debt between 2006 and 2011 had missed at least one of their required monthly payments, according to the New York Fed researchers. Nearly a third of them had defaulted, meaning they missed nine straight months of payments. Read more. 

Now available in the ABI Bookstore: Pick up your copy of the updated and revised Graduating with Debt: Student Loans under the Bankruptcy Code, Second Edition! 

The Consumer Financial Protection Bureau on Friday pushed back against the Justice Department’s contention that its independent structure is unconstitutional, but said that it could still do its job even if a court orders structural changes, the Wall Street Journal reported. The consumer watchdog created under the Obama administration is stepping up its defense ahead of a federal appeals court hearing in May that could significantly transform its operations. Responding to the court’s request for a possible remedy if the agency’s structure is ruled unconstitutional, the CFPB said that if its structure is altered and the president gains the power to fire its director at will, it will still be able to function in the manner consistent with its original mission.

The number of home foreclosures is down sharply from the depths of the financial crisis, even as many of the mortgage firms involved remain the same, including Fannie Mae, Wells Fargo, Bank of America and JPMorgan Chase. But the latest foreclosure rankings also include a number of firms that barely registered or did not exist when the crisis began a decade ago, the New York Times reported today. These new entrants include firms affiliated with the private equity giant Lone Star Funds, the mortgage lender PennyMac Loan Services, the investment bank Goldman Sachs and the mortgage firm Carrington Mortgage Services. This changing of the guard in the foreclosure rankings, based on data compiled by RealtyTrac, reflects the new reality that most foreclosures today are not coming from mortgages written during the post-crisis period, but from soured loans written before the crisis that are in the final stages of liquidation.