Student loan experts warned the House that the student debt crisis is now a “trillion-dollar blackhole” and was hurting the financial system. “Every 28 seconds, another borrower defaults… like kerosene on a fire, student debt is … tearing our country apart,” stated Seth Frotman, former student loan ombudsman and the executive director of the Student Borrower Protection Center. “We cannot continue to be lobbied into believing that the companies getting rich off the misery of millions of Americans are not part of the problem… [and] the trillion-dollar black hole in our financial markets.”
Senator Elizabeth Warren (D-MA), Rep. Bobby Scott (R-VA), and other members of Congress have written to the collapsed for-profit college chain Education Corporation of America (ECA) and its court-appointed receiver asking that ECA not sell its outstanding student loan debt to a financial firm that would seek to collect payments from former students. The letter, sent yesterday, argues that the proposed sale of these student loans to debt collectors “is an unconscionable assault on the financial lives of former students, who have already suffered enough.”
One analyst’s estimate this week that “real” debt could be nearly 2000 percent of GDP attracted plenty of attention, but analysts who study consumer spending habits say there’s a real debt risk much closer to home: The amount and pace at which American consumers are racking up credit card debt. “As far as American’s finances are concerned, the current situation is not too encouraging,” said Jill Gonzalez, senior analyst at personal finance platform WalletHub. “We started the year owing more than $1 trillion in credit card debt, and although we paid off a large chunk in the first quarter, that could be a sign that more debt will be taken on by consumers.”
Good morning! Thank you for the introduction. It’s great to be here in Atlanta today. One reason I’m in town is to open a new Bureau regional office. This will be our fourth regional office located outside of D.C. and by having a presence here in Atlanta, we will be better able to protect consumers. It also gave me an opportunity to make a major announcement outside of Washington, D.C. and include key partners from a different part of the country. As you know, the mission of the CFPB is to protect consumers. You may typically think of this mission as consisting of regulation, supervision, enforcement, and education. These tools are all provided in the Dodd-Frank Act, and I’m determined to use the Bureau’s capabilities to carry out our mission.
WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau), working in partnership with multiple state regulators, launched the American Consumer Financial Innovation Network (ACFIN), a network to enhance coordination among federal and state regulators to facilitate financial innovation. The Bureau invited all state regulators to join ACFIN, and the initial members of ACFIN are the Attorneys General of: Alabama, Arizona, Georgia, Indiana, South Carolina, Tennessee, and Utah.
The Senate Banking Committee’s hearing Tuesday focused on housing finance reform efforts revealed a commitment to ensuring credit unions’ access to the secondary mortgage market. NAFCU has consistently shared with lawmakers, the administration and other stakeholders the importance of preserving this access. “Congress, as well as the Administration, must work hand-in-hand to protect taxpayers and the safety and soundness of the housing finance system,” said NAFCU President and CEO Dan Berger. “First and foremost, a legislative solution is necessary and crucial to ensuring credit unions receive guaranteed access to the secondary mortgage market and fair pricing for their paper, and we appreciate the Senate Banking Committee’s commitment to these key issues.
Wells Fargo, Bank of America, Quicken Loans, others want DTI requirement eliminated from QM lending rules
Four of the largest mortgage lenders in the country are leading a coalition that is calling on the Consumer Financial Protection Bureau to make to changes to the Ability to Repay/Qualified Mortgage rule. Specifically, the group, which includes Bank of America, Quicken Loans, Wells Fargo, and Caliber Home Loans, wants the CFPB to do away with the QM rule’s debt-to-income ratio requirement.