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On August 6, 2021, the U.S. Department of Education announced that it would extend the moratorium on federal student loan payments until January 31, 2022. According to the Department’s press release, this will be the final moratorium extension.

As we discussed back in 2020, the CARES Act provided temporary financial relief to federal student loan

As we detailed in our prior Legal Update, on January 19, 2021, the FHA expanded eligibility to apply for FHA-insured mortgages to individuals residing in the United States under the DACA program by waiving certain FHA Handbook requirements.[1]  On May 28, 2021, the FHA published Mortgagee Letter 2021-12, which clarifies FHA’s existing eligibility requirements for DACA participants and other non-permanent residents who apply for FHA loans and implements the eligibility requirements instituted by the prior waiver into the HUD Handbook.[2]

Specifically, non-permanent residents, including DACA participants, individuals with refugee or asylee status, citizens of the Freely Associated States (“FAS”)[3] and individuals with an H-1B visa, must meet the following requirements:


Continue Reading FHA Issues Guidance on Eligibility of DACA Recipients

In a March 30, 2021 announcement, the Biden administration announced that it would be extending relief to approximately 1.14 million student loan borrowers who previously were not covered under the CARES Act relief enacted last year. These are borrowers who have defaulted on loans issued pursuant to the Federal Family Education Loan Program (“FFELP”). Specifically, under the measure, borrowers who have defaulted on FFELP loans will not face further penalties (and will see penalties already assessed unwound) and will also see their current interest rates reset to 0%.[1] The Biden administration’s action will be retroactive to March 13, 2020—the day the governmental formally declared a state of emergency due to the COVID-19 pandemic—and will return FFELP loans that defaulted during this period to good standing, with credit bureaus asked to remove any related negative credit reporting, allowing the applicable borrowers to rehabilitate their credit scores.[2]
Continue Reading Approaching Student Loan Relief Piecemeal: The Biden Administration Extends CARES Relief to Defaulted FFELP Student Loan Borrowers; Weighs Options for Further Measures

On January 4, 2021, Representative Al Green of Texas, the Chairman of the Subcommittee on Oversight and Investigations for the House Financial Services Committee, re-introduced H.R. 166, titled the Fair Lending for All Act, a bill he previously introduced in 2019. The proposed bill would significantly revise the application and enforcement of the Equal Credit Opportunity Act (ECOA) and would further expand lenders’ collection and reporting obligations under the Home Mortgage Disclosure Act (HMDA).
Continue Reading Re-introduced Fair Lending for All Act Proposes Stiffer ECOA Penalties and CFPB Testing Office

With President Joe Biden’s inauguration as the Nation’s 46th President, change is coming to Washington. And that change will be felt quickly and acutely at the Consumer Financial Protection Bureau (CFPB). At President Biden’s request, CFPB Director Kathy Kraninger submitted her resignation on Wednesday, clearing the way for the President to appoint current FTC Commissioner and former CFPB official Rohit Chopra as the next Director of the agency. Given the CFPB’s single Director structure, the new Director will have significant opportunities to shape the direction of the CFPB over the next four years. Below we address what we can expect to see from CFPB under the new administration.
Continue Reading A New Day Dawns at the CFPB

On October 28, 2020, the CFPB’s Private Education Loan Ombudsman published its annual report on student loans, as required by the Dodd-Frank Act. Despite an increased focus on student loans by many state legislatures and regulators and some members of Congress, the report reflects a significant decline in the number of consumer complaints about student loans over the past year. The report analyzes complaints submitted by consumers about student lenders and servicers between September 2019 and August 2020. Notably, the report covers a period during which many student loan borrowers have experienced financial hardships as a result of the COVID-19 pandemic and the federal government – as well as some state governments (in partnership with holders of private student loans) – has offered a myriad of loss mitigation options for eligible student loan borrowers.

Continue Reading 2020 CFPB Student Loan Ombudsman’s Report Shows Significant Trend of Declining Consumer Complaints

Last week, a pair of fair housing organizations got their wish when a federal judge in Massachusetts granted their request for a preliminary injunction and stay of the effective date of the Department of Housing and Urban Development’s (HUD) new disparate impact rule (the “2020 Rule”), discussed in our recent fair lending newsletter. Plaintiffs Massachusetts Fair Housing Center and Housing Works, Inc. filed a motion in the U.S. District Court for the District of Massachusetts seeking to vacate HUD’s 2020 Rule under the Administrative Procedure Act (APA), on the grounds that it is “contrary to law,” “arbitrary and capricious,” and that certain of its provisions violate the APA’s notice and comment requirements. The court only addressed the plaintiffs’ second argument—that the 2020 Rule is arbitrary and capricious—which it found was likely meritorious.

The court compared the disparate impact rule HUD had issued in 2013 (“2013 Rule”) to the 2020 Rule. Both versions of the rule state the general premise that liability may be established under the Fair Housing Act based on a practice’s discriminatory effect, if the practice was not motivated by a discriminatory intent. But as the court noted, the 2020 Rule significantly altered the 2013 Rule’s standards. The court found that the changes HUD had made constituted a “massive overhaul” of HUD’s disparate impact standards, by introducing onerous pleading requirements on plaintiffs while simultaneously easing the burden on defendants and arming them with broad new defenses.
Continue Reading More Uncertainty around the Future of the Disparate Impact Theory of Liability

Yesterday, we issued the inaugural edition of Mayer Brown’s Fair Lending Newsletter. Our goal in publishing this newsletter is to provide you with a quarterly resource covering the most notable fair-lending developments of the past three months. In this edition, we cover various topics, from the current state of fair lending at federal government agencies

On September 15, 2020, the CFPB published a detailed outline of proposed options it is considering to implement a rule under Section 1071 of the Dodd Frank Act. Ten years ago, Section 1071 amended the Equal Credit Opportunity Act (ECOA) to require that financial institutions collect and report information concerning credit applications made by women- or minority-owned businesses and by small businesses. Although the CFPB was tasked with drafting rules to implement Section 1071, it did not take significant steps to meet that obligation until 2017, when it reported on some preliminary research, and then later in November 2019, when it held an information-gathering symposium.

As we previously noted, once Section 1071 is implemented, certain financial institutions will be required to collect information regarding the race, sex, and ethnicity of the principal owners of small businesses and women- and minority-owned businesses and submit this information to the CFPB, similar to what is currently required by the Home Mortgage Disclosure Act for mortgage loans. The CFPB’s outline released this week proposes several potential options for developing the small business lending data collection rule and is a precursor to any future proposed rulemaking. At this stage, the CFPB is seeking feedback on the direction of the rule. Feedback and comments on the scope of the rule can be sent to 2020-SBREFA-1071@cfpb.gov until December 14, 2020. The CFPB is also seeking feedback on the potential impacts on small business entities and has requested submission of such feedback by November 9, 2020.

Below, we summarize the key aspects of the Bureau’s outline and its proposals regarding the scope of the rule.
Continue Reading CFPB Finally Makes Progress on Implementing Small Business Lending Data Collection Requirements