On April 17, the Consumer Financial Protection Bureau (CFPB or Bureau) entered a consent order against BloomTech, a for-profit vocational school, and its CEO, Austen Allred, for deceptive marketing practices related to income-share agreements (ISAs). The CFPB found that BloomTech and Allred misled students about the nature and cost of their ISAs and made false claims about job-placement rates for graduates. The CFPB’s action highlights the Bureau’s ongoing scrutiny of ISAs, including the Bureau’s classification of ISAs as loans, and the Bureau’s concern that consumers may not fully understand the true cost of their educations if they use ISAs.

On March 29, the Consumer Financial Protection Bureau (CFPB or Bureau) released its Consumer Response Annual Report, providing a high-level overview of the 1,657,600 consumer complaints received by the Bureau from January 1 through December 31, 2023. According to the report, the most-complained-about consumer financial product and service categories in 2023 were consumer reporting (79%), debt collection (7%), credit card (4%), checking or savings account (4%), and mortgage (2%). The CFPB’s 2023 Consumer Response Report found a continued increase in consumer reporting complaints, with more than one million of such complaints sent to the three nationwide consumer reporting agencies (CRA). The CFPB encourages companies to consider how best to incorporate complaint information into their institutional processes to help ensure that problems are detected early and addressed quickly.

As federal student loan repayments resume after a three-year pause due to the COVID-19 pandemic, the Consumer Financial Protection Bureau (CFPB) published an Issue Spotlight on student borrowers’ experiences, using consumer complaints to identify emerging problems.

The U.S. Department of Education (ED) recently announced the approval of an additional $4.9 billion in student loan forgiveness for 73,000 individuals. The relief was provided through several modifications to the income-driven repayment (IDR) forgiveness and Public Service Loan Forgiveness (PLSF) programs. To date, the Biden Administration has forgiven $136.6 billion in student loans for more than 3.7 million borrowers.

We are pleased to share our annual review of regulatory and legal developments in the consumer financial services industry. With active federal and state legislatures, consumer financial services providers faced a challenging 2023. Courts across the country issued rulings that will have immediate and lasting impacts on the industry. Our team of more than 140 professionals has prepared this concise, yet thorough analysis of the most important issues and trends throughout our industry. We not only examined what happened in 2023, but also what to expect — and how to prepare — for the months ahead.

The Consumer Financial Protection Bureau (CFPB or Bureau) released its 14th annual report to Congress in fulfillment of its requirements under the Credit Card Accountability Responsibility and Disclosure (CARD) Act. For the report, the CFPB reviewed information available on college websites on the financial products offered directly to students or jointly marketed to students with third-party providers. According to the CFPB, its research showed that college-sponsored financial products have higher fees and less favorable terms and conditions compared to typical market products.

On October 24, the Biden-Harris administration announced amendments to the regulations implementing title IV of the Higher Education Act of 1965 (HEA). According to the fact sheet, the amendments are intended to allow the Department of Education (ED) to better protect students from the negative effects of sudden college closures, restrict colleges from withholding course credits paid for with federal money from students’ transcripts, require colleges to clearly communicate how much financial aid students will receive, and provide a more streamlined process for states to approve postsecondary opportunities for students without a high school diploma or its equivalent. The amended regulations will take effect on July 1, 2024.

On October 12, in its monthly bulletin the California Department of Financial Protection and Innovation (CA DFPI) announced that final regulations to implement the Student Loan Servicing Act and the Student Loans Borrower Rights Law have been approved and will become effective Jan. 1, 2024. Among other things, the rules clarify that all education financing products, including income share agreements (ISAs) and installment contracts, are student loans, and servicers of all such products are covered by the Student Loan Servicing Act and must be licensed.

On September 14, the Consumer Financial Protection Bureau (CFPB or Bureau) released a report on Tuition Payment Plans in Higher Education. Ninety-eight percent of colleges now allow students to pay for their education in installments using tuition payment plans. Tuition payment plans have a wide range of structures and may be managed by the schools or administered by third-party payment processors. Typically, tuition payment plans are interest-free, but, according to the CFPB, many charge enrollment fees, late fees and returned payment fees. The Bureau asserts that these fees can create a high cost of credit. Specifically, the CFPB states that when the amount borrowed is low and the enrollment fee is high, students can face annual percentage rates as high as 237%.

On June 14, Nevada Governor Joe Lombardo signed into law AB 332, An Act Relating to Student Education Loans, requiring, among other things, student loan servicers to be licensed by the Commissioner of Financial Institutions and regulating certain conduct of the servicers towards borrowers. The law will take effect on January 1, 2024.