b'CREDIT CARDS AUTO LOANSCONSUMER FINANCIAL &TELEPHONE CONSUMER PROTECTION BUREAU PROTECTION ACT For more information, please visit www.lenderlawwatch.com or www.enforcementwatch.comIn 2019, state enforcement agencies (particularly Newin unfair, deceptive, or abusive acts and practices by York and Massachusetts) also brought enforcementinducing students to take out loans without understand-actions against student loan servicers and debting their terms and without any prospect for repayment. relief providers alleging violation of state lawsAnd in December, the FTC announced a settlement and regulations aimed at protecting students fromwith another for-profit school, University of Phoenix, re-MORTGAGESTUDENT LENDING deceptive and unfair practices or mismanagementquiring it to pay a $50 million fine and to cancel approx-STUDENT LENDINGDEBT COLLECTIONof debt-relief plans. However, the main state-specificimately $141 million in debt based on its purported use enforcement trend continues to be on the legislativeof advertising deceptively suggesting that prestigious During 2019, Goodwin tracked 18 federal and state enforcement actions related to student lending,and regulatory side as states continue to pass lawscorporations worked with the school to create job representing a notable increase from the 13 actions tracked both in 2017 and 2018. These actionsenhancing or adding additional requirements foropportunities and tailor the schools curriculum for such included litigation and settlements against student-loan debt relief providers and servicers, as well asstudent loan servicers, such as New Yorks Articlejobs in violation of the FTC Act.several high-profile settlements against for-profit educational institutions and their lenders. While the14-A instituting a number of restrictions on studentFTC Shuts Down Student Loan Debt Relief Providers. increase in enforcement activity from 2017 and 2018 was modest, 2019 saw a significant increase in theloan servicers including restrictions on application ofIn September, the FTC, partnering with the State of FEDERAL COURTS OFamounts obtained through settlementnearly $1 billion total in 2019, versus just $98 million in 2018. payments and requirements to register with the NewMinnesota, settled lawsuits against Manhattan Beach APPEALS DATA SECURITY PAYDAY LENDINGYork Department of Financial Services. Ventures, Student Advocates Team, and Equitable Federally, the FTC remained active in this area and continued to rely primarily on the FTC Act. Notably,Acceptance Corporation, who allegedly participated in the CFPB rejoined the fracas, bringing four student lending actions after largely abandoning the areaMeanwhile, this past year, the CFPB reversed its 2018 in 2018. At the state level, the state attorneys general joined forces to secure two massive settlementsretreat from student-lending enforcement and broughtsimilar student loan debt relief schemes. The FTC and four student-lending related enforcement actions,Minnesota AG alleged that the companies defrauded against for-profit schools and related student lending providers, while several states also filed their ownincluding two settlements with educational institutions,students out of millions of dollars. The FTC brought its actions under applicable state law. an action against a student-loan servicer, and an actionclaims under the FTC Act, the TSR, TILA, and Regula-against a student loan debt relief provider. The FTCtion Z, claiming the debt-relief companies made false and the CFPB continue to pursue actions under thepromises about the result of their services, and that KEY TRENDS student lenders. The result of this new approach, alsoUDAP and UDAAP provisions in the FTC Act and thethe financing company knew of abusive telemarketing In previous years, the main targets of enforcementrecently implemented by the FTC, has been a series ofCFPA. However, in 2019 both also began bringingpractices and violated requirements to disclose terms attention had been student loan debt relief providersstunning settlements totaling over $800 million in loanactions under the TSR, which regulates the use ofon loans it offered. As a result of the settlement, the and refinancers, resulting in relatively small-dollarforgiveness and fines. In addition, some state attorneystelemarketing for debt-relief services.defendants will pay a total of over $32 million and will settlements or judgments based on actual damages togeneral, particularly the attorneys general of Californiabe banned from the student debt-relief business.students. While these actions are still common at theand Massachusetts, have targeted for-profit institutionsMassachusetts AG Remains Active in Policing Student and student lenders on their own, securing loan2019 HIGHLIGHTS Lending in 2019. In addition to joining in two large mul-federal level, in 2019, the state attorneys general beganforgiveness and restitution for borrowers in their states.actively and directly targeting for-profit schools andThree Massive Settlements with Student Loan Pro- tistate settlements with for-profit student educators, the viders and For-Profit Schools. Student loan providersMassachusetts Office of Attorney General (Massachu-7. Student Lending by Year and for-profit schools attracted significant attention insetts AG) displayed a continued focus on student lend-2019 with at least three settlements amounting to overing and debt relief in 2019 and obtained two unilateral STUDENT LENDING ACTIONS SINCE 2016 (WITH RECOVERIES) $100 million each. In January, 49 state attorneys gen- settlementsone with a for-profit education company; eral secured a settlement for nearly $500 million withthe other with a student financing company. In July, the Career Education Corporation, a for-profit educationMassachusetts AG announced that a for-profit educa-company, resolving allegations that the company de- tional institution (Salter College) and its parent company ceived its students about the total costs of enrollment,(Premier Education Group) would provide over $1.6 transferability of credits, and potential for employment,million in debt relief to settle claims that the college did in violation of various states consumer protection laws.not provide its students with critical information on pro-2016 2017 2018 2019 Then in June, the CFPB and 45 state attorneys generalgram job placement, loan repayment, and graduation $42.0M$204.1M$96.0M $986.9M entered into a $168 million settlement with Student CUrates (as required by state law). The settlement also re-10 12 1218 Connect CUSO, LLC, a private student loan providerquired the parent company to wind down all Massachu-related to the now-defunct for-profit school ITT Techni- setts operations by the end of the year. A month later, cal Institute. The lender was alleged to have engagedthe Massachusetts AG announced a consent judgment 26 27'