b'an additional pause will be implemented. But for now,deceptively indicated that its promise-to-pay contracts borrowers can benefit from the additional reprieve, whilewith students could not be discharged in bankruptcy. servicers have been afforded some additional time toAccording to the DFPI, the school offered its students prepare for the inevitable restart. the option to finance their education through a contract in which the student promised to repay the Minnesota AG Reaches $39 Million Settlement withschool based on a percentage of the students future For-Profit Universities income. This contract had a provision that stated, The largest reward obtained this year was in Septemberthis extension of credit is a qualified educational loan when the U.S. Bankruptcy Court for the District ofand is subject to the limitations on dischargeability in Minnesota approved a $39.4 million settlementbankruptcy contained in Section 523(a)(8) of the United between the Minnesota Attorney General and twoStates Bankruptcy Code. The DFPI alleged that this defunct, for-profit colleges: Globe University andlanguage is deceptive because the schools contract Minnesota School of Business. Both schools allegedlyis not a qualified educational loan and therefore is engaged in consumer fraud and illegal lendingnot subject to limitations on dischargeability. Under the practices by misleading students about potentialsettlement, the school must update this provision and program benefits that caused students to take outinform students who entered into the contract that this substantial student loans to enroll. The schools alsoprovision is not accurate. allegedly violated the states usury law by chargingFinally, in September 2021, the DFPI issued its first unlawful interest rates. This settlement brings to restenforcement action against a debt collection company. a lawsuit that was first filed in 2014 and spanned twoAccording to the DFPI, the company (F&F Management trials, several appeals, and a bankruptcy filing. Inc.) engaged in various unlawful practices from May California DFPI Actions through August 2021, including: (1) leaving consumers Last year, we predicted that student loan servicersautomated voicemails that failed to identify the operating in California may experience increasedcompany; (2) making false representations about scrutiny from the California Department of Financialits power initiating legal proceedings and wage Protection and Innovation (DFPI) as a result of last yearsgarnishments; and (3) engaging in debt parking by passage of Californias Student Loan Borrower Bill offurnishing negative credit information to credit bureaus Rights. As expected, this year the DFPI announcedwithout first attempting to communicate with consumers three actions against student lenders and debt reliefabout the alleged debt or notifying consumers in companies under the new California Consumerwriting within 30 days of furnishing that negative Financial Protection Law (CCFPL) provisions prohibitingcredit information in violation of the Consumer Credit companies providing consumer financial productsReporting Agencies Act (CCRAA). The company was or services to California residents from engaging inordered to pay an administrative penalty of $375,000. unlawful, unfair, deceptive, or abusive acts or practicesDOJ Reaches $50,000 Settlement with NJ HESAAor from committing any act in violation of a consumerKeeping with the trend Goodwin observed this year financial law. regarding the enforcement of military servicemembers In February 2021, the DFPI issued its first enforcementrights across various industries, the DOJ obtained action against a student debt relief company. Thea settlement from the New Jersey Higher Education company, Optima Advocates, Inc., was alleged toAssistance Authority (HESAA). The settlement have operated a student loan debt relief scam for overresolved allegations that New Jersey violated the three years whereby it convinced California residentsServicemember Civil Relief Act (SCRA) by seeking to pay tens of thousands of dollars to wipe awaydefault judgments from servicemembers. SCRA their student loans by getting them dismissed orrequires lenders seeking default judgment to notify discharged in exchange for the consumers payingcourts of the consumers military status as a safeguard Optima between25% to 40% of the total studentin case the servicemembers are unable to appear loan balance. According to the DFPI, Optima neverin court and defend themselves due to their military provided any of these services; rather, it simply allowedservice. Specifically, HESAA is alleged to have filed the consumers to default on their loans. Optima wasfalse affidavits stating that borrowers were not in ordered to provide refunds to all consumers who weremilitary service when they in fact were. Under the charged illegal fees and pay a fine of $45,000. proposed consent order, HESAA must pay restitution In April 2021, the DFPI entered into a settlementin the amount of $15,000 to the two servicemembers agreement with Lambda School, an online codingwho had default judgments entered against them and a school, resolving allegations that the school$20,000 civil money penalty.47'