postings by Dalié Jiménez

Virtual Conference on Income Share Agreements

posted by Dalié Jiménez

As many of you know, I direct the Student Loan Law Initiative at UCI Law, a partnership with the the Student Borrower Protection Center (SBPC). We recently announced a series of grants supporting empirical work on student loan law, including Slipster Adam Levitin!

Our partner, SPBC has also been very busy. As income share agreements have become a growing fixture in the student loan law marketplace, SBPC has put on a virtual conference series taking a deep dive into the legal underpinnings of ISAs and arguing that the the existing consumer protection framework already applies to these financial products. Each week has had a 90-min panel and a paper. The final panel in the series, on ISAs and State Law, is happening today at 2pm ET/11am PT (join live by clicking on "register" at the top right).

The first panel focused on the definition of credit and tackled the question of how to classify ISAs under federal consumer financial law. Oregon Attorney General Ellen Rosenblum delivered the keynote. The paper was written by Joanna Peart and Brian Shearer. Joanna was the former Enforcement Chief of Staff and Acting Principal Deputy Enforcement Director for the Consumer Financial Protection Bureau. Brian is the Legal Director of Justice Catalyst.

The second panel focused on the fair lending risks inherent in ISAs. FTC Commissioner Rohit Chopra was the keynote for the day’s event and the paper was written by Stephen Hayes and Alexa Milton. Stephen Hayes is a partner and Alexa Milton is an associate at Relman Colfax.

Today's final panel focuses on the application of state consumer lending and consumer finance laws to ISAs. The accompanying paper was written by Ben Roesch, an attorney at Jensen Morse Baker. Today's panel will be moderated by Jillian Berman from Marketwatch and also include panelists from the Oregon Department of Justice and National Consumer Law Center, among others.

Even if you cannot make this week’s panel live, all the expert panel discussion and papers will be available on the conference website: emergingrisks.org. And if you're interested in more student loan law research, join our mailing list.

CARES Act "Rebates" and Bankruptcy

posted by Dalié Jiménez

Related to Pamela's last post and our article regarding garnishments and the CARES Act "rebates," the US Trustee issued a notice to Chapter 7 and Chapter 13 trustees giving them guidance on what to do about them in a bankruptcy case.

The top line: these payments should not be included in the statutory definitions of "current monthly income" or "disposable income" per the CARES Act itself. But the Act failed to discuss whether these payments are property of the estate, which typically would mean that they are. I know bankruptcy lawyers have been dealing with this already and many feared that some trustees would try to obtain these mounts. I was therefore very pleased to read this in the US Trustee notice, in particular the part in bold:

Regardless of whether the rebate is property of the estate, the United States Trustee expects that it is highly unlikely that the trustee would administer the payment after consideration of all relevant circumstances ... Trustees are directed to notify the United States Trustee prior to taking any action to recover recovery rebates or objecting to a chapter 13 plan based on the treatment of recovery rebates.

Help End the Student Debt Crisis (with Research)

posted by Dalié Jiménez

2014.11.09.Charge2America has a student debt problem. At over $1.6 trillion, outstanding student loan debt is the second-largest category of consumer debt after mortgages. Yet we still know relatively little about the effect of student loans on individuals, communities, states, and our country as a whole. For instance: What were the effects of income-driven repayment (IDR) plans on student borrowers’ financial health and spending habits? What credit usage behaviors predict student loan distress or defaults? Given the disparate impact of student debt on communities of color, what is the effect of this debt on their overall financial health and economic opportunity? 

The lack of answers to these questions motivated me and my UCI Law colleague Jonathan Glater to create the Student Loan Law Initiative (SLLI), a partnership with the Student Borrower Protection Center (SBPC). Our goal is to foster research that can arm policymakers, legislators, and advocates with the best information possible to find solutions to the student debt crisis. It's been a busy 9 months. I have three highlights to share: 

  • Tomorrow, we're hosting a symposium titled, Consumer Protection in the Age of the Student Debt CrisisThe day will bring together academics and student loan law practitioners from across the country to discuss where we are and to set the agenda for where to go from here. The event is free and open to the public and will be webcast live tomorrow (2/21) between 9:30 a.m.- 4:30 p.m. PST. Papers will be published in the UC Irvine Law Review later this year. Follow the events on twitter with #SLLI.
  • We've acquired two important datasets (including a credit panel with anonymized quarterly tradeline data on over 43 million consumers from 2004-19) that will help researchers answer some of these questions.
  • We've launched a new grants program to support researchers of student loan law. The program will offer grants of up to $15,000 to support research on the effects of student debt on consumers’ financial lives and their communities. We'll prioritize applicants who propose to work with one of the datasets we've acquired but are seeking applicants from all fields: law, higher education, economics, and sociology. We're accepting rolling applications through April 1, 2020.

Graphic credit: Blob defeats the student loan monster. Cartoon from the Financial Distress Research Project self-help materials.

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