| Volume 129 Number 1 |
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The People’s Lawyer’s Tip of the Day
If you have an old cellphone that you plan to recycle or sell, make sure you erase your personal information first. You can use data eraser apps to remove your information before you reset the wireless device to default factory settings. Click here for more.
Student Loan Companies Routinely Deny Borrowers' Right to Lower Payments
According to a new report by the Consumer Financial Protection Bureau student loan borrowers are routinely denied their right under the law to make lower payments. Federal student loan borrowers have a right to income-driven repayment programs, which limit a borrower’s student loan payment at a percentage of her income. Private companies who regularly manage the student federal loan repayment process, were found to regularly deny borrowers’ applications to enroll in these plans, even though the borrowers qualified for the program. Click here for more.
Your Money
Starting on November 7th, a new program will allow buyers to contribute to a friend or relative's 529 saving account through gift cards. Giftofcollege.com, a registry for online gifts to 529 accounts, will make plastic 529 gift cards available at Toys “R” Us and Babies “R” Us retail stores. The 529 plans — named for the section of the federal tax code that established them — are state-run programs that allow families to invest funds for college. Contributions to 529 accounts grow tax-free and may be withdrawn tax-free to pay for education. Click here for more.
For the Lawyers
Enforcing a security interest is not debt collection under Fair Debt Collection Practices Act (FDCPA). Borrower sued ReconTrust and Countrywide, claiming they violated federal law in pursuing foreclosure after she defaulted on her loan. In particular, the borrower alleged that ReconTrust violated the FDCPA by sending her default notices stating the amounts owed. The district court dismissed that claim, finding the trustee was not a debt collector engaged in debt collection under the FDCPA. The Ninth Circuit affirmed, holding that merely enforcing a security interest is not “debt collection” under the FDCPA. In so holding, the court disagreed with earlier decisions by the Fourth and Sixth Circuits, creating a split between the circuits. Ho v. ReconTrust Co.(9th Cir. 2016). Click here for more.