On November 7, the Consumer Financial Protection Bureau filed their brief in the Third Circuit Court of Appeals in the ongoing case against the National Collegiate Student Loan Trusts (NCSLT). In the brief, the CFPB defends their position that the Trusts are “covered persons” under the Consumer Financial Protection Act (CFPA) and thereby under the enforcement authority of the CFPB. As discussed in our Virtual Fireside Chat, in their brief the CFPB not only argues that the securitization trusts are “covered persons” they also now argue that these passive trusts are “debt collectors”. Any finding that securitization trusts are debt collectors would only further materially disrupt the consumer lending market.

In late September, SFA submitted an amicus brief in support of the defendants and the industry detailing (1) how upholding the District Court ruling would harm bond investors and increase lending costs for consumers, and (2) why we believe Congress never intended to scope in passive securitization trust with supporting legal arguments. Given the court calendar we don’t expect a final rule for 5 – 7 months, at the earliest.

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