CFPB v. NCSLT: Third Circuit Decides to Hear Appeal

On May 3, the Third Circuit Court of Appeals granted an appeal in Consumer Financial Protection Bureau (CFPB) v. The National Collegiate Master Student Loan Trusts filed by the Trust and two intervenors – Ambac, an insurer on certain Trust securities, and Transworld Systems, Inc., a servicer to the Trust who successfully intervened in the case – to review two legal findings regarding whether the Trusts are “covered persons” for the purposes of this action, and whether the CFPB failed to ratify the enforcement action before reaching the three-year statute of limitations. The Third Circuit Court’s decision to hear the appeal allows the Trusts’ appeal to be docketed and the issues will now be fully briefed over the coming months, effectively pausing the legal proceedings against the Trusts pending the review.

SFA will continue its advocacy on the matter and closely monitor any developments in the case. Additionally, SFA will seek to submit an amicus brief to inform the court on the negative impact that a finding of Trusts as “covered persons” would undoubtedly have on the securitization market.