All Consuming - Financial Litigation Insights: Issue 5, September 2020

View as WebpageSeptember 9, 2020Three Important Ways the COVID-19 Pandemic is Changing theDelivery of Consumer Financial ServicesBy Nicholas P. Mooney IIThe world continues to come to grips with the daily changes brought by the COVID-19 pandemic.Schools contemplate opening. Some do, while others do not. Some professional and college sports teamsplay games to empty stadiums. Some businesses are open, with restrictions, while others are not.Lawsuits are being filed by businesses that think they should be permitted to reopen like their neighborswho already have. It comes as no surprise that the pandemic also is changing the way consumerfinancial services are offered. This article looks at three ways those services and the businesses offeringthem are navigating the “new normal.”Click here to read the entire article.Court Allows Bankruptcy Discharge Of $200,000 In Student Loans"In McDaniel v. Navient, the U.S. Court of Appeals for the 10th Circuit affirmed a lower bankruptcycourt’s determination that a borrower’s private student loan debt could be discharged in bankruptcy."Why this is important: After the 2005 amendments to the Bankruptcy Code, many bankruptcy courtsheld that all student loans – both government and private – could not be discharged. The only exceptionwas if the debtor could show “undue hardship,” which is a fairly high standard to meet under the caselaw. The relevant section of the Code, as amended, excepted from discharge (a) an education loan thatwas made, insured, or guaranteed by the government or a nonprofit institution; (b) a “qualifiededucation loan” as defined by the Internal Revenue Code; and (c) “an obligation to repay funds receivedas an educational benefit, scholarship, or stipend.” The issue is whether student loans that do not meetthe definition in (a) or (b) are still excepted from discharge as an “educational benefit” under (c). In2019, the U.S. Court of Appeals for the Fifth Circuit affirmed, as a matter of first impression, that theprivate student loans at issue in that proceeding were not an “educational benefit” subject to thedischarge exception. See Crocker v. Navient Sols., L.L.C. (In re Crocker), 941 F.3d 206 (5th Cir. 2019).The U.S. Court of Appeals for the Tenth Circuit followed suit last month, holding that a private studentloan is not an “educational benefit, scholarship, or stipend” that is excepted from discharge. The Court’sanalysis focused on certain canons of statutory construction to interpret the relevant Code...