Student loans

Income share agreements, which allow college graduates to repay tuition financing as a percentage of their future income, have come under fire lately from consumer advocates for questionable marketing and other potential legal violations. Some hope a partnership between a Virginia bank and an ISA provider will give the product more legitimacy, while others worry it just masks risks for borrowers.

Cordray, named this week to lead the Education Department's office of federal student aid, cracked down on banks, student loan servicers and for-profit colleges when he was director of the Consumer Financial Protection Bureau.

The deal between San Francisco-based lender and Social Capital Hedosophia Holdings Corp. V is latest example of a closely held firm going public by merging with a special purpose acquisition company.

The consumer bureau said the bank’s migration to a new servicing platform led to unauthorized payment withdrawals, misrepresentations about what borrowers owed and violations of a prior 2015 enforcement action.

The $10 billion portfolio of what are described as high-quality private student loans will be serviced by Nelnet.

The president-elect’s plan to eliminate $10,000 of debt would help borrowers meet other loan obligations, reducing their risk of default. Yet the banking industry seems wary of the precedent it could set.

Wells Fargo is exploring a sale of its corporate-trust unit that could fetch more than $1 billion and is considering whether to find a buyer for its student loan portfolio, according to people familiar with the matter.

As financial distress mounted, 12.4% of mortgagors missed payments across the second and third quarters of 2020 — and it could get worse, according to a study from the Mortgage Bankers Association.

The California plan to create a new, tougher state regulatory agency is at the finish line after lawmakers agreed to key exemptions for banks while maintaining strong enforcement measures for payday lenders and other firms.

The legislation, which would apply to both banks and nonbanks, would give borrowers the right to sue for damages when servicing violations occur.