WASHINGTON (7/2/13)--The federal student loan rate, which was set at 3.4%, doubled for future loans to 6.8% on Monday. While the U.S. Congress did not take action to avert this increase, it can still address the problem when members return from the July 4 recess next week.
Student lending issues are on the minds of many, and details of a private Senate Banking Committee hearing on private student loans held last week are included in this week's edition of the Credit Union National Association's Regulatory Advocacy Report
During that hearing, lawmakers told banking regulators they are concerned about access to student loans and mounting debt problems facing college students. A major point of contention was banks' ability to provide workouts for distressed borrowers and whether banks can offer flexible repayment options. The regulators indicated that banks were free to offer borrowers flexible repayment options.
However, the Regulatory Advocacy Report
noted, accounting standards and a lack of regulator guidance prevent many credit unions and banks from offering robust repayment options.
The Federal Deposit Insurance Corp. has indicated that it will be releasing private student loan guidance soon. CUNA is hopeful that the National Credit Union Administration will also address issues of repayment modifications in the near future.
Other items addressed in this week's Regulatory Advocacy Report
NCUA board nominee Richard Metsger's nomination hearing testimony;
CUNA comments on third-party clarifications;
CUNA's participation in a Bank Secrecy Act Advisory Group meeting; and
An NCUA Inspector General communique to Congress.
Employees or volunteers of CUNA- and state credit union league-member credit unions can sign up below to receive the Regulatory Advocacy Report.
The Regulatory Advocacy Report
is archived on cuna.org