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Volume X, Number 331

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DFPI's Suit Against PHEA Finds No Purchase

The California Student Loan Servicing Act (the "CSLSA") requires all student loan servicers that service student loans in California to be licensed by the California Department of Financial Protection and Innovation (fka the Department of Business Oversight).  Cal. Fin. Code § 28102.  Last April, the DBO filed suit against the Pennsylvania Higher Education Assistance Agency (aka the "PHEAA").  The DFPI's lawsuit asserted two causes of action.  The first sought a court order requiring the PHEAA to provide certain information.  The second sought a judicial declaration that the CSLSA is not preempted by federal law.

Earlier this month, U.S. District Court Judge Maxine N. Chesney dismissed the DFPI's lawsuit, ruling that state licensing statutes cannot be applied to federal contractors. California v. Pa. Higher Educ. Assistance Agency, 2020 U.S. Dist. LEXIS 184281.  In support of her ruling, Judge Chesney cited both Supreme Court (Leslie Miller, Inc. v. Arkansas, 352 U.S. 187 (1956)) and Ninth Circuit precedents (Gartrell Constr. Inc. v. Aubry, 940 F.2d 437 (1991).  The DFPI has until the end of this week to file an amended complaint asserting any non-preempted claims that it may have.

© 2010-2020 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume X, Number 295
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Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
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Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

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