Student Loans

CFPB Releases Guidance on Student Loan Servicing Reform

​On September 29, 2015, the CFPB released a report outlining perceived failures in servicing of both private and federal student loans.  Some of the issues identified in the report include:  servicers not disclosing alternative repayment programs; servicing transfers resulting in processing problems, such as surprise fees and lost repayment benefits; customer service…

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Kentucky AG Secures $11.2 Million Settlement from For-Profit College

​On September 10, Kentucky Attorney General (KY AG) Jack Conway announced a settlement with a for-profit college, resolving claims that the school violated the state Consumer Protection Act.  The state alleged that the college violated the statute by denying students financial aid to purchase textbooks at bookstores other than its own; misrepresenting…

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Office of the Comptroller of the Currency Announces $30 Million Civil Penalty Against National Bank Over SCRA Violations

On August 21, 2015, the Office of the Comptroller of the Currency announced that it had concluded its investigation into several related national banks regarding alleged violations of the Servicemembers Civil Relief Act. The Act prohibits certain debt collection activities against members of the armed forces. Before proceeding with judicial…

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Washington State Attorney General Obtains Judgment Against Private Student Loan Company Over Illegal Fees

​On August 18, 2015, the Washington State Attorney General’s Office announced​ the entry of summary judgment​ against a regional student loan processing company in a case involving alleged illegal fees charged to borrowers. The company offered student loan modification services, including income-based repayment plans, debt consolidation, and debt forgiveness. According…

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CFPB Investigates National Bank Over Student Loan Servicing Practices

On August 3, 2015, a national bank revealed in an U.S. Securities and Exchange Commission filing that its student loan servicing practices are under investigation by the Consumer Financial Protection Bureau (“CFPB”). The bank indicated that it is cooperating with the investigation and anticipates the CFPB may order it to remediate its customers and/or…

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CFPB Enters Consent Agreement with Student Loan Lender Concerning Sales and Billing Practices

On July 23, 2015, the Consumer Financial Protection Bureau (“CFPB”)​ filed a complaint and proposed consent order in the United States District Court for the Eastern District of California in connection with a settlement reached with a student loan lender that offered fee-based assistance to consumers filling out the federal government’s Free Application…

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CFPB Issues Order and Penalties Against National Bank for Student Loan Servicing Practices

On July 22, 2015, the Consumer Financial Protection Bureau (“CFPB”)​ issued a consent order against a national bank and its affiliates for its servicing practices affecting private student loan borrowers.​  The order asserts that the bank violated various sections of the Consumer Financial Protection Act of 2010 (“CFPA”) and the Fair…

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