CFPB Considering Enforcement Action Against Student Loan Servicer

On August 24, 2015, a large student loan company disclosed in a filing with the Securities and Exchange Commission that it “received a letter from the CFPB notifying [it] that, in accordance with the CFPB’s discretionary Notice of Opportunity to Respond and Advise (“NORA”) process, the CFPB’s Office of Enforcement is considering recommending that the CFPB take legal action against [it]” for allegedly unlawful activity concerning “disclosures and assessment of late fees and other matters. . . .”  The company indicated that it will respond to the CFPB’s letter in the hopes of dissuading it from taking legal action.  The company further explained that it is “currently unable to predict the timing of outcome of the NORA process[,]” nor could it “provide any assurance that the CFPB will not ultimately take legal action against [it] or that the outcome of any such action, if brought, will not have a material adverse effect on the Company.”  The Company declined to opine on the “range of potential exposure.”