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On January 16, 2025, the CFPB announced that it entered into a stipulated proposed final judgment to settle its suit against a student loan trust, in which the CFPB alleged that the trust engaged in deceptive acts in violation of the Consumer Financial Protection Act (CFPA) by filing improper debt collection suits against student borrowers. The lawsuit had been initiated back in September 2017 in the United States District Court for the District of Delaware. In that suit, the CFPB alleged that the trust violated the CFPA by 1) submitting false affidavits misrepresenting the personal knowledge of affiants as to borrowers’ debts, 2) improperly representing that affidavits were executed in the presence of a notary, when they in fact were not, 3) filing debt collection suits despite having knowledge that it lacked the documentation necessary to establish the existence of the claimed debt, and 4) attempting to collect from borrowers debt that was barred by applicable statutes of limitations. As part of the stipulated final judgment, the trust agreed to terminate certain debt collection suits it had brought against consumers that remained ongoing, as well as pay $2,250,000 in redress to affected consumers. |
