Search Results: Student Loans

FDIC and Federal Reserve Settle Claims Against Bank and Financial Aid Refund Distributor

On December 23, the FDIC and Federal Reserve each announced settlements in closely related enforcement actions against a bank and a company that distributed financial aid refunds.  The FDIC settled its claims for deceptive practices in violation of Section 5 of the Federal Trade Commission (FTC) Act with each defendant.  The Federal Reserve brought its Section 5…

Read More

Two Student Debt Relief Companies Banned from Operating in Massachusetts

On November 24, the Massachusetts Attorney General’s Office (“AG’s Office”) announced​ that it has reached two separate settlement agreements with student debt relief companies.  The two companies agreed to assurances of discontinuance and agreed to pay $56,000 and $40,000 respectively relating to allegations of charging illegal upfront fees prior to delivering​ full…

Read More

DOJ and State AGs Obtain $100 Million in Student Debt Relief for Students of For-Profit Colleges

On November 16, 2015, the DOJ announced a settlement with a national for-profit education company over alleged violations of the False Claims Act and the Higher Education Act. The settlement resolves four separate qui tam suits filed against the company in federal court. In conjunction with the DOJ announcement, the Attorneys General…

Read More

Washington Attorney General Victorious Against Student Loan Debt Adjustment Company

​​On November 10, 2015, the Washington Attorney General announced ​it received a judgment in Washington Superior Court against a student loan debt adjustment company for allegedly overcharging students and collecting unlawful fees. The judgment comes approximately three months after summary judgment was entered in favor of the Attorney General, as was reported ​by…

Read More

CFPB Summarizes Supervisory Trends for May through August, 2015

On November 3, 2015, the Consumer Financial Protection Bureau (CFPB) released its Supervisory Highlights report​ detailing the Bureau’s supervision efforts for May through August of 2015. The report summarizes the violations of consumer protection laws the Bureau observed during the four-month period and identifies the areas in which the Bureau has…

Read More

CFPB Eyes Student Loan Servicing As Next Target In New Report

The CFPB issued a new report on September 29, 2015, making clear that it is targeting student loan servicing for a set of industry-wide reforms.  Servicers should be on notice that the CFPB is reviewing new standards for them to follow.  The CFPB report is the result of a public inquiry…

Read More

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…

Read More

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…

Read More

No Summer Vacation for Student Lending Companies as Enforcement Activity Continues

Student lending continues to remain in the crosshairs of federal and state consumer finance regulators during the summer months, with over five enforcement actions and investigations in recent weeks.  As covered in both LenderLaw Watch (LLW) and Consumer Finance Enforcement Watch (CFEW), this is a small part of a larger…

Read More

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…

Read More

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…

Read More

CFPB Investigates National Bank Over Student Loan Servicing Practices

Piggy Bank with a Graduation Cap

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…

Read More

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…

Read More

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…

Read More