On May 4, 2016, the Kentucky Attorney General announced that it filed a lawsuit against an out-of-state student loan company on May 2, 2016 for failing to turn over key documents in response to a subpoena in an ongoing investigation. The lawsuit alleges that, under the Kentucky Consumer Protection Act, Kentucky…
On April 7, 2016, the Washington Attorney General (“AG”) announced settlements with six student loan adjustment companies which were alleged to have “preyed on students” by charging excessive fees. The Washington AG claimed that these firms violated Washington’s Debt Adjustment Act and Consumer Protection Act by overcharging 346 Washington students…
On March 23, the Hawaii Attorney General (AG) announced that a consent judgment had been entered in Hawaii state court between a group of state attorneys general and a for-profit education company, under which the company will forgive approximately $118,865 in student loans for former Hawaii students. As previously covered by Enforcement Watch,…
On March 28, the Massachusetts Attorney General (“AG”), together with the U.S. Secretary of Education, announced that more than 2,000 students who were allegedly defrauded by a national for-profit college are eligible to have their federal loans forgiven. In November 2015, the AG had submitted an application to the U.S. Department of Education…
On March 15, 2016, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order and settlement with a national student debt relief company over allegations that the company charged illegal and excessive fees. According to the Complaint, the company operated online student debt management websites that offered services related to…
On January 27, 2016, the Federal Trade Commission (“FTC”) announced that it has filed a complaint against a for-profit college for allegedly violating the FTC Act by engaging in deceptive advertising. The suit was filed in the U.S. District Court for the Central District of California. The FTC has requested a permanent…
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…
On November 30, the Massachusetts Attorney General (AG) submitted an application to the U.S. Department of Education (DOE) for the immediate discharge of all federal student loans taken out by 7,200 borrowers attending a for-profit college between 2007 and 2015. The AG asserted that the college violated state law and…
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…
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…
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…
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…
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…
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…
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…
Click here to check out the latest article from LenderLaw Watch – No Summer Vacation for Student Lending Companies as Enforcement Activity Continues. The article analyzes recent federal and state enforcement activity taken against student lending companies, and comments on what student lenders can expect from enforcers in the near future.
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…
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…
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…
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…