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…
On October 28, the Consumer Financial Protection Bureau (CFPB) announced that the U.S. District Court for the Northern District of Illinois entered a default judgment and order against affiliated for-profit colleges, resolving a complaint filed by the CFPB on September 16, 2014. The complaint alleged that the colleges provided “consumer financial…
On October 8, an article published in the Wall Street Journal disclosed that the Consumer Financial Protection Bureau (CFPB) is investigating the student loan servicing practices of a national bank. Sources indicated that the bank, which is the second largest private student-loan originator by volume, has been under investigation since at least late last…
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…
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…
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…
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…
On July 1, 2015, Governor Cuomo announced a student loan debt relief provider was ceasing operations following an investigation by the Student Protection Unit of the Department of Financial Services. The company allegedly engaged in misleading and deceptive advertising as well as other improper practices. The company claimed it could…
The CFPB’s Request for Information On May 14, 2015, the Consumer Financial Protection Bureau (CFPB) held a field hearing on student loans in Milwaukee, Wisconsin and issued a Request for Information (RFI) about student loan servicing practices. The RFI is in response to a Presidential Memorandum that instructed the Secretary…
On May 4, 2015, Illinois Attorney General Lisa Madigan announced five lawsuits filed on behalf of the State against student loan debt settlement services companies based in Texas, California, Florida, Georgia, and Illinois. The complaints allege that the companies violated Illinois’ consumer protection laws by charging hundreds to thousands of…
On April 7, 2015, the Washington State Attorney General Office announced that it filed suit against a California-based student-loan debt-adjustment company, alleging that the company charged illegal fees in violation of Washington’s Consumer Protection Act and the state’s Debt Adjusting Act. According to the complaint, the company allegedly marketed services…