On September 19, the Consumer Financial Protection Bureau (CFPB) published a recent decision and order denying the petition of one of the largest private student loan servicers in the United States. The petition was aiming to set aside the Bureau’s civil investigative demand (CID) as part of their investigation into potential violations of the Consumer Financial Protection Act’s (CFPA) prohibition of unfair, deceptive, and abusive acts and practices.
The investigation was primarily focused on attempts to collect on loans that had previously been discharged in bankruptcy. The servicer had sought to set aside the CID issued by the CFPB. The Bureau has instead ordered that the servicer must “comply in full” with its demand. The refusal to set aside CID signifies an ongoing and serious approach towards ensuring compliance with fair practices within the finance industry.
It appears the CFPB’s dedication to protect borrowers from potentially unfair, deceptive, or abusive practices remains unwavering in face of this development. CFPB’s refusal does not only reinforce its commitment to holding student loan servicers accountable but it also underscores the seriousness with which it views potential violations of the CFPA.
The information in this piece is based on a report by Orrick, Herrington & Sutcliffe LLP.