The CFPB has issued a rule that allows the CFPB to supervise certain nonbank student loan servicers for the first time.
The CFPB currently oversees student loan servicing at the largest banks. The new rule expands that supervision to any nonbank student loan servicer that handles more than one million borrower accounts, regardless of whether they service federal or private loans. Under the rule, those servicers will be considered “larger participants,” and the CFPB may oversee their activity to ensure they are complying with federal consumer financial laws.
Under the new rule, which was proposed in March, the CFPB estimates that it will have authority to supervise the seven largest student loan servicers. Combined, the CFPB believes those seven service the loans of more than 49 million borrower accounts, representing most of the activity in the student loan servicing market.