CFPB Secures Consent Order Against Student Loan Servicer for Failure to Comply with 2015 Consent Order and Alleged Deceptive Acts and Practices

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On December 22, 2020, the Consumer Financial Protection Bureau (CFPB) announced​ that it had secured a consent order ​against a national student loan servicer based on its failure to comply with a 2015 consent order issued by the CFPB.  Specifically, the company misrepresented the minimum periodic payments owed by consumers on their student loans, misrepresented the amount of annual interest paid by consumers, and engaged in unfair acts and practices by withdrawing payments from consumers’ accounts without valid authorization from the consumer, in violation of the Consumer Financial Protection Act, 12 U.S.C. §§ 5531(a) and 5536(a)(1)(A) and (B), the Electronic Funds Transfer Act, 15 U.S.C. §1693e(a) and (b), and  Regulation E, 12 C.F.R. § 1005.10(b) and (d).

The consent order requires the company to pay a $25 million civil money penalty, at least $10 million in consumer redress, and to take steps to prevent future violations.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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