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.