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  • CFPB Files Suit Against Nation's Largest Student Loan Company

    Courts

    On January 18, the CFPB initiated an enforcement action against the nation’s largest student loan servicer based upon alleged violations of the CFPA, FCRA, and FDCPA. In a complaint filed with the Middle District of Pennsylvania, the Bureau charged that the student lender “systematically and illegally” created “obstacles to repayment” and “cheated” many borrowers out of their rights to lower repayments, causing them to pay much more than they had to for their loans. The CFPB “seeks to obtain permanent injunctive relief, restitution, refunds, damages, civil money penalties, and other relief.”

    Later that day, the lender issued a statement categorically rejecting the CFPB's charges, explaining: “[T]he suit improperly seeks to impose penalties [] based on new servicing standards applied retroactively and applied only against one servicer. The regulator-asserted standards are inconsistent with Department of Education regulations, and will harm student loan borrowers, including through higher defaults.” The company also noted that “the timing of this lawsuit—midnight action filed on the eve of a new administration—reflects their political motivations.”

    Courts Consumer Finance CFPB FDCPA FCRA Student Lending CPA Enforcement

  • CFPB Takes Action Against Pawnbrokers for Misleading Annual Percentage Rates

    Federal Issues

    On December 19, the CFPB announced it had filed enforcement actions (3:16cv987, 3:16cv988, 1:16cv1566, 1: 16cv1567) in federal district court against four Virginia pawnbrokers for misleading customers through deceptively low annual percentage rates that intentionally omit or hide certain fees and charges. In each Complaint, the Bureau alleges both TILA violations and unfair, deceptive, or abusive acts or practices under Dodd-Frank and the CPA. The complaints seek injunctive relief ordering the pawnbrokers to stop the allegedly illegal practices, restitution for consumers, and statutory penalties.

    Federal Issues Consumer Finance CFPB TILA Dodd-Frank CPA

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