Sallie Mae, the nation’s largest student loan company, announced that it’s prepared to spend $70 million to deal with investigations from the Consumer Financial Protection Bureau, the U.S. Department of Justice and the Federal Deposit Insurance Corp. Federal regulators allege that the company violated federal consumer protection laws by engaging in discriminatory lending, overcharging active-duty members of the military and wrongfully processing borrowers’ monthly payments on their student loan debt.
This is the first time the student loan giant has put a number to the expected costs of this ongoing investigation. Yet despite the investigations, the Department of Education recently told Sallie Mae that it intends to renew the company’s lucrative contract to collect payments on federal student loans.
Sallie Mae”s ongoing legal trouble with the CFPB is just one example of how the Bureau is orchestrating a top-down approach to investigating the debt collection industry. First, the CFPB went after big banks, many of which do business with debt collection agencies. Then, the CFPB went after large debt buyers. Now, the CFPB has amped up its audits of debt collection agencies. Now is the time for large market participants to pay attention to CFPB action, and for small market participants to prepare for eventual scrutiny from the Bureau.
Get step-by-step guidance on how to survive a CFPB audit, with your sanity and bottom line intact, with our new webinar, insideCompliance: How to Survive a CFPB Audit. Learn from real-world examples about how the CFPB measures accountability, so you can do the same. Nicole Strickler, partner at Messer & Stilp, Ltd., will show you how to fix mistakes before the CFPB penalizes you for them. You’ll also have the chance to ask Ms. Strickler questions during the live Q&A portion of the webinar.
- How to make sure your compliance policies are current and comprehensive
- What the consequences are of “failing” a CFPB examination
- How to fix compliance mistakes in a manner the CFPB deems appropriate