Mondaq Business Briefing

State AGS in the News - October 15th, 2015

Consumer Financial Protection Bureau

CFPB Continues to Scrutinize Student Loan Servicers

The Consumer Financial Protection Bureau (CFPB) is allegedly investigating Wells Fargo & Co. over its student loan servicing practices. The exact issue with Wells Fargo remains undisclosed, and the bank transferred the servicing of its federal student loan portfolio to third parties in 2011. It does, however, remain the second largest servicer of private student loans by volume.

The CFPB is showing increased interest in student loan servicing. In July, the CFPB brought its first enforcement action against a servicer, alleging that Discover Bank violated the Consumer Financial Protection Act and the Fair Debt Collection Practices Act when it overstated the minimum amount to be paid and failed to inform borrowers of their rights. In addition, the CFPB continues to investigate Navient Solutions, Inc., the largest student loan servicer.

The CFPB has recently issued a thorough report explaining the problems facing the industry, and entered into a Joint Statement of Principles with the Departments of Treasury and Education. Some of the issues highlighted there include loan servicers' actions that contribute to borrower delays and defaults through mismanaged payments and paperwork, as well as loan modifications that put distressed borrowers into improper repayment programs.

Data Privacy

Federal Appeals Court Rules Video Privacy Protection Act Does Not Apply to Free Mobile Apps

In Ellis v. …

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