Since it was founded back in 2010, the Consumer Financial Protection Bureau (CFPB, has been in the news quite a bit. This federal regulation bureau has taken hits in the public for putting pressure on banks, and quite literally trying to drive some types of companies completely out of business. This is not to say that everything the CFPB does is nefarious, but they have had to explain their actions quite a bit. The latest news from the world of the CFPB is that the bureau may be suing the biggest student loan company in the United States, Navient Corp, for allegedly cheating consumers.
The CFPB, which has been running an investigation on Navient for almost two years, recently sent a letter to the company’s executives, telling them that the agency’s staff had found sufficient evidence to prove that the company has violated national consumer protection laws. The Consumer Financial Protection Bureau also notified Navient that their senior officials were weighing the information that they had in order to determine whether or not to take the company to court and sue them outright.
This comes as no surprise, as the bureau recently sent letters to ITT Educational Services and Corinthian Colleges INC, two very popular, for-profit colleges, prior to suing them. However, when asked for a comment, the CFPB’s representatives declined. This all comes to light at a time when the nation’s $1.3 and growing student loan tab has gotten to a point where it threatens to slow down economic growth. With millions of people struggling to make payments or cutting back in other ways, the economic upsurge is definitely at risk. Regulators worry that subpar loan services may be a reason why these issues are beginning to come to light, with borrowers complaining about poor treatment from lending companies, and being forced to save money for larger monthly payments than they should be required to pay.
Navient currently processes more student loan payments than any of their competitors and has been under active investigation for at least 24 months by both federal and state authorities for charging borrowers too much and mistreating their customers. Back in 2014, the Department of Justice alleged that the company was intentionally cheating active duty military personnel about their student loans for almost a decade.
The CFPB has also been looking into the company for some other sketchy practices, like its method of its debt collection department treating distressed debtors poorly and how its loan servicing personnel interact with some borrowers. A group of lawyers from Illinois and Washington has been actively investigating the company for over a year. Another federal regulator, the New York Department of Financial Services has also taken it upon itself to launch an investigation on the educational lender.
If it turns out that Navient is actually guilty of the charges being leveled thus far, then this would be a case of the Consumer Financial Protection Bureau doing what it was tasked with in the first place – protecting the general public from financial malfeasance. If that is how this case pans out, maybe the CFPB can spend more time pursuing legitimate cases and less time meddling with short term lending companies and others that provide needed services to the financially vulnerable, unbanked and underbanked citizens of the United States.