On March 14, 2013, the CFPB announced
a proposed rule to supervise nonbank student loan servicers. Under the
proposed rule, the CFPB would have supervisory authority for loan servicers
with more than one million accounts - a move that would bring the seven largest
nonbank student loan servicers within the scope of the CFPB's authority.
Larger banks' student loan servicing operations are already under CFPB
The announcement of the proposed rule was preceded by a number CFPB reports
detailing consumer complaints with nonbank student loan servicers. The
three major concerns highlighted in the reports - borrower confusion about the
terms and conditions of their student loans, unresponsive customer service
personnel and delays in processing payments - will likely be the focus of the
CFPB's supervisory activity.
The CFPB's examination
procedures for student loan providers serve as a helpful tool for firms
subject to the proposed rule as they prepare for CFPB supervision.
The public has until May 14, 2013, to comment on the
proposed rule. A copy of the proposed rule can be found here.
Read more at Consumer Financial Protection Bureau
Report by Troutman Sanders LLP.
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