According to the Consumer Financial Protection Bureau (CFPB) 2016 spring ruling agenda we can be certain that they will not be flexing their muscles in the student loans department for some time. Released in November, the fall 2015 rule-making agenda determined that student loan rule-making may be on the horizon. However, the spring update directs readers back to the fall agenda for more information. The CFPB’s short-term focus will be arbitration, prepaid accounts, payday and title lending, and prepaid accounts. The CFPB will also maintain its focus on mortgage loan servicing.
With so much being laid out, what, then can student loan servicers anticipate from the CFPB in the near term? In March of 2016, the CFPB dedicated five pages of its Winter 2016 Supervisory Highlights just to student loans. The CFPB specifically noted the following issues that have been identified in examinations:
- Practices related to payment allocation among multiple student loans in a borrower’s account;
- Practices relating to auto-default based on a co-debtor’s bankruptcy and failure to notify co-debtors that a loan was placed in default;
- Failure to disclose the potential effect of student loan forbearance on cosigner release eligibility;
- Servicer errors in converting an account when the owner of the loan changes;
- And failure to establish adequate policies and procedures under FCRA and Regulation V requirements.
The CFPB has pursued investigations of at least four companies since fall 2015. The most recent from May 2016 Notice and Opportunity to Respond and Advise (NORA) letter to First Marblehead Corporation. Although the CFPB does not generally comment on confidential law enforcement investigations they were committed to telling the public what they can to protect consumers. In fact, the CFPB’s Supervisory Highlights and disclosures from multiple entities suggest that more investigations can be expected in 2016.
In the long-term CFPB has signaled that disclosures are a priority, while still considering rulemaking. A set of “prototype” disclosures related to borrowers’ repayment options called the ‘Payback Playbook’ was released in April by the CFPB. The CFPB imagines these disclosures giving customized data to every borrower in month-to-month billing statements, regular e-mails, or when signing into the borrower’s online record.
This information suggests that student loans in fact remain a priority for the CFPB. In the future, we can expect increasing investigations, guidance, oversight, and potential rulemaking. This is only the beginning and therefore will be more to come from student loans at CFPB.
If You’re struggling with your federal student debt. You can lower your payments or even have your loan forgiven thru the Obama Student Loan Forgiveness Program. If you have any Private student loans you can also qualify for a Private Loan Discharge.