Reprinted from the AFL-CIO blog Now by Sarah Lewis & Rob McGarrah on January 25, 2017.
The Consumer Financial Protection Bureau and the attorneys general of Illinois and Washington directed the spotlight on the country’s largest student loan servicer, Navient, in a federal lawsuit filed last week. And the multibillion-dollar corporation is not happy about that.
CFPB, tasked with protecting consumers from banks and other financial institutions, said in a press release:
“Navient has failed to provide the most basic functions of adequate student loan servicing at every stage of repayment for both private and federal loans. Navient provided bad information in writing and over the phone, processed payments incorrectly, and failed to act when borrowers complained about problems. Critically, it systematically made it harder for borrowers to obtain the important right to pay according to what they can afford. These illegal practices made paying back student loans more difficult and costly for certain borrowers.”
The AFL-CIO, as an institutional investor, has repeatedly warned Navient that internal regulatory compliance failures could lead to such consequences, and this isn’t the first time the former loan servicing unit of Sallie Mae has been in trouble with the law. …