Consumers Union and applauds CFPB and urges lawmakers to oppose efforts to weaken the financial watchdog
WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) announced today that it has filed a lawsuit against Navient for providing student loan borrowers inaccurate information, processing payments incorrectly, and failing to take action to address consumer complaints. To make matters worse, the CFPB’s lawsuit charges that Navient violated the law by making it harder for struggling borrowers with federal loans to enroll in more affordable repayment options they had a right to access to help manage their debts.
Consumers Union, the policy and mobilization division of Consumer Reports, applauded the CFPB and said today’s action underscored the importance of having a tough financial watchdog looking out for the interests of consumers.
“For too long, students and families have been pushed deeper in debt because loan servicers like Navient have given them the runaround at every stage of repayment,” said Suzanne Martindale, staff attorney for Consumers Union. “The CFPB’s investigation reveals how devastating these servicing failures can be to borrowers. The agency should be lauded for taking action to hold Navient accountable for their egregious practices and working to ensure borrowers are treated fairly and get the relief they deserve.”
Navient, formerly part of Sallie Mae, is the largest student loan servicer in the U.S. An estimated 44 million Americans owe more than $1.4 trillion in education debt. Consumers Union has worked closely with federal regulators on ways to reform student loan servicing and provided the CFPB with over 500 stories from borrowers who were harmed by failures of the system. Many people who shared their stories with Consumers Union expressed frustration with loan servicers who failed to maintain accurate records, provided inconsistent information, or simply refused to work with them to resolve problems.
Today’s action by the CFPB comes at a time when the agency is under attack by industry opponents and their allies in Congress. Some proposals being considered by Congress would create more bureaucracy by replacing its director with a five-member commission, politicize the CFPB’s budget by subjecting it to the appropriations process, and make it harder for the watchdog to protect consumers from abusive products and services.
“Opponents of consumer protection are at it again,” said Pamela Banks, senior counsel of Consumers Union. “The very same lawmakers who fought the creation of the Consumer Financial Protection Bureau in the first place are now trying to cripple its ability to stand up to the big banks and predatory lenders. Consumers need a real financial watchdog to protect them from shady financial practices — not a lapdog that’s all bark and no bite.”
Contact: Michael McCauley, mmccauley@consumer.org or 415-902-9537 (cell)