The nation’s beleaguered Consumer Financial Protection Bureau is accusing the Education Department of impeding a lawsuit ‘that could bring relief to millions of student loan borrowers.’
The Associated Press reports that the kerfuffle stems from the CFPB’s attempts to sue Navient Solutions.
Navient, the nation’s largest server of student loans, has attracted criticism for its practices. The CFPB, along with other consumer watchdogs, allege that the company was overly-aggressive in its pursuit of repayment. Employees may have misled borrowers, refusing to disclose income-based plans or collecting more than individual accounts were worth.
Under the Obama administration, the Department of Education and CFPB cleared an agreement to share records and resources on organizations violating student loan and consumer protection laws. But, writes the Associated Press, that’s changed since President Donald Trump’s inauguration.
Current Secretary of Education Betsy DeVos rescinded the accord, calling the Protection Bureau “overreaching and unaccountable”—a common line for officials working under Trump.
DeVos’s decision to withhold critical information from the CFPB could complicate the suit against Navient. Without the secretary’s authorization, Navient won’t be compelled to disclose its records.
No authorization, claims the AP, means a potential dearth of evidence for the federal government and the several state attorneys general taking on Navient.
Conflict between the two agencies has continued even after a Trump appointee stepped in to helm the CFPB.
“These records are necessary for the Bureau’s litigation against Navient Solutions so that the Bureau can identify the consumers potentially harmed by the practices described in the Bureau’s complaint, and can quantify the amount of harm suffered by the customers,” wrote CFPB Assistant Director Kristen Donoghue in a letter to DeVos.
Navient is purportedly falling back on the Department of Education’s newly-instated ‘interpretation’ of student loan privacy laws to shield itself from further inquest. Attorneys for the company say no cooperation will occur unless and until DeVos gives the CFPB the green light to pull Navient’s records.
As the Associated Press notes, Donoghue’s letter also shows the federal government is moving forward against Navient. Rumors had indicated that the agency might drop the case as part of the Trump administration’s attempts to downsize the Bureau.
While Navient is responsible for servicing about one out of every four student loan borrowers in the country, the company’ claimed that it has no obligation “to act in the interest of the consumer.” Past investigations into its practices have revealed excess interest rates being levied against members of the U.S. military.
Despite pleas from Department of Education veterans and retirees to sack Navient, DeVos seems intent on shielding the company for the consequences of its own malpractice.
Sources
Betsy DeVos: Stop using Navient to service federal student loans
CFPB says Education Department is stonewalling its lawsuit against student-loan giant Navient
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