Private Student Loan Providers Face Final Exams on Lending Laws

Private Student Loan Providers Face Final Exams on Lending LawsThe Consumer Financial Protection Bureau today released the procedures it will use to make sure private student loan providers are following U.S. lending laws, including using accurate advertising, appropriate disclosures and providing borrowers with detailed account data.
The procedures will be used as a field guide by CFPB examiners to ensure that private student lenders comply with federal consumer financial laws.
“For many borrowers, a student loan may be their first major financial decision,” said CFPB Director Richard Cordray. “With student debt topping a trillion dollars, we will be working to ensure consumers are treated fairly and lenders are held accountable.”
The CFPB has the authority to supervise large banks and non-banks, that make private student loans.
The procedures  may be used to examine both types of lenders.
Examiners will make sure that lenders are:
Using accurate, non-discriminatory advertising or marketing: Examiners will evaluate marketing and advertising materials, such as mail and text messages, telephone solicitation scripts, and agreements and disclosures for the products and services to make sure the materials are not deceptive, misleading, or discriminatory.
Making appropriate disclosures: Examiners will assess whether the lender or service provider makes proper, clear disclosures about loan costs and terms at the time of the consumer’s application, loan approval, and loan disbursement as required under special rules for education lending.
Providing borrowers with accurate account information: Examiners will determine if the lender or service provider, if required to do so, supplies the borrower with periodic statements that include such information as monthly payment requirements, charges, fees, and interest rate changes.
Handling borrower inquiries and complaints: Examiners will determine if a lender or service provider has adequate and effective channels to receive customer questions and complaints. Examiners will also evaluate the systems, procedures, and policies used by the company for tracking, handling, investigating, and resolving consumer inquiries, disputes, and complaints.
The Student Lending Examination Procedures can be found here:

Leave a Reply

Your email address will not be published. Required fields are marked *