news.cuna.org/articles/107817-inside-washington

Inside Washington

October 1, 2015

WASHINGTON (10/1/15)--The Consumer Financial Protection Bureau (CFPB) said this week it has found prevalent failures in the servicing of student loans. The bureau said that an industry standard is needed and that it should be applied across the board.  The agency released a 151-page report that the agency said points to the ways some current servicing practices are harming borrowers. "Consumers describe companies using a wide range of sloppy, patchwork practices that can create obstacles to repayment, raise costs, cause distress, and contribute to driving struggling borrowers to default," the agency said in an accompanying release. "With one out of four student loan borrowers struggling to repay their loans or already in default, cleaning up the servicing market is critical,” said CFPB Director Richard Cordray. “Today’s report underscores the need for market-wide student loan servicing reforms to halt harmful practices and boost assistance for distressed borrowers.” Cordray called upon regulators to hold servicers accountable for shoddy practices ...