Student Loan Servicers Beware: The CFPB is Watching

Published

July 23, 2013

Mitchell D. Weiss is an experienced financial services industry executive and entrepreneur. He is an Executive in Residence at the University of Hartford and co-founder of the university’s Center for Personal Financial Responsibility. His books include Life Happens: A Practical Course on Personal Finance from College to Career and Business Happens: A Practical Guide to Entrepreneurial Finance for Small Businesses and Professional Practices—both of which are now undergraduate courses that Mitch teaches at the university and elsewhere.

There’s some hopeful news for student loan borrowers who continue to be frustrated with the student loan servicers that operate between them and the lenders that originated the loans.

The Consumer Financial Protection Bureau announced that it intends to issue and actively enforce new and stronger measures to guard against violations of the Fair Debt Collections Practices Act. Most hearteningly, not only does the newly invigorated agency intend to focus on the loan servicing companies, but also the lenders that subcontracted the work in the first place.

This is a really big deal because the principle of first party responsibility cuts through the confusion by holding the originating lenders directly accountable for the actions of their agents.

So, if you’re experiencing student loan servicing problems, file a complaint with the CFPB. You can submit a complaint against the company servicing (or collecting) the debt, as well as a separate complaint against the company that originated the loan.

Image: Hemera