The CFPB found that student loan servicers and mortgage services engaged in unfair and deceptive acts when they, for example, charged illegal late fees and deceived consumers about loan modifications.
The CFPB released its sixth edition of Supervisory Highlights, which covers supervisory activities between March and June 2014. The report highlights problems in two specific markets: student loan servicing and mortgage servicing.
Student Loan Servicing.
While supervising for compliance with federal consumer financial laws, Bureau examiners found that one or more student loan servicers were:
- Allocating payments to maximize the number of loan delinquencies and late fees;
- Misrepresenting and inflating minimum payments;
- Charging illegal late fees during the loan grace period;
- Failing to provide accurate tax information;
- Misleading consumers about bankruptcy protections; and
- Making debt collection calls to consumers at inconvenient times.
While supervising for compliance with federal law, Bureau examiners found that some servicers:
- Failed to oversee service providers;
- Unfairly delayed permanent loan modifications; and
- Deceived consumers about status of permanent loan modifications.