Click for St. Louis, Missouri Forecast

// a href = ./ // St Louis News, Weather, Sports, The Big 550 AM, St Louis Traffic, Breaking News in St Louis

Online pharmacy:fesmag.com/tem

Have you a sex problem? Please visit our site:fesmag.com/medic

Site map
 
 
 

Nonbanks servicing student loans come under agency

Rate this item
(0 votes)

   WASHINGTON (AP) — The federal consumer finance watchdog is expanding its oversight to Sallie Mae and other companies that collect student loan payments.

   A rule issued Tuesday by the Consumer Financial Protection Bureau extends the agency's supervision to nonbank companies that manage large volumes of student loans on behalf of lenders.

   The CFPB already oversees banks that service student loans, but it says most student loans are serviced by nonbank companies. It says the scrutiny is needed to ensure servicers comply with consumer laws at a time when more people are falling behind on their student loan payments.

   Nonbank loan servicers like Sallie Mae manage borrowers' accounts and answer their questions. Borrowers have complained that the companies lose paperwork or fail to credit payments.

   Sallie Mae also is the biggest U.S. student lender.

   Martha Holler, a spokeswoman for Sallie Mae, said that as the largest U.S. servicer of student loans, "We have been engaged with the CFPB in the review of our lending, servicing and collections operations."

   In addition to Sallie Mae, formally known as SLM Corp., other nonbank companies that service student loans include American Education Services, Nelnet Inc. and ACS Education Services, which is owned by Xerox Corp. The seven largest servicers cover a combined total of about 49 million borrower accounts, representing most of the student loan servicing market, according to the CFPB. The agency said it expects all seven companies will come under its supervision.

   Outstanding student debt in the U.S. totals about $1.2 trillion, according to the CFPB, and an estimated 7 million student loan borrowers are currently in default.

   Under the new rule, which takes effect March 1, any nonbank student loan servicer that handles more than 1 million borrower accounts will be subject to the agency's oversight. That means the agency will monitor the companies and examine their internal procedures, data and other information.

   While borrowers usually can choose their student lender, they normally have no choice over which company services the loan.

   "Student loan borrowers should be able to rest assured that when they make a payment toward their loans, the company that takes their money is playing by the rules," CFPB Director Richard Cordray said in a statement. "This rule brings new oversight to those large student loan servicers that touch tens of millions of borrowers."

   The agency is the primary federal supervisor for a range of industries, including payday loan companies, student lenders, mortgage companies, credit bureaus and debt collectors. It was established by the 2010 financial overhaul law enacted in response to the crisis that started in 2008.

Latest News

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
Prev Next

Ferry stops service on Mississippi River

  MEYER, Ill. (AP) — A farm cooperative has shut down a ferry service that shuttled agricultural products and other goods across the Mississippi River between western I...

Pepsi franchise to open center in Cape Girardeau

Pepsi franchise to open center in Cape Girardeau

  CAPE GIRARDEAU, Mo. (AP) — A Pepsi franchise is planning to build a new customer service center in Cape Girardeau (juh-RAHR'-doh) that could create 74 jobs. The M...

Man charged in Kansas City-area highway shootings

  KANSAS CITY, Mo. (AP) — Authorities say a Kansas City-area man has been charged with 18 felony counts in connection with about a dozen recent random highway shootings...

Molina's error hurts Cardinals in 3-1 loss to Nats

  WASHINGTON (AP) -- There's a simple reason St. Louis Cardinals pitcher Michael Wacha felt comfortable putting a changeup in the ground with the bases loaded in the se...

St. Louis priest accused of having sex with minor

St. Louis priest accused of having sex with minor

St. Louis, MO (KTRS) - A St. Louis priest is accused of having sex with a minor at the Cathedral Basilica, where he served.   Reverend Joseph Jiang was arrested on ...

Missouri man in custody after clerical error frees him from prison

Missouri man in custody after clerical error frees him …

ST. LOUIS (AP) - A Missouri man who avoided prison because of a clerical error and led a law-abiding life for 13 years said he is overwhelmed by the support he's received since ...

Hazelwood voters could vote on new utility tax

Hazelwood voters could vote on new utility tax

St. Louis, MO (KTRS) - Hazelwood residents could soon have the chance to vote on a proposed utility tax.   Currently, Hazelwood is the only St. Louis County municip...

Courts moving away from eyewitness testimony as gold standard

Courts moving away from eyewitness testimony as gold st…

PORTLAND, Ore. (AP) - Courts and legislatures are slowly shifting away from using eyewitness testimony as the gold standard of evidence. The reason: Studies show it's only right...

© 2013 KTRS All Rights Reserved