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.
TALLAHASSEE, Fla. (AP) - Florida Lottery officials say a winning Mega Money ticket worth $1.3 million remains unclaimed.
The ticket expires Dec. 15, which is 180 days after it was purchased. The numbers for the June 18 drawing were 10-28-34-43 and the Megaball was 19.
Records show the ticket was purchased at a Miami store, Davis Grocery. Lottery officials are encouraging players who may have gone to that store to go back and check their old tickets.
CONCORD, N.H. (AP) — A traveling medical technician who infected dozens of patients in multiple states with hepatitis C through tainted syringes was due to find out Monday how many decades he'll spend in a New Hampshire prison.
David Kwiatkowski, 34, worked as a cardiac technologist in 18 hospitals in seven states before being hired at New Hampshire's Exeter Hospital in 2011, moving from job to job despite being fired at least four times over allegations of drug use and theft. Since his arrest last year, 46 people in four states have been diagnosed with the same strain of hepatitis C he carries.
Kwiatkowski, who has admitted stealing painkillers and replacing them with saline-filled syringes tainted with his blood, pleaded guilty in August to 16 federal drug charges.
In court documents filed last week, prosecutors said Kwiatkowski should spend 40 years in prison because he created a "national public health crisis," put a significant number of people at risk and caused substantial physical and emotional harm to a large number of victims. Defense lawyers argued that a 30-year sentence would better balance the seriousness of the crimes against Kwiatkowski's mental and emotional problems and his addiction to drugs and alcohol, which they said clouded his judgment.
In all, 32 patients were infected in New Hampshire, seven in Maryland, six in Kansas and one in Pennsylvania. Kwiatkowski, 34, also worked in Michigan, New York, Arizona and Georgia.
Two of the 16 charges stem from the case of a Kansas patient who has since died. Authorities say hepatitis C, a blood-borne virus that can cause liver disease and chronic health problems, played a contributing role.