The CFPB recently published the procedures and guidelines to be used by field examiners in assessing a student lender’s compliance with federal consumer financial laws.
“For many borrowers, a student loan may be their first major financial decision,” Richard Cordray, the director of the CFPB, said. “With student debt topping a trillion dollars, we will be working to ensure consumers are treated fairly and lenders are held accountable.”
Examiners will be looking at student lenders to determine whether student lenders are using accurate and non-discriminatory advertising and marketing, issuing the appropriate loan disclosures, providing borrowers with accurate information regarding payments, interest rates and fees, and whether the lender is responding to borrower inquiries and complaints.
The CFPB guidelines reflect a heavy emphasis on fair lending practices, consistent with previous statements made by the agency.
CFPB supervision activities will include report-gathering, data analysis, onsite examinations, regular communication with supervised firms and follow-up monitoring. Examiners will, when appropriate, coordinate with the CFPB’s enforcement staff to address issues that may be harmful to American consumers.
Earlier this month, the Federal Reserve Bank of New York released data revealing that student loan increased to $956 billion, surpassing auto loan debt and credit card debt.