CFPB Signals Future Action on Student Loan Servicing

The Consumer Financial Protection Bureau today issued a request for information on various aspects of student loan servicing, signaling a potential future rulemaking on the subject. The RFI “is meant to find ways to put the ‘service’ back into the student loan servicing market and help people avoid unnecessary defaults,” CFPB Director Richard Cordray said.

The bureau is seeking information on common industry practices related to student loan repayment, including servicer compensation models for third-party servicing and how servicers respond to borrowers in distress and borrowers with unique characteristics, including service members and veterans, first-generation college students and attendees of minority-serving colleges and universities.

The CFPB also asked for comments on how consumer protections in other kinds of loan servicing — such as mortgages — might be applied to student loans, and whether provisions in the Credit CARD Act might also be pertinent. Comments are due by July 13.