2024 Year In Review : Student Lending | Goodwin Procter Llp!

The increase in recoveries is largely due to the increased number of enforcement actions, rather than a significant increase in the average recovery per action.

The number of enforcement actions tracked by Goodwin increased by more-than-threefold in 2024 compared to

The total recoveries in 2024 were approximately $126 million, a significant increase over the $6 million in recoveries in

The majority of the recoveries in 2024 came from a single settlement, with $120 million recovered.The Rise of Enforcement Actions

In 2024, Goodwin tracked seven enforcement actions related to student lending, a substantial increase from the two enforcement actions tracked in 2023. This significant rise in enforcement actions is largely attributed to the increased scrutiny of the student lending industry by regulatory bodies. • The Consumer Financial Protection Bureau (CFPB) has been actively enforcing student lending regulations, leading to a surge in enforcement actions.

Persistent Consumer Complaints

The Consumer Financial Protection Bureau (CFPB) has been actively monitoring and addressing consumer complaints in the financial services industry. A recent report highlights the most persistent types of consumer complaints, providing valuable insights into the issues that continue to plague consumers. The report reveals that the CFPB received more complaints in the one-year period reviewed than in any other period in its history.

Servicer payment processing errors resulting in consumers unable to make timely payments

Failure to timely process applications for certain federal pro-bono services

Difficulty with mortgage servicing and foreclosure

Issues with credit reporting and credit scoring

Difficulty with debt collection and debt settlement

Problems with bank accounts and banking services

Impact on Consumers

These persistent complaints can have a significant impact on consumers’ financial well-being. Consumers who experience issues with payment processing, mortgage servicing, or debt collection may struggle to make ends meet, leading to financial stress and anxiety.

The CFPB’s investigation found that Navient had a practice of steering borrowers towards more expensive repayment plans, often without their knowledge or consent. This practice, known as steering, can lead to borrowers paying thousands of dollars more than they need to over the years.

The Impersonation Rule, enacted in 2020, aims to curb the deceptive practices of companies impersonating the government or other entities to solicit consumers for sensitive information. The rule requires companies to clearly disclose their identity and purpose in all solicitations, including emails, phone calls, and text messages. The FTC alleged that the companies in question failed to comply with this requirement, leading to the filing of the first federal case under the rule. The companies involved in the alleged scheme operated under the guise of being government agencies or non-profit organizations, claiming to offer debt relief services to consumers. They would then use the obtained information to charge consumers exorbitant fees for their services. The FTC alleged that the companies’ actions were a clear violation of the Impersonation Rule, as they failed to provide clear and conspicuous disclosure of their identity and purpose. The FTC’s actions demonstrate the agency’s commitment to protecting consumers from deceptive practices. The agency has been working to enforce the Impersonation Rule, and this case marks an important milestone in that effort. The filing of this case sends a strong message to companies that impersonating the government or other entities to solicit sensitive information is unacceptable and will be prosecuted. The Impersonation Rule has been widely criticized for its complexity and the challenges it poses for companies to comply with its requirements. However, the FTC’s actions in this case demonstrate that the agency is willing to take enforcement action against companies that fail to comply with the rule. The filing of this case underscores the importance of clear and conspicuous disclosure in all solicitations, and serves as a warning to companies that failure to comply with the rule can result in serious consequences.