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CFPB, hard at work
CFPB, hard at work
By Steve Benen
It doesn’t get enough attention, but I still consider the creation of the Consumer Financial Protection Bureau (CFPB) one of the more important breakthroughs for progressive governance in the Obama era. That its work on our behalf tends to happen far from the spotlight somehow makes it more impressive...It was the CFPB that recently announced multi-million dollar fines for four mortgage insurers for “doling out illegal kickbacks to mortgage lenders in exchange for business.” It was the CFPB that cracked down on a lender for allegedly “paying illegal bonuses to employees who steered home buyers toward higher-interest loans.” It was the CFPB that ended 2013 with “a string of enforcement cases … on lending discrimination, mortgage servicing, online lending and credit card products.”
And it’s the CFPB that keeps adding to its to-do list.
<...>
Here’s the situation in a nutshell: young people lacking in collateral often receive student loans with a co-signer, usually a parent. It works like any other debt – the lender figures that if the student struggles to keep up on the payments, the co-signer will be obligated to pick up the slack.
<...>
But if the co-signer dies unexpectedly, the lender panics. “We’re sorry for your loss,” the bank says, “but if you could give us all our money immediately, that’d be great.”...doesn’t matter if the young person hasn’t missed a payment and it doesn’t matter if he/she can’t afford to pay the balance.
The CFPB reported it has received more than 2,300 complaints about private student loans over the last six months, many of which concern lenders’ debt collection practices. One theme throughout the complaints was that, in some cases, lenders are collecting on student loans when a co-signor dies but the primary borrower is still alive and paying on time...the CFPB is intervening on consumers’ behalf. The young people are feeling pushed around by lenders, so now they’ll have a government agency doing what they can’t: push back.
- more -
http://www.msnbc.com/rachel-maddow-show/cfpb-hard-work
By Steve Benen
It doesn’t get enough attention, but I still consider the creation of the Consumer Financial Protection Bureau (CFPB) one of the more important breakthroughs for progressive governance in the Obama era. That its work on our behalf tends to happen far from the spotlight somehow makes it more impressive...It was the CFPB that recently announced multi-million dollar fines for four mortgage insurers for “doling out illegal kickbacks to mortgage lenders in exchange for business.” It was the CFPB that cracked down on a lender for allegedly “paying illegal bonuses to employees who steered home buyers toward higher-interest loans.” It was the CFPB that ended 2013 with “a string of enforcement cases … on lending discrimination, mortgage servicing, online lending and credit card products.”
And it’s the CFPB that keeps adding to its to-do list.
Federal regulators are investigating reports that lenders are pressuring thousands of college graduates to immediately repay their full student loan debt when a relative who co-signed the loans dies or files for bankruptcy.
The Consumer Financial Protection Bureau (CFPB) said Tuesday it is probing the phenomenon, which can damage the credit reports of borrowers who are otherwise in good standing.
<...>
Here’s the situation in a nutshell: young people lacking in collateral often receive student loans with a co-signer, usually a parent. It works like any other debt – the lender figures that if the student struggles to keep up on the payments, the co-signer will be obligated to pick up the slack.
<...>
But if the co-signer dies unexpectedly, the lender panics. “We’re sorry for your loss,” the bank says, “but if you could give us all our money immediately, that’d be great.”...doesn’t matter if the young person hasn’t missed a payment and it doesn’t matter if he/she can’t afford to pay the balance.
The CFPB reported it has received more than 2,300 complaints about private student loans over the last six months, many of which concern lenders’ debt collection practices. One theme throughout the complaints was that, in some cases, lenders are collecting on student loans when a co-signor dies but the primary borrower is still alive and paying on time...the CFPB is intervening on consumers’ behalf. The young people are feeling pushed around by lenders, so now they’ll have a government agency doing what they can’t: push back.
- more -
http://www.msnbc.com/rachel-maddow-show/cfpb-hard-work
4 replies
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