Removing Barriers Blog

CUNA Provides Input to CFPB on Student Loan Servicing
Posted July 09, 2015 by Chandler Schuette

CUNA filed a letter with the CFPB in response to its request for information on student loan servicing. In order to better serve the needs of borrowers and support access to higher education, CUNA supports the Bureau’s effort to clarify expectations in the area of student loan servicing.  

We agree with the Bureau that there may be variation in the level of service delivered by student loan servicers depending on the type of loan borrowed, the identity of lender, or the company selected to service the loan. In addition, while we understand there are some bad actors within all sectors of the financial marketplace, we believe it is important that the CFPB recognize that credit unions are not among them, especially in the areas addressed by this request for information. Therefore, we ask the CFPB to employ a targeted approach that focuses its attention on the entities—including third-party servicers—that have been the source of the majority of consumer complaints in this area.  

In addressing the area of student loan servicing, the Bureau requested input on whether it should use as a guide the existing servicing protections for mortgage and credit card borrowers. Recognizing that there are similarities between the servicing problems encountered by student loan borrowers and those experienced by borrowers of other financial products, we believe it is appropriate to review the protections for mortgage and credit card borrowers. However, we urge the Bureau to rely on the protections in these other areas as a guide only, as student loans and student loan servicing are quite different from mortgages and credit cards.