The Consumer Financial Protection Bureau has a new target, and it’s not mortgages this time.
The agency announced Wednesday a widespread public inquiry into student loan servicing practices—not unlike a study of reverse mortgages the agency completed following its launch.
The Bureau is seeking information in industry practices that create repayment challenges, hurdles for distressed borrowers, and economic incentives that may affect quality of service.
“Student debt stress can make borrowers feel like they are walking a tightrope where any false move in paying back a loan can cause them to fall,” said CFPB Director Richard Cordray in a press release. “Today’s inquiry seeks information on the pain points in student loan servicing that make repayment a more difficult and stressful process.”
In addition to challenges around student loans that consumers are facing, the agency is also interested in whether there exists a lack of transparency across the student loan servicing industry and how much information is available.
The CFPB has been targeting various industries under its watch on an ongoing basis. It has examined and has taken action against credit card companies, student loan companies, mortgage companies, mortgage servicers and others.
In its 2012 report on reverse mortgages, the Bureau drew several conclusions about reverse mortgages, however it ultimately came to light that the agency had not spoken with any consumers in its research.
Written by Elizabeth Ecker