“The illegal debt collection tactics alleged by the CFPB create extreme hardship for student borrowers,” said Attorney General Frosh. “When collection actions are underpinned by fraudulent claims, they violate consumer protection laws. The perpetrators should be punished.” The attorneys general argue that CFPB oversight is crucial because the model used by the trusts incentivizes them to condone misconduct by the debt collectors they hire.
The Maryland Attorney General’s office has long been a national leader in investigating and enforcing consumer protection violations in the higher education field, including entering into a multistate settlement earlier this year with Navient Corporation, one of the nation’s largest student loan servicers, resolving allegations of unfair and deceptive student loan servicing practices and abuses in originating predatory student loans. Attorney General Frosh was joined in filing the brief by the attorneys general of California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Idaho, Illinois, Maine, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Virginia, Washington, and Wisconsin.
