In a lengthy complaint, the the Consumer Financial Protection Bureau (CFPB) on Wednesday said that Navient, which oversees $300 billion in student loans for 12.5 million borrowers, failed customers “at every stage of repayment,” according to a New York Times commentary on Saturday. It’s not enough, in other words, that students must struggle with onerous debt after college. Navient added to the burden, the bureau said, by making those loans harder to repay. Navient failed to apply borrower repayments accurately, the bureau said, and the company did not make clear what its customers needed to do to keep their payments low, according to the commentary. Worst of all, though, it accused Navient of hurting disabled military veterans, who can seek loan forgiveness under a federal program. Navient, the lawsuit said, inaccurately told credit reporting companies that veterans taking advantage of this program had defaulted on their loans.
The Supreme Court will hear oral argument today in Midland Funding, LLC v. Johnson, No. 16-348, looking into:
(1) Whether the filing of an accurate proof of claim for an unextinguished time-barred debt in a bankruptcy proceeding violates the Fair Debt Collection Practices Act;
(2) whether the Bankruptcy Code, which governs the filing of proofs of claim in bankruptcy, precludes the application of the Fair Debt Collection Practices Act to the filing of an accurate proof of claim for an unextinguished time-barred debt.
Click here to review briefs, petitions and analysis of the case. ABI editor-at-large Bill Rochelle will be covering the oral argument to publish a special edition of Rochelle’s Daily Wire and provide a video recap via ABI’s Facebook page later in the day.
