HARRISBURG – Student loan provider Navient has filed a motion to dismiss a federal lawsuit brought by the state of Pennsylvania, calling it a copycat lawsuit that is "pointless" and legally deficient.

Pennsylvania Attorney General Josh Shapiro brought the lawsuit on behalf of the State against Navient, which services more than six million student loans nationally. 

In the Dec. 22 motion to dismiss, Navient alleges Shapiro's lawsuit parrots a complaint filed in January 2017 by the Consumer Financial Protection Bureau (CFPB). In that complaint, the CFPB alleges Navient violated the Consumer Financial Protection Act, the Fair Debt Collection Practices Act and Regulation V of the Fair Credit Reporting Act.

Claiming the complaint brought by Shapiro is an “unauthorized copycat lawsuit,”  the motion to dismiss states, “this would unnecessarily burden the courts and parties, and would risk generating inconsistent rulings across the country.”

The motion to dismiss alleges that Shapiro’s complaint is “essentially cut and pasted from the CFPB’s long ago filed complaint.”

Once elected, Shapiro instituted a state version of the CFPB. He even picked a former member at that federal agency to run his Consumer Financial Protection Unit.

This isn't the first time Navient has used this language, either. "Piggyback" was the term it used to describe a class action filed in the wake of the CFPB lawsuit.

Last year, a federal judge denied the company's motion to dismiss the CFPB lawsuit, which was joined by the attorneys general of Illinois and Washington.

In Shapiro's lawsuit, Navient alleges that the state law claims brought by his office are preempted by federal law.

The motion to dismiss states, “The Higher Education Act expressly preempts the commonwealth’s state law claims regarding federal loan servicing by barring the enforcement of 'any disclosure requirements of any state law.'”

The motion to dismiss also states that Shapiro failed to show that Navient engaged in any unfair or deceptive practices with regards to student loans.

In the October complaint filed in the U.S. District Court for the Middle District of Pennsylvania, Shapiro alleges Navient engaged in predatory loans by, “peddling risky and expensive subprime loans that they knew or should have known were likely to default, and while servicing student loans, failed to perform core servicing duties, thereby causing harm to borrowers and cosigners.”

The complaint also states that, instead of offering counseling to borrowers geared towards affordable payment plans, Navient instead led borrowers toward forbearance.

Want to get notified whenever we write about any of these organizations ?
Next time we write about any of these organizations, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

Pennsylvania Office of the Attorney General U.S. District Court for the Middle District of Pennsylvania

More News