PITTSBURGH - A recent decision from Pittsburgh federal court shows that the Consumer Financial Protection Bureau, under new leadership, is continuing to pursue cases involving allegations of deceptive practices by student loan servicers, according to Jenny Lee, a partner at Dorsey & Whitney LLP.
On Feb. 28, U.S. District Judge Cathy Bissoon ordered Heartland Campus Solutions ECSI to respond to a June 9 request for information related to a CFPB investigation into its student loan servicing practices. Heartland Campus Solutions has since appealed the order.
“Going forward, I think the Heartland decision is notable,” Lee told the Pennsylvania Record.
Lee said the Heartland Campus Solutions case and others across the country show that Mick Mulvaney, acting director of the CFPB, has not stopped pursuing these types of enforcement issues.
“[Heartland] demonstrates that the CFPB is continuing to pursue aggressive enforcement,” Lee said.
According to the district judge’s opinion, Heartland Campus Solutions argued that it should not have to comply with the CFPB's civil investigative demand (CID) because it “does not comply with the notice requirements” established under the law.
Specifically, Heartland Campus Solutions said it believes that the CFPB did not do enough in the CID to clarify exactly what was being investigated.
However, Bissoon disagreed with Heartland Campus Solutions’ case against compliance with the CID.
“The June 9 CID’s legitimate purpose is clear on its face — that is, to investigate whether student loan servicers or others committed unfair, deceptive or abusive acts or practices in violation of the Consumer Financial Protection Act or… the Fair Credit Reporting Act… by their actions in connection with the servicing of student loans,” Bissoon wrote in the order.
Lee said she is not surprised that Heartland Campus Solutions has elected to appeal the district court’s order.
“It’s not unusual for companies or institutions to challenge [a] CID,” she said. “I think Heartland’s… decision to appeal is not really unusual.”