Potential Consumer Financial Protection Bureau (CFPB) Enforcement Action
against Navient (Formerly Known As Sallie Mae)
Earlier this month, Navient Solutions, Inc., a wholly-owned subsidiary
of Navient Corporation and corporate spinoff of Sallie Mae, informed their
shareholders of a potential
Consumer Financial Protection Bureau Enforcement Action. Navient is one of the nations largests servicers of
government and private student loans.
In a publicly released report to the Securities and Exchange Commission,
Navient Solutions, Inc. admitted to receiving a
Discretionary Notice and Opportunity to Respond and Advise (NORA) letter from the CFPB. A NORA is a CFPB notice of potential enforcement
action due to violations of CFPB rules and regulations, and failures to
maintain specific industry standards. The letter also allows the recipient
the opportunity to present any legal or policy arguments as to why the
recipient is not liable for violations to the CFPB.
Learn more about
Navient Student Loans
While it’s too early to tell whether the CFPB will go forward with
an enforcement action, an adjudication of the same may have serious impacts
on Navient which could include rescission or reformation of contracts,
refund of money to consumers, disgorgement and refund of various types
of assets, restitution, payment of damages or other monetary relief, limits
on the activities of the company, and of course civil monetary penalties.
Furthermore, the CFPB could recommend to the
Department of Justice that they
seek a criminal action against Navient if any criminal laws were broken.