Navient Student Loan Servicer Under Scrunity by CFPB

Posted By Law Office of Simon Goldenberg, PLLC || 28-Aug-2015

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.

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