New York - The Wall Street Journal reported on Friday that the Consumer
Financial Protection Bureau (CFPB) is investigating Wells Fargo regarding
its student loans servicing practices.
Although the specifics of the investigation are unclear, it appears that
the probe on Wells Fargo began back in late 2014. Wells Fargo is the second
largest originator for private student loans in the United States. They
stopped servicing federal student loan accounts in 2011 when then they
transferred their servicing of federal loans to a third-party.
This probe comes amidst a recent string of investigations by the Bureau
of the estimated $1.2 trillion student loans servicing industry. An enforcement
action was announced with
Discover Student Loans in July, and the CFPB is currently watching many of the student loan servicing
companies, including big student loans servicing names such as
Currently, there are less than 10 student loan servicing companies. With
the recent string of probes focusing on student loan payment processing
and how servicers handle distressed borrowers, it seems the CFPB is giving
much necessary attention to student loan servicing.
Learn more about
Wells Fargo Student Loans and
Wells Fargo Credit Cards.
If enforcement actions are taken against the student loan servicers, it
may lead to significant changes for the student loan servicing industry
and may serve to curb some of the practices that impact student loan borrowers
that are struggeling stay current on their loans and avoid default.