America's dirtiest, biggest student lender neutralized by federal watchdog


#1

Originally published at: https://boingboing.net/2017/09/19/elizabeth-warrens-legacy.html


#2

Oh hell yes! Finally some good news!

I love me some CFPB, and pray their budgets to get altered further, not only because of the amazing work they do, but also because they happen to have contracts with my employer. But mostly the former, honest.


#3

Is there a term for a monster slayer that specializes in corporations?


#4

Fear not! I’m sure Betsy de Vos will soon put an end to the cruel spectacle of multibillion dollar lenders being picked on by consumer rights bodies.


#5

May I present for your pleasure, “Corporate Flayer” Prince Beowulf!

(CFPB for short.)


#6

Under the settlement’s terms, the Trusts (who specialized in buying, packaging and securitizing debt) will have to audit more than $8B worth of loans and show proof that the debts are valid – that they hold sufficient paperwork on them and that the statute of limitations has not run out on them.

On the plus side, this will provide new work for people in the robo-signing forgery industry. Knowing how sleazeball executives drift from shady industry to shady industry, the people doing the hiring might be the same ones who hired the robo-signers from the banking and mortgage industries. Job creators!


#7

De Vos will find a way to poop on this pronto.


#8

Just to be clear, my understanding is that these are essentially debt collectors who are in charge of collecting onerous penalties and interest on debt that was already distressed when they paid for the right to harass the borrowers? F these guys. The big secret of the student loan business is that the big money is in the penalties and fees on those who are late paying. Most borrowers who go into default on their loans end up paying significantly more money than if they had paid off according to the original terms, no matter how difficult THAT seemed. They’re essentially shakedown artists. It is a business model based entirely on the ability to be a bigger asshole that the original lender.

OTOH, I don’t realize how an agreement with the CFPB can affect how the IRS treats this. The borrowers GOT the money, spent it (on educational expenses) and if they don’t pay it back, it really IS income. At least if the borrower has paid less than the original loan amount. I don’t think that treating forgiveness of onerous penalties and late fees can reasonably be treated as “income” though.


#9

Great! Plenty of time for this to get reversed at the Supreme Court level or below. :money_mouth_face:

/s


#10

Student lending is predatory, put that to whatever exponent you wish to after it was made impossible to clear those debts via bankruptcy. Having one of these lenders neutered isn’t what I want, because what I want is illegal, immoral, and probably war crimes and DEFINITELY crimes against humanity to have done unto them… But given how shit news seems to always stay? I WILL TAKE IT!


#11

This confuses me too.

If I borrow money, and the owner of the debt forgives it for whatever reason, then yes, that is income.

If I borrow money, and the lender sells the debt (whether I was in default or not), and some third party falsely claims to own the debt, then proving they don’t doesn’t mean the debt has been forgiven. It only means that that particular debt collector has no authority to collect it, forgive it, or charge penalties on it. I could very will be willing to pay the debt (even if I previously defaulted) but no longer know who I owe it to.


#12

The lesson of the robosigning debacle SHOULD have been that paperwork MATTERS. But instead it seems to have been that the government would rather sweep that issue under the rug than deal with banks and lenders failing because they would rather hire people to forge documents than to keep the documents up to date in the first place.


#13

Has anyone checked to see if Steve Mnuchin has any interest in the debt collecting company? Kinda fits his style.


#14

Glad to read this. Since few months ago, I could read many complaints filed by people regarding debt collectors on the internet. One of them at http://www.whycall.me/news/consumer-sues-debt-collector-nra-group-over-robocalls-and-wins/. I think CFPB should do more crack downs on those law breakers. There have been so many victims.


#15

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