Overnight Regulation: Consumer agency sues major student loan provider

Overnight Regulation: Consumer agency sues major student loan provider
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Welcome to Overnight Regulation, your daily rundown of news from the federal agencies, Capitol Hill, the courts and beyond. It's Wednesday evening here in Washington where Inauguration Day preparations are well underway. 

Here's the latest. 

 

THE BIG STORY 

Financial regulators are cracking down on one of the nation's largest student loan providers. 

The Consumer Financial Protection Bureau filed a lawsuit Wednesday against Navient for allegedly using "shortcuts and deception" to make borrowers pay more than they owed. 

As The Hill's Peter Schroeder reports, the CFPB claims the company regularly dragged its feet in helping clients successfully enroll in payment plans, giving them bad information and incorrectly processing payments.

"For years, Navient failed consumers who counted on the company to help give them a fair chance to pay back their student loans," said CFPB Director Richard Cordray. "At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs. Too many borrowers paid more for their loans because Navient illegally cheated them and today's action seeks to hold them accountable."

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The company, which used to be part of Sallie Mae, has over 12 million borrowers to its name, including 6 million accounts under a contract with the Department of Education.

The company reportedly slammed the agency in a statement after the suit was filed. It claimed the administration was giving it an ultimatum: either settle before Inauguration Day or be sued. 

"The allegations of the Consumer Financial Protection Bureau are unfounded, and the timing of this lawsuit--midnight action filed on the eve of a new administration--reflects their political motivations," the company said. "We cannot and will not accept agenda-driven ultimatums designed to get headlines rather than help for student borrowers."

CFPB, however, claims Navient has regularly proved that its made it difficult if not impossible for borrowers to pay back their loans through the most cost-effective payment programs possible.

CFPB said the company regularly misapplied payments and steered students who were struggling to make payments into forbearance. As a result, the CFPB estimates Navient made $4 billion in additional interest charges.

Click here for the story.

 

ON TAP FOR THURSDAY

The Senate Energy and Natural Resources committee will hold a hearing to consider the nomination of former Texas Gov. Rick Perry to be secretary of Energy. 

The Senate Finance Committee will hold a hearing to consider the nomination of Steven Mnuchin to Treasury secretary. 

The Senate Homeland Security Committee will hold a hearing to look at ways to improve small business input on federal regulations.

 

TOMORROW'S REGS TODAY

Here's a sneak peek at Thursday's edition of the Federal Register.

--The Department of Transportation (DOT) will propose new rules for airlines.

Airlines will be required to disclose the fees for checked bags and carry-on bags "wherever fare and schedule information is provided to consumers," the agency says in a supplemental notice of proposed rulemaking.

This would require airline websites to disclose baggage fee information "at the first point in the search process where a fare is listed in connection with a specific flight itinerary, adjacent to the fare."

Ticket agents would also be required to disclose baggage fees.

The public has 60 days to comment.

--The National Marine Fisheries Service (NMFS) will issue new protections for guitarfish.

The NMFS will list the blackchin guitarfish and common guitarfish as threatened species, the agency says.

"We will not designate critical habitat for either of these species because the geographical areas occupied by these species are entirely outside U.S. jurisdiction," the agency says, "and we have not identified any unoccupied areas within U.S. jurisdiction that are currently essential to the conservation of either of these species."

The protections go into effect in 30 days.

--The Food and Drug Administration (FDA) and Environmental Protection Agency (EPA) will draft new guidelines for eating fish.

The guidelines include advice for consumers who eat fish, including "questions and answers for those who want to understand the advice in greater detail."

--The Department of Energy (DOE) will issue new efficiency rules for ceiling fans.

The Energy Department's Office of Energy Efficiency and Renewable Energy is pushing new ceiling fan energy conservation standards.

The changes go into effect in 60 days.

 

NEWS RIGHT NOW

Inauguration regulation: No selfie sticks, umbrellas, backpacks

States sue to block last-minute Obama environmental rule

Report: Manufacturers face 300K regs

High court grapples with racist trademarks

Trump's Commerce pick admits to unknowingly hiring undocumented worker

Haley: No justification for Muslim registry

Trump: 'I haven't seen any of the facts' on AT&T-Time Warner merger

Senators looking for deal on Trump's nominees

Department of Labor sues Oracle for discrimination

Pruitt says his EPA will work with the states

Sanders slams Pruitt's call for 'more debate' on climate science

Scott Pruitt could tip regulatory power from EPA to states (Bloomberg BNA)

  

TODAY'S REG COUNT

25: Proposed rules

34: Final rules

(From the Federal Register)

 

QUOTE OF THE DAY

"You can wear ponchos and hats if it rains," -- the Senate Sergeant at Arms. Umbrellas are just one of the many items banned from the inauguration area on the National Mall. Read more here.

 

We'll work to stay on top of these and other stories throughout the week, so check The Hill's Regulation page (http://thehill.com/regulation) early and often for the latest. And send any comments, complaints or regulatory news tips our way, tdevaney@thehill.com or lwheeler@thehill.com. And follow us at @timdevaney and @wheelerlydia.

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