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CBA Statement on Annual Report of the CFPB Student Loan Ombudsman
Washington, D.C. (October 15, 2014) – CBA’s General Counsel Steve Zeisel issued the following statement in response to the Annual Report of the CFPB’s Student Loan Ombudsman:
“The private student loan market is a small but integral part of how some students meet their education financing needs. With a sustained and incredibly low default rate of less than 3%, private student loans far outperform federal loans, which have default rates over 14%. CBA members are proud of their role in helping students and their families achieve the American dream.
“Along with an ultra-low default rate, less than 0.1% of private student loans had a complaint submitted to the CFPB, none of which are verified by the regulator. One complaint is too many, but these numbers clearly demonstrate the success and good business practices by CBA’s members, who are working to benefit students and their families.
“While the vast majority of private loans demonstrate ongoing successful repayment, CBA’s members remain committed to providing robust options to the very small subset of private loan customers experiencing sustained financial distress. We are working with the prudential regulators to develop short and long term loan modification programs to provide borrowers with more flexibility, particularly in the early stages of their career. Some of CBA’s members already have launched loan modification programs, while others are piloting programs in advance of a broader roll-out. These programs are designed to address the unique nature of student loan borrowers within the confines of safety and soundness principles.”
For more information about the private student loan market please visit PrivateStudentLoanFacts.com.
The Consumer Bankers Association (CBA) is the trade association for today's leaders in retail banking - banking services geared toward consumers and small businesses. The nation's largest financial institutions, as well as many regional banks, are CBA corporate members, collectively holding two-thirds of the industry's total assets. CBA’s mission is to preserve and promote the retail banking industry as it strives to fulfill the financial needs of the American consumer and small business.