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CBA Statement on CFPB Student Loan Ombudsman’s Annual Report
Washington, D.C. (October 16, 2013) – Richard Hunt, president and CEO of the Consumer Bankers Association, released the following statement after the Consumer Financial Protection Bureau (CFPB) Student Loan Ombudsman released his annual report:
“CBA and its members involved in the private student loan market remain committed to working with the CFPB to make the private student loan market transparent and easy to navigate for consumers. Partial and overpayments with no direction from the customer do present challenges for student loan servicers, and the Bureau should be commended for advising customers to notify their services how to allocate payments in these situations.
However, today’s report skews the reality of today’s private loan market. The report relies on a sweeping characterization of the market based on 3,800 unverified complaints from 0.002 percent of customers. What remains a continued disappointment is the CFPB has ignored that over 86 percent of student loan borrowers have federal student loans. CBA believes the Bureau should help all consumers especially when federal loan portfolios carry a 14.7 percent three-year default rate. It appears these borrowers are under great duress since federal loans, unlike private loans, are funded without determining the borrower’s ability to repay. This is something the CFPB has indicated is the most important consumer protection. A fair, transparent and accurate analysis of the market is what all borrowers deserve.”
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.