CFPB Settles with Discover Bank, the Student Loan Corporation and Discover Products for violating a consent order and other unlawful practices
December 22, 2020 Consumer Financial Protection Bureau issued a consent order that Discover must pay at least $10 million to consumers, and $25 million as a penalty for their unfair acts and practices. Below is a reprint of the CFPB’s announcement and Order.
The Bureau previously issued a consent order against Discover in July 2015 (2015 Order). The Bureau’s 2015 Order was based on the Bureau’s finding that Discover misstated the minimum amounts due on billing statements as well as tax information consumers needed to get federal income tax benefits. The Bureau also found that Discover engaged in illegal debt collection practices. The Bureau’s 2015 Order required Discover to refund $16 million to consumers, pay a penalty, and fix its unlawful practices servicing and collection practices. The Bureau found that Discover violated the 2015 Order’s requirements in several ways. Discover misrepresented the minimum loan payments consumers owed, the amount of interest consumers paid, and other material information, such as interest rates, payments, due dates, and the availability of rewards, among other things. Discover also did not provide all of the consumer redress the 2015 Order required.
The consent order can be found at: https://files.consumerfinance.gov/f/documents/cfpb_discover-bank-et-al_consent-order_2020-12.pdf.
MUSINGS BY DIANE:
Most students in higher-education are looking for ways to improve their future, and that of their family. Yes, there are a few who see student loans as “free money” and damn the consequences of taking out these loans. But, I am going to ignore that group and focus on the honest borrowers.
Honest borrowers assume that their student loan lender will be honest and treat them with respect. Unfortunately, we are seeing time after time that the banks and student loan companies and servicers just see the borrowers as easy marks and cash registers. Among other things, they mislead the borrowers about the cost of the loans and about the options to work out payments during difficult times. The successful future of our country depends on quality education for everyone. Right now student loan lenders are preying on the most vulnerable members of our society – those who see higher education as the path to a better life, but cannot afford to pay for that costly education.
– Diane L. Drain
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*
In Case You Missed It
Published On: June 29, 2024
From the National Consumer Law Center "NCLC" a toolkit to deal with your student loans, 5/2024 Whether you are just starting your student loan journey or have been dealing with student loan debt for decades, [...]
Published On: September 2, 2023
NEW STUDENT LOAN REPAYMENT PLAN, plus UPDATES (at end of this article) SAVE – “SAVING ON A VALUABLE EDUCATION” “SAVE” – New Student Loan Repayment Plan (8/23) [...]
Published On: July 19, 2023
IMPORTANT PROGRESS FOR STUDENT LOAN BORROWERS WHO HAVE BEEN IN REPAYMENT TWO DECADES OR MORE Posting from the National Consumer Law Center Important Progress for Student Loan Borrowers Reposting from NCLC, July [...]
Published On: April 18, 2022
Education Loans Can Be Discharged in Bankruptcy Busting myths about bankruptcy and private student loans By Robert G. Cameron – APR 12, 2022 (Reprint from Consumer Financial Protection Bureau "www.CFPB.gov". The following is an [...]
