Private Student Loans : Clarification from CFPB Could Help Ensure More Consistent Opportunities and Treatment for Borrowers. Report to Congressional Committees. GAO-19-430 / Alicia Puente Cackley.
The Economic Growth, Regulatory Relief, and Consumer Protection Act enabled lenders to offer a rehabilitation program to private student loan borrowers who have a reported default on their credit report. The lender may remove the reported default from credit reports if the borrower meets certain con...
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Full Text (via ERIC) |
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| Format: | eBook |
| Language: | English |
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Distributed by ERIC Clearinghouse,
2019.
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| Summary: | The Economic Growth, Regulatory Relief, and Consumer Protection Act enabled lenders to offer a rehabilitation program to private student loan borrowers who have a reported default on their credit report. The lender may remove the reported default from credit reports if the borrower meets certain conditions. Congress included a provision in statute for the Government Accountability Office (GAO) to review the implementation and effects of these programs. This report examines (1) the factors affecting financial institutions' participation in private student loan rehabilitation programs, (2) the risks the programs may pose to financial institutions, and (3) the effects the programs may have on student loan borrowers' access to credit. GAO reviewed applicable statutes and agency guidance. GAO also asked a credit scoring firm to simulate the effect on borrowers' credit scores of removing student loan defaults. GAO also interviewed representatives of regulators, some of the largest private student loan lenders, other credit providers, credit bureaus, credit scoring firms, and industry and consumer advocacy organizations. GAO is making two recommendations, including that Consumer Financial Protection Bureau (CFPB) provide written clarification to nonbank private student loan lenders on their authority to offer private student loan rehabilitation programs. CFPB does not plan to take action on this recommendation and stated that it was premature to take action on the second recommendation. GAO maintains that both recommendations are valid, as discussed in this report. |
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| Item Description: | Availability: US Government Accountability Office. 441 G Street NW, Washington, DC 20548. Tel: 202-512-6000; Web site: http://www.gao.gov. Abstractor: ERIC. |
| Physical Description: | 1 online resource (47 pages) |
| Audience: | Policymakers. |