June 28, 2019

STATEMENT BY FINANCIAL SERVICES SUPERINTENDENT LINDA A. LACEWELL REGARDING THE SEVENTH CIRCUIT’S DECISION UPHOLDING STATES’ AUTHORITY TO PROTECT STUDENT LOAN BORROWERS

“DFS applauds the Seventh Circuit’s decision holding student loan servicers accountable for affirmative misrepresentations. Student loan servicers cannot claim to be acting in a consumer’s best interest when in reality they are simply steering borrowers into more costly repayment plans. This decision importantly recognizes that states are not preempted from taking action to protect student loan borrowers against such deceptive practices.  The Department is actively preparing to implement and enforce New York’s recently enacted student loan servicer legislation to protect student loan borrowers from these and other predatory practices.”

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