The Consumer Financial Protection Bureau is requesting information on the private student lending market from lenders, student loan servicers, the higher education community and the public to aid in its preparation of a new report to Congress, the new agency announced this week.
In its call for voluntary feedback on market practices, the CFPB is asking for information on the following: private student loan shopping, the role of schools in the marketplace, underwriting criteria, repayment terms and behavior, impacts on borrowers’ field of study and career choices, servicing and loan modification, and financial education and default avoidance.
The agency plans to use the input in a private student lending report to Congress and its own regulatory and compliance work. The CFPB and the Department of Education is required to produce the report by July 21, 2012 under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The CFPB says “too little is known” about private student loans, which has resulted in billions of dollars of unpaid debt. The agency lists credit unions along with banks, state agencies, nonprofit organizations, marketers, servicers and schools as active participants in the private student lending market.
“The private student loan market is one of the least understood consumer credit markets,” said Raj Date, Special Advisor to the Secretary of the Treasury on the CFPB. “Shedding light on this industry will benefit students, lenders and the market as a whole.”
Participants are invited to submit their feedback electronically on the CFPB’s website.
Congress established the CFPB, which among credit unions has direct supervisory authority only over Navy FCU, Pentagon FCU and State Employees’ Credit Union of North Carolina, in July 2011 as the primary regulator of consumer protection in the U.S. The agency and has been a constant target of scrutiny by the GOP, which has help up the appointment of its first permanent director.