Sen. Elizabeth Warren (D-Mass.) took Sallie Mae and the FederalHome Loan Banks to task Tuesday during a Senate Banking Committeehearing on private student loans over a FHLB line of credit that hasallegedly produced big profits for Sallie Mae.
Warren first broached the subject in an April 24 letter toFederal Housing Finance Agency Acting Director Edward DeMarco in which she questioned an $8.5billion line of credit from the FHLB of Des Moines, Iowa, to SallieMae.
According to its corporate filings, Sallie Mae initially paid0.23% on a credit line, but charges 25 to 40 times the interest forfixed rate, private student loans. Last year, Warren said in theletter, Sallie Mae reported approximately $2.5 billion in interestincome off its private student loan business.
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