NCUA chairman Debbie Matz has responded to a group of advocacy organizations that called on the NCUA to look into what they believe to be predatory student loans.
Matz's response came in the form of a letter, which stated that although the NCUA has no enforcement authority over CUSOs or other third parties – including ITT Educational Services, the Rochdale Group and Student CU Connect – at the NCUA's instigation, the seven credit unions that had participated in a lending program deemed predatory by the advocacy organizations ceased purchasing those loans in 2012 after a three-year contract expired.
The groups sent a letter to the NCUA in July, warning that loans made by federally chartered credit unions; federally insured, state chartered credit unions and CUSOs "may constitute unfair and deceptive trade practices, and threaten the credit unions' safety and soundness by posing serious credit, reputation and compliance risks."
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