CFPB Student Debt Collection Enforcement Upheld by Appeals Court

Federal oversight applies to a student loan investment trust that contracted out debt collection to a third party, a federal appeals court ruled Tuesday in a test of how far the CFPB could go to protect student loan borrowers.

The trust is subject to the Consumer Financial Protection Act’s enforcement because it’s own agreements indicate it engages in both student loan servicing and debt collection, said Judge Jane Roth, writing for a three-judge panel of the US Court of Appeals for the Third Circuit.

As such, it falls “within the purview of the CFPA because they ‘engage’ in a known ...