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*FOR IMMEDIATE RELEASE:*

November 17, 2022




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*AG Press <[email protected]>






AG Nessel Joins Coalition Pushing Back Against Abusive Student Loan Debt Collection Practices





*LANSING ?* Michigan Attorney General Dana Nessel joined a bipartisan coalition of 23 attorneys general, led by Illinois Attorney General Kwame Raoul, filing an amicus brief [ [link removed] ] in support of the Consumer Financial Protection Bureau?s (CFPB) efforts to combat alleged illegal debt collection practices in the student loan industry.?

The CFPB filed a lawsuit alleging that 15 trusts purchased student loan debt and then engaged in illegal debt collection practices in an attempt to collect on that debt. The CFPB?s complaint describes how collections agencies hired by the trusts submitted false and misleading affidavits and testimony in support of nearly 100,000 debt collection actions brought by the trusts. Additionally, the trusts are alleged to have filed hundreds of lawsuits against consumers for debt that was time-barred or missing critical supporting documentation. The coalition argues that the trusts should be held liable for these misdeeds under the Consumer Financial Protection Act of 2010.??

?I have made consumer protection one of my office's top priorities and the CFPB has been a strong partner in providing remedies to illegal conduct,? Nessel said. ?The entities that purchase student loan debt from the original creditors have engaged in deceitful and unlawful debt collection practices, such as suing student loan debtors based on faulty, misleading, or incomplete credit information -- a clear violation of the Consumer Financial Protection Act. I stand firmly with my colleagues in supporting CFPB's ability to enforce the prohibitions against unfair debt collection practices, which have had negative financial outcomes for many Michigan residents.??

The attorneys general argue that CFPB oversight is crucial because the model used by the trusts incentivizes them to condone misconduct by the debt collectors they hire.?

The Michigan Attorney General?s office has long been a national leader in investigating and enforcing consumer protection violations in the higher education field. AG Nessel has issued consumer alerts to warn Michigan residents about loan forgiveness scams. She has worked to hold for-profit schools accountable for misrepresentations and deceptive earnings claims. And she has supported the U.S. Department of Education?s proposed changes to its Borrower Defense, Public Service Loan Forgiveness and Closed School Discharge regulations, while recommending additional changes to further benefit borrowers.??

AG Nessel and AG Raoul were joined in filing the brief by the attorneys general of California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Idaho, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Virginia, Washington and Wisconsin.?

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