- CBA on
- CBA Media
CBA is the public policy voice for private-market capital to fund loans supporting America’s students. Private student loans serve important purposes, primarily to provide gap funding for undergraduates who need to pay for college. In addition, for some families and graduate students, private loans can be a sensible alternative to federal loans, especially PLUS loans. Almost 97% of private student loans are being successfully repaid. That is largely due to the high level of underwriting required to receive a private loan, as well as the use of cosigners. Nearly 70% of private student loans are made by six lenders, five of which are CBA Members. Collectively, private loans account for just 8% of loans being made today. The other 92% are Direct Loans made by the U.S. Department of Education.
- March 9, 2016The Consumer Financial Protection Bureau is clamping down on student loan lenders and servicers that automatically default on loans when a co-signer declared bankruptcy or dies. The agency said this week in its latest supervision report that such defaults are an unfair practice. The majority of private student lenders have contracts that include so-called auto-default clauses, whereby a lender or...
- March 8, 2016A top official at the Consumer Financial Protection Bureau on Tuesday said student loan companies are at risk of breaking the law if they place people in default when the co-signer of their loan dies or declares bankruptcy, signaling that the bureau may start legal action. These “auto defaults” leave borrowers with no choice but to repay the full balance or ruin their credit, making it difficult...
- March 7, 2016There are many traps that await students seeking to finance their college education. One of the most common involves co-signers, usually the student's parents or grandparents. Since they're a generation or two ahead of the student, it's not uncommon for co-signers to die before the loan has been paid off. When that happens, many lenders automatically declare the loan to be in default, leaving the...
- February 24, 2016February 24, 2016 The Honorable John Kline The Honorable Bobby Scott Chairman Ranking Member Committee on Education and the Workforce Committee on Education and the Workforce U.S. House of Representatives U.S. House of Representatives Washington, DC 20515 Washington, DC 20515 Dear Chairman Kline and Ranking Member Scott: The Consumer Bankers Association (CBA) appreciates the Education and...
- February 24, 2016On Wednesday, February 24, 2016, the House Education and Workforce Committee convened a hearing on the U.S. Department of Education’s Fiscal Year 2017 budget. The lone witness, Department Acting Secretary Dr. John King highlighted the proposed two percent increase in Department funding, which would promote preschool for all, expand the initiative to provide two years of free community college,...February 12, 2016Small-Dollar Lending Gets Presidential Attention Earlier this week, President Obama released his final budget proposal which included a $10 million dollar line-item that would fund a small-dollar loan program through Community Development Financial Institutions. President Obama is right to recognize low-and moderate-income American families often need access to short-term liquidity. But here is...February 11, 2016 - 2:00PMPastFebruary 8, 2016On Monday, February 8, 2016, CBA responded to a request for comment by the U.S. Department of Education regarding their forthcoming Enterprise Complaint System, which is mandated by the White House Student Aid Bill of Rights Presidential Memorandum . CBA advocated that the Department follow the Federal Trade Commission model and keep complaints private and only conveys information to the...February 8, 2016February 8, 2016 Director of the Information Collection Clearance Division Department of Education 400 Maryland Avenue SW., LBJ, Room 2E10 Washington, DC 20202–4537 Via electronic submission RE: Comment Request; Enterprise Complaint System Docket ID number ED–2015–ICCD–0138 Dear Director, The Consumer Bankers Association (“CBA”)1 appreciates the opportunity to respond to the Department of...January 28, 2016On Thursday, January 28, 2016 the CFPB released the latest edition of its Monthly Complaint Report , which focused on complaints in the New York Metro area, as well as those falling into the “other financial services” category. Below are notable takeaways: For three months in a row, the top three “Most Complained about Companies” are credit bureaus, not banks. Prepaid complaints showed the...