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Bipartisan AG Coalition Supports CFPB in Effort to Hold Student Loan Trusts Liable for Unlawful Debt Collection Practices

  • A bipartisan coalition of 23 AGs filed an amicus brief in the U.S. Court of Appeals for the Third Circuit arguing that student loan trusts are “covered persons” under the Consumer Financial Protection Act (CFPA).
  • The AG amici support the CFPB in its case against the National Collegiate Student Loan Trusts (“Trusts”) for allegedly violating the CFPA by engaging in unlawful debt collection practices. The district court denied the Trusts’ motion to dismiss, concluding that the Trusts were covered persons because they “engaged in” servicing and collecting debt by contracting with third parties to collect and service the debts they purchased.
  • The AG amici urge the Third Circuit to affirm the district court’s decision. They argue that the Trusts’ narrow interpretation of covered persons would allow debt buyers to evade liability from unlawful debt collection practices by hiring subcontractors to perform loan servicing and collection on their behalf.