In a companion enforcement action to a 2015 enforcement against Discover, the Consumer Financial Protection Bureau (CFPB) cited Citibank for errors and failures it alleged in its servicing of student loans.
In a consent order announced shortly before Director Richard Cordray resigned from the CFPB, Citibank was charged with incorrectly charging borrowers late fees and adding interest to loans which should have been deferred until the students stopped attending school. Citi also was alleged to mislead borrowers by not clearly explaining that they were eligible for a tax deduction on the interest paid on their student loans.
Read on for more about the reaction, and what the CFPB will require Citi to do moving forward.
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