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Wells Fargo's Student Loan Practices Under CFPB Scanner

Wells Fargo & Company WFC, the world’s second largest originator of private student loans, has come under the regulatory scanner of Consumer Financial Protection Bureau (“CFPB”), according to the Wall Street Journal. However, people with knowledge about the matter claimed that the financial bigwig has been facing CFPB investigation since the past one year.

While no particular reason for investigation into Wells Fargo’s practices has been cited till now, CFPB is likely to examine the bank’s payment processing procedures and the steps taken to help distressed borrowers.

Whether the investigation will culminate into any enforcement action or settlement remains uncertain. However, any action will considerably impair the fragmented private student loan market that likely has less than 10 players.

CFPB in Focus

CFPB recently disclosed that...