NEW YORK - New York Attorney General Andrew Cuomo on Monday reached an agreement with Wells Fargo, meaning he has now settled with the five largest providers of student loans.
Cuomo had already reached agreements with Sallie Mae, Citibank, JP Morgan Chase and Bank of America. Each agreed to abide by Cuomo's College Loan Code of Conduct and paid a total of $9.5 million to a fund designed to educate future college students about their loan choices.
"As our nationwide investigation continues, more lenders and schools are changing their practices," Cuomo said. "I applaud Wells Fargo for acting decisively to set an example that all lenders should follow. The message is clear -- lenders large and small must adhere to best practices and help restore integrity to the student loan industry."
New York's legislature recently passed the SLATE (Student Lending Accountability, Transparency and Enforcement) Act, modeled after Cuomo's Code of Conduct.
He has said that his investigation has revealed inappropriate relationships between lenders and schools. He alleged that Education Finance Partners, against whom he filed his first lawsuit and with whom he eventually settled, was put on schools' "preferred lender" lists because it offered a cut of its profit to those schools. EFP has since settled those allegations.
Meanwhile, he recently expanded his investigation to include alumni associations and told the National Association of Student Financial Aid Administrators that a code of conduct it proposed is not tough enough.
Twenty-four schools have agreed to Cuomo's Code, nine of which have agreed to reimburse students more than $3 million for the cost of revenue sharing agreements.