SCRANTON, Pa. (Legal Newsline) – The nation’s largest student loan servicer says federal authorities have failed to make their case against it, even after more than six years of litigation.
On Wednesday, Navient filed a motion for summary judgment in Pennsylvania federal court, hoping it will convince Judge Robert Mariani to throw out the lawsuit filed by the Consumer Financial Protection Bureau.
The case has been intensely litigated as the company fights allegations it steered cash-strapped borrowers into forbearance – delaying payments while interest continues to grow.
Borrowers were not told about income-driven repayment, the CFPB alleged, but the company says every witness put forward during the long discovery process had been “repeatedly informed by Navient about the availability of IDR and other repayment options.”
“Unable to prove its claims under the applicable legal standards, the CFPB seeks to invent a novel and unsupported one,” the motion says.
“According to the CFPB, any isolated call with a borrower was unlawful if the representative did not engage in an elaborate matrix of CFPB-prescribed questions and answers before granting a request for forbearance benefits.
“The failure to run through the CFPB’s contrived Q&A on every call (which it labels ‘steering’) is not a coercive act.”
Navient’s motion seeks judgment on 11 claims made by the CFPB. It complains that the feds are attempting to impose new regulations through its litigation against Navient rather than going through a proper rulemaking procedure.
Part of that change would be requiring servicers to go through a question-and-answer process designed by the CFPB.
“(T)he CFPB seeks instead to discourage access to a federal prescribed benefit – forbearance – in favor of its preferred option, IDR,” the motion says.
“Moreover, the CFPB cannot show that Navient derives any benefit from a particular phone call that does not follow the CFPB’s asserted requirements.”
The CFPB also filed its motion for summary judgment but its brief in support was filed under seal. The agency filed its case under former CFPB director Richard Cordray, who left after President Trump took office.
The CFPB has recently fought an order allowing one of its former employees to testify against its case.