SCRANTON, Pa. (Legal Newsline) – A federal agency all of a sudden has an interest in getting its arguments out as it fights to keep its lawsuit against the nation’s largest student loan servicer alive.
The Consumer Financial Protection Bureau last week asked a Pennsylvania federal judge to make public its motion for summary judgment, which was filed under seal pursuant to an order handed down three years ago when the case was just starting.
The CFPB has found a frisky foe in Navient, which has filed two motions for summary judgment on different grounds. One says the CFPB doesn’t have a case, and the other says the CFPB didn’t have the authority to file one.
“The filing of the Bureau’s summary judgment papers and other judicial records under seal, while required by paragraph 11 of the stipulated order, is contrary to the presumptive right of public access applicable to judicial records,” the CFPB’s motion says.
“While the stipulated order was appropriate to facilitate the exchange of materials in discovery, additional procedures are necessary to protect the public’s right of access to judicial records filed after the close of discovery.”
The order was intended to speed up discovery and requires filings with confidential material in them to be filed under seal. Since discovery ended, the sides have filed their motions for judgment.
Navient filed a motion for judgment on July 10, some three years after the CFPB filed suit against it. The lawsuit claims Navient pushes forbearance on students struggling to pay back loans.
The company has claimed it is an effort to regulate its practices through litigation and actual education agencies – and not the CFPB, which tracks financial institutions – should be in charge of any changes.
Navient is armed with a former CFPB lawyer who will testify against the agency, much to CFPB’s dismay.
Navient’s motion seeks judgment on 11 claims. 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.
In another motion, Navient argues that because the U.S. Supreme Court earlier this year found the CFPB’s executive director couldn’t be removed at will and wasn’t even answerable to the President, its decision to sue Navient should, in a sense, not count.
It’s up to Judge Robert Mariani to decide new CFPB director Kathleen Kraninger can ratify the lawsuit or whether a new one would exceed the statute of limitations.