Discover Financial Services Faces Student-Loan Probe

February 26, 2014
Wall Street Journal 
student loan news
The Consumer Financial Protection Bureau (CFPB) has launched an investigation of Discover Financial Services' student-loan business and is seeking documents and other information about the servicing practices of its Discover Bank unit. The announcement comes just months after the CFPB said it was expanding is monitoring of student-loan servicers due to concern about improper fees and the failure to properly credit borrowers' payments in some instances.

Discover Bank also is under investigation by the Federal Deposit Insurance Corp. for possible deficiencies in its anti-money-laundering program and Bank Secrecy Act measures. If enforcement actions are filed against the company by either regulator, it could be hit with civil penalties, ordered to change its business practices, and forced to refund money to its student-loan customers.

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