As the financial services industry digests the Consumer Financial Protection Bureau’s Student Lending Examination Procedures manual release on December 18, 2012, Sallie Mae, which services more student loans than any other single company, is confident its operating procedures are already stringent enough to pass over the heightened regulatory bar. Sallie and its subsidiaries manage or service $234 billion in education loans and administer $38 billion in 529 college savings plans.
Nikki A. Lavoie, corporate communications manager for Sallie Mae, declined to discuss the new guidelines at length, but offered responses to two questions:
Will any element of the Consumer Financial Protection Bureau’s new examination guidelines for student lending result in procedural change for Sallie Mae?
We have always been committed to lending responsibly to ensure families borrow only what they have demonstrated they can repay, and we encourage in-school payments, even nominal ones, so students graduate with less debt.
In your view, are consumer benefits proposed by the CFPB in balance with the amount of work required by the lender to comply?
We agree on the importance of making clear disclosures and providing consumers with reliable information to inform their decisions. Our private education loan products deliver market-leading pro-consumer safeguards, and we continuously review and revise our policies for compliance with all applicable laws and regulations.
The information we provide before, during, and after a loan is made demonstrates our commitment to ensuring our customers have important information to make informed choices. We provide not one, but three different disclosures during the loan origination process. Once approved, customers have 30 days to shop around without losing their qualifying rate. Sallie Mae goes beyond the three-day right to cancel period by providing a 60-day, penalty free, right to cancel period after the loan has been disbursed. We also provide monthly statements – even during periods of deferment – to help customers monitor their progress in repaying their loans.
We have a robust review function to ensure we are in compliance with applicable laws and regulations. We only succeed when our customers succeed. Customer success begins with students and families making informed and responsible decisions on financing their investment in higher education.