Attorney General Miyares joins coalition pushing back against abusive student loan debt collection practices

Attorney General Jason Miyares joined a bipartisan coalition of 22 attorneys general, led by Illinois, to file an amicus brief in support of the Consumer Financial Protection Bureau’s (CFPB) efforts to combat alleged illegal debt collection practices in the student loan industry.

In 2017, the CFPB filed a lawsuit alleging that 15 trusts purchased student loan debt and then engaged in illegal debt collection practices in an attempt to collect on that debt. The CFPB’s complaint describes how third-party collections agencies hired by the trusts submitted false and misleading affidavits and testimony in support of nearly 100,000 debt collection actions brought by the trusts. Additionally, the trusts are alleged to have filed hundreds of lawsuits against consumers for debt that was time-barred or missing critical supporting documentation. The coalition argues that the trusts should be held liable for these misdeeds under the Consumer Financial Protection Act of 2010.

“Hiring third-party agents to collect on purchased debts poses too large of a risk to Virginians. As someone who had to work to put themselves through college, I know that the decision to pursue higher education can pose a financial strain. The debt purchasing business model employed by the trusts incentivizes them to take no notice of any misconduct or predatory action at the hands of the third-party debt collectors they hire, putting Virginians at unnecessary risk,” said Attorney General Miyares.

In order to fully protect consumers from these abuses, debt purchasers must be held to account, regardless of whether they collect debts through their third-party agents. Accordingly, the district court’s decision to deny the trusts’ motion to dismiss should be affirmed.

Attorney General Miyares is joined in filing the brief by the attorneys general of California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Idaho, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Washington, and Wisconsin.

Read the brief HERE.