Appellate court rules that investment trusts must follow consumer protection laws.
The Third Circuit U.S. Court of Appeals ruled that investment trusts that purchase and hold private student loans must follow consumer protection laws. This ruling allows the Consumer Financial Protection Bureau (CFPB) to move ahead with lawsuits against 15 investment trusts, which allege that the trusts violated consumer protection laws by using deceptive lawsuits of their own to unfairly collect from over 800,000 student loan borrowers.
The CFPB received support from consumer groups and 22 states when they filed to appeal the federal ruling blocking their lawsuits in 2021. The states said investment trusts often purchase debt deemed uncollectible because it is old or undocumented, and are “more likely than the original creditors to resort to unlawful tactics.”
As the Lord Leads, Pray with Us…
- For the judges who hear the case against the creditors to be prudent in their decisions.
- For CFPB officials as they argue the case against the investment trusts.
Sources: Reuters, Law360
