The government already regulates large banks that issue student loans, and the new regulation allows the CFPB to oversee nonbank loan servicers like Sallie Mae that collect and process payments.
Richard Cordray, director of the bureau, told reporters that the new rule would help the federal government prevent abuses by these companies, such as making it exceptionally difficult for customers to make payments, according to the Hill.
“We will be keeping a watchful eye over any servicing company that engages in unfair or deceptive acts or practices toward student loan borrowers,” Cordray said. “Today’s rule affects one out of every five households in this country and will help address our broader concerns that unmanageable student loan debt may be dragging down people’s lives.”
The CFPB will oversee servicers with more than a million customers — the seven largest servicers, which work with 70 percent of borrowers in the student loan market, according to a statement from the bureau.