Posted at: 12/03/2013 4:11 AM
By: Associated Press
The federal consumer finance watchdog is expanding its oversight to Sallie Mae and other companies that collect student loan payments.
A rule issued Tuesday by the Consumer Financial Protection Bureau extends the agency's supervision to nonbank companies that manage large volumes of student loans on behalf of lenders.
The CFPB already oversees banks that service student loans, but it says most student loans are serviced by nonbank companies. It says the scrutiny is needed to ensure servicers comply with consumer laws at a time when more people are falling behind on their student loan payments.
Nonbank loan servicers like Sallie Mae manage borrowers' accounts and answer their questions. Borrowers have complained that the companies lose paperwork or fail to credit payments.
Sallie Mae also is the biggest U.S. student lender.