The Consumer Financial Protection Bureau’s lawsuit against Navient should be able to continue moving forward the agency argues, despite the Supreme Court’s ruling in the Seila Law case, filing a ratification from Director Kathleen Kraninger and announcing that it will oppose Navient’s motion for judgment on the pleadings.
The developments in this case are significant because it is the first case in which the Supreme Court’s ruling is being used as a tool to quash enforcement actions by the CFPB.
Navient filed a motion last week, arguing that the Supreme Court’s ruling — coupled with the fact that the statute of limitations has expired on the alleged infractions — provide all the ammunition needed for a District Court judge to award the case in its favor.
Along with filing its notification that it will oppose Navient’s motion, the CFPB also submitted a ratification from Kraninger, affirming the Bureau’s decision to file a complaint against the student loan servicer.
The CFPB sued Navient back in 2017, alleging the company “systematically and illegally” failed borrowers at “every stage” of the repayment process. The CFPB alleged that Navient failed to correctly apply or allocate borrower payments to their accounts, steered struggling borrowers toward paying more than they have to on loans, obscured information consumers needed to maintain their lower payments, deceived private student loan borrowers about requirements to release their co-signer from the loan, and harmed the credit of disabled borrowers, including severely injured veterans.
One interesting tidbit is that the ratification was signed by Kraninger on July 9, a day before Navient filed its motion for judgment on the pleadings. Either the CFPB anticipated Navient was going to attempt to get the lawsuit thrown out or it had already decided it was moving forward regardless of what it though Navient may try, or both.
