ITT Education Services, Inc. Sued for Predatory Student Lending

The Consumer Financial Protection Bureau (CFPB) has filed a suit against ITT Education Services, Inc. for their predatory student lending practices. The CFPB believes that the company utilizes high-pressure tactics to push many students into expensive private student loans that are likely to end in default. This is a momentous act taken by the federal agency against the lending industry, because this is the CFPB’s first public enforcement against a company in the for-profit college industry. Director Richard Cordray has made it clear in his press conference that the agency is dedicated to protecting students against predatory lending tactics, and this enforcement action should serve as a warning for other similar companies engaged in these lending services.

Within the complaint, the CFPB cites various violations of the Consumer Financial Protection Act for ITT’s unfair, deceptive and abusive acts and practices. In addition, ITT is alleged to have violated the Truth in Lending Act for its failure to disclose information. Among the many illegal practices, ITT is liable for making misleading representations, using aggressive and controlling tactics to recruit students, utilizing dubious complex practice that induce students’ reliance, coercing students to stake out private student loans for ITT’s financial gain, and failing to disclose finance charges. The bureau is asking for injunctive relief, civil penalties, equitable relief, and restitution against ITT.

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