Joseph Ax
February 20, 2014
Photo courtesy businessinsider.com
NEW YORK (Reuters) – SLM Corp, better known as Sallie Mae, faces a multistate probe led by Illinois into its student loan practices, a spokeswoman for Illinois Attorney General Lisa Madigan said on Thursday.
The investigation is part of an increasingly broad review of student lending by state and federal regulators.
In a filing with the U.S. Securities and Exchange Commission on Wednesday, Sallie Mae said it was facing “significant year-over-year increases” in the number of investigative demands and in the breadth of information being sought.
The rise in requests has been largely driven by state attorneys general and by the federal Consumer Financial Protection Bureau, the company said.
Madigan’s spokeswoman, Natalie Bauer, said Illinois and other states have opened an “active investigation” into Sallie Mae’s loan servicing and debt collection practices, among other issues. She would not identify the other states involved in the inquiry.
“Inquiries from state attorney generals have occurred regularly in the ordinary course of our business, for informational as well as regulatory purposes,” Patricia Christel a spokeswoman for the company said in an emailed statement.
“Since the passage of Dodd Frank, the frequency of these inquiries has increased significantly, and we are responsive to all requests, sharing how our customer service practices help customers succeed,” Christel added.